EXHIBIT 4.7
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GIANT INDUSTRIES, INC.
AND
THE SUBSIDIARY GUARANTORS
AND
THE BANK OF NEW YORK,
AS TRUSTEE
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF MAY 3, 2004
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TABLE OF CONTENTS
Page
Article I. DEFINITIONS........................................ 1
Section 1.01. Certain Terms Defined in the Indenture........... 1
Section 1.02. Definitions...................................... 1
Article II. FORM AND TERMS OF THE NOTES........................14
Section 2.01. Terms of the Notes...............................14
Section 2.02. Events of Default................................15
Section 2.03. Covenants........................................15
Section 2.04. Consolidation, Merger, Sale or Conveyance........23
Section 2.05. Application of Article III of the
Indenture Regarding Redemption of Notes..........23
Section 2.06. Application of Article X of the
Indenture Regarding Sinking Funds................24
Section 2.07. Subsidiary Guarantees............................24
Article III. MISCELLANEOUS......................................35
Section 3.01. Governing Law; Waiver of Jury Trial..............35
Section 3.02. Separability.....................................35
Section 3.03. Ratification.....................................36
Section 3.04. Effectiveness....................................36
EXHIBIT
EXHIBIT A - Form of 8% Senior Subordinated Note due 2014........A-1
FIRST SUPPLEMENTAL INDENTURE (this "First Supplemental Indenture"),
dated as of May 3, 2004, among Giant Industries, Inc., a Delaware
corporation (the "Company"), the Subsidiary Guarantors listed as
signatories hereto, and The Bank of New York, a New York banking
corporation, as Trustee ("Trustee").
RECITALS
The Company, Trustee and the Subsidiary Guarantors executed and
delivered an Indenture, dated as of May 3, 2004 (the "Base Indenture" and,
as supplemented by this First Supplemental Indenture, the "Indenture"), to
provide for the issuance by the Company from time to time of Notes to be
issued in one or more series as provided in the Indenture.
The issuance and sale of $150 million aggregate principal amount of a
new series of the Company's 8% Senior Subordinated Notes due May 15, 2014
guaranteed by the Subsidiary Guarantors (the "Notes") have been authorized
by resolutions adopted by the Board of Directors of the Company on
February 19, 2004 and April 28, 2004 and by the Subsidiary Guarantors on
March 12, 2004.
The Company desires to issue and sell $150 million aggregate
principal amount of the Notes on the date hereof, with the terms set forth
in this Indenture.
All things necessary to make this First Supplemental Indenture a
valid supplement to the Indenture according to its terms and the terms of
the Indenture have been done.
For and in consideration of the premises and the purchase of the
Notes by the Holders thereof, the parties hereby enter into this First
Supplemental Indenture, and covenant and agree, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE I.
DEFINITIONS
Section 1.01. Certain Terms Defined in the Indenture. All
capitalized terms used but not defined in this First Supplemental
Indenture shall have the meanings ascribed to such terms in the Base
Indenture, as amended hereby.
Section 1.02. Definitions.
(a) Except as may be provided in a future supplemental
indenture, for the benefit of the Holders of all Notes, Section 1.01 of
the Indenture shall be amended by adding or superceding the following
definitions:
"Asset Sale" means any sale, capitalized lease (within the meaning of
GAAP), transfer, exchange or other disposition (or series of related
sales, capitalized leases, transfers, exchanges or dispositions) of shares
of Capital Stock of a Subsidiary (other than directors' qualifying
shares), or of property or assets or any interests therein (each referred
to for purposes of this definition as a "disposition") by the Company or
any of its Restricted Subsidiaries, including any disposition by means of
a merger, consolidation or similar transaction (other than, (i) by the
Company to a Restricted Subsidiary or by a Restricted Subsidiary to the
Company or a
Restricted Subsidiary, (ii) a sale of inventory or hydrocarbons or other
products (including both crude oil and refined products), in each case in
the ordinary course of business of the Company's or a Restricted
Subsidiary's operations, (iii) the merger or consolidation of, or the
disposition of all or substantially all of the assets of the Company made
in compliance with Section 5.01, (iv) the merger or consolidation of a
Restricted Subsidiary made in compliance with Section 12.02(b)(i)(A), (v)
the sale or lease of equipment, inventory, accounts receivable or other
assets in the ordinary course of business, (vi) dispositions of
receivables in connection with the compromise, settlement or collection
thereof in the ordinary course of business or in bankruptcy or similar
proceedings and exclusive of factoring or similar arrangements, (vii) a
Restricted Payment that is permitted by Section 4.08, and (viii) any sale
or disposition of any property or equipment that has become damaged, worn
out, obsolete or otherwise unsuitable for use in connection with the
business of the Company or its Restricted Subsidiaries.
"Average Life" means, as of the date of determination, with respect
to any Indebtedness, the quotient obtained by dividing (i) the sum of the
products of (A) the number of years from such date to the date of each
successive scheduled principal payment of such Indebtedness multiplied by
(B) the amount of such principal payment by (ii) the sum of all such
principal payments.
"Bank Credit Facility" means a revolving credit and/or letter of
credit and/or bankers' acceptance facility the proceeds of which are used
for working capital and other general corporate purposes existing on the
Issue Date or entered into after the Issue Date by one or more of the
Company and its Restricted Subsidiaries and one or more financial
institutions, as amended, extended or refinanced from time to time.
"Borrowing Base" means, as of any date, an amount equal to the sum of
(i) 85% of the book value of all accounts receivable owned by the Company
and its Restricted Subsidiaries (excluding any accounts receivable from an
Affiliate of the Company or that are more than 90 days past due, less
(without duplication) the allowance for doubtful accounts attributable to
such current accounts receivable) and (ii) 60% of the book value of all
inventory owned by the Company and its Restricted Subsidiaries as of such
date, all calculated on a consolidated basis and in accordance with GAAP.
To the extent that information is not available as to the amount of
accounts receivable as of a specific date, the Company may utilize the
most recent available information for purposes of calculating the
Borrowing Base.
"Capitalized Lease Obligations" of any Person means the obligations
of such Person to pay rent or other amounts under a lease of property,
real or personal, that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in
accordance with GAAP.
"Change of Control" means any event or series of events by which:
(i) any "Person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) of 50% or more of
the total voting power of the Voting Stock of the Company;
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(ii) the Company consolidates with or merges or amalgamates
with or into another Person or conveys, transfers, or leases all or
substantially all of its assets to any Person, or any Person consolidates
with, or merges or amalgamates with or into the Company, in any such event
pursuant to a transaction in which the outstanding Voting Stock of the
Company is changed into or exchanged for cash, securities or other
property, other than any such transaction where (A) the outstanding Voting
Stock of the Company is changed into or exchanged for Voting Stock of the
surviving corporation which is not Disqualified Stock and (B) the holders
of the Voting Stock of the Company immediately prior to such transaction
own, directly or indirectly, not less than a majority of the Voting Stock
of the surviving corporation immediately after such transaction;
(iii) the stockholders of the Company approve any plan of
liquidation or dissolution of the Company; or
(iv) during any period of 12 consecutive months, individuals
who at the beginning of such period constituted the Board of Directors of
the Company (or whose appointment or nomination for election by the
stockholders of the Company was approved by a vote of not less than a
majority of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office.
"Change of Control Notice" has the meaning assigned to such term in
Section 4.15(b).
"Change of Control Offer" has the meaning assigned to such term in
Section 4.15(a).
"Change of Control Payment Date" has the meaning assigned to such
term in Section 4.15(a).
"Consolidated Coverage Ratio" means, for any Reference Period, the
ratio on a pro forma basis of (i) Consolidated EBITDA for the Reference
Period to (ii) Consolidated Interest Expense for such Reference Period;
provided that, in calculating Consolidated EBITDA and Consolidated
Interest Expense (A) with respect to any acquisition or disposition which
occurs during the Reference Period or subsequent to the Reference Period
and on or prior to the date giving rise to the need to calculate the
Consolidated Coverage Ratio (the "Determination Date"), such acquisition
or disposition shall be assumed to have occurred on the first day of the
Reference Period, (B) with respect to the incurrence of any Indebtedness
(including the Notes) during the Reference Period or subsequent to the
Reference Period and on or prior to the Determination Date, the incurrence
of such Indebtedness shall be assumed to have occurred on the first day of
such Reference Period, (C) any Indebtedness that had been outstanding
during the Reference Period that has been repaid on or prior to the
Determination Date shall be assumed to have been repaid as of the first
day of such Reference Period, (D) the Consolidated Interest Expense
attributable to interest or dividends on any Indebtedness bearing a
floating interest (or dividend) rate shall be computed on a pro forma
basis as if the rate in effect on the Determination Date were the average
rate in effect during the entire Reference Period, and (E) in determining
the amount of Indebtedness pursuant to Section 4.07, the incurrence of
Indebtedness giving rise to the need to calculate the Consolidated
Coverage Ratio and, to the extent the net proceeds from
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the incurrence or issuance thereof are used to retire Indebtedness, the
application of the proceeds therefrom, shall be assumed to have occurred
on the first day of the Reference Period.
"Consolidated EBITDA" means, for any Reference Period, the
Consolidated Net Income of the Company and its Restricted Subsidiaries for
such Reference Period, increased (to the extent deducted in determining
Consolidated Net Income) by the sum of (i) all income taxes of the Company
and its Restricted Subsidiaries paid or accrued according to GAAP for such
period (other than income taxes attributable to extraordinary gains or
losses), (ii) all interest expense of the Company and its Restricted
Subsidiaries paid or accrued in accordance with GAAP for such period
(including amortization of original issue discount and other non-cash
interest expense), (iii) depreciation and depletion of the Company and its
Restricted Subsidiaries, (iv) amortization of the Company and its
Restricted Subsidiaries including, without limitation, amortization of
capitalized debt issuance costs, (v) other non-cash charges (excluding any
such non-cash charges to the extent they require an accrual of, or a
reserve for, cash charges for any future periods) to the extent such non-
cash charges are deducted in connection with the determination of
Consolidated Net Income minus non-cash items increasing such Consolidated
Net Income and (vi) extraordinary losses to the extent deducted in
connection with the determination of Consolidated Net Income.
"Consolidated Interest Expense" means, with respect to the Company
and its Restricted Subsidiaries, for any Reference Period, the aggregate
amount (without duplication) of (i) interest expensed or capitalized in
accordance with GAAP (including, in accordance with the following
sentence, interest attributable to Capitalized Lease Obligations) during
such period in respect of all Indebtedness of the Company and its
Restricted Subsidiaries, including (A) amortization of original issue
discount on any Indebtedness, (B) the interest portion of all deferred
payment obligations, calculated in accordance with GAAP, and (C) all
commissions, discounts and other fees and charges owed with respect to
bankers' acceptance financing and currency and interest rate swap
arrangements, in each case to the extent attributable to such Reference
Period, and (ii) dividend requirements of the Company and its Restricted
Subsidiaries with respect to Disqualified Stock of the Company or its
Restricted Subsidiaries, whether in cash or otherwise (except dividends
paid solely in shares of Qualified Stock of the Company), paid (other than
to the Company or any of its Restricted Subsidiaries), declared, accrued
or accumulated during such period, divided by the difference of one minus
the applicable actual combined federal, state, local and foreign income
tax rate of the Company and its Restricted Subsidiaries (expressed as a
decimal), on a consolidated basis, for the four quarters immediately
preceding the date of the transaction giving rise to the need to calculate
Consolidated Interest Expense, in each case to the extent attributable to
such Reference Period and excluding items eliminated in consolidation.
For purposes of this definition, (i) interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably
determined by the Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP and (ii) interest
expense attributable to any Indebtedness represented by the guarantee by
the Company or a Restricted Subsidiary of the Company of an obligation of
another Person shall be deemed to be the interest expense attributable to
the Indebtedness guaranteed.
"Consolidated Net Income" of the Company means, for any period, the
aggregate net income (or loss) of the Company and its Restricted
Subsidiaries for such period on a consolidated basis, determined in
accordance with GAAP, provided that (i) the net income for
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such period of any Person that is not a Restricted Subsidiary or that is
accounted for by the equity method of accounting will be included only to
the extent of the amount of dividends, payments or distributions actually
paid to the Company or its Restricted Subsidiaries by such other Person in
such period; (ii) the net income for such period of any Restricted
Subsidiary of the Company that is subject to any Payment Restriction will
be included only to the extent of the amount of dividends, payments or
distributions which (A) are actually paid by such Restricted Subsidiary in
such period to the Company (or another Restricted Subsidiary which is not
subject to a Payment Restriction) and (B) are not in excess of the amount
which such Restricted Subsidiary would be permitted to pay to the Company
(or another Restricted Subsidiary which is not subject to a Payment
Restriction) in any future period under the Payment Restrictions
applicable to such Restricted Subsidiary, assuming that the net income of
such Restricted Subsidiary in each future period is equal to the net
income for such Restricted Subsidiary for such period; and (iii) the
following will be excluded: (A) any net gain on the sale or other
disposition by the Company or any of its Restricted Subsidiaries of assets
(other than a sale of inventory or hydrocarbons or other products
(including both crude oil and refined products), in each case in the
ordinary course of business of the Company's operations) and of the
Capital Stock of any Restricted Subsidiary of the Company, (B) the net
income (or loss) of any other Person acquired by the Company or any
Restricted Subsidiary prior to the date of such acquisition, (C)
extraordinary gains, and (D) the $5.4 million reserve recorded in 2001 for
a related party note and interest thereon.
"Consolidated Net Tangible Assets" means, as of any date, the total
assets of the Company and its Restricted Subsidiaries on a consolidated
basis as of such date (less applicable reserves and other items properly
deductible from total assets) and after deducting therefrom: (i) total
liabilities and total capital items as of such date except the following:
items constituting Indebtedness, paid-in capital and retained earnings,
provisions for deferred income taxes and deferred gains, and reserves
which are not reserves for any contingencies not allocated to any
particular purpose; (ii) goodwill, trade names, trademarks, patents,
unamortized debt discount and expense, and other intangible assets; and
(iii) all Investments other than Permitted Investments.
"Consolidated Tangible Net Worth" means, with respect to any Person,
as at any date of the determination, the sum of Capital Stock (other than
Disqualified Stock) and paid-in capital plus retained earnings (or minus
accumulated deficit) minus all intangible assets, including, without
limitation, organization costs, patents, trademarks, copyrights,
franchise, research and development costs, and any amount reflected in
treasury stock, of such Person determined on a consolidated basis in
accordance with GAAP.
"Disqualified Stock" means any Capital Stock of a Person which, by
its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event or with
the passage of time, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of
the holder thereof, in whole or in part, on or prior to the Maturity Date
or which is exchangeable or convertible into debt securities of such
Person or any other Person, except to the extent that such exchange or
conversion rights cannot be exercised prior to the Maturity Date.
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"Domestic Subsidiary" means any Restricted Subsidiary that was formed
under the laws of the United States or any state thereof or the District
of Columbia or that guarantees or otherwise provides direct credit support
for any Indebtedness of the Company or any Subsidiary Guarantor.
"Equity Offering" means a public or private sale of Capital Stock
(other than Disqualified Stock) of the Company.
"Indebtedness" means, without duplication, with respect to any
Person, (i) all obligations of such Person (A) in respect of borrowed
money (whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof), (B) evidenced by
bonds, notes, debentures or similar instruments, (C) representing the
balance deferred and unpaid of the purchase price of any property or
services (other than accounts payable or other obligations arising in the
ordinary course of business), (D) evidenced by bankers' acceptances or
similar instruments issued or accepted by banks, (E) for the payment of
money relating to a Capitalized Lease Obligation, or (F) evidenced by a
letter of credit or a reimbursement obligation of such Person with respect
to any letter of credit; (ii) all net obligations of such Person as of the
date of a required calculation under interest rate swap obligations and
foreign currency xxxxxx, other than interest rate swap obligations and
foreign currency xxxxxx incurred to protect the Company or its Restricted
Subsidiaries from fluctuations in interest rates or foreign currency
exchange rates; (iii) all liabilities of others of the kind described in
the preceding clauses (i) or (ii) that such Person has guaranteed or that
are otherwise its legal liability; (iv) Indebtedness (as otherwise defined
in this definition) of another Person secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person,
the amount of such obligations being deemed to be the lesser of (A) the
full amount of such obligations so secured, and (B) the fair market value
of such asset, as determined in good faith by the Board of Directors of
such Person, which determination shall be evidenced by a Board Resolution
of such Person; (v) the liquidation preference and any mandatory
redemption payment obligations in respect of Disqualified Stock of such
Person; and (vi) any and all deferrals, renewals, extensions, refinancings
and refundings (whether direct or indirect) of, or amendments,
modifications or supplements to, any liability of the kind described in
any of the preceding clauses (i), (ii), (iii), (iv), (v), or this clause
(vi), whether or not between or among the same parties.
"Investment" of any Person means (i) all investments by such Person
in any other Person in the form of loans, advances or capital
contributions (excluding advances to employees in the ordinary course of
business in an aggregate amount outstanding at any one time not to exceed
$5 million), (ii) all guarantees of Indebtedness or other obligations of
any other Person by such Person, (iii) all purchases (or other
acquisitions for consideration) by such Person of Indebtedness, Capital
Stock or other securities of any other Person and (iv) all other items
that would be classified as investments or advances on a balance sheet of
such Person prepared in accordance with GAAP.
"Issue Date" means the date on which the Notes are originally issued
under this First Supplemental Indenture.
"Make-Whole Premium" means, with respect to a Note on any date of
redemption, the greater of (i) 1% of the principal amount of such Note or
(ii) the excess of (A) the present value
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at such date of redemption of (1) the redemption price of such Note at May
15, 2009 (as provided in Section 3.04(a)) plus (2) all remaining required
interest payments (exclusive of interest accrued and unpaid to the date of
redemption) due on such Note through May 15, 2009, computed using a
discount rate equal to the Treasury Rate plus 50 basis points, over (B)
the then outstanding principal amount of such Note.
"Maturity Date" means May 15, 2014.
"Net Available Proceeds" means, with respect to any Asset Sale of any
Person, cash proceeds received (including any cash proceeds received by
way of deferred payment of principal pursuant to a note or installment
receivable or otherwise, but only as and when received, and excluding any
other consideration until such time as such consideration is converted
into cash) therefrom, in each case net of all legal, title and recording
tax expenses, commissions and other fees and expenses incurred, and all
federal, state or local taxes required to be accrued as a liability as a
consequence of such Asset Sale, and in each case net of all Indebtedness
which is secured by such assets, in accordance with the terms of any Lien
upon or with respect to such assets, or which must, by its terms or in
order to obtain a necessary consent to such Asset Sale to prevent a
default or event of default under Senior Indebtedness or by applicable
law, be repaid out of the proceeds from such Asset Sale and which is
actually so repaid.
"Net Cash Proceeds" means, in the case of any sale by the Company of
securities pursuant to Section 4.08(a)(iii)(B) or (C), the aggregate net
cash proceeds received by the Company, after payment of expenses,
commissions, discounts and any other transaction costs incurred in
connection therewith.
"Pari Passu Indebtedness" means the 9% Notes and the 11% Notes and
any other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Notes in right of payment and
is not subordinated by its terms in right of payment to any Indebtedness
or other obligation of the Company which is not Senior Indebtedness.
"Permitted Business Investments" means:
(i) Investments by the Company or any Restricted Subsidiary in
any Person which immediately prior to the making of such Investment is a
Restricted Subsidiary;
(ii) Investments in the Company by any Restricted Subsidiary;
(iii) Investments by the Company or any Restricted Subsidiary
of the Company in a Person, if as a result of such Investment (A) such
Person becomes a Restricted Subsidiary of the Company or (B) such Person
is merged, consolidated or amalgamated with or into, or transfers or
conveys all or substantially all of its assets to, or is liquidated into,
the Company or a Restricted Subsidiary of the Company;
(iv) Investments arising in connection with interest rate
protection agreements, foreign currency hedging agreements and commodity
hedging agreements incurred in the ordinary course of business for the
purpose of fixing or hedging interest rate, currency or
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commodity risk in connection with the conduct of the business of the
Company and its Restricted Subsidiaries and not for speculative purposes;
(v) Investments received by the Company or any Restricted
Subsidiary in connection with Asset Sales, provided that the aggregate
fair market value of all Investments permitted pursuant to this clause (v)
after the Issue Date shall not exceed $10 million in the aggregate;
(vi) Investments to the extent acquired in exchange for, or out
of the Net Cash Proceeds of a substantially concurrent offering of,
Capital Stock (other than Disqualified Stock) of the Company;
(vii) stock, obligations or securities received in satisfaction
of judgments; and
(viii) other Investments in any Person that is not an Affiliate
of the Company (other than a Restricted Subsidiary) having an aggregate
fair market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (viii) since the
date of the Indenture, not to exceed $10 million.
"Permitted Financial Investments" means:
(i) United States dollars;
(ii) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or instrumentality
thereof;
(iii) certificates of deposit and eurodollar time deposits with
maturities of 12 months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding 12 months and overnight bank
deposits, in each case with any domestic commercial bank having capital
and surplus in excess of $300 million;
(iv) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (ii) and
(iii) entered into with any financial institution meeting the
qualifications specified in clause (iii) above;
(v) commercial paper rated at least A-2 or the equivalent
thereof at the time of purchase by Standard & Poor's or rated at least P-2
or the equivalent at the time of purchase by Xxxxx'x Investors Service,
Inc., and in each case maturing within 12 months after the date of
acquisition;
(vi) money market mutual or similar funds having assets in
excess of $100 million; and
(vii) any debt securities or adjustable rate preferred stock
issued by a corporation organized under the laws of a state of the United
States of America or issued by any state, county or municipality located
within the United States of America which is rated at least AA- or the
equivalent thereof by Xxxxx'x Investors Service, Inc. and
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Standard & Poor's Corporation and maturing or having a call provision not
exceeding 24 months from the date of acquisition.
"Permitted Investments" means Permitted Business Investments and
Permitted Financial Investments.
"Permitted Liens" means:
(i) Liens existing on the Issue Date;
(ii) Liens on property of the Company now or hereafter
securing Senior Indebtedness of the Company and Liens on property of a
Subsidiary Guarantor now or hereafter securing Senior Indebtedness of such
Subsidiary Guarantor;
(iii) Liens now or hereafter securing any interest rate
hedging obligations (A) that the Company is required to enter into with
respect to the Bank Credit Facility or (B) that are entered into for the
purpose of managing interest rate risk with respect to Indebtedness of the
Company and its Restricted Subsidiaries, provided that such interest rate
obligations under clauses (A) and (B) do not have an aggregate notional
amount which exceeds the aggregate principal amount of Indebtedness of the
Company and its Restricted Subsidiaries;
(iv) Liens securing obligations under agreements that the
Company enters into in the ordinary course of business for the purpose of
protecting against fluctuations in oil, natural gas, or refined products
prices;
(v) Liens securing Indebtedness, the proceeds of which are
used to refinance secured Indebtedness of the Company or its Restricted
Subsidiaries; provided that such Liens extend to or cover only the
property or assets currently securing the Indebtedness being refinanced;
(vi) Liens for taxes, assessments and governmental charges
not yet delinquent or being contested in good faith and for which adequate
reserves have been established to the extent required by GAAP;
(vii) mechanics', workmen's, materialmen's, operator's or
similar Liens arising in the ordinary course of business for sums that are
not yet delinquent or are being contested in good faith by appropriate
action;
(viii) Liens in connection with workmen's compensation,
unemployment insurance or other social security, old age pension or public
liability obligations not yet due or which are being contested in good
faith by appropriate action;
(ix) Liens, deposits or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of money),
leases, public or statutory obligations, surety, stay, appeal, indemnity,
performance or other similar bonds, or other similar obligations arising
in the ordinary course of business;
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(x) survey exceptions, encumbrances, easements or
reservations, or rights of others for, rights of way, zoning or other
restrictions as to the use of real properties, and minor defects in title
which, in the case of any of the foregoing, were not incurred or created
to secure the payment of borrowed money or the deferred purchase price of
property or services, and in the aggregate do not materially adversely
affect the value of such properties or materially impair use for the
purposes of which such properties are held by the Company or any
Restricted Subsidiaries;
(xi) Liens on, or related to, properties to secure all or
part of the costs incurred in the ordinary course of business of
exploration, drilling, development or operation thereof;
(xii) Liens on pipeline or pipeline facilities which arise
out of operation of law;
(xiii) judgment and attachment Liens not giving rise to an
Event of Default or Liens created by or existing from any litigation or
legal proceeding that are currently being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established to the extent required by GAAP;
(xiv) (A) Liens upon any property of any Person existing at
the time of acquisition thereof by the Company or a Subsidiary, (B) Liens
upon any property of a Person existing at the time such Person is merged
or consolidated with the Company or any Restricted Subsidiary or existing
at the time of the sale or transfer of any such property of such Person to
the Company or any Restricted Subsidiary, or (C) Liens upon any property
of a Person existing at the time such Person becomes a Restricted
Subsidiary; provided that in each case such Lien has not been created in
contemplation of such sale, merger, consolidation, transfer or
acquisition, and provided further that in each such case no such Lien
shall extend to or cover any property of the Company or any Restricted
Subsidiary other than the property being acquired and improvements
thereon;
(xv) Liens on deposits to secure public or statutory
obligations or in lieu of surety or appeal bonds entered into in the
ordinary course of business;
(xvi) Liens in favor of collecting or payor banks having a
right of setoff, revocation, refund or chargeback with respect to money or
instruments of the Company or any Restricted Subsidiary on deposit with or
in possession of such bank;
(xvii) purchase money Liens granted in connection with the
acquisition of fixed assets in the ordinary course of business and
consistent with past practices, provided that (A) such Liens attach only
to the property so acquired with the purchase money indebtedness secured
thereby and (B) such Liens secure only Indebtedness that is not in excess
of 100% of the purchase price of such fixed assets;
(xviii) Liens reserved in oil and gas mineral leases for
bonus or rental payments and for compliance with the terms of such leases;
(xix) Liens arising under partnership agreements, oil and
gas leases, farm-out agreements, division orders, contracts for the sale,
purchase, exchange, transportation or
10
processing of oil, gas or other hydrocarbons, unitization and pooling
declarations and agreements, development agreements, operating agreements,
area of mutual interest agreements, and other agreements which are
customary in the Principal Business; and
(xx) other Liens provided that such other Liens shall not
secure obligations in excess of $10 million in the aggregate at any one
time outstanding.
"Permitted Refinancing Indebtedness" means:
(i) Indebtedness of the Company or any Restricted
Subsidiary, the terms of which have been amended, modified or supplemented
in a manner that does not (A) affect the priority of such Indebtedness in
right of payment in relation to the Notes or the Guarantees, (B)
accelerate the maturity of such Indebtedness or (C) shorten the Average
Life of such Indebtedness, and
(ii) Indebtedness of the Company or any Restricted
Subsidiary, the net proceeds of which are used to renew, extend,
refinance, defease, refund or repurchase outstanding Indebtedness of the
Company or such Subsidiary, provided that (A) if the Indebtedness
(including any guarantee thereof) being renewed, extended, refinanced,
defeased, refunded or repurchased is pari passu with or subordinated in
right of payment to the Notes or Guarantees, then such Indebtedness is
pari passu with or subordinated in right of payment to, as the case may
be, the Notes or Guarantees at least to the same extent as the
Indebtedness being renewed, extended, refinanced, defeased, refunded or
repurchased, (B) such Indebtedness is scheduled to mature no earlier than
the Indebtedness being renewed, extended, refinanced, defeased, refunded
or repurchased, (C) such Indebtedness has an Average Life at the time such
Indebtedness is incurred that is equal to or greater than the remaining
Average Life of the Indebtedness being renewed, extended, refinanced,
defeased, refunded or repurchased and (D) such Indebtedness is incurred
either by the Company or the Restricted Subsidiary who is the obligor on
the Indebtedness being extended, refinanced, renewed, replaced, defeased
or refunded; provided further that such Indebtedness (to the extent that
such Indebtedness constitutes Permitted Refinancing Indebtedness) is in an
aggregate principal amount (or, if such Indebtedness is issued at a price
less than the principal amount thereof, the aggregate amount of gross
proceeds therefrom is) not in excess of the aggregate principal amount
then outstanding under the Indebtedness being renewed, extended,
refinanced, defeased, refunded or repurchased (or if the Indebtedness
being renewed, extended, refinanced, defeased, refunded or repurchased was
issued at a price less than the principal amount thereof, then not in
excess of the amount of liability in respect thereof determined in
accordance with GAAP) plus all accrued interest thereon and the amount of
any reasonably determined premium necessary to accomplish such refinancing
and such reasonable expenses incurred in connection therewith.
"Principal Business" means (i) the business of the exploration for,
and development, acquisition, production, processing, marketing, refining,
storage and transportation of, hydrocarbons, (ii) any related energy and
natural resource business, (iii) any business currently engaged in by the
Company or its Subsidiaries, (iv) convenience stores, retail service
stations,
11
truck stops and other public accommodations in connection therewith, and
(v) any activity or business that is a reasonable extension, development
or expansion of any of the foregoing.
"Publicly Traded Stock" means, with respect to any Person, Voting
Stock of such Person which is registered under Section 12 of the Exchange
Act and which is actively traded on the New York Stock Exchange or
American Stock Exchange or quoted in the Nasdaq National Market System.
"Qualified Stock" means any Capital Stock that is not Disqualified
Stock.
"Reference Period" means, with respect to any Person, the four full
fiscal quarters ended immediately preceding any date upon which any
determination is to be made pursuant to the terms of the Notes or the
Indenture.
"Restricted Payment" means, with respect to any Person, any of the
following:
(i) any dividend or other distribution in respect of such
Person's Capital Stock (other than (A) dividends or distributions payable
solely in Capital Stock (other than Disqualified Stock) of such Person and
(B) in the case of Restricted Subsidiaries of the Company, dividends or
distributions payable to the Company or to a Restricted Subsidiary of the
Company;
(ii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock, or any option, warrant, or
other right to acquire shares of Capital Stock, of the Company or any of
its Restricted Subsidiaries other than any such purchase, redemption or
other acquisition or retirement for value by the Company or any Restricted
Subsidiary of the Company of any Capital Stock, or any option, warrant or
other right to acquire shares of Capital Stock, of any Restricted
Subsidiary with respect to such Capital Stock, option, warrant or other
right which is owned, at the time of any such transaction, by the Company
or another Restricted Subsidiary;
(iii) the making of any principal payment on, or the
purchase, defeasance, repurchase, redemption or other acquisition or
retirement for value, prior to any scheduled maturity, scheduled repayment
or scheduled sinking fund payment, of any Indebtedness which is
subordinated in right of payment to the Notes or any Guarantee; and
(iv) the making by such Person of any Investment other than
a Permitted Investment.
"Restricted Subsidiary" means any Subsidiary of the Company other
than an Unrestricted Subsidiary. By a Board Resolution of the Company, as
evidenced by written notice thereof delivered to the Trustee, the Company
may designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided, however, that, immediately after giving effect to such
designation, (i) the Company could incur at least $1.00 in additional
Indebtedness pursuant to Section 4.07(a), and (ii) no Default or Event of
Default shall have occurred and be continuing.
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"Senior Indebtedness" means any Indebtedness (other than the 9% Notes
and the 11% Notes and any Restricted Subsidiary's guarantee thereof) of a
Person (whether outstanding on the date hereof or hereafter incurred),
unless such Indebtedness is stated to be pari passu with or is
contractually subordinate or junior in right of payment to the Notes or
Guarantee; provided that Senior Indebtedness does not include (i) any
liability for federal, state, local or other taxes owed or owing by the
Company; (ii) any Indebtedness of the Company to any of its Subsidiaries
or other Affiliates; (iii) any trade payables; or (iv) the portion of any
Indebtedness that is incurred in violation of the Indenture.
"Subsidiary Guarantor" means (i) each of the Company's Subsidiaries
in existence on the Issue Date, except for Navajo Convenient Stores Co.,
LLC, (ii) each of the Subsidiaries that becomes a guarantor of the Notes
in compliance with the provisions of the Indenture and (iii) each of the
Subsidiaries executing a supplemental indenture in which such Subsidiary
agrees to be bound by the terms of the Indenture; and their respective
successors and assigns until released from their obligations under their
Guarantee in accordance with the Indenture.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15 (519) which has become publicly available at least two
Business Days prior to the date fixed for prepayment (or, if such
Statistical Release is no longer published, any publicly available source
for similar market data)) most nearly equal to the then remaining term of
the Notes to May 15, 2009; provided, however, that if the then remaining
term to May 15, 2009 is not equal to the constant maturity of a United
States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United
States Treasury securities for which such yields are given, except that if
the then remaining term of the Notes to May 15, 2009 is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"Unrestricted Subsidiary" means (i) any Subsidiary of an Unrestricted
Subsidiary or (ii) any Subsidiary of the Company or of a Restricted
Subsidiary that is designated as an Unrestricted Subsidiary by a Board
Resolution of the Company in accordance with the following sentence. The
Company may designate any Subsidiary of the Company or of a Restricted
Subsidiary (including any Restricted Subsidiary or any newly formed or
newly acquired Subsidiary) to be an Unrestricted Subsidiary by a Board
Resolution of the Company, as evidenced by written notice thereof
delivered to the Trustee, if after giving effect to such designation, (i)
the Company could incur $1.00 of additional Indebtedness pursuant to
Section 4.07(a), (ii) the Company could make an additional Restricted
Payment of $1.00 pursuant to Section 4.08(a), (iii) such Subsidiary does
not own or hold any Capital Stock of, or any Lien on any property of, the
Company or any Restricted Subsidiary and (iv) such Subsidiary is not
liable, directly or indirectly, with respect to any Indebtedness other
than Unrestricted Subsidiary Indebtedness and Indebtedness to be released
upon such Subsidiary's designation as an Unrestricted Subsidiary.
"Unrestricted Subsidiary Indebtedness" of any Person means
Indebtedness of such Person (i) as to which neither the Company nor any
Restricted Subsidiary is directly or indirectly liable
13
(by virtue of the Company's or such Restricted Subsidiary's being the
primary obligor, or guarantor of, or otherwise liable in any respect on,
such Indebtedness), (ii) which, with respect to Indebtedness incurred
after the date of the Indenture by the Company or any Restricted
Subsidiary, upon the occurrence of a default with respect thereto, does
not result in, or permit any holder of any Indebtedness of the Company or
any Restricted Subsidiary to declare, a default on such Indebtedness of
the Company or any Restricted Subsidiary and (iii) which is not secured by
any assets of the Company or of any Restricted Subsidiary.
"9% Notes" means the 9% senior subordinated notes due 2007 of the
Company issued under an indenture, dated as of August 26, 1997, among the
Company, the guarantors party thereto and The Bank of New York, as
trustee.
"11% Notes" means the 11% senior subordinated notes due 2012 of the
Company issued under an indenture, dated as of May 14, 2002, among the
Company, the guarantors party thereto and The Bank of New York, as
trustee.
ARTICLE II.
FORM AND TERMS OF THE NOTES
Section 2.01. Terms of the Notes. The following terms relating to
the Notes are hereby established:
(a) The Notes shall constitute a series of Notes having the
title "8% Senior Subordinated Notes due 2014." The Notes shall form their
own series for voting purposes, and shall not be part of the same class or
series as any other notes issued by the Company.
(b) The aggregate principal amount of the Notes that may be
authenticated and delivered under this First Supplemental Indenture is
unlimited; provided, however, that the Company complies with the
provisions of this First Supplemental Indenture.
(c) The entire outstanding principal amount of the Notes
shall be payable on May 15, 2014.
(d) The rate at which the Notes shall bear interest shall be
8%. Interest on the Notes shall accrue from the date hereof. The
Interest Payment Dates for the Notes on which interest shall be payable
shall be May15 and November 15 of each year, beginning November 15, 2004.
The Regular Record Dates for the interest payable on the Notes on any
Interest Payment Date shall be May 1 with respect to the May 15 Interest
Payment Date and November 1 with respect to the November 15 Interest
Payment Date. Interest on overdue principal and premium, if any, shall be
at the same rate as borne by the Notes, to the extent lawful, and interest
on overdue interest (without regard to any applicable grace period) shall
be at the same rate, to the extent lawful.
(e) Each of the Notes shall be issuable in whole in the
registered form of one or more Global Notes, without coupons, and the
Depositary for such Global Notes will be DTC.
14
(f) Each of the Notes shall be guaranteed by the Subsidiary
Guarantors in accordance with Article XII of the Base Indenture and
Section 2.07 of this First Supplemental Indenture.
(g) The Notes shall rank pari passu with the Pari Passu
Indebtedness of the Company.
(h) All provisions of the Base Indenture shall apply to the
Notes, except as otherwise provided in this First Supplemental Indenture
and except as provided in any future Supplemental Indenture. Without
limiting the generality of the foregoing, the subordination provisions of
Article XI of the Base Indenture shall apply to the Notes.
(i) The Notes, Subsidiary Guarantees and the Trustee's
certificate of authentication shall be substantially in the form of
Exhibit A attached hereto.
Section 2.02. Events of Default. Except as may be provided in a
future supplemental indenture, for the benefit of the Holders of the
Notes, Section 6.01(a) of the Base Indenture is deleted in its entirety
and replaced with the following new Section 6.01(a):
"the Company or any Subsidiary Guarantor defaults in the payment
of the principal of or premium, if any, on any Note of such series when
the same becomes due and payable at maturity, upon repurchase pursuant to
a Change of Control Offer or a Asset Sale Offer, upon acceleration or
otherwise (whether or not prohibited by the subordination provisions of
the Indenture);"
Section 2.03. Covenants. Except as may be provided in a future
supplemental indenture, for the benefit of the Holders of the Notes, the
following new Sections 4.07 through 4.15 are hereby added to the
Indenture:
"4.07 Limitation on Incurrence of Additional Indebtedness.
(a) The Company will not, and will not permit any of the
Restricted Subsidiaries, directly or indirectly, to issue, incur, assume,
guarantee, become liable, contingently or otherwise, with respect to or
otherwise become responsible for the payment of (collectively, "incur")
any Indebtedness; provided, however, that if no Default or Event of
Default with respect to the Notes shall have occurred and be continuing at
the time or as a consequence of the incurrence of such Indebtedness, the
Company or the Restricted Subsidiaries may incur Indebtedness if, on a pro
forma basis, after giving effect to such incurrence and the application of
the proceeds therefrom, the Consolidated Coverage Ratio would have been
equal to or greater than 2.0 to 1.0.
(b) Notwithstanding the foregoing, (i) the Company may incur
Indebtedness consisting of the Notes to be issued on the Issue Date;
(ii) the Subsidiary Guarantors may incur the Guarantees; (iii) the Company
and the Subsidiary Guarantors may incur Indebtedness in existence on the
date of this Indenture; (iv) the Company or any Subsidiary may incur
secured or unsecured Indebtedness outstanding at any time in an aggregate
principal amount not to exceed the greater of (A) $100 million or (B) the
Borrowing Base; (v) the Company may incur Permitted Company Refinancing
Indebtedness; (vi) any Restricted Subsidiary may incur Permitted
15
Subsidiary Refinancing Indebtedness; (vii) the Company may incur
Indebtedness to any Restricted Subsidiary, and any Restricted Subsidiary
may incur Indebtedness to the Company or to any Restricted Subsidiary;
provided that (X) any subsequent issuance or transfer that results in any
such Indebtedness being held by a Person other than the Company or a
Restricted Subsidiary or (Y) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary, shall be deemed, in each case to constitute an incurrence of
such Indebtedness by the Company or such Restricted Subsidiary, as the
case may be, that was not permitted by this clause (vii); (viii) the
Company or any Subsidiary Guarantor may incur Indebtedness represented by
Capitalized Lease Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of financing all or
any part of the purchase price or cost of construction or improvement of
property, plant or equipment used in the business of the Company or such
Subsidiary Guarantor, in an aggregate principal amount, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (viii), not to
exceed $15 million at any time outstanding; (ix) this covenant will not
prohibit the Guarantee by the Company or any of the Subsidiary Guarantors
of Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this covenant;
and (x) the Company or any Subsidiary Guarantor may incur additional
Indebtedness in an aggregate principal amount at any time outstanding,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(x), not to exceed $15 million.
(c) Any Indebtedness of a Person existing at the time such
Person becomes a Restricted Subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be incurred by such
Restricted Subsidiary at the time it becomes a Restricted Subsidiary.
For purposes of determining compliance with this Section 4.07,
in the event that any proposed Indebtedness meets the criteria of more
than one of the categories of debt described in paragraph (b) above or is
entitled to be incurred pursuant to paragraph (a) above, the Company will
be permitted to classify such item of Indebtedness on the date of its
incurrence in any manner that complies with this covenant, including
applying such Indebtedness to any one or more categories.
4.08 Limitation on Restricted Payments.
(a) The Company will not, and will not permit any of the
Restricted Subsidiaries to, directly or indirectly, make any Restricted
Payment, unless:
(i) no Default or Event of Default shall have occurred
and be continuing at the time of or immediately after giving effect to
such Restricted Payment;
(ii) at the time of and immediately after giving effect
to such Restricted Payment, the Company would be able to incur at least
$1.00 of additional Indebtedness pursuant to Section 4.07(a); and
16
(iii) immediately after giving effect to such
Restricted Payment, the aggregate of all Restricted Payments declared or
made after August 26, 1997 does not exceed the sum of (A) 50% of the
Consolidated Net Income of the Company and its Restricted Subsidiaries (or
in the event such Consolidated Net Income shall be a deficit, minus 100%
of such deficit) during the period (treated as one accounting period)
subsequent to September 30, 1997 and ending on the last day of the fiscal
quarter immediately preceding the date of such Restricted Payment; (B) the
aggregate Net Cash Proceeds, and the fair market value of property other
than cash (as determined in good faith by the Company's Board of Directors
and evidenced by a Board Resolution), received by the Company during such
period from any Person other than a Restricted Subsidiary of the Company
as a result of the issuance or sale of Capital Stock of the Company (other
than any Disqualified Stock), other than in connection with the conversion
of Indebtedness or Disqualified Stock; (C) the aggregate Net Cash
Proceeds, and the fair market value of property other than cash (as
determined in good faith by the Company's Board of Directors and evidenced
by a Board Resolution), received by the Company during such period from
any Person other than a Restricted Subsidiary of the Company as a result
of the issuance or sale of any Indebtedness or Disqualified Stock to the
extent that at the time the determination is made such Indebtedness or
Disqualified Stock, as the case may be, has been converted into or
exchanged for Capital Stock of the Company (other than Disqualified
Stock); (D)(1) in case any Unrestricted Subsidiary has been redesignated a
Restricted Subsidiary, an amount equal to the lesser of (x) the book value
(determined in accordance with GAAP) at the date of such redesignation of
the aggregate Investments made by the Company and its Restricted
Subsidiaries in such Unrestricted Subsidiary and (y) the fair market value
of such Investments in such Unrestricted Subsidiary at the time of such
redesignation, as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive and evidenced by a
Board Resolution; or (2) in case any Restricted Subsidiary has been
designated an Unrestricted Subsidiary, minus the greater of (x) the book
value (determined in accordance with GAAP) at the date of designation of
the aggregate Investments made by the Company and its Restricted
Subsidiaries in such Restricted Subsidiary and (y) the fair market value
of such Investments in such Restricted Subsidiary at the time of such
designation, as determined in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board Resolution;
(E) without duplication, with respect to any Investment (other than a
Permitted Investment) of any Person which has previously been made by the
Company or any of its Restricted Subsidiaries, the amount of any such
Investment that has been fully and unconditionally repaid to the Company
or a Restricted Subsidiary, not to exceed the cash amount received by the
Company or such Restricted Subsidiary upon such repayment or with respect
to any Indebtedness of any Person that has previously been guaranteed by
the Company or any of its Restricted Subsidiaries (other than the Notes or
Subsidiary Guarantees), the amount of any such Indebtedness that has been
fully and unconditionally released from any and all further obligation or
liability with respect thereto, provided in each case that such amount
shall not exceed the aggregate amount of Restricted Payments previously
taken into account with respect to such amount for purposes of determining
the aggregate amount of all Restricted Payments declared or made pursuant
to this clause (iii); and (F) $30 million.
17
Notwithstanding the foregoing, the above limitations will not
prevent (i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration, such payment complied
with the provisions hereof, (ii) the purchase, redemption, acquisition or
retirement of any shares of Capital Stock of the Company or any Subsidiary
Guarantor in exchange for, or out of the net proceeds of the substantially
concurrent sale (other than to a Restricted Subsidiary of the Company) of,
other shares of Capital Stock (other than Disqualified Stock) of the
Company; (iii) the defeasance, redemption, repurchase, retirement or other
acquisition of Indebtedness which is subordinate in right of payment to
the Notes or any Guarantee, in exchange for, by conversion into, or out of
the net proceeds of the substantially concurrent issue or sale (other than
to a Restricted Subsidiary of the Company) of Capital Stock (other than
Disqualified Stock) of the Company (iv) the defeasance, redemption,
repurchase, retirement or other acquisition of Indebtedness which is
subordinate in right of payment to the Notes or any Guarantee with the net
cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(v) the payment of any dividend by a Restricted Subsidiary of the Company
to the holders of its common Equity Interests on a pro rata basis; or (vi)
the repurchase of Capital Stock deemed to occur upon the exercise of
options or warrants if such Capital Stock represents all or a portion of
the exercise price thereof; provided that, other than with respect to
clause (i) above, no Default or Event of Default has occurred and is
continuing at the time, or shall occur as a result thereof.
4.09 Limitation on Sale of Assets.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, make any Asset Sales that, in the aggregate, have a fair
market value of $15 million or more in any 12-month period unless:
(i) the Company (or its Restricted Subsidiaries, as the
case may be) receives consideration at the time of such sale or other
disposition at least equal to the fair market value thereof (as determined
in good faith by the Company's Board of Directors and evidenced by a Board
Resolution in the case of any Asset Sales or series of related Asset Sales
having a fair market value of $15 million or more;
(ii) not less than 75% of the proceeds received by the
Company (or its Restricted Subsidiaries, as the case may be) from each
such Asset Sale consists of (A) cash, (B) cash equivalents which would
constitute Permitted Financial Investments, (C) Publicly Traded Stock of a
Person primarily engaged in a Principal Business, (D) other consideration
with an aggregate fair market value, together with all other consideration
of the type specified in this clause (D) received by the Company and its
Restricted Subsidiaries from all Asset Sales after the Issue Date, not to
exceed $5 million; provided that any sale of such other consideration
shall be for cash and shall be considered an Asset Sale under this
Indenture, (E) all or substantially all of the assets of a Principal
Business, the majority of the Voting Stock of another Person engaged in a
Principal Business that thereupon becomes a Restricted Subsidiary or long-
term assets that are used or useful in a Principal Business, or (F) any
combination of the foregoing; provided, however, that (1) the amount of
(x) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet or in the notes thereto) of the
18
Company or such Restricted Subsidiary (other than liabilities that are by
their terms expressly subordinated to the Notes or any guarantee thereof)
that are assumed by the transferee of any such assets and (y) any notes or
other obligations received by the Company or any such Restricted
Subsidiary from such transferee that, within 90 days following the closing
of such sale or disposition, are converted by the Company or such
Restricted Subsidiary into cash (to the extent of the cash received),
shall be deemed to be cash for purposes of this provision and (2) the
aggregate fair market value (as determined in good faith by the Board of
Directors of the Company, evidenced by a Board Resolution) of all
consideration of the type specified in clause (C) above received by the
Company and its Restricted Subsidiaries from all Asset Sales after the
Issue Date shall not exceed 15% of Consolidated Net Tangible Assets at the
time of such Asset Sale; and
(iii) the Net Available Proceeds received by the
Company (or its Restricted Subsidiaries, as the case may be) from such
Asset Sales are applied in accordance with paragraph (b) or (c) hereof.
(b) The Company may, within 360 days following the receipt
of Net Available Proceeds from any Asset Sale, apply such Net Available
Proceeds to: (i) the repayment of Indebtedness of the Company under a
Bank Credit Facility or other Senior Indebtedness of the Company or Senior
Indebtedness of a Subsidiary Guarantor or Indebtedness of a Restricted
Subsidiary that is not a Subsidiary Guarantor (but only from proceeds of
Asset Sales of such Restricted Subsidiary) that results in a permanent
reduction in the principal amount of such Senior Indebtedness in an amount
equal to the principal amount so repaid; or (ii) make an investment in
capital assets used in a Principal Business.
(c) Any Net Available Proceeds from Asset Sales that are not
applied or invested as provided in the preceding paragraph will constitute
"Excess Proceeds." Within 10 days after the aggregate amount of Excess
Proceeds exceeds $10 million, the Company will make an Asset Sale Offer to
all holders of Notes and all holders of other Indebtedness that is pari
passu with the Notes or any Subsidiary Guarantee containing provisions
similar to those set forth in the Indenture with respect to offers to
purchase with the proceeds of sales of assets, to purchase the maximum
principal amount of Notes and such other Pari Passu Indebtedness that may
be purchased out of the Excess Proceeds. The offer price in any Asset
Sale Offer will be equal to 100% of the principal amount of the Notes and
such other Pari Passu Indebtedness plus accrued and unpaid interest to the
date of purchase, and will be payable in cash. If any Excess Proceeds
remain after consummation of an Asset Sale Offer, the Company may use such
Excess Proceeds for any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount of Notes and such other Pari Passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Notes and such other Pari Passu Indebtedness shall be
purchased on a pro rata basis based on the principal amount of Notes and
such other Pari Passu Indebtedness tendered. Upon completion of each
Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(d) The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in
connection with each repurchase of Notes pursuant to an Asset Sale Offer.
To the extent that the provisions of any securities laws or regulations
conflict with
19
the Asset Sales provisions of the Indenture, the Company will comply with
the applicable securities laws and regulations and will not be deemed to
have breached its obligations under the Asset Sale provisions of the
Indenture by virtue of such compliance.
(e) During the period between any Asset Sale and the
application of the Net Available Proceeds therefrom in accordance with
this covenant, all Net Available Proceeds shall be invested in Permitted
Financial Investments or may be used to repay indebtedness under a Bank
Credit Facility.
4.10 Limitation on Liens Securing Indebtedness.
The Company will not, and will not permit any of Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens (other
than Permitted Liens) upon any of their respective properties securing
(a) any Indebtedness of the Company (other than Senior Indebtedness of the
Company), unless the Notes are equally and ratably secured until such time
as such obligations are no longer secured by a Lien or (b) any
Indebtedness of any Subsidiary Guarantor (other than Senior Indebtedness
of such Subsidiary Guarantor), unless the Guarantees of such Subsidiary
Guarantors are equally and ratably secured until such time as such
obligations are no longer secured by a Lien; provided, however, that if
such Indebtedness is expressly subordinated to the Notes or the
Guarantees, the Lien securing such Indebtedness will be subordinated and
junior to the Lien securing the Notes or the Guarantees, with the same
relative priority as such subordinated Indebtedness of the Company or a
Subsidiary Guarantor will have with respect to the Notes or the
Guarantees, as the case may be.
4.11 Limitation on Payment Restrictions Affecting Restricted
Subsidiaries.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
consensual restriction on the ability of any Restricted Subsidiary of the
Company to (i) pay dividends or make any other distributions on its
Capital Stock, or any other interest or participation in a Restricted
Subsidiary; (ii) pay any Indebtedness owed to the Company or a Restricted
Subsidiary of the Company; (iii) make loans or advances to the Company or
a Restricted Subsidiary of the Company; or (iv) transfer any of its
properties or assets to the Company or a Restricted Subsidiary of the
Company (each, a "Payment Restriction"), except for (A) encumbrances or
restrictions with respect to Senior Indebtedness in effect on the Issue
Date; (B) encumbrances or restrictions under a Bank Credit Facility;
(C) consensual encumbrances or consensual restrictions binding upon any
Person at the time such Person becomes a Restricted Subsidiary of the
Company (unless the agreement creating such consensual encumbrance or
consensual restrictions was entered into in connection with, or in
contemplation of, such entity becoming a Restricted Subsidiary);
(D) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of any Restricted Subsidiary; (E) customary
restrictions in security agreements or mortgages securing Indebtedness of
a Restricted Subsidiary to the extent such restrictions restrict the
transfer of the property subject to such security agreements and
mortgages; (F) customary restrictions in purchase money obligations for
property acquired in the ordinary course of business restricting the
transfer of the property acquired thereby; (G) consensual encumbrances or
consensual restrictions under any agreement that refinances or replaces
any agreement described in clauses
20
(A), (B), (C), (D), (E) or (F) above, provided that the terms and
conditions of any such restrictions are no less favorable to the Holders
of the Notes than those under the agreement so refinanced or replaced; and
(H) any encumbrance or restriction due to applicable law.
Section 4.12 Limitation on Transactions with Affiliates.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) sell, lease, transfer or
otherwise dispose of any of its properties, assets or securities to,
(ii) purchase or lease any property, assets or securities from, (iii) make
any Investment in, or (iv) enter into or amend any contract or agreement
with or for the benefit of, either (A) an Affiliate of any of them,
(B) any Person, or Person who is a member of a group (as such term is used
for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or
not applicable) that, directly or indirectly, is the beneficial holder of
10% or more of any class of equity securities of the Company, (C) any
Person who is an Affiliate of any such holder, or (D) any officers,
directors, or employees of any of the above (each case under (A), (B), (C)
and (D), an "Affiliate Transaction"), in one or a series of related
transactions (to either party), except for transactions evidenced by an
Officers' Certificate addressed and delivered to the Trustee stating that
such Affiliate Transaction is made in good faith, the terms of which are
fair and reasonable to the Company and such Restricted Subsidiary, as the
case may be, or, with respect to Affiliate Transactions between the
Company and any of its Subsidiaries, to the Company; provided that
(v) transactions between or among the Company and any of its Restricted
Subsidiaries shall not be deemed to constitute Affiliate Transactions,
(w) any reasonable employment, compensation, benefit or indemnification
agreement entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business shall not be deemed to
constitute Affiliate Transactions, (x) Restricted Payments that are
permitted by the provisions of this Indenture described in Section 4.08
shall not be deemed to constitute Affiliate Transactions, (y) any sale of
Capital Stock (other than Disqualified Stock) of the Company shall not be
deemed to constitute Affiliate Transactions, and (z) with respect to any
Affiliate Transaction or series of related transactions with an aggregate
value (to either party) in excess of $2 million (excluding issuances of
Qualified Stock of the Company and any forgiveness of Indebtedness to an
Affiliate existing on the Issue Date), the Company must, prior to the
consummation thereof, obtain a written favorable opinion as to the
fairness of such transaction to itself from a financial point of view from
an independent accounting, appraisal or investment banking firm of
national reputation.
Section 4.13 Limitation on Future Senior Subordinated Indebtedness.
The Company shall not incur any Indebtedness that is subordinated in
right of payment to any other Indebtedness of the Company unless such
Indebtedness by its terms, is pari passu with or subordinated to the Notes
to the same extent. No Subsidiary Guarantor shall incur any Indebtedness
that is subordinated in right of payment to any other Indebtedness of such
Subsidiary Guarantor unless such Indebtedness, by its terms, is pari passu
with or subordinated to the Guarantee of such Subsidiary Guarantor to the
same extent. For purposes of the foregoing, no Indebtedness will be
deemed to be subordinated in right of payment to any other Indebtedness of
the Company or any Subsidiary Guarantor, as applicable, solely by virtue
of being unsecured or by virtue of the fact that the holders of any
secured Indebtedness have entered into
21
intercreditor agreements giving one or more of such holders priority over
the other holders in the collateral held by them.
Section 4.14 Line of Business.
For so long as any Notes are outstanding, the Company shall not, and
shall not permit any of its Restricted Subsidiaries to, engage in any
business or activity other than a Principal Business.
Section 4.15 Change of Control.
(a) Within 30 days following the occurrence of any Change of
Control, the Company shall offer (a "Change of Control Offer") to purchase
all outstanding Notes at a purchase price equal to 101% of the aggregate
principal amount of the Notes, plus accrued and unpaid interest to the
date of purchase. The Change of Control Offer shall include a payment
date (the "Change of Control Payment Date"), which shall be no earlier
than 30 days and no later than 60 days from the date the Change of Control
Offer is mailed. If the Change of Control Payment Date is on or after an
interest payment record date and on or before the related interest payment
date, any accrued interest will be paid to the Person in whose name a Note
is registered at the close of business on such record date, and no
additional interest will be payable to Holders who tender Notes pursuant
to the Change of Control Offer.
(b) Within 30 days after any Change of Control, the Company
(with notice to the Trustee), or the Trustee at the Company's request,
will mail or cause to be mailed to all Holders on the date of the Change
of Control a notice (the "Change of Control Notice") of the occurrence of
such Change of Control and of the Holders' rights arising as a result
thereof. The Change of Control Notice will contain all instructions and
materials necessary to enable Holders to tender their Notes to the
Company. The Change of Control Notice, which shall govern the terms of
the Change of Control Offer, shall state: (1) that the Change of Control
Offer is being made pursuant to this Section 4.15; (2) the purchase price
and the Change of Control Payment Date; (3) that any Note not tendered
will continue to accrue interest; (4) that any Note accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest on
the Change of Control Payment Date; (5) that Holders electing to have a
Note purchased pursuant to any Change of Control Offer will be required to
surrender the Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice prior to termination of the Change of Control
Offer; (6) that Holders will be entitled to withdraw their election if the
Company, depositary or Paying Agent, as the case may be, receives, not
later than the expiration of the Change of Control Offer, or such longer
period as may be required by law, a facsimile transmission or letter
setting forth the name of the Holder, the certificate or other identifying
number, the principal amount of the Note the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have the
Note purchased; and (7) that Holders whose Notes are purchased only in
part will be issued Notes equal in principal amount to the unpurchased
portion of the Notes surrendered.
(c) On the Change of Control Payment Date, the Company shall
(i) accept for payment Notes or portions thereof tendered pursuant to the
Change of Control Notice, (ii) if the
22
Company appoints a depositary or Paying Agent, deposit with such
depositary or Paying Agent money sufficient to pay the purchase price of
all Notes or portions thereof so tendered and (iii) deliver to the Trustee
Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof tendered to the
Company. The depositary, the Company or the Paying Agent, as the case may
be, shall promptly mail to the Holder of Notes so accepted payment in an
amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail to such Holders a new Note equal in principal amount
to any unpurchased portion of the Note surrendered. Prior to complying
with the provisions of this Section 4.15, but in any event within 30 days
following a Change of Control, the Company will either repay all
outstanding Senior Indebtedness or obtain the requisite consents, if any,
under all agreements governing Senior Indebtedness to permit the
repurchase of the Notes required by this Section 4.15. The Company will
publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date. For purposes of
this Section 4.15, the Trustee shall act as the Paying Agent.
(d) The Company, to the extent applicable and if required by
law, will comply with Section 14 of the Exchange Act and the provisions of
Regulation 14E and any other tender offer rules under the Exchange Act and
any other federal and state securities laws, rules and regulations which
may then be applicable to any offer by the Company to purchase the Notes
of the Holders upon a Change of Control."
(e) The Company will not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change
of Control Offer in the manner, at the times and otherwise in compliance
with the requirements set forth in this Indenture applicable to a Change
of Control Offer made by the Company and purchases all of the Notes
validly tendered and not withdrawn under such Change of Control Offer.
Section 2.04. Consolidation, Merger, Sale or Conveyance. Except as
may be provided in a future supplemental indenture, for the benefit of the
Holders of the Notes, Section 5.01 of the Base Indenture is hereby deleted
and replaced with the following new Section 5.01:
"5.01 Company May Consolidate, Merge, Etc. on Certain Terms. The
Company will not, directly or indirectly, consolidate with or merge with
or into another Person or convey, transfer, lease or otherwise dispose of
all or substantially all of the properties and assets of the Company and
its Restricted Subsidiaries taken as a whole, in one or more related
transactions, to any Person, unless: (a) the Company survives such merger
or the Person formed by such consolidation or into which the Company is
merged or that acquires by conveyance or transfer or other disposition, or
which leases, all or substantially all of the property of the Company is a
corporation organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia and expressly
assumes, by supplemental indenture, the due and punctual payment of the
principal of, premium, if any, and interest on, all the Notes and the
performance of every other covenant and obligation of the Company under
this Indenture; (b) immediately before and after giving effect to such
transaction no Default or Event of Default exists; (c) immediately after
giving effect to such transaction on a pro forma basis, the Company (or
the surviving or transferee entity) would be able to incur $1.00 of
additional Indebtedness under the tests described in Section 4.07(a) and
(d) the Company delivers to the Trustee an Officers' Certificate
(attaching the arithmetic computation to demonstrate compliance with
23
clause (c) above) and Opinion of Counsel, in each case stating that such
transaction and such agreement complies with this covenant and that all
conditions precedent provided for herein relating to such transaction have
been complied with.
Upon any such consolidation, merger, lease, conveyance or transfer in
accordance with the foregoing, the successor Person formed by such
consolidation or into which the Company is merged or to which such lease,
conveyance or transfer is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor had been named as the
Company therein and thereafter (except in the case of a lease) the
predecessor corporation will be relieved of all further obligations and
covenants under this Indenture and the Notes. Clause (c) above of this
covenant will not apply to any merger, conveyance, transfer or other
disposition of assets between or among the Company and any of its
Restricted Subsidiaries."
Section 2.05. Application of Article III of the Indenture Regarding
Redemption of Notes. Article III of the Base Indenture, as amended
hereby, shall apply to the Notes. Except as may be provided in a future
supplemental indenture, for the benefit of the Holders of the Notes, a new
Section 3.04 shall be added to Article III of the Indenture as follows:
"3.04 Optional Redemption.
(a) At any time on or after May 15, 2009, the Company may,
at its option, redeem all or any portion of the Notes at the redemption
prices (expressed as percentages of the principal amount of the Notes) set
forth below, plus, in each case, accrued interest thereon to the
applicable redemption date, if redeemed during the 12-month period
beginning May 15, 2009 of the years indicated below:
Year Percentage
2009.................... 104.000%
2010.................... 102.667%
2011.................... 101.333%
2012 and thereafter..... 100.000%
(b) In addition, at any time prior to May 15, 2009, the
Company may redeem all or part of the Notes upon not less than 30 days nor
more than 60 days' notice at a redemption price equal to the sum of (i)
the principal amount thereof, plus (ii) accrued and unpaid interest, if
any, to the applicable date of redemption, plus (iii) the Make-Whole
Premium.
(c) At any time on or prior to May 15, 2007, the Company
may, at its option, redeem up to 35% of the aggregate principal amount of
the Notes originally issued with the net cash proceeds of one or more
Equity Offerings at a redemption price equal to 108.000% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the date of
redemption, provided that at least 65% of the aggregate initial principal
amount of the Notes remain outstanding after giving effect to each such
redemption. In order to effect the foregoing redemption, the Company must
mail notice of redemption no later than 60 days after the related Equity
Offering.
24
(d) If less than all of the Notes are to be redeemed, the
Trustee shall select pro rata or by lot the Notes to be redeemed in
multiples of $1,000. Notes in denominations larger than $1,000 may be
redeemed in part."
Section 2.06. Application of Article X of the Indenture Regarding
Sinking Funds. Except as may be provided in a future supplemental
indenture, the Notes shall not be entitled to the benefit of any sinking
fund and the provisions of the Base Indenture relating to a sinking fund,
including Article X, shall not apply to the Notes.
Section 2.07. Subsidiary Guarantees. Except as may be provided in a
future supplemental indenture, for the benefit of the Holders of the
Notes, Article XII of the Base Indenture is hereby deleted and replaced
with the following new Article XII:
"Section 12.01 Unconditional Guarantee.
Each Subsidiary Guarantor hereby, jointly and severally,
unconditionally guarantees (such guarantee to be referred to herein as the
"Guarantee") to each Holder and to the Trustee the due and punctual
payment of the principal of, premium, if any, and interest on the Notes
and all other amounts due and payable under this Indenture and the Notes
by the Company whether at maturity, by acceleration, redemption,
repurchase or otherwise, including, without limitation, interest on the
overdue principal of, premium, if any, and interest on the Notes, to the
extent lawful, all in accordance with the terms hereof and thereof;
subject, however, to the limitations set forth in Article XII.
Failing payment when due of any amount so guaranteed for
whatever reason, the Subsidiary Guarantors will be jointly and severally
obligated to pay the same immediately. Each Subsidiary Guarantor hereby
agrees that its obligations hereunder shall be unconditional, irrespective
of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder of the Notes with respect to any provisions hereof
or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor. Each
Subsidiary Guarantor hereby waives diligence, presentment, demand of
payments, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against
the Company, protest, notice and all demands whatsoever and covenants that
this Guarantee will not be discharged except by complete performance of
the obligations contained in the Notes, this Indenture and in this
Guarantee. If any Holder or the Trustee is required by any court or
otherwise to return to the Company, any Subsidiary Guarantor, or any
custodian, trustee, liquidator or other similar official acting in
relation to the Company or any Subsidiary Guarantor, any amount paid by
the Company or any Subsidiary Guarantor to the Trustee or such Holder,
this Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect. Each Subsidiary Guarantor agrees it shall not
be entitled to any right of subrogation in relation to the Holders in
respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Subsidiary Guarantor further agrees
that, as between each Subsidiary Guarantor, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article VI
for the purposes of this Guarantee, notwithstanding any stay, injunction
or other prohibition
25
preventing such acceleration in respect of the obligations guaranteed
hereby, and (y) in the event of any acceleration of such obligations as
provided in Article VI, such obligations (whether or not due and payable)
shall forthwith become due and payable by each Subsidiary Guarantor for
the purpose of this Guarantee.
The guarantee of each Subsidiary Guarantor herein shall be, in
the manner and to the extent set forth in Article XII, subordinated in
right of payment to the prior payment when due of the principal of,
premium, if any, accrued and unpaid interest and all other amounts owing
on all existing and future Senior Indebtedness of such Subsidiary
Guarantor and of the Company, as the case may be, and senior to the right
of payment of principal of, premium, if any, and accrued and unpaid
interest on all existing and future Subordinated Indebtedness of such
Subsidiary Guarantor.
Section 12.02 Subsidiary Guarantors May Consolidate, Etc., on
Certain Terms.
(a) Nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of a Subsidiary Guarantor
with or into the Company or another Subsidiary Guarantor or shall prevent
any sale or conveyance of all or substantially all of its assets to the
Company or another Subsidiary Guarantor.
(b) The Company may not sell the Capital Stock of a
Subsidiary Guarantor, and a Subsidiary Guarantor may not consolidate with
or merge into or sell all or substantially all of its assets (in a single
transaction or series of related transactions) to any Person other than
the Company or another Subsidiary Guarantor (whether or not affiliated
with the Company or the Subsidiary Guarantor), unless (i) with respect to
a consolidation or merger of such Subsidiary Guarantor, either (A)(1) the
surviving entity is a Restricted Subsidiary of the Company or, as a result
of the transaction, becomes a Restricted Subsidiary of the Company, (2)
the surviving entity remains a Restricted Subsidiary of the Company or,
simultaneously with the consummation of the transaction, is designated as
a Restricted Subsidiary of the Company, (3) immediately after giving
effect to such transaction on a pro forma basis, the Company would be able
to incur $1.00 of additional Indebtedness under the test described in
Section 4.07(a), (4) if the surviving entity is not the Subsidiary
Guarantor, the surviving entity agrees to assume such Subsidiary
Guarantor's Guarantee and all its obligations pursuant to this Indenture
in accordance with the provisions of Section 12.03, and (5) such
transaction does not (x) violate any covenant in the Indenture or (y)
result in a Default or an Event of Default immediately thereafter that is
continuing or (B)(1) such transaction is made in accordance with Section
4.09 and (2) such transaction does not (x) violate any other covenant in
the Indenture or (y) result in a Default or Event of Default immediately
thereafter that is continuing and (ii) with respect to the sale of the
Capital Stock or all or substantially all of the assets of such Subsidiary
Guarantor, (A) such transaction is made in accordance with Section 4.09
and (B) such transaction does not (x) violate any other covenants in the
Indenture or (y) result in a Default or Event of Default immediately
thereafter that is continuing. In the case of any such consolidation,
merger, sale or conveyance involving the assumption by the successor
entity of a Subsidiary Guarantor's obligations under the Indenture, such
successor entity shall assume such obligations by supplemental indenture
executed and delivered to the Trustee in accordance with the provisions of
Section 12.03. Upon execution and delivery of such supplemental indenture,
such successor entity shall succeed to
26
and be substituted for the Subsidiary Guarantor with the same effect as if
it had been named herein as a Subsidiary Guarantor.
Section 12.03 Addition of Subsidiary Guarantors.
(a) The Company agrees to cause each Person that shall
become a Domestic Subsidiary after the Issue Date to execute and deliver a
supplemental indenture pursuant to which such Restricted Subsidiary shall
guarantee the payment of the Notes pursuant to the terms hereof.
(b) Any Person who is not a Subsidiary Guarantor on the
Issue Date may become a Guarantor by executing and delivering to the
Trustee (i) a supplemental indenture in form and substance satisfactory to
the Trustee, which subjects such Person to the provisions (including the
representations and warranties) of this Indenture as a Subsidiary
Guarantor and (ii) an Opinion of Counsel and Officers' Certificate to the
effect that such supplemental indenture has been duly authorized and
executed by such Person and constitutes the legal, valid, binding and
enforceable obligation of such Person (subject to such customary
exceptions concerning creditors' rights and equitable principles as may be
acceptable to the Trustee and provided that no opinion need be rendered
concerning the enforceability of the Guarantee).
Section 12.04 Release of a Subsidiary Guarantor.
A Subsidiary Guarantor shall be deemed released from its
Guarantee and all of its obligations in this Indenture upon (i) (A) the
sale of all of the Capital Stock of such Subsidiary Guarantor, the
consolidation or merger of such Subsidiary Guarantor, or in the event of
the liquidation and dissolution of such Subsidiary Guarantor into the
Company or any other Subsidiary Guarantor, made in accordance with the
provisions of either Section 12.02(b)(i)(B) or Section 12.02(b)(ii) (other
than a sale of substantially all of the assets of the Subsidiary
Guarantor) or (B) the designation of a Restricted Subsidiary as an
Unrestricted Subsidiary, provided that such designation is made in
accordance with the provisions of this Indenture, and (ii) receipt of a
request by the Company accompanied by an Officers' Certificate and an
Opinion of Counsel certifying that all conditions specified in this
Indenture for such release have been satisfied in accordance with the
provisions of this Indenture. Upon receipt of the items specified in
clause (ii) of the preceding sentence, the Trustee shall deliver to the
Company an appropriate instrument evidencing such release. Any Subsidiary
Guarantor not so released remains liable for the full amount of principal
of and interest on the Notes as provided in this Article XII.
Section 12.05 Limitation of Subsidiary Guarantor's Liability.
Each Subsidiary Guarantor and by its acceptance hereof each
Holder hereby confirms that it is the intention of all such parties that
the guarantee by such Subsidiary Guarantor pursuant to its Guarantee not
constitute a fraudulent transfer or conveyance for purposes of any
federal, state or foreign law. To effectuate the foregoing intention, the
Holders and each Subsidiary Guarantor hereby irrevocably agree that the
obligations of each Subsidiary Guarantor under the Guarantee shall be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor and after
giving effect to any collections from or payments made by or on behalf of
any other Subsidiary
27
Guarantor in respect of the obligations of such other Subsidiary Guarantor
under its Guarantee or pursuant to Section 12.06, result in the
obligations of such Subsidiary Guarantor under the Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal,
state or foreign law.
Section 12.06 Contribution.
In order to provide for just and equitable contribution among
the Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that
in the event any payment or distribution is made by any Subsidiary
Guarantor (a "Funding Guarantor") under the Guarantee, such Funding
Guarantor shall be entitled to a contribution from each other Subsidiary
Guarantor for all payments, damages and expenses incurred by the Funding
Guarantor in discharging the Company's obligations with respect to the
Notes or any other Subsidiary Guarantor's obligations with respect to the
Guarantee.
Section 12.07 Execution and Delivery of Guarantee.
To further evidence the Guarantees set forth in Section 12.01,
each Subsidiary Guarantor hereby agrees that a notation relating to such
Guarantee shall be endorsed on each Note authenticated and delivered by
the Trustee and executed by either manual or facsimile signature of two
Officers of each Subsidiary Guarantor.
Each of the Subsidiary Guarantors hereby agrees that its
Guarantee set forth in Section 12.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation relating to
such Guarantee.
If an Officer of a Guarantor whose signature is on this
Indenture or a Note no longer holds that office at the time the Trustee
authenticates such security or at any time thereafter, such Subsidiary
Guarantor's Guarantee of such Note shall be valid nevertheless.
The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any
Guarantee set forth in this Indenture on behalf of the Subsidiary
Guarantor.
Section 12.08 Severability.
In case any provision of this Guarantee shall be invalid,
illegal or unenforceable, that portion of such provision that is not
invalid, illegal or unenforceable shall remain in effect, and the
validity, legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
Section 12.09 Consent to Jurisdiction and Service of Process.
Each Subsidiary Guarantor that is not organized under the laws
of the United States or any state thereof (each a "Non-U.S. Subsidiary
Guarantor") hereby appoints the principal office of CT Corporation System
in The City of New York which, on the date hereof, is located at 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as the authorized agent thereof (the
"Authorized Agent") upon whom process may be served in any action, suit or
proceeding arising
28
out of or based on this Indenture or the Notes which may be instituted in
the Supreme Court of the State of New York or the United States District
Court for the Southern District of New York, in either case in The Borough
of Manhattan, The City of New York, by the Holder of any Note, and each
Non-U.S. Subsidiary Guarantor hereby waives any objection which it may
now have to the laying of venue of any such proceeding and expressly and
irrevocably accepts and submits, for the benefit of the Holders from time
to time of the Notes, to the nonexclusive jurisdiction of any such court
in respect of any such action, suit or proceeding, for itself and with
respect to its properties, revenues and assets. Such appointment shall be
irrevocable unless and until the appointment of a successor authorized
agent for such purpose, and such successor's acceptance of such
appointment, shall have occurred. Each Non-U.S. Subsidiary Guarantor
agrees to take any and all actions, including the filing of any and all
documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process
upon the Authorized Agent with respect to any such action shall be deemed,
in every respect, effective service of process upon any such Non-U.S.
Subsidiary Guarantor. Notwithstanding the foregoing, any action against
any Non-U.S. Subsidiary Guarantor arising out of or based on any Note may
also be instituted by the Holder of such Note in any court in the
jurisdiction of organization of such Non-U.S. Subsidiary Guarantor, and
such Non-U.S. Subsidiary Guarantor expressly accepts the jurisdiction of
any such court in any such action. The Company shall require the
Authorized Agent to agree in writing to accept the foregoing appointment
as agent for service of process.
Section 12.10 Waiver of Immunity.
To the extent that any Non-U.S. Subsidiary Guarantor or any of
its properties, assets or revenues may have or may hereafter become
entitled to, or have attributed to it, any right of immunity, on the
grounds of sovereignty or otherwise, from any legal action, suit or
proceeding, from the giving of any relief in any thereof, from set-off or
counterclaim, from the jurisdiction of any court, from service of process,
from attachment upon or prior to judgment, from attachment in aid of
execution of judgment, or from execution of judgment, or other legal
process or proceeding for the giving of any relief or for the enforcement
of any judgment, in any jurisdiction in which proceedings may at any time
be commenced, with respect to its obligations, liabilities or any other
matter under or arising out of or in connection with this Indenture or the
Notes, such Non-U.S. Subsidiary Guarantor, to the maximum extent permitted
by law, hereby irrevocably and unconditionally waives, and agrees not to
plead or claim, any such immunity and consents to such relief and
enforcement.
Section 12.11 Judgment Currency.
Each Non-U.S. Subsidiary Guarantor agrees to indemnify the
Trustee and each Holder against any loss incurred by it as a result of any
judgment or order against such Non-U.S. Subsidiary being given or made and
expressed and paid in a currency (the "Judgment Currency") other than
United States dollars and as a result of any variation as between (i) the
rate of exchange at which the United States dollar amount is converted
into the Judgment Currency for the purpose of such judgment or order and
(ii) the spot rate of exchange in The City of New York at which the
Trustee or such Holder on the date of payment of such judgment or order is
able to purchase United States dollars with the amount of the Judgment
Currency actually received by the Trustee or such Holder. The foregoing
indemnity shall constitute a separate and
29
independent obligation of each Non-U.S. Subsidiary Guarantor and shall
continue in full force and effect notwithstanding any such judgment or
order as aforesaid. The term "spot rate of exchange" shall include any
premiums and costs of exchange payable in connection with the purchase of,
or conversion into, United States dollars.
Section 12.12 Subordination of Subsidiary Guarantees.
(a) Guarantees Subordinated to Senior Indebtedness. Each
Subsidiary Guarantor, for itself and its successors, and each Holder, by
his acceptance of Notes, agrees that the Guarantees of such Subsidiary
Guarantor are subordinated, to the extent and in the manner provided in
this Section 12.12, to the prior payment in full of all Senior
Indebtedness of such Subsidiary Guarantor (hereinafter in this Section
12.12 referred to as "Senior Indebtedness"). The Guarantees shall rank
pari passu in right of payment with all guarantees by a Subsidiary
Guarantor of Pari Passu Indebtedness of the Company.
This Section 12.12 shall constitute a continuing offer to
all Persons who become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders
of Senior Indebtedness, and such holders are made obligees hereunder and
any one or more of them may enforce such provisions.
(b) No Payment on Guarantees in Certain Circumstances.
Upon the maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, unless and until all principal thereof,
premium, if any, interest thereon and other amounts due thereon shall
first be paid in full, no payment shall be made by or on behalf of any
Subsidiary Guarantor pursuant to the Guarantees with respect to the
principal of, premium, if any, interest on or other amounts owing on the
Notes.
Upon the happening of any default in the payment of any
principal of, premium, if any, or interest on or other amounts due on any
Senior Indebtedness (a "Payment Default"), then, unless and until such
default shall have been cured or waived or shall have ceased to exist, no
payment shall be made by or on behalf of any Subsidiary Guarantor pursuant
to the Guarantees with respect to the principal of, premium, if any,
interest on or other amounts owing on the Notes (except that, subject to
applicable law, Holders may receive Subordinated Securities of Subsidiary
Guarantors).
Upon the happening of any default or event of default (other
than a Payment Default) (including any event which with the giving of
notice or the lapse of time or both would become an event of default and
including any default or event of default which would result upon any
payment pursuant to the Guarantees) with respect to any Senior
Indebtedness of a Subsidiary Guarantor, as such default or event of
default is defined therein or in the instrument or agreement or other
document under which it is outstanding, then upon written notice thereof
given to the Subsidiary Guarantors and the Trustee by a holder or holders
of any Designated Senior Indebtedness or their representative ("Payment
Notice"), no payment shall be made by or on behalf of the Subsidiary
Guarantors pursuant to the Guarantees with respect to the principal of,
premium, if any, interest on or other amounts owing on the Notes during
the period (the "Payment Blockage Period") commencing on the date of such
receipt of such Payment Notice
30
and ending on the earlier of (i) the date, if any, on which such default
is cured or waived or ceases to exist or (ii) the date, if any, on which
the Designated Senior Indebtedness to which such default relates is
discharged; provided, however, that no default or event of default (other
than a Payment Default) shall prevent the making of any payment pursuant
to the Guarantees for more than 179 days after the Payment Notice shall
have been given. Notwithstanding the foregoing, (i) not more than one
Payment Notice shall be given within a period of 360 consecutive days, and
(ii) no event of default which existed or was continuing on the date of
any Payment Notice shall be made the basis for the giving of a subsequent
Payment Notice unless all such events of default shall have been cured or
waived for a period of at least 180 consecutive days after such date, and
(iii) if any Subsidiary Guarantor or the Trustee receives any Payment
Notice, a similar notice relating to or arising out of the same default or
facts giving rise to such default (whether or not such default is on the
same issue of Designated Senior Indebtedness) shall not be effective for
purposes of this paragraph.
The Subsidiary Guarantors shall resume payments of principal of,
premium, if any, and interest on the Guarantees (i) in the case of a
Payment Default, upon the date such Payment Default is cured or waived by
the holders of Senior Indebtedness to which such Payment Default relates
and (ii) in the case of a default or event of default (other than a
Payment Default) with respect to Designated Senior Indebtedness, on the
earlier of (A) the date such default or event of default is cured or (B)
the expiration of the Payment Blockage Period with respect thereto if, in
the case of this clause (B), this Section 12.12 otherwise does not
prohibit such payment.
In furtherance of the provisions of Section 12.12(a), in the
event that, notwithstanding the foregoing provisions of this Section
12.12(b), any payment (other than a payment in the form of Subordinated
Securities of Subsidiary Guarantors) with respect to the principal of,
premium, if any or interest on the Notes shall be made by or on behalf of
any Subsidiary Guarantor, and received by the Trustee, by any Holder or by
any Paying Agent (or, if the Company is acting as its own Paying Agent,
money for any such payment shall be segregated and held in trust), at a
time when such payment was prohibited by the provisions of this Section
12.02, then, unless and until such payment is no longer prohibited by this
Section 12.12(b), such payment (subject to the provisions of Sections
12.12(f) and 12.12(g)) shall be received and held in trust by the Trustee
or such Holder or Paying Agent for the benefit of and shall be immediately
paid over to the holders of Senior Indebtedness or their representative,
ratably according to the aggregate amounts remaining unpaid on account of
the principal of, premium, if any, and interest on the Senior Indebtedness
held or represented by each, for application to the payment of all Senior
Indebtedness in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the benefit of the holders of
Senior Indebtedness.
The provisions of this Section 12.12(b) shall not modify or
limit in any way the application of Section 12.12(c).
Each Subsidiary Guarantor shall give prompt written notice to
the Trustee of any default in the payment of any Senior Indebtedness of
such Subsidiary Guarantor or any acceleration under any such Senior
Indebtedness or under any agreement pursuant to which such Senior
Indebtedness may have been issued. Failure to give such notice shall not
affect the
31
subordination of the Guarantees to the Senior Indebtedness or the
application of the other provisions provided in this Section 12.12.
(c) Guarantees Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of a Subsidiary
Guarantor.
In the event of any Insolvency or Liquidation Proceeding with
respect to any Subsidiary Guarantor, all amounts payable in respect of any
Senior Indebtedness of such Subsidiary Guarantor shall first be paid in
full before the Holders are entitled to receive any direct or indirect
payment or distribution of any cash, property or securities (other than
Subordinated Securities of Subsidiary Guarantors) pursuant to the
Guarantees on account of principal of, premium, if any, or interest on the
Notes or any other payment with respect to the Notes.
The holders of Senior Indebtedness shall be entitled to receive
directly, for application to the payment of Senior Indebtedness (to the
extent necessary to pay in full all Senior Indebtedness, whether or not
due, including specifically, without limitation, all Post-Commencement
Interest, whether or not allowed as a claim in such insolvency or
Liquidation Proceeding, after giving effect to any substantially
concurrent payment or distribution to the holders of Senior Indebtedness
on account of Senior Indebtedness), any payment or distribution of any
kind or character, whether in cash, property or securities (other than
Subordinated Securities of Subsidiary Guarantors), including any payment
or distribution which may be payable or deliverable by reason of the
payment of any other payment of any other indebtedness of such Subsidiary
Guarantor being subordinated to the payment of the Guarantees) which may
be payable or deliverable in respect of the Guarantees in any such
Insolvency or Liquidation Proceeding.
In the event that, notwithstanding the foregoing provisions of
this Section 12.12(c), the Trustee or any Paying Agent or the Holder of
any Note shall have received any payment from or distribution of assets of
such Subsidiary Guarantor or the estate created by the commencement of any
such Insolvency or Liquidation Proceeding, of any kind or character in
respect of the Guarantees, whether in cash, property or securities (other
than Subordinated Securities of Subsidiary Guarantors), including any
payment or distribution which may be payable or deliverable by reason of
the payment of any other indebtedness of such Subsidiary Guarantor being
subordinated to the payment of the Guarantees, before all Senior
Indebtedness (whether or not due including specifically, without
limitation, all Post-Commencement Interest, whether or not allowed as a
claim in such Insolvency or Liquidation Proceeding) is paid in full, then
and in such event such payment or distribution shall be received and held
in trust by the Trustee, any such Paying Agent or Holder for and shall be
paid over to the holders of Senior Indebtedness (to the extent necessary
to pay in full all such Senior Indebtedness, whether or not due, including
specifically, without limitation, all Post-Commencement Interest thereon,
whether or not allowed as a claim in such Insolvency or Liquidation
Proceeding), after giving effect to any substantially concurrent payment
or distribution to the holders of Senior Indebtedness on account of Senior
Indebtedness, for application to the payment in full of such Senior
Indebtedness.
32
The Company and each Subsidiary Guarantor shall give prompt
written notice to the Trustee of any Insolvency or Liquidation Proceeding
with respect to such Subsidiary Guarantor.
(d) Holders to Be Subrogated to Rights of Holders of Senior
Indebtedness.
After all amounts payable under or in respect of Senior
Indebtedness (whether or not due) are paid in full, the Holders shall be
subrogated (without any duty on the part of the holders of Senior
Indebtedness to warrant, create, effectuate, preserve or protect such
subrogation), to the extent of the payments or distributions made to the
holders of Senior Indebtedness pursuant to the provisions of this Section
12.12 (equally and ratably with the holders of all other indebtedness of
any Subsidiary Guarantor which by its express terms is subordinate and
subject in right of payment to Senior Indebtedness to substantially the
same extent as the Guarantees are so subordinated and subject in right of
payment and which is entitled to like rights and subrogation), to the
rights of the holders of Senior Indebtedness to receive payments and
distributions of cash, property and securities applicable to the Senior
Indebtedness, until the principal of and interest on the Notes shall be
paid in full. For the purpose of such subrogation no such payments or
distributions to the holders of Senior Indebtedness by or on behalf of the
Company, or by or on behalf of the Holders by virtue of this Section
12.12, which otherwise would have been made to the Holders shall, as
between any Subsidiary Guarantor and the Holders, be deemed to be payment
by such Subsidiary Guarantor to or on account of the Senior Indebtedness,
it being understood that the provisions of this Section 12.12 are and are
intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of Senior Indebtedness, on the
other hand.
(e) Guarantees Unconditional.
Except as otherwise provided herein, nothing contained in this
Indenture or in any Guarantee is intended to or shall impair, as between
the Subsidiary Guarantors and the Holders, the Guarantees, which are
absolute and unconditional, as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect
the relative rights of the Holders and creditors of the Subsidiary
Guarantors, other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Section
12.12, of the holders of Senior Indebtedness in respect of cash, property
or securities of any Subsidiary Guarantor received upon the exercise of
any such remedy. Upon any distribution of assets of any Subsidiary
Guarantor referred to in this Section 12.12, the Trustee, subject to the
provisions of Section 7.01, and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which
such Insolvency or Liquidation Proceedings is pending, or a certificate of
the liquidating trustee or agent or other Person making any distribution
to the Trustee or to the Holders for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the
Senior Indebtedness and other indebtedness of such Subsidiary Guarantor,
the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this
Section 12.12.
33
(f) Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.
The Trustee shall not at any time be charged with knowledge of
the existence of any facts which would prohibit the making of any payment
to or by the Trustee unless and until the Trustee or any Paying Agent
shall have received written notice at the address specified in
Section 13.03 from the Company or a Subsidiary Guarantor or from one or
more holders of Senior Indebtedness or from any representative therefor
and, prior to the receipt of any such written notice, the Trustee, subject
to the provisions of Section 7.01, shall be entitled in all respects
conclusively to assume that no such fact exits. Nothing in this Section
12.12(f) is intended to or shall relieve any Holder from the obligations
imposed under Sections 12.12(b) and 12.12(c) with respect to money or
other distributions received in violation of the provisions thereof.
(g) Application by Trustee of Assets Deposited With It.
All money and U.S. Government Obligations deposited in trust
with the Trustee pursuant to and in accordance with Section 8.01 shall be
for the sole benefit of the Holder and shall not be subject to this
Section 12.12. Otherwise, any deposit of assets by any Subsidiary
Guarantor pursuant to the Guarantees with the Trustee or any Paying Agent
(whether or not in trust) for the payment of principal of or interest on
any Notes shall be subject to the provisions of this Section 12.12;
provided that, if prior to the second Business Day preceding the date on
which by the terms of this Indenture any such assets may become
distributable for any purpose (including without limitation, the payment
of either principal of or interest on any Note) the Trustee or such Paying
Agent shall not have received with respect to such assets the written
notice provided for in Section 12.12(f), then the Trustee or such Paying
Agent shall have full power and authority to receive such assets and to
apply the same to the purpose for which they were received, and shall not
be affected by any notice to the contrary which may be received by it on
or after such date. The preceding sentence shall be construed solely for
the benefit of the Trustee and each Paying Agent and shall not otherwise
affect the rights of holders of Senior Indebtedness.
(h) Subordination Rights Not Impaired by Acts or Omissions
of the Subsidiary Guarantors or Holders of Senior Indebtedness.
No right of any present or future holder of any Senior
Indebtedness to enforce the subordination provisions in this Section 12.12
shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of any Subsidiary Guarantor or by any act or
failure to act by any such holder, or by any noncompliance by the Company
with the terms of this Indenture, regardless of any knowledge thereof
which any such holder may have or be otherwise charged with. The holders
of Senior Indebtedness may extend, renew, modify or amend the terms of the
Senior Indebtedness or any security therefor and release, sell or exchange
such security and otherwise deal freely with the Subsidiary Guarantors,
all without affecting the liabilities and obligations of the parties to
this Indenture or the Holders.
(i) Holders Authorize Trustee to Effectuate Subordination of
Notes.
34
Each Holder of Notes by his acceptance thereof (i) authorizes
and expressly directs the Trustee on his behalf to take such action as may
be necessary or appropriate to effectuate the subordination provided in
this Section 12.12 and to protect the rights of the Holders pursuant to
this Indenture, and (ii) appoints the Trustee his attorney-in-fact for
such purpose, including in the event of any Insolvency or Liquidation
Proceeding with respect to any Subsidiary Guarantor, the timely filing of
a claim of the unpaid balance of his Notes pursuant to the Guarantees in
the form required in said proceeding and the causing of such claim to be
approved. If the Trustee shall not file a proper claim or proof of debt
in the form required in such proceeding prior to 30 days before the
expiration of the time to file such claim or claims, then the holders of
the Senior Indebtedness or their representative shall have the right to
file an appropriate claim for and on behalf of the Holders. Nothing
herein contained shall be deemed to authorize the Trustee or any holder of
Senior Indebtedness or their representative to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes, the Guarantees
or the rights of any Holder, or to authorize the Trustee or any holder of
Senior Indebtedness or their representative to vote in respect of the
claim of any Holder in any such proceeding.
(j) Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in
this Section 12.12 in respect of any Senior Indebtedness at any time held
by it to the same extent as any other holder of Senior Indebtedness, and
nothing in this Indenture shall be construed to deprive the Trustee of any
of its rights as such holder.
(k) Payment.
A payment pursuant to the Guarantees with respect to a Note or
with respect to principal of, premium, if any, or interest on a Note shall
include, without limitation, payment of principal of, premium, if any, and
interest on any Note, any depositing of funds under Article IV, any
payment on account of any mandatory or optional repurchase or redemption
of any Note (including payments pursuant to Article III or Section 4.08 or
Section 4.15) and any payment or recovery on any claim (whether for
rescission or damages and whether based on contract, tort, duty imposed by
law, or any other theory of liability) relating to or arising out of the
offer, sale or purchase of any Note, provided that any such payment,
deposit, other payment or recovery (i) not prohibited pursuant to this
Section 12.12 at the time actually made shall not be subject to any
recovery by any holder of Senior Indebtedness or representative therefor
or other Person pursuant to this Section 12.12 at any time thereafter and
(ii) made by or from any Persons other than any Subsidiary Guarantor shall
not be subject to any recovery by any holder of Senior Indebtedness or
representative therefor or other Person pursuant to this Section 12.12 at
any time thereafter except to the extent such Person recovers any such
amount paid from such Subsidiary Guarantor, whether pursuant to rights of
indemnity, rescission or otherwise.
(l) Trustee Not Fiduciary for Holders of Senior
Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of
its covenants or obligations as are specifically set forth in
35
this Article and no implied covenants or obligations with respect to
holders of Senior Indebtedness shall be read into this Indenture against
the Trustee."
ARTICLE III.
MISCELLANEOUS
Section 3.01. Governing Law; Waiver of Jury Trial. This Indenture
and the Notes shall be governed by, and construed in accordance with, the
laws of the State of New York without giving effect to applicable
principles of conflicts of law thereof. EACH OF THE COMPANY AND THE
TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION
CONTEMPLATED HEREBY.
Section 3.02. Separability. In case any provision in the Indenture
or in the Notes is invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions will not in any
way be affected or impaired thereby.
Section 3.03. Ratification. The Base Indenture, as supplemented and
amended by this First Supplemental Indenture, is in all respects ratified
and confirmed, and the Base Indenture and this First Supplemental
Indenture shall be read, taken and construed as one and the same
instrument. All provisions included in this First Supplemental Indenture
supersede any conflicting provisions included in the Base Indenture unless
not permitted by law.
Section 3.04. Effectiveness. The provisions of this First
Supplemental Indenture shall become effective as of the date hereof.
* * *
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused the First
Supplemental Indenture to be duly executed as of the date first written
above.
COMPANY:
GIANT INDUSTRIES, INC.
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
SUBSIDIARY GUARANTORS:
GIANT INDUSTRIES ARIZONA, INC.
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
CINIZA PRODUCTION COMPANY
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
GIANT STOP-N-GO OF NEW MEXICO, INC.
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
37
GIANT FOUR CORNERS, INC.
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
PHOENIX FUEL CO., INC.
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
SAN XXXX REFINING COMPANY
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
GIANT MID-CONTINENT, INC.
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
GIANT PIPELINE COMPANY
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
38
GIANT YORKTOWN, INC.
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
GIANT YORKTOWN HOLDING COMPANY
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
TRUSTEE:
THE BANK OF NEW YORK
By: /s/ XXXX XXXXX
---------------------------------
Name: Xxxx Xxxxx
Title: Vice President
39
EXHIBIT A
[Face of Note]
GIANT INDUSTRIES, INC.
FORM OF 8% SENIOR SUBORDINATED NOTES DUE 2014
For Global Notes only: UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (THE "DEPOSITORY", WHICH TERM INCLUDES ANY SUCCESSOR
DEPOSITORY FOR THE CERTIFICATES), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT HEREIN
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
No. ________ $150,000,000.00
CUSIP No. 000000XX0
Giant Industries, Inc., a Delaware corporation, promises to pay to
Cede & Co. or registered assigns the principal sum of ONE HUNDRED FIFTY
MILLION DOLLARS on May 15, 2014.
Interest Payment Dates: May 15 and November 15, commencing November
15, 2004
Record Dates: May 1 and November 1.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
40
In Witness Whereof, Giant Industries, Inc. has caused this Note to be
signed manually or by facsimile by its duly authorized officers.
GIANT INDUSTRIES, INC.
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
By:
---------------------------------
Name:
Title:
Dated: May 3, 2004
Certificate of Authentication:
The Bank of New York,
as Trustee, certifies that this is one of
the Notes referred to in the within-
mentioned Indenture.
By: /s/ XXXX XXXXX
--------------------------
Authorized Signatory
41
[Reverse of Note]
GIANT INDUSTRIES, INC.
8% Senior Subordinated Notes due 2014
1. Interest. Giant Industries, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note
at 8% per annum from May 3, 2004 until maturity. The Company will pay
interest semiannually on May 15 and November 15 of each year (each an
"Interest Payment Date"), or if any such day is not a Business Day, on the
next succeeding Business Day. Interest on the Notes will accrue from the
most recent Interest Payment Date on which interest has been paid or, if
no interest has been paid, from May 3, 2004; provided that if there is no
existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the
next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; provided further that the first
Interest Payment Date shall be November 15, 2004. The Company shall pay
interest on overdue principal and premium, if any, from time to time on
demand at a rate equal to the interest rate then in effect; it shall pay
interest on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to
the extent lawful. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes
to the persons who are registered holders of Notes at the close of
business on the record date immediately preceding the Interest Payment
Date, even if such Notes are cancelled after the record date and on or
before the Interest Payment Date. Holders must surrender Notes to a
Paying Agent to collect principal payments. The Company will pay
principal of, premium, if any, and interest on the Notes in money of the
United States of America that at the time of payment is legal tender for
payment of public and private debts. However, the Company may pay such
amounts by check payable in such money. It may mail an interest check to
a Holder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-registrar without notice. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
4. Indenture. The Company issued the Notes under an Indenture,
dated as of May 3, 2004, as amended by the First Supplemental Indenture,
dated as of May 3, 2004 (together, the "Indenture"), each among the
Company, the Subsidiary Guarantors and the Trustee. Capitalized terms
herein are used as defined in the Indenture unless otherwise defined
herein. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act
of 1939 (15 U.S. Code Sections 77aaa-77bbb) as in effect on the date of
the Indenture. Notwithstanding anything to the contrary herein, the Notes
are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision
of this Note conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and control. The Indenture
pursuant to which the Notes are issued provides that an unlimited
aggregate principal amount of Notes may be issued thereunder.
5. Ranking and Guarantees. The Notes are general senior
subordinated unsecured obligations of the Company. The Company's
obligation to pay principal, premium, if any, and interest with respect to
the Notes is unconditionally guaranteed on a senior subordinated basis,
jointly and severally, by the Subsidiary Guarantors pursuant to Article
XII of the Indenture. Certain limitations to the obligations of the
Subsidiary Guarantors are set forth in further detail in the Indenture.
6. Optional Redemption. At any time on or after May 15, 2009,
the Company may, at its option, redeem all or any portion of the Notes at
the redemption prices (expressed as percentages of the principal amount of
the Notes) set forth below, plus, in each case, accrued interest thereon
to the applicable redemption date, if redeemed during the 12-month period
beginning May 15 of the years indicated below:
Year Percentage
2009 104.000%
42
2010 102.667%
2011 101.333%
2012 and thereafter 100.000%
In addition, at any time prior to May 15, 2009, the Company may
redeem all or part of the Notes upon not less than 30 days nor more than
60 days' notice at a redemption price equal to the sum of (i) the
principal amount thereof, (ii) accrued and unpaid interest, if any, to the
applicable date of redemption, and (iii) the Make-Whole Premium.
At any time and from time to time on or prior to May 15, 2007, the
Company may redeem in the aggregate up to 35% of the aggregate principal
amount of the Notes originally issued with the net proceeds of one or more
Equity Offerings, at a redemption price (expressed as a percentage of
principal amount) of 108%, plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest
payment date); provided, however, that at least 65% of the aggregate
initial principal amount of the Notes must remain outstanding after each
such redemption. In order to effect the foregoing redemption, the Company
must mail notice of redemption in accordance with the terms of the
Indenture no later than 60 days after the related Equity Offering.
7. Notice of Redemption. Notice of redemption will be mailed to
the Holder's registered address at least 30 days but not more than 60 days
before the redemption date to each Holder of Notes to be redeemed. If
less than all Notes are to be redeemed, the Trustee shall select pro rata
or by lot the Notes to be redeemed in multiples of $1,000. Notes in
denominations larger than $1,000 may be redeemed in part. On and after
the redemption date interest ceases to accrue on Notes or portions of them
called for redemption (unless the Company shall default in the payment of
the redemption price or accrued interest).
8. Change of Control. In the event of a Change of Control of the
Company, the Company shall be required to make an offer to purchase each
Holder's Notes, at 101% of the principal amount thereof, plus accrued
interest to the Change of Control Payment Date.
9. Asset Sales Offer. In the event of certain Asset Sales, the
Company may be required to make an Asset Sales Offer to purchase pro rata
or by lot all or any portion of each Holder's Notes, at 100% of the
principal amount of the Notes plus accrued interest to the date of
purchase.
10. Restrictive Covenants. The Indenture imposes certain
limitations on, among other things, the ability of the Company to merge or
consolidate with any other Person or sell, lease or otherwise transfer all
or substantially all of its properties or assets, and the ability of the
Company and its Restricted Subsidiaries to dispose of certain assets, to
pay dividends and make certain other distributions and payments, to make
certain investments or redeem, retire, repurchase or acquire for value
shares of Capital Stock, to incur additional Indebtedness or incur
encumbrances against certain property and to enter into certain
transactions with Affiliates, all subject to certain limitations described
in the Indenture.
11. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in denominations of $1,000 and whole
multiples of $1,000. A Holder may transfer or exchange Notes in
accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Notes selected
for redemption. Also, it need not transfer or exchange any Notes for a
period of 15 days before the mailing of a notice of redemption of Notes to
be redeemed.
12. Persons Deemed Owners. The registered Holder of a Note may
be treated as the owner of it for all purposes and neither the Company,
any Subsidiary Guarantor, the Trustee nor any Agent shall be affected by
notice to the contrary.
13. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for one year, the Trustee or Paying Agent will
pay the money back to the Company at its written request. After that, all
liability of the Trustee and such Paying Agent with respect to such money
shall cease.
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14. Amendment, Supplement, Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of
the Notes, and any past default or noncompliance with any provision may be
waived with the consent of the Holders of a majority in principal amount
of the Notes. In addition, any amendment to, or waiver of, the provisions
of the Indenture relating to subordination that adversely affects the
right of the Holders of the Notes will require the consent of the Holders
of at least 75% in aggregate principal amount of Notes then outstanding.
Without the consent of any Holder, the Company may amend or supplement the
Indenture or the Notes to, among other things, cure any ambiguity, defect
or inconsistency or to provide for uncertificated Notes in addition to
certificated Notes or to make any change that does not adversely affect
the rights of any Holder.
15. Successor Corporation. When a successor corporation assumes
all the obligations of its predecessor under the Notes and the Indenture,
the predecessor corporation will be released from those obligations.
16. Defaults and Remedies. An event of default generally is:
default by the Company or any Subsidiary Guarantor for 30 days in payment
of interest on the Notes; default by the Company or any Subsidiary
Guarantor in payment of principal of or premium, if any, on the Notes;
default by the Company or any Subsidiary Guarantor in the deposit of any
optional redemption payment when due and payable; failure to pay at
maturity or defaults resulting in acceleration prior to maturity of
certain other Indebtedness; failure by the Company or any Subsidiary
Guarantor for 60 days after notice to comply with any of its other
agreements in the Indenture; certain final judgments against the Company
or Subsidiaries; a failure of any Guarantee of a Subsidiary Guarantor to
be in full force and effect or denial by any Subsidiary Guarantor of its
obligations with respect thereto; and certain events of bankruptcy or
insolvency. Subject to certain limitations in the Indenture, if an Event
of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare
all the Notes to be due and payable immediately, except that in the case
of an Event of Default arising from certain events of bankruptcy,
insolvency or reorganization relating to the Company, all outstanding
Notes shall become due and payable immediately without further action or
notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may require indemnity and security
satisfactory to it before it enforces the Indenture or the Notes. Subject
to certain limitations, Holders of a majority in principal amount of the
Notes may direct the Trustee in its exercise of any trust or power. The
Company must furnish an annual compliance certificate to the Trustee.
17. Trustee Dealings with Company and Subsidiary Guarantors. The
Bank of New York, the Trustee under the Indenture, in its individual or
any other capacity, may become the owner or pledgee of Notes and may
otherwise deal with the Company, the Subsidiary Guarantors or their
respective Subsidiaries or Affiliates with the same rights it would have
if it were not Trustee.
18. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company, any Subsidiary Guarantor or the
Trustee, shall not have any liability for any obligations of the Company,
any Subsidiary Guarantor or the Trustee, under the Notes or the Indenture
or for any claim based on, in respect of or by reason of, such obligations
or their creation. Each Holder by accepting a Note waives and releases
all such liability. The waiver and release are part of the consideration
for the issue of the Notes.
19. Authentication. This Note shall not be valid until the
Trustee or an authenticating agent signs the certificate of authentication
on the other side of this Note.
20. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right
of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
21. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company
will cause CUSIP numbers to be printed on the Notes as a convenience to
Holders of the Notes. No representation is made as to the accuracy of
such numbers as printed on the Notes and reliance may be placed only on
the other identification numbers printed hereon.
44
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to: Giant
Industries, Inc., 00000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx 00000,
Attention: Treasurer.
45
GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture), jointly and
severally, have unconditionally guaranteed the due and punctual payment of
the principal of, premium, if any, and interest on the Notes, and all
other amounts due and payable under the Indenture and the Notes by the
Company, whether at maturity, acceleration, redemption, repurchase or
otherwise, including, without limitation, the due and punctual payment of
interest on the overdue principal of, premium, if any, and interest on the
Notes, to the extent lawful.
The obligations of the Subsidiary Guarantors pursuant to the
Guarantee are subject to the terms and limitations set forth in Article
XII of the Indenture, and reference is made thereto for the precise terms
of the Guarantee.
46
In Witness Whereof, the Subsidiary Guarantors have caused this
Guarantee to be signed manually or by facsimile by its duly authorized
officers.
SUBSIDIARY GUARANTORS
Giant Industries Arizona, Inc.,
an Arizona corporation
Attest: By:
-------------- -------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
Ciniza Production Company,
a New Mexico corporation
Attest: By:
-------------- -------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
Giant Stop-N-Go of New Mexico, Inc.,
a New Mexico corporation
Attest: By:
-------------- -------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
Giant Four Corners, Inc.,
an Arizona corporation
Attest: By:
-------------- -------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
Phoenix Fuel Co., Inc.,
an Arizona corporation
Attest: By:
-------------- -------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
47
San Xxxx Refining Company,
a New Mexico corporation
Attest: By:
-------------- -------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
Giant Mid-Continent, Inc.,
an Arizona corporation
Attest: By:
-------------- -------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
Giant Pipeline Company,
a New Mexico corporation
Attest: By:
-------------- -------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
Giant Yorktown, Inc.,
a Delaware corporation
Attest: By:
-------------- -------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
Giant Yorktown Holding Company,
a Delaware corporation
Attest: By:
-------------- -------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and
Chief Accounting Officer
48
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
_________________________________________________________________________
(Insert assignee's social security or tax I.D. no.)
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________as agent to transfer this Note on
the books of the Company. The agent may substitute another to act for
him.
_________________________________________________________________________
Your Signature:__________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Your Name:_______________________________________________________________
Date:______________________
Signature Guarantee:_____________________________________________________
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FORM OF OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.09 or Section 4.15 of the Indenture, check the
box:[ ]
If you want to have only part of this Note purchased by the Company
pursuant to Section 4.09 or Section 4.15 of the Indenture, state the
amount (in integral multiples of $1,000):
$________________________
Date:____________________ Signature:_________________________________
(Sign exactly as your name appears on the
other side of this Note)
Name:__________________________________________________________________
Signature Guarantee:___________________________________________________
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SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
Date of Amount of Amount of Principal Signature of
Exchange decrease in increase in Amount of this authorized
Principal Principal Global Note signatory of
Amount of this Amount of this following such Trustee or
Global Note Global Note decrease or Notes
increase Custodian
51
1527639.6
