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RAM ENERGY, INC.
AND
SUBSIDIARY GUARANTORS
INDENTURE
Dated as of February ______, 0000
XXXXXX XXXXXX TRUST COMPANY OF NEW YORK
Trustee
________% SENIOR NOTES DUE 2008
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CROSS REFERENCE TABLE*
TRUST INDENTURE ACT SECTION INDENTURE SECTION
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
311(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
312(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.3
313(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6;7.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.6;11.2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
314(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.3;11.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.12
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.4
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.4
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.3;11.4;11.5
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.5
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
315(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.5;11.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.11
316 (a)(last sentence). . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.12
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
318(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.1
N.A. means not applicable.
*This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . 1
SECTION 1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 OTHER DEFINITIONS. . . . . . . . . . . . . . . . . . . . 18
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. . . . 18
SECTION 1.4 RULES OF CONSTRUCTION. . . . . . . . . . . . . . . . . . 19
ARTICLE 2
THE NOTES. . . . . . . . . . . . . . . . 20
SECTION 2.1 FORM AND DATING. . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.2 EXECUTION AND AUTHENTICATION . . . . . . . . . . . . . . 21
SECTION 2.3 REGISTRAR AND PAYING AGENT; DEPOSITORY APPOINTMENT . . . 22
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST. . . . . . . . . . . 22
SECTION 2.5 HOLDER LISTS . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.6 TRANSFER AND EXCHANGE. . . . . . . . . . . . . . . . . . 23
SECTION 2.7 REPLACEMENT NOTES. . . . . . . . . . . . . . . . . . . . 25
SECTION 2.8 OUTSTANDING NOTES. . . . . . . . . . . . . . . . . . . . 25
SECTION 2.9 TREASURY NOTES . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.10 TEMPORARY NOTES. . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.11 CANCELLATION . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.12 DEFAULTED INTEREST . . . . . . . . . . . . . . . . . . . 26
SECTION 2.13 CUSIP NUMBERS. . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 3
REDEMPTION AND PREPAYMENT. . . . . . . . . . . . 27
SECTION 3.1 NOTICES TO TRUSTEE . . . . . . . . . . . . . . . . . . . 27
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED. . . . . . . . . . . . 27
SECTION 3.3 NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . . . 27
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION . . . . . . . . . . . . . 28
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE. . . . . . . . . . . . . . . 28
SECTION 3.6 NOTES REDEEMED IN PART . . . . . . . . . . . . . . . . . 29
SECTION 3.7 OPTIONAL REDEMPTION. . . . . . . . . . . . . . . . . . . 29
SECTION 3.8 MANDATORY REDEMPTION . . . . . . . . . . . . . . . . . . 29
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS CASH. . . . . 30
ARTICLE 4
COVENANTS. . . . . . . . . . . . . . . . 31
SECTION 4.1 PAYMENT OF NOTES . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . . 32
SECTION 4.3 REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.4 COMPLIANCE CERTIFICATE . . . . . . . . . . . . . . . . . 33
SECTION 4.5 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.6 STAY, EXTENSION AND USURY LAWS . . . . . . . . . . . . . 34
SECTION 4.7 LIMITATION ON INCURRENCES OF ADDITIONAL INDEBTEDNESS
AND ISSUANCES OF DISQUALIFIED CAPITAL STOCK. . . . . . . 34
SECTION 4.8 LIMITATION ON RESTRICTED PAYMENTS. . . . . . . . . . . . 35
i
SECTION 4.9 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES OF THE COMPANY . . . . 37
SECTION 4.10 LIMITATION ON TRANSACTION WITH AFFILIATES. . . . . . . . 37
SECTION 4.11 LIMITATION ON ASSET SALES. . . . . . . . . . . . . . . . 38
SECTION 4.12 LIMITATION ON LIENS. . . . . . . . . . . . . . . . . . . 39
SECTION 4.13 LIMITATION ON LINE OF BUSINESS . . . . . . . . . . . . . 39
SECTION 4.14 DESIGNATION OF UNRESTRICTED SUBSIDIARIES . . . . . . . . 39
SECTION 4.15 LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES OF THE COMPANY . . . . . . . . . 40
SECTION 4.16 OWNERSHIP AND RECOGNITION OF SUBSIDIARIES; FUTURE
GUARANTORS . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.17 OFFER TO REPURCHASE UPON CHANGE OF CONTROL . . . . . . . 41
SECTION 4.18 DISCHARGE OF CERTAIN PREFERRED STOCK . . . . . . . . . . 42
ARTICLE 5
SUCCESSORS. . . . . . . . . . . . . . . . 42
SECTION 5.1 LIMITATION ON MERGER OR SALE OR CONSOLIDATION. . . . . . 42
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED. . . . . . . . . . . . 43
ARTICLE 6
DEFAULTS AND REMEDIES. . . . . . . . . . . . . 43
SECTION 6.1 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . 43
SECTION 6.2 ACCELERATION . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.3 OTHER REMEDIES . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.4 WAIVER OF PAST DEFAULTS. . . . . . . . . . . . . . . . . 45
SECTION 6.5 CONTROL BY MAJORITY. . . . . . . . . . . . . . . . . . . 46
SECTION 6.6 LIMITATION ON SUITS. . . . . . . . . . . . . . . . . . . 46
SECTION 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT. . . . . . 46
SECTION 6.8 COLLECTION SUIT BY TRUSTEE . . . . . . . . . . . . . . . 46
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM . . . . . . . . . . . . 47
SECTION 6.10 PRIORITIES . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.11 UNDERTAKING FOR COSTS. . . . . . . . . . . . . . . . . . 48
ARTICLE 7
TRUSTEE . . . . . . . . . . . . . . . . 48
SECTION 7.1 DUTIES OF TRUSTEE. . . . . . . . . . . . . . . . . . . . 48
SECTION 7.2 RIGHTS OF TRUSTEE. . . . . . . . . . . . . . . . . . . . 49
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE . . . . . . . . . . . . . . 50
SECTION 7.4 TRUSTEE'S DISCLAIMER . . . . . . . . . . . . . . . . . . 50
SECTION 7.5 NOTICE OF DEFAULT. . . . . . . . . . . . . . . . . . . . 50
SECTION 7.6 REPORT BY TRUSTEE TO HOLDERS OF THE NOTES. . . . . . . . 50
SECTION 7.7 COMPENSATION AND INDEMNITY . . . . . . . . . . . . . . . 51
SECTION 7.8 REPLACEMENT OF TRUSTEE . . . . . . . . . . . . . . . . . 51
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC . . . . . . . . . . . . 52
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION. . . . . . . . . . . . . . 52
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY. . 53
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE; SATISFACTION AND DISCHARGE . 53
ii
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE . . . . . . . . . . . . . 53
SECTION 8.3 COVENANT DEFEASANCE. . . . . . . . . . . . . . . . . . . 54
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE . . . . . . . 54
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS. . . . . . . . . . 55
SECTION 8.6 REPAYMENT TO THE COMPANY . . . . . . . . . . . . . . . . 56
SECTION 8.7 REINSTATEMENT. . . . . . . . . . . . . . . . . . . . . . 56
SECTION 8.8 SATISFACTION AND DISCHARGE OF INDENTURE. . . . . . . . . 56
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER . . . . . . . . . . 57
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES. . . . . . . . . . . 57
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES . . . . . . . . . . . . 58
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT. . . . . . . . . . . 59
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS. . . . . . . . . . . . 59
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES . . . . . . . . . . . . 60
SECTION 9.6 TRUSTEE TO SIGN AMENDMENT ETC. . . . . . . . . . . . . . 60
ARTICLE 10
SUBSIDIARY GUARANTEES. . . . . . . . . . . . . 60
SECTION 10.1 SUBSIDIARY GUARANTEES. . . . . . . . . . . . . . . . . . 60
SECTION 10.2 ADDITIONAL SUBSIDIARY GUARANTEES . . . . . . . . . . . . 62
SECTION 10.3 LIMITATION OF SUBSIDIARY GUARANTORS' LIABILITY . . . . . 62
SECTION 10.4 SUBSIDIARY GUARANTORS MAY CONSOLIDATE ETC., ON CERTAIN
TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 10.5 RELEASES OF SUBSIDIARY GUARANTORS. . . . . . . . . . . . 63
SECTION 10.6 "TRUSTEE" TO INCLUDE PAYING AGENT. . . . . . . . . . . . 64
SECTION 10.7 CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.8 EXECUTION OF SUBSIDIARY GUARANTEES . . . . . . . . . . . 64
ARTICLE 11
MISCELLANEOUS. . . . . . . . . . . . . . . 65
SECTION 11.1 TRUST INDENTURE ACT CONTROLS . . . . . . . . . . . . . . 65
SECTION 11.2 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.3 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT . . . 66
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. . . . . . 67
SECTION 11.6 RULES BY TRUSTEE AND AGENTS. . . . . . . . . . . . . . . 67
SECTION 11.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . 67
SECTION 11.8 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . 67
SECTION 11.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. . . . . . 68
SECTION 11.10 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 11.11 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 11.12 COUNTERPART ORIGINALS. . . . . . . . . . . . . . . . . . 68
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC . . . . . . . . . . . . 68
iii
INDENTURE dated as of February ______, 1998, by and among RAM ENERGY,
INC., a Delaware corporation (the "COMPANY"), the Subsidiary Guarantors (as
defined herein) and UNITED STATES TRUST COMPANY OF NEW YORK, as trustee (the
"TRUSTEE").
The Company, the Subsidiary Guarantors and the Trustee agree as follows
for the benefit of one another and for the equal and ratable benefit of the
Holders of the ______% Senior Notes due 2008 of the Company (the "NOTES"),
without preference of any issuance of Notes under this Indenture over another:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"ADJUSTED CONSOLIDATED NET INCOME" of the Company for any period means
the Net Income of the Company and the Subsidiary Guarantors for such period,
determined in accordance with GAAP, excluding (i) the Net Income of any
Unrestricted Subsidiary of the Company which is a consolidated Subsidiary of
the Company for such period and (ii) the amount of the deduction from Net
Income of the Company attributable to the minority interest in any
Unrestricted Subsidiary of the Company which is a consolidated Subsidiary of
the Company for such period.
"ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS" means (without duplication),
as of the date of determination, (i) the sum of (a) discounted future net
revenue from proved oil and gas reserves of the Company and the Subsidiary
Guarantors calculated in accordance with Commission guidelines before any
state or federal income taxes, as estimated or audited by independent
petroleum engineers in one or more Reserve Reports prepared as of the end of
the Company's most recently completed fiscal year as INCREASED BY, as of the
date of determination, the discounted future net revenue of (A) estimated
proved oil and gas reserves of the Company and the Subsidiary Guarantors
attributable to any acquisition consummated since the effective date of such
year-end Reserve Reports and (B) estimated oil and gas reserves of the
Company and the Subsidiary Guarantors attributable to extensions, discoveries
and other additions and upward revisions of estimates of proved oil and gas
reserves due to exploration, development or exploitation, production or other
activities conducted or otherwise occurring since the effective date of such
year-end Reserve Reports which, in the case of the preceding sub-clauses (A)
and (B), would, in accordance with standard industry practice, result in such
increases, in each case calculated in accordance with Commission guidelines
(utilizing the prices utilized in such year-end Reserve Reports), and
DECREASED BY, as of the date of determination, the discounted future net
revenue of (C) estimated proved oil and gas reserves of the Company and the
Subsidiary Guarantors produced or disposed of since the effective date of
such year-end Reserve Reports and (D) reductions in the estimated oil and gas
reserves of the Company and the Subsidiary Guarantors since the effective
date of such year-end Reserve Reports attributable to downward revisions of
estimates of proved oil and gas reserves due to exploration, development or
exploitation, production or other activities conducted or otherwise occurring
since the effective date of such year-end Reserve Reports which would, in
accordance with standard industry practice, result in such revisions, in each
case calculated in accordance with Commission guidelines (utilizing the
prices utilized in such year-end Reserve Reports); PROVIDED THAT, in the case
of each of the determinations made pursuant to the preceding
1
SUB-CLAUSES (A) THROUGH (D), such increases and decreases shall be as
estimated by the Company's engineers, except that if there is a Material
Change and in connection with the Incurrence of Indebtedness for which the
Consolidated Fixed Charge Coverage Ratio must be determined, all or any part
of an increase in discounted future net revenue resulting from the matters
described in the preceding SUB-CLAUSES (A) AND (B) is needed to permit the
Incurrence of such Indebtedness, then the discounted future net revenue
utilized for purposes of CLAUSE (I)(A) of this definition shall be confirmed
in writing by independent petroleum engineers, PROVIDED FURTHER THAT, if the
events referred to in the preceding SUB-CLAUSES (C) AND (D), when taken
alone, would not cause a Material Change, then such written confirmation need
only cover the incremental additions to discounted future net revenue
resulting from the determinations made pursuant to the preceding SUB-CLAUSES
(A) AND (B) to the extent needed to permit the Incurrence of such
Indebtedness, (b) the capitalized costs that are attributable to oil and gas
properties of the Company and the Subsidiary Guarantors to which no proved
oil and gas reserves are attributed, based on the Company's books and records
as of a date no earlier than the date of the Company's latest annual or
quarterly financial statements, (c) the Net Working Capital on a date no
earlier than the date of the Company's latest annual or quarterly financial
statements and (d) the greater of (A) the net book value on a date no earlier
than the date of the Company's latest annual or quarterly financial
statements and (B) the appraised value, as estimated by independent
appraisers, of other tangible assets (including the amount of Investments in
unconsolidated Subsidiaries) of the Company and the Subsidiary Guarantors, as
of a date no earlier than the date of the Company's latest audited financial
statements, MINUS (ii) the sum of (a) minority interests, (b) any non-current
portion of gas balancing liabilities of the Company and the Subsidiary
Guarantors reflected in the Company's latest annual or quarterly financial
statements, (c) the discounted future net revenue, calculated in accordance
with Commission guidelines (utilizing the prices utilized in the Company's
year-end Reserve Reports), attributable to reserves which are required to be
delivered to third parties to fully satisfy the obligations of the Company
and the Subsidiary Guarantors with respect to Production Payments on the
schedules specified with respect thereto, (d) the discounted future net
revenue, calculated in accordance with Commission guidelines (utilizing the
same prices utilized in the Company's initial or year-end Reserve Reports),
attributable to reserves subject to participation interests, overriding
royalty interests or other interests of third parties, pursuant to
participation, partnership, vendor financing or other agreements then in
effect, or which otherwise are required to be delivered to third parties and
(e) the amount of environmental liabilities payable by the Company or any
Subsidiary Guarantor. If the Company changes its method of accounting from
the full cost method to the successful efforts method or a similar method of
accounting, Adjusted Consolidated Net Tangible Assets will continue to be
calculated as if the Company was still using the full cost method of
accounting.
"AFFILIATE" means (i) any Person, directly or indirectly, controlling or
controlled by or under direct or indirect common control with the Company or
any Subsidiary of the Company or any officer, director, or employee of the
Company or any Subsidiary of the Company or of such Person, (ii) the spouse,
any immediate family member, or any other relative who has the same principal
residence of any Person described in clause (i) above, and any Person,
directly or indirectly, controlling or controlled by or under direct or
indirect common control with, such spouse, family member or other relative,
and (iii) any trust in which any Person described in CLAUSE (I) OR (II) of
this definition is a fiduciary or has a beneficial interest. For purposes of
this definition, the term "control" means (a) the power to direct the
management and policies of a Person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by
contract, or otherwise, or (b) the beneficial ownership of 10% or more of the
Voting Stock of such Person (on a fully diluted basis) or of warrants or
other rights to acquire such equity (whether or not presently exercisable).
2
"AGENT" means any Registrar, Paying Agent or as appointed hereunder, any
co-registrar or authenticating agent.
"ASSET SALE" means (i) any direct or indirect conveyance, sale, transfer
or other disposition (including through damage or destruction for which
Insurance Proceeds are paid or by condemnation), in one transaction or a
series of related transactions, of any of the properties, businesses or
assets of the Company or any of its Restricted Subsidiaries, whether owned on
the Issue Date or thereafter acquired or (ii) any sale or other disposition
by the Company of any Capital Stock of any Affiliate, Unrestricted Subsidiary
or any Restricted Subsidiary of the Company. Notwithstanding the foregoing,
the following will not be deemed to be an Asset Sale: (a) the conveyance,
sale, lease, transfer or other disposition by any Restricted Subsidiary of
the Company of any or all of its assets (upon voluntary liquidation or
otherwise) to the Company; (b) the conveyance, sale, lease, transfer or other
disposition by any Restricted Subsidiary of any or all of its assets (upon
voluntary liquidation or otherwise) to another Restricted Subsidiary of the
Company; (c) non-material dispositions of assets in the ordinary course of
business; (d) Asset Sales not otherwise included by CLAUSES (a) THROUGH (c)
OR (f) AND (g) of this definition, PROVIDED THAT the aggregate proceeds from
all such Asset Sales do not exceed $1,000,000 in any twelve-month period; (e)
the disposition of all or substantially all of the assets of (A) the Company
and the Subsidiary Guarantors, taken as a whole, or (B) the Company, if such
disposition is governed by the provisions of SECTION 4.17 OR 5.01; (f) a
conveyance, sale, assignment, lease, license, transfer, abandonment or other
disposal by the Company and the Subsidiary Guarantors of (A) damaged, worn
out, unserviceable or other obsolete property in the ordinary course of
business or (B) other property no longer necessary for the proper conduct of
their business; and (g) the conveyance, sale, transfer or other disposition
by the Company and its Restricted Subsidiaries of crude oil and natural gas
production and refined products in the ordinary course of business of the Oil
and Gas Business.
"ATTRIBUTABLE INDEBTEDNESS" in respect of a Sale and Leaseback
Transaction means, at the time of determination, the present value
(discounted at the rate of interest implicit in such transaction, determined
in accordance with GAAP or, in the event that such rate of interest is not
reasonably determinable, discounted at the rate of interest borne by the
Notes) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such Sale and Leaseback Transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).
"BANKRUPTCY CUSTODIAN" means any receiver, trustee, assignee, liquidator
or similar officer under any Bankruptcy Law.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or
state law of any jurisdiction, domestic or foreign to the United States of
America or any of its states, for the relief of debtors.
"BOARD OF DIRECTORS" means, with respect to a Person, the board of
directors of such Person or if not a board of directors, a comparable
governing body of such Person, or any authorized committee of such board or
governing body, as applicable.
"BOARD RESOLUTION" means, with respect to a Person, a copy of a
resolution certified by (i) the secretary or an assistant secretary of such
Person and (ii) the principal financial officer of such Person to have been
duly adopted by the Board of Directors of such Person and to be in full force
and effect on the date of such certification.
3
"BUSINESS DAY" means any day other than a Saturday, Sunday or any other
day on which banking institutions in the City of New York, New York are
required or authorized by law or other governmental action to be closed.
"CAPITAL EXPENDITURES" of a Person means expenditures (whether paid in
cash or accrued as a liability) by such Person or any of its Subsidiaries
that, in conformity with GAAP, are or would be included in "capital
expenditures," "additions to property, plant, or equipment" or comparable
items in the consolidated financial statements of such Person consistent with
prior accounting practices.
"CAPITAL STOCK" means, with respect to any Person, (i) any capital stock
of such Person and shares, interests, participations or other ownership
interests (however designated) of such Person, including without limitation,
each class of common stock and preferred stock of such Person, if such Person
is a corporation, (ii) each general or limited partnership interest of such
Person, if such Person is a partnership, (iii) each membership or similar
interest of such Person, if such Person is a limited liability company and
(iv) each other interest or participation that confers on a Person the right
to receive a share of the profits or losses of, or distributions of assets
of, the issuing Person, in each case, including any rights (other than debt
securities convertible into any such interests), warrants or options to
purchase any of the foregoing.
"CAPITALIZED LEASE OBLIGATION" means obligations under a lease that are
required to be capitalized for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by such obligations
shall be the capitalized amount of such obligations, as determined in
accordance with GAAP.
"CARLTON" means Carlton Resources Corporation, a Delaware corporation.
"CASH EQUIVALENTS" 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 having maturities of not
more than one year from the date of acquisition, (iii) certificates of
deposit with maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year, and overnight
bank deposits, in each case, with any Eligible Institution, (iv) repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in CLAUSES (ii) AND (iii) of this definition entered
into with any Eligible Institution, (v) commercial paper rated "P-l," "A-l"
or the equivalent thereof by Moody's or Standard & Poor's, respectively, and
in each case maturing within 180 days after the date of acquisition, (vi)
shares of money market funds, including those of the Trustee, that invest
solely in United States dollars and securities of the types described in
CLAUSES (i) THROUGH (v) of this definition, and (vii) demand and time
deposits and certificates of deposit with an Eligible Institution or with
commercial banks insured by the Federal Deposit Insurance Corporation.
"CHANGE OF CONTROL" means the occurrence of (i) the sale, lease,
transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all of the assets of the Company to any
person (as such term is used in Section 13(d)(3) of the Exchange Act) other
than to a Subsidiary Guarantor, (ii) the Company consolidates with or merges
into another Person or any Person consolidates with, or merges 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 or resulting Person that is Qualified Capital Stock and (b) the
holders of the Voting Stock of the Company immediately prior to such
transaction
4
own, directly or indirectly, not less than a majority of the Voting Stock of
the surviving or resulting Person immediately after such transaction, (iii)
the adoption of a plan relating to the liquidation or dissolution of the
Company not involving a merger or consolidation or a sale or other
disposition of assets described in CLAUSE (i) of this definition, (iv) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any person (as defined above),
excluding the Permitted Holders, becomes the "beneficial owner" (as that term
is used in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the total voting power of the Company's then
outstanding Voting Stock; PROVIDED THAT the sale of Voting Stock of the
Company to a Person or Persons acting as underwriters in connection with a
firm commitment underwriting shall not constitute a Change of Control, or (v)
the first day on which a majority of the members of the Board of Directors of
the Company are not Continuing Directors (other than by action of the
Permitted Holders). For purposes of this definition, any transfer of an
equity interest of an entity that was formed for the purpose of acquiring
Voting Stock of the Company will be deemed to be a transfer of such portion
of such Voting Stock as corresponds to the portion of the equity of such
entity that has been so transferred.
"COMMISSION" means the Securities and Exchange Commission.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" on any date means, with
respect to the Company, the ratio, on a PRO FORMA basis, of (i) the aggregate
amount of EBITDA attributable to continuing operations and businesses
(exclusive of the amounts attributable to operations and businesses
discontinued or disposed of, on a PRO FORMA basis as if such operations and
businesses were discontinued or disposed of on the first day of the Reference
Period) for the Reference Period to (ii) the aggregate Consolidated Interest
Expense (exclusive of amounts attributable to discontinued operations and
businesses on a PRO FORMA basis as if such operations and businesses were
discontinued or disposed of on the first day of the Reference Period, but
only to the extent that the obligations giving rise to such Consolidated
Interest Expense would no longer be obligations contributing to Consolidated
Interest Expense subsequent to the date of discontinuation or disposal)
during the Reference Period; PROVIDED THAT, for purposes of such computation,
in calculating EBITDA and Consolidated Interest Expense, (a) the transaction
giving rise to the need to calculate the Consolidated Fixed Charge Coverage
Ratio shall be assumed to have occurred on the first day of the Reference
Period, (b) the Incurrence of any Indebtedness or issuance of Disqualified
Capital Stock or the retirement of any Indebtedness or Capital Stock during
the Reference Period or subsequent thereto shall be assumed to have occurred
on the first day of such Reference Period, and (c) Consolidated Interest
Expense attributable to any Indebtedness (whether existing or being Incurred)
bearing a floating interest rate shall be computed as if the rate in effect
on the date of determination had been the applicable rate for the entire
period, unless the Company or any Subsidiary Guarantor is a party to a Swap
Obligation (that remains in effect for the 12-month period after the date of
determination) that has the effect of fixing the interest rate on the date of
computation, in which case such rate (whether higher or lower) shall be used.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the aggregate
interest expense (without duplication), during such period in respect of all
Indebtedness of the Company and the Subsidiary Guarantors (including all
commissions, discounts, other fees and charges owed with respect to letters
of credit and banker's acceptance financing and costs associated with Swap
Obligations) determined on a consolidated basis in accordance with GAAP. For
purposes of this definition, (i) interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined to be the
rate of interest implicit in such Capitalized Lease Obligation in accordance
with GAAP (including Statement of Financial Accounting Standards No. 13 of
the Financial Accounting Standards Board), and (ii) Consolidated Interest
Expense attributable to any Indebtedness guaranteed by the Company or a
Subsidiary
5
Guarantor, other than with respect to Indebtedness of the Company or a
Subsidiary Guarantor, shall be deemed to be the interest expense attributable
to the item guaranteed.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the Issue Date or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time
of such nomination or election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be the address of the
Trustee specified in SECTION 11.2 or such other address as to which the
Trustee may give notice to the Company.
"DEFAULT" means an event or condition, the occurrence of which is, or
with the lapse of time or giving of notice or both would be, an Event of
Default.
"DEFINITIVE NOTES" means Notes that are in the form of the Note attached
hereto as EXHIBIT A, excluding the paragraphs referred to in footnotes 1 and
2 thereto and the schedule referred to in footnote 3 thereto, but including
the modification referred to in footnote a.
"DEPOSITORY" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in SECTION 2.3 as the
Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"DISINTERESTED DIRECTOR" means, with respect to any transaction or
series of related transactions in respect of which the Board of Directors is
required to deliver a Board Resolution of such Board of Directors under this
Indenture, a member of such Board of Directors who does not have any material
direct or indirect financial interest (other than an interest arising solely
from the beneficial ownership of Capital Stock of the Company) in or with
respect to such transaction or series of transactions.
"DISQUALIFIED CAPITAL STOCK" means, with respect to any Person, any
Capital Stock of such Person or its Subsidiaries that, by its terms or by the
terms of any security into which it is convertible or exchangeable, is, or
upon the happening of an event or the passage of time would be, required to
be redeemed or repurchased by such Person or its Subsidiaries, including at
the option of the holder, in whole or in part, or has, or upon the happening
of an event or passage of time would have, a redemption or similar payment
due, on or prior to the Stated Maturity Date.
"EBITDA" means, for any period, (i) the sum of the Adjusted Consolidated
Net Income for such period, PLUS (ii) the sum, without duplication (and only
to the extent such amounts are deducted from net revenues in determining such
Adjusted Consolidated Net Income), of (a) the provision for federal and state
income taxes for such period, (b) depreciation, depletion, and amortization
for such period, (c) Consolidated Interest Expense for such period,
determined, in each case, on a consolidated basis for the Company and the
Subsidiary Guarantors otherwise in accordance with GAAP, (d) any charge
associated solely with the prepayment of any Indebtedness (PROVIDED THAT
neither the Incurrence of such Indebtedness nor the making of such prepayment
occurred in violation of any provision of this Indenture) and (e) any other
non-cash charges.
"ELIGIBLE INSTITUTION" means a commercial banking institution that has
combined capital and surplus of not less than $500,000,000 and that is rated
"A" (or higher) according to
6
Moody's or Standard & Poor's at the time as of which any investment or
rollover therein is made.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the Commission thereunder.
"EXCHANGE ASSETS" means assets acquired by the Company or any Subsidiary
Guarantor in exchange for assets of the Company or any Subsidiary Guarantor
in connection with an Asset Sale, which acquired assets include proved
reserves with a value that, together with the cash or Cash Equivalents
received therefor by the Company or such Subsidiary Guarantor, is equal to or
greater than the value of the proved reserves included in the assets disposed
of by the Company or such Subsidiary Guarantor in connection with such Asset
Sale; PROVIDED, THAT (i) ownership of such assets does not violate the
provisions of SECTION 4.13 and (ii) during any fiscal year, the Company and
the Subsidiary Guarantors can collectively acquire assets (other than proved
reserves, cash or Cash Equivalents) with a fair market value of up to
$500,000 in exchange for assets of the Company and the Subsidiary Guarantors,
and such assets acquired by such Person shall constitute "Exchange Assets"
hereunder.
"GAAP" means generally accepted accounting principles as in effect in
the United States on the Issue Date applied on a basis consistent with that
used in the preparation of the audited financial statements of the Company
included in the Prospectus.
"GLOBAL NOTE" means a Note that is in the form of the Note attached
hereto as EXHIBIT A, including the paragraphs referred to in footnotes 1 and
2 thereto and the schedule referred to in footnote 3 thereto, but excluding,
to the extent therein referenced, the text referred to in footnote a thereto.
"GOVERNMENT SECURITIES" means securities that are (i) direct obligations
of the United States of America for the timely payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the timely payment of which is unconditionally guaranteed as a
full faith and credit obligation of the United States of America, which, in
either case, are not callable or redeemable as the option of the issuer
thereof, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act), as custodian with respect
to any such Government Security or a specific payment of principal of or
interest on any such Government Security held by such custodian for the
account of the holder of such depository receipt; PROVIDED, THAT (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the Government Security or the
specific payment of principal of or interest on the Government Security
evidenced by such depository receipt.
The term "GUARANTEE" means, as applied to any Indebtedness or other
obligation, (i) a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner, of any part or all of such Indebtedness or other
obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of nonperformance) of all
or any part of such Indebtedness or other obligation, including, without
limiting the foregoing, the payment of amounts drawn down under letters of
credit. When used as a verb, "GUARANTEE" has a corresponding meaning.
7
"HEDGING CONTRACT" means an oil, gas or oil and gas purchase or hedging
agreement, and other agreement or arrangements, in each case, that is
designed to provide protection against fluctuations in the prices of oil or
gas, or both.
"HOLDER" means any Person from time to time in whose name any Note is
registered on the Note Register.
"HYDROCARBONS" means oil, natural gas, condensate, and natural gas
liquids.
"INCUR" means, with respect to any Indebtedness, to create, incur,
assume, guarantee or otherwise become liable for, contingently or otherwise,
any Indebtedness, and the term "INCURRENCE" when used as a noun shall have a
correlative meaning. Neither the accrual of interest nor the accretion of
original issue discount, nor the accretion of principal of a non-interest
bearing or other discount security shall be deemed the Incurrence of
Indebtedness.
"INDEBTEDNESS" means, with respect to any Person, without duplication
(i) all liabilities, contingent or otherwise, of such Person (a) for 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 or letters of credit or
representing the balance deferred and unpaid of the purchase price of any
property acquired by such Person or services received by such Person, but
excluding trade account payables and accrued liabilities arising in the
ordinary course of business that are not overdue by 90 days or being
contested in good faith by appropriate proceedings, promptly instituted and
diligently pursued, (c) evidenced by bankers' acceptances or similar
instruments issued or accepted by banks or Swap Obligations, (d) for the
payment of money relating to a Capitalized Lease Obligation, (e) for the
Attributable Indebtedness associated with any Sale and Leaseback Transaction
or (f) for Production Payments, (ii) reimbursement obligations of such Person
with respect to letters of credit, (iii) all liabilities of others of the
kind described in CLAUSE (i) OR (ii) of this definition that such Person has
guaranteed or that is otherwise its legal liability (to the extent of such
guarantee or other legal liability) other than for endorsements, with
recourse, of negotiable instruments in the ordinary course of business, and
(iv) all obligations secured by a Lien (other than Permitted Liens, except to
the extent the obligations secured by such Permitted Liens are otherwise
included in CLAUSE (i), (ii) OR (iii) of this definition and are obligations
of such Person) to which the property or assets (including, without
limitation, leasehold interests and any other tangible or intangible property
rights) of such Person are subject, regardless of whether the obligations
secured thereby shall have been assumed by or shall otherwise be such
Person's legal liability (but, if such obligations are not assumed by such
Person or are not otherwise such Person's legal liability, the amount of such
Indebtedness shall be deemed to be limited to the fair market value of such
property or assets determined as of the end of the preceding fiscal quarter).
"INDENTURE" means this indenture, as amended or supplemented from time
to time.
"INSURANCE PROCEEDS" means the interest in and to all proceeds (net of
costs of collection, including attorneys' fees) which now or hereafter may be
paid under any insurance policies now or hereafter obtained by or on behalf
of the Company or any Subsidiary Guarantor in connection with any assets
thereof, together with interest payable thereon and the right to collect and
receive the same, including, without limitation, proceeds of casualty
insurance, title insurance, business interruption insurance and any other
insurance now or hereafter maintained with respect to such assets.
8
"INTEREST RATE OR CURRENCY AGREEMENT" of any Person means any forward
contract, futures contract, swap, option or other financial agreement or
arrangement (including, without limitation, caps, floors, collars, puts and
similar agreements) relating to, or the value of which is dependent upon,
interest rates or currency exchange rates.
"INVESTMENT" by any Person in any other Person means (i) the acquisition
(whether for cash, property, services, securities or otherwise) of capital
stock, bonds, notes, debentures, partnership, or other ownership interests or
other Capital Stock or securities of such other Person or any agreement to
make any such acquisition, (ii) the making by such Person of any deposit
with, or advance, loan or other extension of credit to, such other Person
(including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property
to such other Person) and (without duplication) any amount committed to be
advanced, loaned or extended to such other Person, (iii) the entering into of
any guarantee of, or other contingent obligation with respect to,
Indebtedness or other liability of such other Person, (iv) the entering into
of any Swap Obligation with such other Person, or (v) the making of any
capital contribution by such Person to such other Person.
"INVESTMENT GRADE RATING" means with respect to any Person or issue of
debt securities or preferred stock, a rating in one of the four highest
letter rating categories (without regard to "+" or "-" or other modifiers) by
any Rating Agency or if any such Rating Agency has ceased using letter rating
categories or the four highest of such letter rating categories are not
considered to represent "investment grade" ratings, then the comparable
"investment grade" ratings (as designated by any such Rating Agency).
"ISSUE DATE" means the first date on which the Notes are issued under
this Indenture.
"LIEN" means any mortgage, lien, pledge, charge, security interest, or
other encumbrance of any kind, regardless of whether filed, recorded, or
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement and any lease deemed to constitute a security
interest and any option or other agreement to give any security interest).
"MATERIAL CHANGE" means an increase or decrease (excluding changes that
result solely from changes in prices) of more than either (i) 10% from the
end of the immediately preceding fiscal quarter in the estimated discounted
future net revenue from proved oil and gas reserves of the Company and its
Restricted Subsidiaries, or (ii) 20% from the end of the immediately
preceding year in the estimated discounted future net revenue from proved oil
and gas reserves of the Company and its Restricted Subsidiaries, in each case
calculated in accordance with CLAUSE (i)(a) of the definition of "Adjusted
Consolidated Net Tangible Assets"; PROVIDED, HOWEVER, that the following will
be excluded from the calculation of Material Change: (a) any acquisitions of
oil and gas reserves made after the end of the immediately preceding year for
which the discounted future net revenues have been estimated by independent
petroleum engineers since the end of the preceding year and on which a
Reserve Report or Reserve Reports exist and (b) any disposition of properties
existing at the beginning of the current quarter or current year, as the case
may be, for purposes of CLAUSE (i) or CLAUSE (ii) of this definition, that
have been disposed of in accordance with the provisions of SECTION 4.11.
"MOODY'S" means Xxxxx'x Investors Service, Inc. and any successor to the
rating agency business thereof.
"NET CASH PROCEEDS" means an amount equal to (i) the aggregate amount of
cash and Cash Equivalents received by the Company or any Restricted
Subsidiary of the Company in respect of an Asset Sale, LESS (ii) the sum of
(a) all reasonable out-of-pocket fees, commissions, and
9
other expenses incurred in connection with such Asset Sale, including the
amount (estimated in good faith by the Company) of income, franchise, sales
and other applicable taxes to be paid, payable or accrued by the Company or
such Restricted Subsidiary (in each case as estimated in good faith by the
Company without giving effect to tax attributes unrelated to such Asset Sale)
in connection with such Asset Sale, and (b) the aggregate amount of cash and
Cash Equivalents so received which is used to retire any then existing
Indebtedness of the Company or any Subsidiary Guarantor (other than the
Notes), as the case may be, which is secured by a Lien on the property which
is the subject of the Asset Sale or which is required by the terms of such
Indebtedness to be repaid in connection with such Asset Sale.
"NET INCOME" of any Person for any period means the net income (loss) of
such Person for such period, determined on a consolidated basis in accordance
with GAAP, excluding (without duplication) (i) all extraordinary, unusual and
nonrecurring gains, (ii) the net income, if positive, of any other Person, in
which such Person or any of its consolidated Subsidiaries has an interest,
except to the extent of the amount of any dividends or distributions actually
paid in cash to such Person or a consolidated Subsidiary of such Person
during such period, (iii) the net income, if positive, of any Person acquired
in a pooling of interests transaction for any period prior to the date of
such acquisition and (iv) the net income, if positive, of any Subsidiary of
such Person to the extent that the declaration or payment of dividends or
similar distributions is not at the time permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order,
statute, rule, or governmental regulation applicable to such Subsidiary.
"NET PROCEEDS" means (i) in the case of any sale by a Person of
Qualified Capital Stock or other securities, the aggregate net cash proceeds
received by such Person from the sale of such securities (if such Person is
the Company, other than to a Restricted Subsidiary of the Company, and if
such Person is not the Company, other than to any of its consolidated
Subsidiaries) after payment of reasonable out-of-pocket expenses, commissions
and discounts incurred in connection therewith, and (ii) in the case of any
exchange, exercise, conversion or surrender of any outstanding securities or
Indebtedness of such Person for or into shares of Qualified Capital Stock of
such Person, the net book value of such outstanding securities as adjusted on
the books of such Person or Indebtedness of such Person to the extent
recorded in accordance with GAAP, in each case, on the date of such exchange,
exercise, conversion or surrender (PLUS any additional amount required to be
paid by the holder of such Indebtedness or securities to such Person upon
such exchange, exercise, conversion or surrender and LESS (a) any and all
payments made to the holders of such Indebtedness or securities and (b) all
other expenses incurred by such Person in connection therewith, in each case,
in so far as such payments or expenses are incident to such exchange,
exercise, conversion, or surrender).
"NET WORKING CAPITAL" of any Person means (i) all current assets of such
Person and, if such Person is the Company, the Subsidiary Guarantors, and if
such Person is not the Company, its Restricted Subsidiaries, MINUS (ii) all
current liabilities of such Person and its consolidated Subsidiaries other
than the current portion of long term Indebtedness, each item to be
determined on a consolidated basis in conformity with GAAP.
"NET WORTH" of any Person means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of such Person and, if such Person is the
Company, the Subsidiary Guarantors, and if such Person is not the Company,
its Restricted Subsidiaries (which balance sheet shall be as of a date not
more than 90 days prior to the date of such computation), LESS any amounts
included therein attributable to Disqualified Capital Stock or any equity
security convertible into or exchangeable for Indebtedness, the cost of
treasury stock (not otherwise deducted from stockholders' equity), and the
principal amount of any promissory notes receivable from the
10
sale of the Capital Stock of such Person or, if such Person is the Company,
any of the Subsidiary Guarantor, and if such Person is not the Company, its
Restricted Subsidiaries, each item to be determined in conformity with GAAP.
"NOTE CUSTODIAN" means the Trustee, as custodian with respect to the
Global Notes, or any successor entity thereto.
"NOTE REGISTER" means the register maintained by or for the Company in
which the Company shall provide for the registration of the Notes and the
transfer of the Notes.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFERING" has the meaning assigned to such term in the Prospectus.
"OFFICER" means, with respect to any Person, its chief or principal
executive officer, president, chief or principal financial officer, principal
accounting officer, treasurer, secretary or any vice president of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers of
the Company, at least one of whom shall be the principal executive officer,
principal accounting officer or principal financial officer of the Company,
that meets the requirements of SECTION 11.5.
"OIL AND GAS ASSETS" means assets and properties used in the Oil and Gas
Business.
"OIL AND GAS BUSINESS" means the business of acquiring, holding,
leasing, selling, exploring and developing Oil and Gas Assets, including the
exploration for, and exploitation, development, production, processing (but
not refining), purchasing, marketing and transportation of, Hydrocarbons and
other related oil and gas businesses.
"OIL AND GAS SECURITIES" means the Voting Stock of a Person engaged in
the Oil and Gas Business, PROVIDED THAT such Voting Stock shall constitute a
majority of the Voting Stock of such Person in the event that such Voting
Stock is not subject to the reporting requirements of the Exchange Act.
"OPINION OF COUNSEL" means a written opinion of legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of SECTION
11.5. The counsel may be an employee of or counsel to the Company.
"OPINION OF INDEPENDENT COUNSEL" means a written opinion of legal
counsel which is issued by a Person who is not an employee, director or
consultant (other than non-employee legal counsel) of the Company or any of
its Subsidiaries, who may be outside counsel to the Company and who shall be
reasonably acceptable to the Trustee.
"PERMITTED BANK CREDIT FACILITY" means, with respect to any Person, a
term, revolving credit or letter of credit facility, or any combination of
such facilities, with a commercial banking institution, the proceeds of which
are used to acquire Oil and Gas Securities or Oil and Gas Assets, for working
capital and other general corporate purposes, as the same may be amended,
extended or refinanced from time to time.
"PERMITTED HEDGING TRANSACTIONS" means non-speculative transactions in
futures, forwards, swaps or option contracts (including both physical and
financial settlement
11
transactions) engaged in by the Company and the Subsidiary Guarantors as part
of their normal business operations as a risk-management strategy or hedge
against adverse changes in the prices of natural gas, feedstock or refined
products which arise in the ordinary course of business of the Company and
the Subsidiary Guarantors; PROVIDED, THAT such transactions do not in the
case of the Company and the Subsidiary Guarantors, on a monthly basis, relate
to more than 90% of their combined average net natural oil and gas production
per month for the most recent 3-month period measured at the time of such
transaction; PROVIDED, FURTHER, THAT, at the time of such transaction (i) the
counterparty to any such transaction is an Eligible Institution or a Person
that has an Investment Grade Rating or has an issue of debt securities or
preferred stock outstanding with an Investment Grade Rating or (ii) such
counter party's obligation pursuant to such transaction is unconditionally
guaranteed in full by, or secured by a letter of credit issued by, an
Eligible Institution or a Person that has an Investment Grade Rating or that
has an issue of debt securities or preferred stock outstanding with an
Investment Grade Rating.
"PERMITTED HOLDERS" means Xx. Xxxxxxx X. Xxxxxx XX, Xxxxx X. Xxx,
Xxxxxxx Xxxxxx Xxxxx and M. Xxxxx Xxxxxxx (or (i) their heirs, their estates
or any trusts in which they or any of their immediate family members own,
directly or indirectly, a beneficial interest in excess of 50% or (ii) any
corporation, partnership or other legal entity in which they own, directly or
indirectly, a beneficial interest in excess of 50%).
"PERMITTED INDEBTEDNESS" means, without duplication, (i) the
Indebtedness evidenced by the Original Notes or the Subsidiary Guarantees,
(ii) Indebtedness owed by any Subsidiary Guarantor to the Company or any
other Subsidiary Guarantor or Indebtedness owed by the Company to any
Subsidiary Guarantor; PROVIDED THAT in each case, (a) such Indebtedness is
Subordinated Indebtedness, and (b) upon any subsequent issuance or transfer
of any Capital Stock or any other event that results in any such Subsidiary
Guarantor ceasing to be a Subsidiary Guarantor or any other subsequent
transfer of any such Indebtedness (except to the Company or a Subsidiary
Guarantor), such Indebtedness shall be deemed to be Incurred and shall be
treated as an Incurrence of Indebtedness for purposes of the provisions of
SECTION 4.7 at the time the Subsidiary Guarantor in question ceased to be a
Subsidiary Guarantor or the time such subsequent transfer occurred, (iii)
Indebtedness outstanding under a Permitted Bank Credit Facility so long as
the aggregate principal amount of all Indebtedness outstanding under all
Permitted Bank Credit Facilities for the Company and the Subsidiary
Guarantors does not exceed $25,000,000 LESS the amount of Net Cash Proceeds
from any Asset Sale applied pursuant to the provisions of SECTION 4.11 to
repay or prepay such Indebtedness that results in a permanent reduction
relating thereto, (iv) Swap Obligations of the Company or the Subsidiary
Guarantors, (v) Indebtedness outstanding on the Issue Date (and not repaid
with the proceeds of the Offering), (vi) Indebtedness owed by the Company or
the Subsidiary Guarantors in an aggregate principal amount outstanding not to
exceed $5,000,000 at any one time, and (vii) Permitted Refinancing
Indebtedness of the Company and the Subsidiary Guarantors.
"PERMITTED INVESTMENT" means, when used with reference to the Company or
any Subsidiary Guarantor, (i) trade credit extended to Persons in the
ordinary course of business, (ii) purchases of Cash Equivalents, (iii)
Investments by the Company or the Subsidiary Guarantors in Persons which are
or which will, contemporaneously with the making of such Investment, become
Wholly Owned Subsidiary Guarantors and are engaged in the Oil and Gas
Business, (iv) Investments in Oil and Gas Assets, (v) Investments in any
Person the sole consideration for which consists of Qualified Capital Stock
of the Company, (vi) Interest Rate and Currency Agreements with respect to
Permitted Bank Credit Facilities entered into with one or more financial
institutions that are lender parties thereto in the ordinary course of
business and not for purposes of speculation and that is designed to protect
the Company
12
against risks or fluctuations in interest rates related to payment
obligations existing and arising under such Permitted Bank Credit Facilities
and Swap Obligations, (vii) advances to officers and employees of the Company
or any Subsidiary Guarantor in connection with the performance of their
duties in the ordinary course of business in an amount not to exceed $250,000
in the aggregate outstanding at any time, (viii) margin deposits in
connection with Permitted Hedging Transactions, (ix) Investments and
expenditures made in the ordinary course of business by the Company or the
Subsidiary Guarantors, and of a nature that is or shall have become customary
in, the Oil and Gas Business as a means of actively exploiting, exploring
for, acquiring, developing, enhanced recovery of, processing, gathering,
purchasing, selling, marketing or transporting oil or gas through agreements,
transactions, interests or arrangements, including arrangements which permit
a Person to share risks or costs, comply with regulatory requirements
regarding local ownership or satisfy other objectives customarily achieved
through the conduct of the Oil and Gas Business jointly with third parties,
including, without limitation, (a) ownership interests in oil and gas
properties or gathering systems and (b) Investments and expenditures in the
form of or pursuant to operating agreements, processing agreements, farm-in
agreements, farm-out agreements, development agreements, area of mutual
interest agreements, unitization agreements, pooling arrangements, joint
bidding agreements, service contracts, joint venture agreements, partnership
agreements (whether general or limited), subscription agreements, stock
purchase agreements and other similar agreements with third parties; PROVIDED
THAT in the case of any joint venture engaged in processing, gathering,
marketing or transporting oil or gas (1) all Indebtedness of such joint
venture (other than a joint venture that is an Unrestricted Subsidiary of the
Company) that would not otherwise constitute Indebtedness of the Company or a
Subsidiary Guarantor shall be deemed Indebtedness of such Person in
proportion to its direct or indirect ownership interest in such joint venture
and (2) such joint venture shall be reasonably calculated to enhance the
value of the reserves of such Person or marketability of production from such
reserves, (x) other Investments not in excess of $2,500,000 at any time
outstanding, and (xi) loans made to officers, directors and employees of the
Company or any Subsidiary Guarantor approved by the applicable Board of
Directors (or by an authorized officer), the proceeds of which are used
solely to purchase stock or to exercise stock options received pursuant to an
employee stock option plan or other incentive plan, in a principal amount not
to exceed the purchase price of such stock or the exercise price of such
stock options, as applicable.
"PERMITTED LIENS" with respect to any Person means (i) Liens imposed by
governmental authorities for taxes, assessments, or other charges not yet due
or which are being contested in good faith and by appropriate proceedings, if
adequate reserves with respect thereto are maintained on the books of any
such Person in accordance with GAAP, (ii) statutory Liens of landlords,
carriers, warehousemen, mechanics, materialmen, repairmen, vendors, mineral
interest owners, or other like Liens arising by operation of law in the
ordinary course of business PROVIDED THAT (a) the underlying obligations are
not overdue for a period of more than 60 days, or (b) such Liens are being
contested in good faith and by appropriate proceedings and adequate reserves
with respect thereto are maintained on the books of any such Person in
accordance with GAAP, (iii) deposits of cash or Cash Equivalents to secure
the performance of bids, trade contracts (other than borrowed money), leases,
statutory obligations, surety bonds, performance bonds, and other obligations
of a like nature incurred in the ordinary course of business (or to secure
reimbursement obligations or letters of credit issued to secure such
performance or other obligations), (iv) easements, rights-of-way, zoning,
similar restrictions and other similar encumbrances or title defects incurred
in the ordinary course of business which, in the aggregate, are not material
in amount and which do not, in any case, materially detract from the value of
the property subject thereto or materially interfere with the ordinary
conduct of the business of such Person, (v) Liens securing the Notes, any
Subsidiary Guarantee or any Permitted Bank Credit Facility, (vi) pledges or
deposits made in the ordinary course of business in connection with worker's
compensation, unemployment
13
insurance, other types of social security legislation, property insurance and
liability insurance, (vii) Liens on the assets of any Person existing at the
time such assets are acquired by such Person, whether by merger,
consolidation, purchase of assets or otherwise so long as such Liens (a) are
not created, incurred or assumed in contemplation of such assets being
acquired by such Person and (b) do not extend to any other assets of such
Person, (viii) leases or subleases granted to others (to the extent of any
such lessee's normal and customary usage rights thereunder) or obtained from
others (to the extent of any such lessor's title thereunder), in either case,
that do not materially interfere with the ordinary course of business of any
of such Person, (ix) Liens ordinarily and customarily arising under operating
agreements, and (x) any extension, renewal or replacement of the Liens
created pursuant to any of CLAUSES (i) THROUGH (ix) of this definition,
PROVIDED THAT such Liens would have otherwise been permitted under such
clauses, and PROVIDED FURTHER THAT the Liens permitted by this clause (x) do
not secure any additional Indebtedness or encumber any additional property.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of a Person
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund, other Indebtedness of such
Person; PROVIDED THAT (i) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) then outstanding of the
Indebtedness for which the exchange is made or so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable
expenses incurred in connection therewith), (ii) such Permitted Refinancing
Indebtedness (other than Indebtedness under Permitted Bank Credit Facilities)
has a final maturity date later than the final maturity date of, and has a
weighted average life equal to or greater than the weighted average life of,
the Indebtedness for which the exchange is made or being extended,
refinanced, renewed, replaced, defeased or refunded, (iii) if the
Indebtedness for which the exchange is made or being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment
to the Notes or any Subsidiary Guarantee (as the case may be) such Permitted
Refinancing Indebtedness has a final maturity date later than the final
maturity date of, and is subordinated in right of payment to, the Notes or
any Subsidiary Guarantee (as the case may be), on terms at least as favorable
to the Holders of Notes or any Subsidiary Guarantee (as the case may be) as
those contained in the documentation governing the Indebtedness for which the
exchange is made or being extended, refinanced, renewed, replaced, defeased
or refunded, and (iv) with respect to any such Indebtedness of the Company
for which the exchange is made or being extended, refinanced, renewed,
replaced, defeased or refunded, such Permitted Refinancing Indebtedness shall
not be Incurred by any Subsidiary Guarantor.
"PERSON" means any corporation, individual, joint stock company, joint
venture, partnership, limited liability company, unincorporated association,
governmental regulatory entity, country, state, or political subdivision
thereof, trust, municipality, or other entity.
"PREFERRED STOCK" means, with respect to any Person, any class or
classes (however designated) of Capital Stock of such Person that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person
over shares of Capital Stock of any other class of such Person.
"PRODUCTION PAYMENT" means any volumetric or dollar-denominated
production payment or other similar burden on the property of the Company or
any Subsidiary Guarantor.
"PROSPECTUS" means the "Prospectus" regarding the issuance of the Notes,
which is included as a part of the Company's Registration Statement on Form
S-1, as amended (Registration No. 333-42641), which was filed with the
Commission on December 18, 1997 and declared effective by the Commission on
____________ ____, 199__.
14
"PUBLIC EQUITY OFFERING" means an underwritten public offering, subsequent
to the Issue Date, by a nationally recognized member of the National Association
of Securities Dealers, Inc. of Qualified Capital Stock of the Company pursuant
to an effective registration statement filed with the Commission pursuant to the
Securities Act.
"QUALIFIED CAPITAL STOCK" means any Capital Stock that is not Disqualified
Capital Stock.
"RATING AGENCIES" means Standard and Poor's and Moody's, or any successor
to the respective rating agency businesses thereof.
"REFERENCE PERIOD" with regard to any Person means the four full fiscal
quarters of such Person ended on or immediately preceding any date upon which
any determination is to be made pursuant to the terms of the Notes or this
Indenture.
"RESERVE REPORT" means a report prepared by independent petroleum engineers
with respect to Hydrocarbon reserves in accordance with guidelines published by
the Commission.
"RESPONSIBLE OFFICER", when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee (or any successor
group of the Trustee) with the direct responsibility for the administration of
this Indenture and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"RESTRICTED INVESTMENT" means (i) the designation of a Subsidiary as an
Unrestricted Subsidiary in the manner described in the definition of
"Unrestricted Subsidiary" and (ii) any Investment other than a Permitted
Investment.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary of such Person.
"SALE AND LEASEBACK TRANSACTION" means an arrangement relating to property
owned on the Issue Date or thereafter acquired whereby a Person or a Subsidiary
of such Person transfers such property to another Person and leases it back from
such other Person.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"STANDARD AND POOR'S" means Standard and Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., and any successor to the rating
agency business thereof.
"STATED MATURITY DATE" means __________________, 2008.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company or a
Subsidiary Guarantor that (i) requires no payment of principal prior to or on
the Stated Maturity Date and (ii) is expressly subordinate and junior in right
of payment to the Notes or the Subsidiary Guarantees, as the case may be.
"SUBSIDIARY" with respect to any Person means, as of each relevant time,
(i) a corporation with respect to which such Person or its Subsidiaries (or any
combination thereof) own or control, directly or indirectly, at least 50% of
such corporation's Voting Stock, (ii) a partnership in which such Person or a
Subsidiary of such Person is, at the time, a general partner of such partnership
and has more than 50% of the total voting power of partnership interests, or
(iii) any other Person (other than a corporation or a partnership) in which such
15
Person, one or more Subsidiaries of such Person, or such Person and one or more
Subsidiaries of such Person, directly or indirectly, has (a) at least a 50%
ownership interest or (b) the power to elect or direct the election of the
directors or other governing body of such other Person.
"SUBSIDIARY GUARANTEE" means any guarantee of the Notes by any Subsidiary
Guarantor pursuant to the provisions of this Indenture.
"SUBSIDIARY GUARANTORS" means (i) RB Operating Company, a Delaware
corporation, (ii) RLP Gulf States, L.L.C., an Oklahoma limited liability
company, and (iii) each other Person that guarantees the payment and performance
of the Notes in accordance with the provisions of this Indenture, in each case,
until any such Person shall be released and relieved of its obligations as a
Subsidiary Guarantor pursuant to the provisions of this Indenture.
"SWAP OBLIGATION" of any Person means any Interest Rate or Currency
Agreement or Hedging Contract entered into with one or more financial
institutions or one or more futures exchanges in the ordinary course of business
and not for purposes of speculation that is designed to protect such Person
against risks or fluctuations that arise in the ordinary course of business of
the Company and the Subsidiary Guarantors in (i) interest rates related to
payment obligations on Indebtedness (other than Permitted Indebtedness)
permitted to be Incurred pursuant to the provisions of SECTION 4.7(a) and which
shall have a notional amount no greater than 100% of the principal amount of
such Indebtedness being hedged thereby, (ii) currency exchange rate fluctuations
related to the payment obligations on Indebtedness (other than Permitted
Indebtedness) permitted to be Incurred pursuant to the provisions of
SECTION 4.7(a) or to the foreign currency cash flows reasonably expected to be
generated by the Company and the Subsidiary Guarantors and the notional
principal amount of such currency exchange obligations does not exceed the
amount of such foreign currency cash flows to which they relate, or (iii)
fluctuations in oil and gas prices.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA, except as provided in SECTION 9.3; PROVIDED, HOWEVER, that, in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by such amendments, the Trust
Indenture Act of 1939 as so amended.
"TRUSTEE" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"UNRESTRICTED NON-RECOURSE INDEBTEDNESS" of any Unrestricted Subsidiary
means (i) Indebtedness of such Person that is secured solely (other than with
respect to clause (ii) below) by a Lien upon the stock of an Unrestricted
Subsidiary of such Person and as to which there is no recourse (other than with
respect to clause (ii) below) against such Person or any of its assets other
than against such stock (and the dollar amount of any Indebtedness of such
Person as described in this clause (i) shall be deemed to be zero for purposes
of all other provisions of this Indenture) and (ii) guarantees of the
Indebtedness of Unrestricted Subsidiaries of such Person.
"UNRESTRICTED SUBSIDIARY" means, in respect of any Person, any other Person
("Other Person") that would, but for this definition of "Unrestricted
Subsidiary", be a Restricted Subsidiary of such Person organized or acquired
after the Issue Date as to which all of the following conditions apply:
(i) neither such Person nor any of its other Subsidiaries provides, or is
obligated to provide, any credit support of any Indebtedness, or other financial
support, of such Other Person (including any undertaking, agreement or
instrument evidencing such
16
Indebtedness or maintenance or preservation of such Other Person's financial
condition or to cause such Other Person to achieve any specified levels of
operating results); (ii) such Other Person is not liable, directly or
indirectly, with respect to any Indebtedness other than Unrestricted
Subsidiary Indebtedness and does not own any Capital Stock of, or own or hold
any Lien on any property of, such Person or any of its other Restricted
Subsidiaries; (iii) neither such Person nor any of its Restricted
Subsidiaries has made an Investment in such Other Person unless such
Investment was permitted by the provisions of SECTION 4.8, and neither such
Person nor any of its Restricted Subsidiaries has any obligations to make any
Investment in such Other Person; (iv) such Other Person, either alone or in
the aggregate with all other Unrestricted Subsidiaries, does not operate or
own, directly or indirectly, any significant portion of the assets or
business of such Person and its other Subsidiaries; and (v) the Board of
Directors of such Person, as provided below, shall have designated such Other
Person to be an Unrestricted Subsidiary on or prior to the date of
organization or acquisition of such Other Person. Any such designation by the
Board of Directors of such Person shall be evidenced to the Trustee by
delivering to the Trustee a Board Resolution thereof giving effect to such
designation and an Officers' Certificate certifying that such designation
complies with the foregoing conditions and was permitted by the provision of
SECTION 4.8.
"UNRESTRICTED SUBSIDIARY INDEBTEDNESS" means, as to any Unrestricted
Subsidiary of any Person, Indebtedness of such Unrestricted Subsidiary (i) as to
which neither such Person nor any Subsidiary of such Person (a) is directly or
indirectly liable (by virtue of such Person or any such Subsidiary being the
primary obligor on, guarantor of, general partner of, or otherwise liable in any
respect to, such Indebtedness), or (b) constitutes a lender, (ii) no default
with respect to which would permit any holder of any Indebtedness of such Person
or any Subsidiary of such Person to declare a default on such Indebtedness of
such Person or any Subsidiary of such Person or cause the payment thereof to be
accelerated or payable prior to its stated maturity, and (iii) as to which the
lenders have been notified in writing that they will not have any recourse to
the stock or assets of such Person or any of its Subsidiaries.
"VOTING STOCK" means Capital Stock of a Person entitled (without regard to
the occurrence of any contingency) to vote in the election of the directors,
managers, trustees or similar Persons of such Person.
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary to the extent (i) all of the
Capital Stock or other ownership interests in such Subsidiary, other than any
directors' qualifying shares mandated by applicable law, is owned directly or
indirectly by the Company or (ii) such Subsidiary is organized in a foreign
jurisdiction and is required by the applicable laws and regulations of such
foreign jurisdiction to be partially owned by the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction or
another foreign jurisdiction in order for such Subsidiary to transact business
in such foreign jurisdiction, PROVIDED THAT the Company, directly or indirectly,
owns the remaining Capital Stock or ownership interests in such Subsidiary and,
by contract or otherwise, controls the management and business of such
Subsidiary and derives the economic benefits of ownership of such Subsidiary to
substantially the same extent as if such Subsidiary were a wholly owned
Subsidiary.
"WHOLLY OWNED SUBSIDIARY GUARANTOR" means any Subsidiary Guarantor to the
extent (i) all of the Capital Stock or other ownership interests in such
Subsidiary Guarantor, other than any directors' qualifying shares mandated by
applicable law, is owned directly or indirectly by the Company or (ii) such
Subsidiary Guarantor is organized in a foreign jurisdiction and is required by
the applicable laws and regulations of such foreign jurisdiction to be partially
owned by the government of such jurisdiction or individual or corporate citizens
of such foreign jurisdiction or another foreign jurisdiction in order for such
Subsidiary
17
Guarantor to transact business in such foreign jurisdiction, PROVIDED THAT
the Company, directly or indirectly, owns the remaining Capital Stock or
ownership interests in such Subsidiary Guarantor and, by contract or
otherwise, controls the management and business of such Subsidiary Guarantor
and derives the economic benefits of ownership of such Subsidiary Guarantor
to substantially the same extent as if such Subsidiary Guarantor were a
Wholly Owned Subsidiary of the Company.
SECTION 1.2 OTHER DEFINITIONS.
Defined in
Term Section
---- ----------
"ADJUSTED NET ASSETS"........................... 10.7
"AGENT MEMBERS"................................. 2.1
"BENEFITTED PARTY".............................. 10.1
"CHANGE OF CONTROL OFFER"....................... 4.17
"CHANGE OF CONTROL PAYMENT DATE"................ 4.17
"CHANGE OF CONTROL PURCHASE PRICE".............. 4.17
"COVENANT DEFEASANCE"........................... 8.3
"DTC"........................................... 2.3
"EVENT OF DEFAULT".............................. 6.1
"EXCESS CASH"................................... 4.11
"EXCESS CASH ACCEPTANCE AMOUNT.................. 4.11
"EXCESS CASH OFFER"............................. 4.11
"EXCESS CASH OFFER AMOUNT"...................... 4.11
"EXCESS CASH OFFER PRICE"....................... 4.11
"EXCESS CASH OFFER TRIGGER DATE"................ 4.11
"EXCESS CASH PURCHASE DATE"..................... 4.11
"FUNDING GUARANTOR"............................. 10.7
"INTEREST PAYMENT DATE"......................... Exhibit A
"LEGAL DEFEASANCE".............................. 8.2
"OFFER PERIOD".................................. 3.9
"ORIGINAL NOTES"................................ 2.2
"PAYING AGENT".................................. 2.3
"REGISTRAR"..................................... 2.3
"RESTRICTED PAYMENT"............................ 4.8
"SUBSIDIARY GUARANTEE".......................... 10.1
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"INDENTURE SECURITIES" means the Notes and the Subsidiary Guarantees;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
18
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
"OBLIGOR" on the Notes means the Company, any Subsidiary Guarantor and any
successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them.
SECTION 1.4 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "OR" is not exclusive, and "INCLUDING" means "including
without limitation", "including but not limited to" or words of similar
import;
(iv) words in the singular include the plural, and in the plural
include the singular;
(v) the words "HEREIN", "HEREOF" and "HEREUNDER" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(vi) all references herein to particular Articles, Sections,
clauses or subclauses of Sections and Exhibits refer to this Indenture unless
expressly otherwise as indicated;
(vii) provisions apply to successive events and transactions;
and
(viii) references to sections of or rules under the Securities
Act or the Exchange Act shall be deemed to include substitute, replacement
of successor sections or rules adopted by the Commission from time to time.
ARTICLE 2
THE NOTES
SECTION 2.1 FORM AND DATING.
(a) GENERAL. The Notes, the notation thereon relating to the Subsidiary
Guarantees and the Trustee's certificate of authentication shall be
substantially in the form of EXHIBIT A. The Notes may have notations, legends
or endorsements required by law, stock exchange rule or usage. Each Note shall
be issued in fully-registered form, without coupon, in minimum
19
denominations of $1,000 and integral multiples thereof, and shall be dated
the date of its authentication.
All Notes issued pursuant to this Indenture shall be considered
collectively to be a single class for all purposes of this Indenture, including,
waivers, amendments, redemptions and offers to purchase.
The terms and provisions contained in the form of the Notes and the
notation thereon relating to the Subsidiary Guarantees annexed hereto as
EXHIBIT A and the Subsidiary Guarantees shall constitute, and are hereby
expressly made, a part of this Indenture, and the Company, the Subsidiary
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
(b) GLOBAL NOTES.
(i) GENERALLY. The Notes initially offered and sold pursuant to the
Prospectus shall be issued in the form of one or more permanent global notes and
shall be substantially in the form of EXHIBIT A (including the text referred to
in footnotes 1 and 2 thereto and the schedule referred to in footnote 3 thereto,
but excluding, to the extent therein referenced, the text referred to in
footnote a thereto). Each Global Note shall be deposited on behalf of the
purchasers of the Notes represented thereby with, or on behalf of, the
Depository, registered in the name of the Depository or its designated nominee,
duly executed by the Company and authenticated by the Trustee as herein
provided. Each Global Note shall represent such of the outstanding Notes as
shall be specified therein, and each shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be increased, subject to the limitation set forth in SECTION 2.2, or
decreased, by adjustments made on the records of the Trustee and the Depository
or its nominee as herein provided. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the amount of outstanding Notes
represented thereby shall be made by the Trustee or the Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by SECTION 2.6. The Notes shall remain in the form of
Global Notes until the occurrence of either of the events specified in CLAUSE
(y) OR (z) of SECTION 2.6(b)(ii) and the completion of the cancellation and
reissuance procedures therein provided.
(ii) BOOK-ENTRY PROVISIONS. The Company shall execute and the Trustee
shall, in accordance with SECTION 2.2, authenticate and deliver each Global Note
that shall be (i) registered in the name of the Depository or its nominee and
(ii) delivered by the Trustee to the Depository or pursuant to the Depository's
instructions or held by the Trustee as Note Custodian for the Depository. With
respect to the Notes that are represented by a Global Note, the Company
authorizes the execution and delivery by the Trustee of a letter of
representation or other similar agreement or instrument in the form customarily
provided by the Depositary appointed with respect to such Global Note.
Members of, or participants in, the Depository ("AGENT MEMBERS") shall have
no rights either under this Indenture with respect to any Global Note held on
their behalf by the Depository (or its nominee), or the Note Custodian as its
custodian, or under such Global Note, and the Depository may be treated by the
Company, the Subsidiary Guarantors, the Trustee and any agent of the Company,
the Subsidiary Guarantors or the Trustee as the absolute owner and Holder of
such Global Note for all purposes whatsoever, including the Person (i) through
whom all rights of ownership may be exercised, (ii) to whom all notices are
required to be made, and (iii) entitled to receive payments from or at the
direction of the Company with respect to the Notes. Notwithstanding the
foregoing, (y) the registered Holder of a Global
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Note may grant proxies and otherwise authorize any Person, including Agent
Members and Persons that may hold interests through Agent Members, to take
action that a Holder is entitled to take under this Indenture or the Notes
and (z) nothing herein shall prevent the Company, the Subsidiary Guarantors,
the Trustee or any agent of the Company, the Subsidiary Guarantors or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or shall impair, as between the
Depository and its Agent Members, the operation of customary practices and
procedures of such Depository governing the exercise of the rights of an
owner of a beneficial interest of any Note.
(c) DEFINITIVE NOTES. Notes shall be issued in definitive form upon
either of the occurrences specified in CLAUSE (y) OR (z) of SECTION 2.6(b)(II),
and when so issued, shall be substantially in the form of EXHIBIT A (including
the modification provided for in footnote a thereto, but excluding the text
referred to in footnotes 1 and 2 thereto and the schedule referred to in
footnote 3 thereto) and executed, authenticated and delivered as provided for
in, or referred to by, SECTION 2.6(b)(II).
SECTION 2.2 EXECUTION AND AUTHENTICATION.
One Officer shall sign the Notes for the Company by manual or facsimile
signature. If an Officer whose signature is on a Note no longer holds that
office at the time the Trustee authenticates the Note, the Note shall
nevertheless be valid. Each Subsidiary Guarantor shall execute its Subsidiary
Guarantee in the manner set forth in SECTION 10.8.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture. The form of Trustee's certificate of
authentication to be borne by the Notes shall be substantially as set forth in
EXHIBIT A.
The Trustee shall authenticate (i) the Notes for original issue on the
Issue Date in the aggregate principal amount of $115,000,000 (the "ORIGINAL
NOTES") and (ii) additional Notes for original issue from time to time after the
Issue Date in such principal amount as may be set forth in a written order of
the Company delivered to the Trustee, which written order shall specify (a) the
amount of Notes to be authenticated and the date of original issue thereof and
(b) the amount of Notes to be issued in global form or definitive form. The
aggregate principal amount of Notes outstanding at any time may not exceed
$115,000,000 PLUS such additional principal amounts as may be issued and
authenticated pursuant to CLAUSE (ii) of this paragraph, except as provided in
SECTION 2.7.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company or an Affiliate of the
Company.
At any time and from time to time after the execution of this Indenture,
the Trustee or an authenticating agent shall upon receipt of a written order of
the Company signed by two Officers or by an Officer and either an assistant
secretary or an assistant treasurer of the Company authenticate for original
issue Notes in the aggregate principal amount specified in such order; PROVIDED
THAT the Trustee shall be entitled to receive an Officers' Certificate and an
Opinion of Counsel of the Company that it may reasonably request in connection
with such authentication of Notes. Such order shall specify the amount of Notes
to be authenticated, the date on which the original issue of Notes is to be
authenticated and the aggregate principal amount of Notes then authorized.
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SECTION 2.3 REGISTRAR AND PAYING AGENT; DEPOSITORY APPOINTMENT.
The Company shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("REGISTRAR") and an office or
agency where Notes may be presented for payment ("PAYING AGENT"). The Registrar
shall keep a register of the Notes and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional paying
agents. The term "REGISTRAR" includes any co-registrar and the term "PAYING
AGENT" includes any additional paying agent. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company shall notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any
domestically incorporated Wholly Owned Subsidiary Guarantor may act as Paying
Agent, Registrar or co-registrar. The Company shall enter into an appropriate
agency agreement with any Registrar or Paying Agent not a party to this
Indenture. The agreement shall implement the provisions of this Indenture that
relate to such Agent.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depository with respect to the Global Notes.
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, of premium, if any, or interest on the Notes and will notify the
Trustee of any default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee and to account for any funds disbursed. Upon payment over to the
Trustee and upon accounting for all funds disbursed, the Paying Agent (if other
than the Company or a Subsidiary thereof) shall have no further liability for
the money. If the Company or a Subsidiary thereof acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes. Each Paying Agent shall otherwise comply with TIA Section 317(b).
SECTION 2.5 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each Interest Payment Date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes, and the Company shall otherwise comply with TIA Section 312(a).
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SECTION 2.6 TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE NOTES - GENERALLY. When a Note is presented by
a Holder to the Registrar or co-registrar with a request:
(y) to register the transfer of the Note; or
(z) to exchange such Note for an equal principal amount of Notes
of other authorized denominations,
the Registrar or a co-registrar shall register the transfer or make the exchange
as requested if its requirements for such transactions are met; PROVIDED,
HOWEVER, that each Note presented or surrendered for register of transfer or
exchange shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar or a co-registrar duly executed
by such Holder or by its attorney, duly authorized in writing.
To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Notes at the Registrar's or a co-
registrar's request and upon surrender and submission of the applicable Note or
Notes. No service charge shall be made to a Holder for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange or transfer pursuant to SECTIONS 3.7, 3.9, 4.11, 4.17 and
9.5). Neither the Registrar nor a co-registrar shall be required to register
the transfer or exchange of (i) any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part, or (ii)
any Note the transfer of which is not required by the Company pursuant to this
SECTION 2.6(a). All Notes issued upon any registration of transfer or exchange
pursuant to the applicable terms of this Indenture shall be the valid
obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Notes surrendered upon such registration
of transfer or exchange.
The Company shall not be required:
(w) to issue, to register the transfer or exchange of, or
to exchange, Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
redemption under SECTION 3.2 or repurchase under SECTION 3.9, 4.11 OR
4.17, and ending at the close of business on the day of selection;
(x) to register the transfer or exchange of or to exchange
any Note so selected for redemption or repurchase in whole or in part,
except the unredeemed or unpurchased portion of any Note being
redeemed or repurchased in part;
(y) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest payment date;
or
(z) to register the transfer of or to exchange a Note other
than in amounts of $1,000 or integral multiples thereof.
Prior to due presentment for the registration of a transfer or exchange of
any Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of
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principal of and premium (if any) and interest on such Note and for all other
purposes whatsoever (whether or not the Note is overdue), and neither the
Trustee, any Agent nor the Company shall be affected by notice to the
contrary.
(b) TRANSFER AND EXCHANGE OF GLOBAL NOTES.
(i) GENERALLY. Notwithstanding anything to the contrary contained in
SECTION 2.6(a), transfers of Global Notes shall be limited to transfers thereof
in whole, but not in part, and may be transferred as a whole only by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository; PROVIDED, that each such transfer is effected through the
Depository, its applicable rules and procedures and otherwise in accordance with
this Indenture. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depository, in accordance with this
Indenture and the rules and procedures of the Depository that apply to such
transfer or exchange.
(ii) EXCHANGE OF GLOBAL NOTES FOR DEFINITIVE NOTES; AUTHENTICATION OF
DEFINITIVE NOTES. Definitive Notes shall be transferred to all beneficial owners
of Global Notes in exchange for their beneficial interest in such Global Notes
IF, AND ONLY IF, either (y) the Company notifies the Trustee in writing that the
Depository has notified it that the Depository is unwilling or unable to
continue as Depository for the Global Notes and a qualified successor Depository
for the Global Notes is not appointed by the Company within 90 days after
delivery of such notice; or (z) the Company, at its option, notifies the Trustee
in writing that it elects to cause the issuance of Definitive Notes under this
Indenture. Then, upon surrender of the Global Notes by the Depository or on
behalf of the Depository by its nominee or the Note Custodian, the Company shall
execute, and the Trustee shall, upon receipt of an authentication order in
accordance with SECTION 2.2, authenticate and deliver, Definitive Notes to the
Persons that the Depository and, if applicable, its nominee identify as being
the owners of the respective beneficial interests in the Global Notes, in an
aggregate principal amount equal to the principal amount of the Global Notes in
exchange for such Global Notes. Neither the Company nor the Trustee will be
liable for any delay by the Holder of a Global Note or the Depository or any
Agent Member in identifying the beneficial owners of the Notes, and the Company
and the Trustee may rely on, and will be protected in relying on, instructions
from, or pursuant to proxies or similar instruments granted by, the Holder of a
Global Note or the Depository for all such purposes.
(iii) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such
time as all beneficial interests in Global Notes have been exchanged for
Definitive Notes, redeemed, repurchased or canceled, all Global Notes shall be
surrendered to or retained and cancelled by the Trustee in accordance with
SECTION 2.11. At any time prior to such cancellation, if any beneficial
interest in a Global Note is redeemed, repurchased or cancelled, the principal
amount of Notes represented by such Global Note shall be reduced accordingly by
adjustments made on the records of the Trustee and the Depository and further
reflected by an endorsement made on a schedule to such Global Note by the
Trustee or the Note Custodian, at the direction of the Trustee, to reflect such
reduction.
SECTION 2.7 REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Company, and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by
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the Holder that is sufficient in the judgment of the Trustee and the Company
to protect the Company, the Trustee, any Agent and any authenticating agent
from any loss that any of them may suffer if a Note is replaced. The Company
may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
SECTION 2.8 OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those redeemed, those repurchased pursuant to SECTION 3.9, 4.11 OR 4.17, those
reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof and those described in this Section as not
outstanding. Except as set forth in SECTION 2.9, a Note does not cease to be
outstanding because the Company, any of the Subsidiary Guarantors or any
Affiliate of the Company or any of the Subsidiary Guarantors holds the Note.
If a Note is replaced pursuant to SECTION 2.7, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Note is
held by a bona fide purchaser.
If the principal amount of any Note is considered paid under SECTION 4.1
and the Paying Agent is not prohibited from paying such money to the Holders on
the date due for the payment of such money, it ceases to be outstanding and
interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
SECTION 2.9 TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, any of the Subsidiary Guarantors or any Affiliate of the Company or any
of the Subsidiary Guarantors, shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes as to
which either (i) a Responsible Officer actually knows are so owned, or
(ii) written notice of such ownership has been given to the Trustee by the
Company, the Depository or the Registrar, shall be so disregarded.
SECTION 2.10 TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers thereof. Temporary Notes shall be substantially
in the form of Global Notes or Definitive Notes, as applicable, but may have
variations that the Company considers appropriate for temporary Notes and as
shall be reasonably acceptable to the Trustee. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate Definitive Notes or the
Global Note, as applicable, in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.
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SECTION 2.11 CANCELLATION.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, redemption, repurchase, replacement or cancellation
and shall destroy (subject to record retention requirements of the Exchange Act)
such cancelled Notes. The Trustee shall provide a certificate of destruction to
the Company from time to time, at the written request of the Company. The
Company may not issue new Notes to replace Notes that it has redeemed,
repurchased, paid or that have been delivered to the Trustee for cancellation.
If the Company or any Subsidiary Guarantor shall acquire any of the Notes (other
than pursuant to SECTION 3.9, 4.11 OR 4.17), such acquisition shall not operate
as a redemption, repurchase or satisfaction of the Indebtedness represented by
such Notes unless and until the same are surrendered to the Trustee for
cancellation pursuant to this SECTION 2.11.
SECTION 2.12 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in SECTION 4.1. The Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or,
upon the written request of the Company, the Trustee in the name and at the
expense of the Company) shall mail or cause to be mailed to Holders a notice
that states the special record date, the related payment date and the amount of
such interest to be paid.
SECTION 2.13 CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if then generally
in use), and, if so, the Trustee shall use CUSIP numbers in notices of
redemption or repurchase (as applicable) as a convenience to Holders; PROVIDED
THAT any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption or repurchase (as applicable) and that reliance may
be placed only on the other identification numbers printed on the Notes, and any
such redemption or repurchase (as applicable) shall not be affected by any
defect in or omission of such numbers. The Company shall promptly notify the
Trustee of any change in the CUSIP numbers.
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ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.1 NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of SECTION 3.7, it shall furnish to the Trustee, at least 45 days but
not more than 60 days before a redemption date, an Officers' Certificate setting
forth (i) the clause of this Indenture pursuant to which the redemption shall
occur, (ii) the redemption date, (iii) the principal amount of Notes to be
redeemed and (iv) the redemption price.
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the Trustee
shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
PRO RATA basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate; PROVIDED THAT no Note of $1,000 or less will be
redeemed in part. In the event that less than all of the Notes are to be
redeemed by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder shall be redeemed. Except as
provided in the preceding sentence, provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption.
The provisions of the two preceding paragraphs of this SECTION 3.2 shall
not apply with respect to any redemption affecting only a Global Note, whether
such Global Note is to be redeemed in whole or in part. In case of any such
redemption in part, the unredeemed portion of the principal amount of the Global
Note shall be in an authorized denomination.
SECTION 3.3 NOTICE OF REDEMPTION.
Subject to the provisions of SECTION 3.9, at least 30 days but not more
than 60 days before a redemption date, the Company shall mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose Notes
are to be redeemed at its registered address. Failure to receive such notice or
any defect in the notice to any such Holder shall not affect the validity of the
proceedings for the redemption of any other Notes or portion thereof.
The notice shall identify the Notes to be redeemed (including CUSIP number)
and shall state:
(i) the redemption date;
(ii) the redemption price;
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(iii) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(vi) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(vii) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(viii) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Notes.
If any of the Notes to be redeemed is in the form of a Global Note, then
the Company shall modify such notice to the extent necessary to accord with the
procedures of the Depository applicable to redemption.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; PROVIDED, HOWEVER, that the Company
shall have delivered to the Trustee, at least 45 days (unless the Trustee and
the Company agree to a shorter period) prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with SECTION 3.3, Notes
called for redemption become irrevocably due and payable on the redemption date
at the redemption price. A notice of redemption may not be conditional.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.
On or prior to the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in SECTION 2.4) money sufficient
to pay the redemption price of and accrued interest on all Notes to be redeemed
on that date. The Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the Company
in excess of the amounts necessary to pay the redemption price of, and accrued
interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the
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failure of the Company to comply with the preceding paragraph, interest shall
be paid on the unpaid principal, from the redemption date until such
principal is paid, and to the extent lawful on any interest not paid on such
unpaid principal, in each case at the rate provided in the Note and in
SECTION 4.1.
SECTION 3.6 NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and the Trustee shall authenticate for the Holder at the expense of the Company
a new Note equal in principal amount to the unredeemed portion of the Note
surrendered.
SECTION 3.7 OPTIONAL REDEMPTION.
(a) The Notes will not be redeemable at the Company's option prior to
________ ____, 2003. Thereafter, the Notes will be subject to redemption at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' written notice, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest thereon, if
any, to the applicable redemption date, if redeemed during the 12-month period
beginning on ________ ____ of the years indicated below:
YEAR PERCENTAGE
2003 ________%
2004 ________%
2005 ________%
2006 and thereafter 100.0000%
(b) Notwithstanding the foregoing, at any time on or prior to
________ ____, 2001, the Company may redeem up to an aggregate of 35% of the
aggregate principal amount of Notes originally issued, in cash, at a redemption
price of _______% of the principal amount thereof, together with accrued and
unpaid interest thereon to the redemption date, with the net proceeds of a
Public Equity Offering; PROVIDED that (i) at least 65% of the aggregate
principal amount of Notes originally issued remains outstanding immediately
after the occurrence of each such redemption and (ii) each such redemption shall
occur within 60 days of the date of the closing of each such Public Equity
Offering.
(c) Any redemption pursuant to this SECTION 3.7 shall be made pursuant to
the provisions of SECTIONS 3.1 THROUGH 3.6.
SECTION 3.8 MANDATORY REDEMPTION.
Except as set forth under SECTIONS 4.11 AND 4.17, the Company shall not be
required to make mandatory redemption payments or sinking fund payments with
respect to the Notes.
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS CASH.
(a) In the event that, pursuant to SECTION 4.11, the Company shall be
required to commence an Excess Cash Offer, it shall follow the procedures
specified below.
(i) The Excess Cash Offer shall be made to all Holders and shall
remain open for a period of at least 20 Business Days following its
commencement and no longer than 30 Business Days thereafter, except to the
extent that a longer period is required by applicable law (the "OFFER
PERIOD").
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(ii) If the Excess Cash Purchase Date is on or after an interest
record date and on or before the related interest payment date, any accrued
and unpaid interest thereon, if any, shall 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 shall be payable to Holders who tender Notes
pursuant to the Excess Cash Offer.
(iii) Within 10 days following any Excess Cash Offer Trigger Date,
the Company shall send, by first class mail, a notice to each of the
Holders at such Holder's registered address, with a copy to the Trustee.
The notice, which shall govern the terms of the Excess Cash Offer, shall
contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Excess Cash Offer, and shall state:
(A) that the Excess Cash Offer Trigger Date has occurred
pursuant to SECTION 4.11 and that the Company is offering to purchase
Notes in the aggregate principal amount of the Excess Cash Offer
Amount, in cash, at the corresponding Excess Cash Offer Price,
together with accrued and unpaid interest thereon, if any, to the
Excess Cash Purchase Date, which shall be a Business Day that is not
earlier than 30 days nor later than 60 days from the date such notice
is mailed;
(B) the amount of accrued and unpaid interest, if any, as
of the Excess Cash Offer Purchase Date;
(C) that any Note subject to the Excess Cash Offer not
tendered shall continue to accrue interest;
(D) that, unless the Company defaults in the payment of the
purchase price for the Notes payable pursuant to the Excess Cash
Offer, any such Notes accepted for payment pursuant to the Excess Cash
Offer shall cease to accrue interest after the Excess Cash Offer
Purchase Date;
(E) that Holders electing to have a Note purchased pursuant
to an Excess Cash Offer may only elect to have all of such Note
purchased (subject to the provisions of SECTION 3.9(a)(iii)(H)) and
may not elect to have only a portion of such Note purchased;
(F) that Holders electing to have a Note purchased pursuant
to any Excess Cash Offer shall 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 or a Paying Agent at the address
specified in the notice at least three Business Days before the Excess
Cash Purchase Date;
(G) any Holder shall be entitled to withdraw its election
if the Company or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing its election to have such
Note purchased;
(H) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Excess Cash Offer Amount or less
than all of the Notes tendered pursuant to the Excess Cash Offer are
accepted for
30
payment by the Company for any reason consistent with this Indenture,
the Trustee shall select the Notes to be purchased in compliance with
the requirements of the principal national securities exchange, if
any, on which the Notes are listed or, if the Notes are not so listed,
on a PRO RATA basis, by lot or by such method as the Trustee deems
fair and appropriate; PROVIDED that Notes accepted for payment in part
will only be purchased in integral multiples of $1,000; and
(I) that Holders whose Notes were purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered.
If any of the Notes subject to an Excess Cash Offer is in the form of a
Global Note, then the Company shall modify such notice to the extent necessary
to accord with the procedures of the Depository applicable to repurchases.
(b) On or before an Excess Cash Purchase Date, the Company shall comply
with each of the matters set forth in CLAUSES (i) THROUGH (iii) of
SECTION 4.11(f). The Paying Agent shall promptly mail to Holders of Notes so
accepted payment in an amount equal to the Excess Cash Offer Price, plus accrued
and unpaid interest thereon to the Excess Cash Purchase Date. The Trustee shall
promptly cancel all Notes accepted by the Company pursuant to the Excess Cash
Offer and authenticate and mail to the Holders of Notes so accepted a new Note
equal to the principal amount of any unpurchased portion of the Notes
surrendered. Any Notes not so accepted shall be promptly mailed by the Company
to the Holders thereof.
(c) Other than as specifically provided in this SECTION 3.9, any purchase
pursuant to this SECTION 3.9 shall be made pursuant to the provisions of
SECTIONS 3.1 THROUGH 3.6.
ARTICLE 4
COVENANTS
SECTION 4.1 PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary
Guarantor, holds as of 11:00 a.m. Eastern Time on the due date money deposited
by the Company in immediately available funds and designated for and sufficient
to pay all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
at the rate that is 1% per annum in excess of the then applicable interest rate
on the Notes to the extent lawful; it shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
same rate to the extent lawful.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Xxxxxxxxx
00
or co-registrar) where Notes may be presented for payment, surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served.
The Company shall give prompt written notice to the Trustee of the location,
and any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; PROVIDED, HOWEVER,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with SECTION 2.3.
SECTION 4.3 REPORTS.
(a) Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Company shall furnish to
the Trustee and the Holders of Notes (i) either the actual Forms 10-Q and 10-K
filed with the Commission within 15 days following the filing thereof, or all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Company
were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" that describes the
consolidated financial condition and results of operations of the Company and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants, in each case, within 15 days following the
date such filing would be required to be filed with the Commission, and
(ii) either any actual Form 8-K filed with the Commission, or all information
that would be required to be contained in a filing with the Commission on
Form 8-K if the Company were required to file such Form. In addition, whether
or not required by the rules and regulations of the Commission, the Company
shall file a copy of all such information and reports with the Commission for
public availability (unless the Commission will not accept such a filing) and
make such information available to securities analysts and prospective investors
upon request. The Company shall at all times comply with TIA Section 314(a).
(b) Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company'
compliance with any of the covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.4 COMPLIANCE CERTIFICATE.
(a) The Company and each Subsidiary Guarantor shall deliver to the
Trustee, together with, and at the same time as the delivery of, the filings,
reports and information referred to in SECTION 4.3(a), an Officers' Certificate
stating that a review of the activities of the Company, the Subsidiary
Guarantors and their respective Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether each of the Company and the Subsidiary Guarantors has kept,
observed,
32
performed and fulfilled its covenants and obligations under this Indenture,
and further stating, as to each such Officer signing such certificate, that
to the best of his or her knowledge, each of the Company and the Subsidiary
Guarantors has kept, observed, performed and fulfilled each and every
covenant and obligation contained in this Indenture and is not in default in
the performance or observance of any of the terms, provisions and conditions
of this Indenture (or, if a Default or Event of Default shall have occurred
and is continuing, describing all such Defaults or Events of Default of which
he or she may have knowledge and what action each of the Company and the
Subsidiary Guarantors (as applicable) is taking or proposes to take with
respect thereto) and that to the best of his or her knowledge, no event has
occurred and remains in existence by reason of which payments on account of
the principal of or premium, if any, or interest on the Notes are prohibited
or if such event has occurred, a description of the event and what action the
Company is taking or proposes to take with respect thereto. In addition, the
Company shall notify the Trustee of each change in the composition of the
Board of Directors of the Company and each of the Subsidiary Guarantors and
of each amendment to the charter or bylaws of the Company or each of the
Subsidiary Guarantors, in each case, such notification being made in writing
to the Trustee promptly following the occurrence of each such change in
composition or amendment.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to SECTION 4.3 shall be accompanied by a written
statement of the Company's independent public accountants (who shall be a firm
of established national reputation) that in making the examination necessary for
certification of such financial statements, nothing has come to their attention
that would lead them to believe that the Company has violated any provisions of
ARTICLE 4 or ARTICLE 5 or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.5 TAXES.
The Company shall pay, and shall cause each of its Restricted Subsidiaries
to pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.6 STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
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SECTION 4.7 LIMITATION ON INCURRENCES OF ADDITIONAL INDEBTEDNESS AND
ISSUANCES OF DISQUALIFIED CAPITAL STOCK.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, Incur any Indebtedness or issue any
Disqualified Capital Stock, except that the Company or a Subsidiary Guarantor
may Incur Indebtedness and the Company may issue shares of Disqualified Capital
Stock if, on a PRO FORMA basis, after giving effect to such Incurrence or
issuance, as the case may be, and the application of the proceeds therefrom, all
of the following tests have been satisfied:
(i) the Consolidated Fixed Charge Coverage Ratio for the
Company's Reference Period for which internal financial statements are
available immediately preceding the date on which such additional
Indebtedness is Incurred or such Disqualified Capital Stock is issued
would have been (A) at least 2.0 to 1.0 if such additional
Indebtedness is Incurred or such Disqualified Capital Stock is issued
during the period commencing on the Issue Date and ending on
December 31, 1998 or (B) at least 2.5 to 1.0 if such additional
Indebtedness is Incurred or such Disqualified Capital Stock is issued
at any time thereafter;
(ii) no Default or Event of Default shall have occurred and be
continuing at the time such additional Indebtedness is Incurred or
such Disqualified Capital Stock is issued or would occur as the result
of such Incurrence of such additional Indebtedness or the issuance of
such Disqualified Capital Stock; and
(iii) the Company's Adjusted Consolidated Net Tangible Assets
as of the last day of the applicable Reference Period are equal to or
greater than 150% of the consolidated Indebtedness of the Company and
the Subsidiary Guarantors.
(b) Notwithstanding the foregoing, if no Default or Event of Default shall
have occurred and be continuing at the time or as a consequence of the
Incurrence of such Indebtedness, the Company and any Subsidiary Guarantor may
Incur Permitted Indebtedness.
(c) Any Indebtedness Incurred or Disqualified Capital Stock issued by any
Person that is not a Subsidiary of the Company or a Restricted Subsidiary of the
Company, which Indebtedness or Disqualified Capital Stock is outstanding at the
time such Person becomes a Restricted Subsidiary of, or is merged into, or
consolidated with the Company or such Restricted Subsidiary, as the case may be,
shall be deemed to have been Incurred or issued, as the case may be, at the time
such Person becomes a Restricted Subsidiary of, or is merged into, or
consolidated with the Company or a Subsidiary Guarantor.
SECTION 4.8 LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend on, or
make any other distribution to holders of, any shares of Capital Stock of the
Company or any Restricted Subsidiary of the Company (other than dividends or
distributions payable solely in shares of Qualified Capital Stock of the Company
or any Restricted Subsidiary of the Company or dividends or distributions
payable to the Company or any Wholly Owned Subsidiary Guarantor or warrants,
rights or options to acquire Qualified Capital Stock of the Company or any
Restricted
34
Subsidiary of the Company), (ii) purchase, redeem or otherwise acquire or
retire for value any such shares of Capital Stock of the Company or any
Affiliate (other than any Capital Stock owned by the Company or any of its
Wholly Owned Subsidiary Guarantors), or any options, warrants or other rights
to acquire such Capital Stock, (iii) make any principal payment on or
repurchase, redeem, defease or otherwise acquire or retire for value any
Subordinated Indebtedness, prior to any scheduled principal payment,
scheduled sinking fund payment or maturity, or (iv) make any Restricted
Investment (such payments or other actions described in clauses (i) through
(iv) being collectively referred to as a "RESTRICTED PAYMENT"), unless at the
time of and after giving effect to the proposed Restricted Payment (the
amount of any such Restricted Payment, if other than cash, shall be the
amount determined by the Board of Directors of the Company, whose
determination shall be conclusive and evidenced by a Board Resolution, a copy
of which Board Resolution shall be delivered to the Trustee),
(1) no Default or Event of Default shall have occurred and be
continuing,
(2) the Company could Incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in accordance with the provisions of
SECTION 4.7(a), and
(3) the aggregate amount of all Restricted Payments declared or made
after the Issue Date shall not exceed the sum (without duplication) of the
following:
(A) 50% of the Adjusted Consolidated Net Income of the Company
accrued on a cumulative basis during the period commencing with the
first full quarter after the Issue Date and ending on the last day of
the Company's last fiscal quarter ending prior to the date of such
proposed Restricted Payment (or if Adjusted Consolidated Net Income is
a loss, MINUS 100% of such loss), PLUS
(B) the aggregate Net Proceeds received after the Issue Date by
the Company from the issuance or sale (other than with respect to the
Offering and other than to any Restricted Subsidiary of the Company)
of shares of Qualified Capital Stock of the Company or any options,
warrants or rights to purchase such shares of Qualified Capital Stock
of the Company, PLUS
(C) the aggregate Net Proceeds received after the Issue Date by
the Company (other than from any Restricted Subsidiary of the Company)
upon the exercise of any options, warrants or rights to purchase
shares of Qualified Capital Stock of the Company, PLUS
(D) the aggregate Net Proceeds received after the Issue Date by
the Company from the issuance or sale (other than to any Restricted
Subsidiary of the Company) of Indebtedness or shares of Disqualified
Capital Stock that have been converted into or exchanged for Qualified
Capital Stock of the Company, together with the aggregate cash
received by the Company at the time of such conversion or exchange,
MINUS
(E) the amount of any write-downs or writeoffs, other negative
revaluations, and other negative extraordinary charges not otherwise
reflected in Adjusted Consolidated Net Income of the Company during
such period.
(b) Notwithstanding SECTION 4.8(a), the Company and the Subsidiary
Guarantors may take the following actions so long as (in the case of CLAUSES
(2) AND (3) immediately below) no Default or Event of Default shall have
occurred and be continuing:
35
(1) the payment of any dividend on Capital Stock of the Company or
any Subsidiary Guarantor within 60 days after the date of declaration
thereof, if at such declaration date such declaration complied with the
provisions of SECTION 4.8(a) above;
(2) the repurchase, redemption or other acquisition or retirement of
any shares of any class of Capital Stock of the Company or any Subsidiary
Guarantor, in exchange for, or out of the aggregate Net Proceeds from, a
substantially concurrent issue and sale (other than to a Subsidiary
Guarantor) of shares of Qualified Capital Stock of the Company;
(3) the repurchase, redemption, repayment, defeasance or other
acquisition or retirement for value of any Subordinated Indebtedness in
exchange for, or out of the aggregate Net Proceeds from, a substantially
concurrent issue and sale (other than to a Subsidiary Guarantor) of
(i) Subordinated Indebtedness (provided such Indebtedness is on terms no
less favorable to the Holders of the Notes than the terms of the
Subordinated Indebtedness being redeemed) or (ii) shares of Qualified
Capital Stock of the Company; and
(4) the redemption of 12 shares of Carlton's outstanding redeemable
preferred stock pursuant to the termination of all rights in respect of
such shares, except the right to receive the redemption price payable on
the scheduled redemption thereof as prescribed in Carlton's certificate of
incorporation, which redemption must occur no later than March 29, 1998.
The actions described in CLAUSE (1) of this SECTION 4.8(b) shall be
Restricted Payments that shall be permitted to be made in accordance with this
SECTION 4.8(b) but shall reduce the amount that would otherwise be available for
Restricted Payments under CLAUSE (3) of SECTION 4.8(a), PROVIDED THAT any
dividend paid pursuant to CLAUSE (1) of this SECTION 4.8(a) shall reduce the
amount that would otherwise be available under CLAUSE (3) of SECTION 4.8(a) when
declared, but not also when subsequently paid pursuant to CLAUSE (1) of this
SECTION 4.8(b), and PROVIDED THAT any Net Proceeds received under CLAUSES (2) OR
(3)(ii) of this SECTION 4.8(b) shall not be included in SUBCLAUSES (B) OR (C) of
CLAUSE (3) of SECTION 4.8(a).
SECTION 4.9 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES OF THE COMPANY.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, or permit or suffer to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to (i) pay dividends or make other
distributions on its Capital Stock to the Company or any other Restricted
Subsidiary of the Company, (ii) make loans or advances or pay any Indebtedness
or other obligations owed to the Company or to any other Restricted Subsidiary
of the Company, or (iii) transfer any of its properties or assets to the Company
or to any other Restricted Subsidiary of the Company, except encumbrances and
restrictions existing under (a) this Indenture, any Permitted Bank Credit
Facility as in effect on the Issue Date and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings thereof, PROVIDED THAT such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings are no more restrictive with respect to such dividend and other
payment or transfer restrictions than those contained in the Permitted Bank
Credit Facility as in effect on the Issue Date and (b) any agreement of a Person
acquired by the Company or a Restricted Subsidiary of the Company, which
restrictions existed at the time of acquisition, were not put in place in
36
anticipation of such acquisition, and are not applicable to any Person or
property, other than the Person or any property of the Person so acquired.
SECTION 4.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter directly or indirectly into, or permit to exist, any
transaction or series of related transactions with or for the benefit of any
Affiliate except for transactions made in good faith, the terms of which are
fair and reasonable to the Company or such Restricted Subsidiary, as the case
may be, and are at least as favorable as the terms which could be obtained by
the Company or such Restricted Subsidiary, as the case may be, in a comparable
transaction made on an arm's length basis with Persons who are not Affiliates
and the Company delivers to the Trustee (i) with respect to any transaction or
series of related transactions with an Affiliate involving aggregate
consideration in excess of $1,000,000, an Officers' Certificate certifying that
such transaction or transactions comply with this covenant, (ii) with respect to
any transaction or series of related transactions with an Affiliate involving
aggregate consideration in excess of $2,000,000, a Board Resolution of the Board
of Directors of the Company set forth in an Officers' Certificate certifying
that such transaction or transactions comply with this covenant and that such
transaction or transactions have been approved in good faith by a majority of
the Disinterested Directors of such Board of Directors (which Board Resolution
shall be conclusive evidence of compliance with this provision), PROVIDED THAT
if there is not a majority of Disinterested Directors able to approve such
transaction, the Company shall also deliver an opinion as to the fairness, from
a financial point of view, to the Company or such Restricted Subsidiary of such
transaction or transactions issued by an investment banking firm of recognized
national standing, which opinion shall be conclusive evidence of compliance with
this provision, and (iii) with respect to any transaction or series of related
transactions with an Affiliate involving aggregate consideration in excess of
$5,000,000, a Board Resolution of the Board of Directors of the Company set
forth in an Officers' Certificate as described in SUBCLAUSE (ii) immediately
above and an opinion as to the fairness, from a financial point of view, to the
Company or such Restricted Subsidiary of such transaction or transactions issued
by an investment banking firm of recognized national standing, which Board
Resolution and opinion shall be conclusive evidence of compliance with this
provision; PROVIDED, HOWEVER, that this covenant will not restrict (a)
transactions between the Company and any Subsidiary Guarantor or transactions
between Subsidiary Guarantors, (b) Restricted Payments permitted by the
provisions of SECTION 4.8, (c) any employee compensation arrangements by the
Company or any of its Restricted Subsidiaries which has been approved by a
majority of the Company's Disinterested Directors and found in good faith by
such directors to be in the best interests of the Company or such Restricted
Subsidiary, as the case may be, and (d) customary directors' fees and
indemnification and similar arrangements.
SECTION 4.11 LIMITATION ON ASSET SALES.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the fair market value (as determined in good
faith by a Board Resolution of the Board of Directors of the Company set forth
in an Officers' Certificate delivered to the Trustee, which determination shall
be conclusive evidence of compliance with this provision) of the assets or
Capital Stock being sold or issued or otherwise disposed of, and (ii) at least
85% of the value of the consideration for such Asset Sale consists of cash, Cash
Equivalents or Exchange Assets or any combination thereof; PROVIDED THAT the
amount of any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet) of the Company or such Restricted
Subsidiary (other than contingent liabilities and liabilities that are
Subordinated Indebtedness
37
or otherwise by their terms subordinated to the Notes or the Subsidiary
Guarantees) that are assumed by the transferee of such assets pursuant to a
customary novation agreement that releases the Company and such Restricted
Subsidiary from further liability shall also be deemed to be cash for
purposes of this provision.
(b) Within 365 days after the receipt of any Net Cash Proceeds from an
Asset Sale, the Company or such Restricted Subsidiary may apply such Net Cash
Proceeds, at its option, in any order or combination (i) to repay and
permanently reduce Indebtedness outstanding under any Permitted Bank Credit
Facility to which it or any Subsidiary Guarantor is a party, (ii) to make
Capital Expenditures or (iii) to make other acquisitions of assets to be used in
the Company's and the Subsidiary Guarantors' Oil and Gas Business. Pending the
final application of any such Net Cash Proceeds, the Company or such Restricted
Subsidiary may temporarily invest such Net Cash Proceeds in any manner that is
not prohibited by the terms of this Indenture or temporarily reduce outstanding
revolving credit borrowings under Permitted Bank Credit Facilities. Any Net
Cash Proceeds from Asset Sales that are not applied as provided in CLAUSES
(i) THROUGH (iii) of the first sentence of this SECTION 4.11(b) will (after
expiration of the relevant periods) be deemed to constitute "EXCESS CASH".
(c) When the amount of Excess Cash exceeds $10,000,000 (the date of such
occurrence, the "EXCESS CASH OFFER TRIGGER DATE"), the Company will make an
irrevocable, unconditional offer (an "EXCESS CASH OFFER") to the Holders to
purchase the maximum amount of Notes which could be acquired by application of
such amount of Excess Cash as described herein (the "EXCESS CASH OFFER AMOUNT"),
in cash at the purchase price equal to 100% of the principal amount thereof (the
"EXCESS CASH OFFER PRICE"), together with accrued and unpaid interest to the
Excess Cash Purchase Date. Such Excess Cash Offer shall be effected pursuant to
the provisions of SECTION 3.9 and this SECTION 4.11.
(d) Notice of an Excess Cash Offer will be sent at least 30 and not more
than 60 days prior to the date on which the Notes tendered shall be accepted
(the "EXCESS CASH PURCHASE DATE"), by first-class mail, by the Company to each
Holder at the address on the Note Register, with a copy to the Trustee. Such
notice will set forth the Excess Cash Purchase Date and the Excess Cash Offer
shall remain open for at least 20 Business Days and close no later than 30
Business Days after the date such notice is given. The notice to the Holders
will contain all information, instructions and materials required by applicable
law or otherwise material to such Holders' decision to tender Notes pursuant to
the Excess Cash Offer.
(e) To the extent applicable and if required by law, the Company will
comply with Section 14 of the Exchange Act, the provisions of Regulation 14E and
any other tender offer rules under the Exchange Act and other securities laws,
rules and regulations which may then be applicable to any Excess Cash Offer by
the Company; and, if such laws, rules, and regulations require or prohibit any
action inconsistent with the foregoing, compliance by the Company with such
laws, rules, and regulations will not constitute a breach of its obligations
with respect to the foregoing.
(f) On or before an Excess Cash Purchase Date, the Company shall
(i) accept for payment Notes or portions thereof properly tendered pursuant to
the Excess Cash Offer, (ii) deposit with the Paying Agent money sufficient to
pay the Excess Cash Offer Price, plus accrued and unpaid interest thereon to the
Excess Cash Purchase Date of all Notes or portions thereof so accepted, and
(iii) deliver to the Trustee all Notes so accepted together with an Officers'
Certificate listing the Notes or portions thereof being purchased by the
Company. The Company will publicly announce the results of the Excess Cash
Offer on or as soon as practicable after the Excess Cash Purchase Date.
38
(g) If the amount required to acquire all Notes tendered by Holders
pursuant to the Excess Cash Offer (the "EXCESS CASH ACCEPTANCE AMOUNT") shall be
less than the aggregate Excess Cash Offer Amount, then the excess of the Excess
Cash Offer Amount over the Excess Cash Acceptance Amount may be used by the
Company or any Subsidiary Guarantor for any of their respective general
corporate purposes, PROVIDED THAT no such purpose is prohibited or restricted by
this Indenture. Upon consummation of any Excess Cash Offer made in accordance
with the terms of this Indenture, the amount of Excess Cash will be reduced to
zero.
SECTION 4.12 LIMITATION ON LIENS.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, incur or suffer to exist any Lien upon any of their
respective properties or assets, whether now owned or acquired after the Issue
Date, or any income, profits or proceeds therefrom, other than Permitted Liens.
SECTION 4.13 LIMITATION ON LINE OF BUSINESS.
The Company shall not engage, and shall not permit any of its Restricted
Subsidiaries to engage, in any line of business other than the Oil and Gas
Business.
SECTION 4.14 DESIGNATION OF UNRESTRICTED SUBSIDIARIES.
(a) The Board of Directors of the Company may designate any Subsidiary of
the Company to be an Unrestricted Subsidiary of the Company if such designation
would not cause a Default or an Event of Default and following such designation,
the Company could Incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to SECTION 4.7(a). For purposes of making such
determination, all outstanding Investments by the Company and its Restricted
Subsidiaries in the Subsidiary so designated which have not been repaid in cash
will be deemed to be Restricted Payments at the time of such designation and
will reduce the amount available for Restricted Payments under CLAUSE (3) of
SECTION 4.8(a). All such outstanding Investments will be deemed to constitute
Restricted Investments in an amount equal to the greater of the fair market
value or book value of such Investments at the time of such designation. Such
designation will only be permitted if such Restricted Payment would be permitted
at such time and if such Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. In addition, the definition of "Unrestricted
Subsidiary" set forth in SECTION 1.1 describes additional requirements that a
Subsidiary of the Company must satisfy before it may be designated as an
Unrestricted Subsidiary of the Company by the Board of Directors of the Company.
(b) Neither the Company nor any Restricted Subsidiary of the Company nor
any Unrestricted Subsidiary of the Company may take any action or omit to take
any action which would cause any requirement in the definition of "Unrestricted
Subsidiary" set forth in SECTION 1.1 not to be at all times satisfied with
respect to any Unrestricted Subsidiary of the Company, other than pursuant to a
designation or redesignation (as applicable) as provided in SECTION 4.14(c).
If, at any time subsequent to the designation of a Person as an Unrestricted
Subsidiary of the Company and prior to a corresponding redesignation as provided
in SECTION 4.14(c), any requirement in the definition of "Unrestricted
Subsidiary" set forth in SECTION 1.1 is not met with respect to such
Unrestricted Subsidiary, then such Unrestricted Subsidiary shall thereafter
cease to be an Unrestricted Subsidiary of the Company for purposes of this
Indenture, and any Indebtedness of such Subsidiary shall be deemed Incurred as
of such date.
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(c) The Board of Directors of the Company may designate or redesignate (as
applicable) any Unrestricted Subsidiary of the Company as a Restricted
Subsidiary of the Company; PROVIDED THAT, (i) if such Unrestricted Subsidiary
has any Indebtedness outstanding or is otherwise liable for any Indebtedness or
has a negative Net Worth, then immediately after giving PRO FORMA effect to such
designation or redesignation, as applicable, the Company could Incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to
the provisions of SECTION 4.7(a) (assuming, for purposes of this calculation,
that each dollar of negative Net Worth is equal to one dollar of Indebtedness),
(ii) all Indebtedness of such Unrestricted Subsidiary shall be deemed to be
Incurred by a Restricted Subsidiary of the Company on the date such Unrestricted
Subsidiary becomes a Restricted Subsidiary, and (iii) no Default or Event of
Default would occur or be continuing after giving effect to such designation or
redesignation, as applicable. Any Subsidiary of an Unrestricted Subsidiary shall
be an Unrestricted Subsidiary for purposes of this Indenture.
SECTION 4.15 LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES OF THE COMPANY.
The Company shall not, directly or indirectly, sell or otherwise dispose of
any shares of Capital Stock of any of its Restricted Subsidiaries and shall not
permit any of its Restricted Subsidiaries, directly or indirectly, to issue or
sell or otherwise dispose of any of its Capital Stock except (i) to the Company
or a Wholly Owned Subsidiary Guarantor, or (ii) if all shares of Capital Stock
of such Restricted Subsidiary are sold or otherwise disposed of. In connection
with any sale or disposition of Capital Stock of any Restricted Subsidiary of
the Company, the Company shall comply with the provisions of SECTION 4.11.
SECTION 4.16 OWNERSHIP AND RECOGNITION OF SUBSIDIARIES; FUTURE GUARANTORS.
The Company shall at all times own, directly or indirectly, all of the
Capital Stock of each of its Restricted Subsidiaries. The Company and each
Subsidiary of the Company recognize and agree that all Persons (other than an
Unrestricted Subsidiary of the Company) now or hereafter becoming a Subsidiary
of the Company (whether by formation, acquisition or otherwise) shall be, and
shall be recognized as, a Subsidiary Guarantor for all purposes of this
Indenture. In furtherance (but not in limitation) of the foregoing,
simultaneously with the acquisition (by merger, consolidation, acquisition of
assets, stock or properties or otherwise) or formation of a Person which,
directly or indirectly, becomes a Subsidiary of the Company, or the occurrence
of any other event, circumstance or transaction pursuant to which, directly or
indirectly, a Person becomes a Subsidiary of the Company (in each case, other
than a Person then designated an Unrestricted Subsidiary of the Company in
accordance with SECTION 4.14), the Company shall cause such Person to become a
Subsidiary Guarantor pursuant to SECTION 10.2.
SECTION 4.17 OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall make an
irrevocable, unconditional offer to repurchase (a "CHANGE OF CONTROL OFFER") and
shall, subject to the provisions of this SECTION 4.17 described below,
repurchase on a Business Day not more than 60 nor less than 30 days following
the occurrence of such Change of Control (the date on which the repurchase is
effected being referred to herein as the "CHANGE OF CONTROL PAYMENT DATE"), all
of the then outstanding Notes validly tendered pursuant to such Change of
Control Offer, at a cash purchase price equal to 101% of the principal amount
thereof (the "CHANGE OF CONTROL PURCHASE PRICE"), plus accrued and unpaid
interest thereon to the Change of Control Payment Date. The Change of Control
Offer shall remain open for at least 20 Business Days
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and until the close of business of the fifth Business Day prior to the Change
of Control Purchase Date.
(b) To effect such Change of Control Offer, the Company (i) shall, not
later than 5 Business Days after the occurrence of the Change of Control, notify
the Trustee and (ii) shall, not later than 20 Business Days after the occurrence
of the Change of Control, make a Change of Control Offer to the Holders of all
of the then outstanding Notes, by sending written notice of a Change of Control
Offer, by first class mail, to each Holder at its registered address, with a
copy to the Trustee. The notice to Holders shall contain all instructions and
materials required by applicable law, shall contain or make available to Holders
other information material to such Holders' decision to tender Notes pursuant to
the Change of Control Offer and shall otherwise govern the terms of the Change
of Control Offer.
(c) On or before the Change of Control Payment Date, the Company shall, to
the extent lawful, (i) accept for payment Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent an amount sufficient to pay the Change of Control Purchase Price of all
Notes so tendered, and (iii) deliver or cause to be delivered to the Trustee all
Notes so accepted, together with an Officers' Certificate listing the Notes or
portions thereof being purchased by the Company. The Paying Agent will promptly
mail to the Holders of Notes so accepted payment in an amount equal to the
Change of Control Purchase Price for such Notes, plus accrued and unpaid
interest thereon to the Change of Control Payment Date, and the Trustee will
promptly cancel all Notes so accepted by the Company pursuant to the Change of
Control Offer and authenticate and mail (or cause to be transferred by book
entry) to such Holders new Notes equal in principal amount, as applicable, to
any unpurchased portion of the Note surrendered. Any Notes not so accepted will
be promptly mailed by the Company to the Holders thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(d) The Change of Control provisions of this SECTION 4.17 described above
shall be applicable whether or not any other provisions of this Indenture are
applicable.
(e) The Company shall 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 repurchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
(f) To the extent applicable and if required by law, the Company shall
comply with Section 14 of the Exchange Act, the provisions of Regulation 14E and
any other tender offer rules under the Exchange Act and other securities laws,
rules and regulations which may then be applicable to any offer by the Company
to repurchase the Notes at the option of Holders upon a Change of Control; and,
if such laws, rules and regulations require or prohibit any action inconsistent
with the foregoing, compliance by the Company with such laws, rules, and
regulations will not constitute a breach of the Company's obligations with
respect to the foregoing.
SECTION 4.18 DISCHARGE OF CERTAIN PREFERRED STOCK.
On or before April 10, 1998, the Company shall fully and finally pay and
discharge, or cause to be fully and finally paid and discharged, the redemption
price referred to in SECTION 4.8(B)(4), and, if applicable, any interest on such
redemption price accruing from April 1, 1998 and until the earlier of such date
of payment and April 10, 1998.
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Contemporaneous with the receipt of net proceeds from the Offering, the
Company shall deposit in a segregated bank account, an amount of cash equal
to the sum of the redemption price and maximum accrued interest referred to
in the preceding sentence, and neither the Company nor any Restricted
Subsidiary of the Company shall utilize any such deposited amount for any
purpose other than the payment and discharge of such redemption price and
related accrued interest.
ARTICLE 5
SUCCESSORS
SECTION 5.1 LIMITATION ON MERGER OR SALE OR CONSOLIDATION.
The Company shall not consolidate with or merge with or into any other
Person, or, directly or indirectly, sell, lease, assign, transfer or convey all
or substantially all of its assets (computed on a consolidated basis) to another
Person or group of Persons acting in concert, whether in a single transaction or
through a series of related transactions, unless (i) either (a) the Company is
the continuing Person or (b) the resulting, surviving or transferee entity is a
corporation organized under the laws of the United States, any state thereof or
the District of Columbia, and shall expressly assume all of the obligations of
the Company under this Indenture and the Notes by a supplemental indenture,
executed and delivered to the Trustee on or prior to the consummation of such
transaction, in form satisfactory to the Trustee, (ii) no Default or Event of
Default shall exist or shall occur immediately after giving effect to such
transaction, (iii) immediately after giving effect to such transaction on a PRO
FORMA basis, the Net Worth of the resulting, surviving or transferee entity is
at least equal to the Net Worth of the Company immediately prior to such
transaction, (iv) except for a merger of the Company with or into any Wholly
Owned Subsidiary Guarantor, the resulting, surviving or transferee entity would,
at the time of such transaction and after giving effect thereto, be permitted to
Incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to SECTION 4.7(a), (v) each Subsidiary Guarantor shall
have executed and delivered to the Trustee, in form satisfactory to the Trustee,
a supplemental indenture confirming such Subsidiary Guarantor's obligations to
pay the principal of and interest on the Notes pursuant to its Subsidiary
Guarantee, and (vi) the Trustee shall have received, in form and substance
reasonably satisfactory to the Trustee, an Officers' Certificate and an Opinion
of Counsel, each stating that such consolidation, merger or sale, conveyance or
other transfer and each supplemental indenture in respect thereto comply with
this provision and that all conditions precedent in this Indenture relating to
such transaction have been complied with, and also, such Opinion of Counsel
shall further state that such consolidation, merger or sale, conveyance or other
transfer will not result in the Company being required to make any withholding
or similar deduction for or on account of taxes from payments made under or in
respect of the Notes. For purposes of this SECTION 5.1, the Consolidated Fixed
Charge Coverage Ratio shall be determined on a PRO FORMA consolidated basis
(after giving effect to the transaction) as if such transaction had occurred at
the beginning of the Reference Period immediately preceding such transaction.
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any transfer of all or substantially
all of the assets of the Company in accordance with SECTION 5.1, the successor
Person formed by such consolidation or merger or the Person to whom such
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 corporation had been named as the Company therein,
42
but the Company in the case of a conveyance, transfer or lease shall not be
released from the obligation to pay principal of, premium (if any) and
interest on the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" occurs upon:
(i) the failure to pay interest on any Note when the same
becomes due and payable and such failure continues for a period of 30 days;
(ii) the failure to pay the principal of, or premium, if any,
on, any Note when the same becomes due and payable, at maturity, upon
redemption, by acceleration or otherwise (including the failure to make a
payment to purchase Notes tendered pursuant to a Change of Control Offer or
an Excess Cash Offer);
(iii) a default in the performance or breach of the provisions
of SECTION 4.11, 4.17 OR 5.1 hereof;
(iv) a default in the observance or performance of any covenant
or agreement contained in this Indenture, the Notes or any Subsidiary
Guarantee (other than a covenant or agreement referred to in any of the
preceding CLAUSES (i), (ii) OR (iii)), which default continues for 30 days
after written notice thereof is given to the Company by the Trustee or to
the Company and the Trustee by Holders of at least 25% of the principal
amount of the Notes then outstanding;
(v) a default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any Restricted Subsidiary
of the Company (or the payment of which is guaranteed by the Company or any
Restricted Subsidiary of the Company) whether such Indebtedness or
guarantee now exists, or is created after the Issue Date, which default
(A) extends beyond any stated period of grace applicable thereto (including
any extensions thereof) or (B) is caused by a failure to pay principal of
or premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the date of
such default, and, in each case, the outstanding principal amount of any
such Indebtedness of the Company or such Restricted Subsidiary aggregates
in excess of $1,000,000, and PROVIDED, FURTHER, that if any such default is
waived by all lenders, holders or obligees (as applicable) of such
Indebtedness, then such Event of Default under this SECTION 6.1(v) shall be
deemed waived and any consequential acceleration of the Notes shall be
automatically rescinded, so long as such rescission does not conflict with
any judgment or decree;
(vi) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction against
the Company or any Restricted Subsidiary of the Company, and such judgment
or judgments remain unpaid and undischarged for a period (during which
execution shall not be effectively stayed) of 60 consecutive days, PROVIDED
THAT the aggregate of all such unpaid and undischarged judgments exceed
applicable and in force insurance contracts (as to which all coverage
43
corresponding to the claim or claims made a basis of such judgment or
judgments have been acknowledged and confirmed for timely payment on such
judgment or judgments by the respective insurers of then financial standing
capable of paying such amount or amounts) by at least $1,000,000;
(vii) any of this Indenture, the Notes or the Subsidiary
Guarantees shall for any reason cease to be, or be asserted by the Company
or any Subsidiary Guarantor, as applicable, not to be, in full force and
effect (except pursuant to the release of any Subsidiary Guarantee in
accordance with this Indenture) or shall be declared null and void or
unenforceable, or the validity or enforceability thereof shall be denied or
contested by the Company, any Affiliate or any other Person;
(viii) the Company or any Subsidiary Guarantor, pursuant to or
within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it
in an involuntary case,
(C) consents to the appointment of a Bankruptcy Custodian
of it or for all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors, or
(E) generally is not paying its debts as they become due;
or
(ix) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief, in an involuntary case, against the
Company or any Subsidiary Guarantor;
(B) appoints a Bankruptcy Custodian of the Company or any
Subsidiary Guarantor, for all or substantially all of the property of
the Company or any Subsidiary Guarantor; or
(C) orders the liquidation of the Company or any Subsidiary
Guarantor, for all of substantially all of the property of the Company
or any Subsidiary Guarantor;
and the order or decree remains unstayed and in effect for 60 consecutive
days.
SECTION 6.2 ACCELERATION.
If any Event of Default (other than an Event of Default specified in
CLAUSE (viii) OR (ix) of SECTION 6.1) occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes by written notice to the Company (and to the Trustee if given
by such Holders) may declare all principal of, premium, if any, and accrued
interest on the Notes to be due and payable immediately. Upon any such
declaration, such principal, premium and accrued interest on the Notes shall
become due and payable immediately. If an Event of Default specified in
CLAUSE (viii) OR (ix) of SECTION 6.1 hereof
44
occurs, all principal, premium, if any, and accrued interest on the Notes
will be immediately due and payable on all outstanding Notes without further
declaration or other act on the part of any Person.
The Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by written notice to the Trustee may on behalf of all
of the Holders rescind any such acceleration and its consequences if (i) any
existing Events of Default, other than the non-payment of the principal,
premium, if any, or interest on the Notes which have become due solely by such
acceleration, have been cured or waived in compliance with applicable provisions
of this Indenture and (ii) the rescission would not conflict with any judgment
or decree.
SECTION 6.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.4 WAIVER OF PAST DEFAULTS.
Prior to the declaration of acceleration of the Notes, the Holders of not
less than a majority in aggregate principal amount of the then outstanding Notes
by notice to the Trustee may waive on behalf of the Holders of all of the Notes
an existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, any Note not yet cured (including in connection with a redemption
or an offer to purchase pursuant to SECTIONS 3.7, 3.9, 4.11 OR 4.17) or a
Default or Event of Default with respect to any covenant or provision which
cannot be modified or amended without the consent of the Holders of all the
Notes. Upon any such waiver, such Default or Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 6.5 CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on the Trustee. However, the Trustee may refuse to
follow any direction that conflicts with law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of other Holders of Notes or
that may involve the Trustee in personal liability.
45
SECTION 6.6 LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Note only if:
(i) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount
of the then outstanding Notes make a written request to the Trustee to
pursue the remedy;
(iii) such Holder or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision
of indemnity; and
(v) during such 60-day period the Holders of a majority in
aggregate principal amount of the then outstanding Notes do not give the
Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
SECTION 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and interest
on the Note, on or after the respective due dates expressed in the Note
(including in connection with a redemption or an offer to purchase pursuant to
SECTIONS 3.7, 3.9, 4.11 OR 4.17), or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in SECTION 6.1(i) OR (ii) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due to
the Trustee under SECTION 7.7.
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due to the Trustee under SECTION 7.7) and the Holders of the Notes
allowed in any judicial proceedings relative to the Company (or any other
obligor upon the Notes), its creditors or its property and shall be entitled and
empowered to collect, receive and distribute any money or other property payable
or deliverable on any such
46
claims and any custodian in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee, and in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under SECTION 7.7. To the
extent that the payment of any such compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under SECTION 7.7 out of the estate in any such proceeding shall
be denied for any reason, payment of the same shall be secured by a Lien on,
and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive
in such proceeding whether in liquidation or under any plan of reorganization
or arrangement or otherwise. Nothing herein contained shall be deemed to
authorize the Trustee 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 or the rights of any Holder, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10 PRIORITIES.
If the Trustee collects any money pursuant to this ARTICLE 6, it shall pay
out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due under
SECTION 7.7, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses
of collection;
SECOND: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Notes for principal, premium, if any, and interest, respectively; and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this SECTION 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due regard for the
merits and good faith of the claims or defenses made by the party litigant.
This SECTION 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to SECTION 6.6, or a suit by Holders of more than 10% in
aggregate principal amount of the then outstanding Notes.
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ARTICLE 7
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(iii) this paragraph does not limit the effect of PARAGRAPH (B)
of this SECTION 7.1;
(iv) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(v) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to SECTION 6.5.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to PARAGRAPHS (a),
(b) AND (c) of this SECTION 7.1.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
48
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.2 RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any attorney or agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) The Trustee shall not be charged with knowledge of any Default or
Event of Default with respect to the Notes of any series for which it is acting
as Trustee unless either (1) a Responsible Officer shall have actual knowledge
of such Default or Event of Default or (2) written notice of such Default or
Event of Default shall have been given to the Trustee by the Company or any
other obligor on such Notes or by any Holder of such Notes.
(h) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any "conflicting interest" (within the
meaning of Section 3.10(b) of the TIA), it must eliminate such conflict within
90 days, apply to the Commission for permission to continue as
49
trustee or resign. Any Agent may do the same with like rights and duties.
The Trustee is also subject to SECTIONS 7.1 AND 7.11.
SECTION 7.4 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULT.
If an Event of Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to Holders of Notes a notice of the Event of
Default within 90 days after it occurs; PROVIDED THAT, except in the case of a
default in payment of principal of, premium, if any, or interest on any Notes,
the Trustee may withhold, and shall be protected in withholding, the notice if
and so long as a committee of its Responsible Officers in good faith determines
that the withholding of such notice is in the interest of the Holders of the
Notes.
SECTION 7.6 REPORT BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA Section 313(a) (but if no event described in
TIA Section 313(a) has occurred within the 12 months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with
TIA Section 313(b)(2) and Section 313(b)(1). The Trustee shall also transmit by
mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
SECTION 7.7 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such compensation as
shall be agreed between the Company and the Trustee for its acceptance of this
Indenture and services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and any successor Trustee
against any and all losses, liabilities, damages, claims or expenses, including
taxes (other than taxes based on the income of the Trustee), incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this SECTION 7.7) and
50
defending itself against any claim (whether asserted by the Company or any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent
any such loss, liability or expense may be attributable to its negligence or
bad faith. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of much counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
The obligations of the Company under this SECTION 7.7 shall survive the
resignation or removal of the Trustee and the satisfaction and discharge of this
Indenture.
To secure the Company's payment obligations in this SECTION 7.7, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal, premium,
if any, and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in SECTION 6.1(viii) OR (ix) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law. The Trustee shall also be entitled to receive compensation for
extraordinary services in default administration.
The Trustee shall comply with the provisions of TIA Section 313 (b)(2) to
the extent applicable.
SECTION 7.8 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this SECTION 7.8.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in aggregate principal amount of the then outstanding Notes may remove
the Trustee by so notifying the Trustee and the Company in writing. The Company
may remove the Trustee if:
(i) the Trustee fails to comply with SECTION 7.10;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(iii) a Bankruptcy Custodian or public officer takes charge of the
Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of
51
the then outstanding Notes may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of Notes of at least 10% in aggregate principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with SECTION 7.10,
such Holder of a Note may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in
SECTION 7.7. Notwithstanding replacement of the Trustee pursuant to this
SECTION 7.8, the Company's obligations under SECTION 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to another corporation, the
successor corporation without any further act shall be the successor Trustee.
As soon as practicable, the successor Trustee shall mail a notice of its
succession to the Company and the Holders of the Notes.
SECTION 1.701 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has (together with its parent bank holding company, if any)
a combined capital and surplus of at least $200,000,000 as set forth in its most
recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
SECTION 1.71 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
52
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE; SATISFACTION AND DISCHARGE
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
Board Resolution set forth in an Officers' Certificate delivered to the Trustee,
at any time, elect to have either SECTION 8.2 OR 8.3 be applied to all
outstanding Notes upon compliance with the conditions set forth below in this
ARTICLE 8.
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under SECTION 8.1 of the option applicable to
this SECTION 8.2, the Company and each Subsidiary Guarantor shall, subject to
the satisfaction of the conditions set forth in SECTION 8.4 and continuance of
certain provisions hereinafter referenced, be deemed to have been discharged
from its obligations with respect to all outstanding Notes on the date the
conditions set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For
this purpose, Legal Defeasance means that the Company and each Subsidiary
Guarantor shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of SECTION 8.5 and the other Sections of
this Indenture referred to in CLAUSES (i) AND (ii) of this SECTION 8.2, and the
Company and each Subsidiary Guarantor shall be deemed to have satisfied all of
its other obligations under such Notes or Subsidiary Guarantee (as applicable)
and this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions, which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in SECTION 8.4, and as more fully set forth
in such Section, payments in respect of the principal of, premium, if any, and
interest on such Notes when such payments are due; (ii) the Company's
obligations with respect to such Notes under ARTICLE 2 and SECTION 4.2;
(iii) the rights, powers, trusts, duties, obligations and immunities of the
Trustee hereunder, including the Trustee's rights under SECTION 7.7, and the
Company's obligations in connection therewith; (iv) SECTIONS 10.3 AND 10.7; and
(v) this ARTICLE 8. Subject to compliance with this ARTICLE 8, the Company may
exercise its option under this SECTION 8.2 notwithstanding the prior exercise of
its option under SECTION 8.3.
SECTION 8.3 COVENANT DEFEASANCE.
Upon the Company's exercise under SECTION 8.1 hereof of the option
applicable to this SECTION 8.3, the Company shall, subject to the satisfaction
of the conditions set forth in SECTION 8.4, be released from its obligations
under the covenants contained in SECTIONS 4.5, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12,
4.13, 4.14, 4.15, 4.16, AND 4.17 and ARTICLE 10 (other than SECTION 10.3 AND
SECTION 10.7) hereof with respect to the outstanding Notes on and after the date
the conditions set forth below are satisfied (hereinafter, "COVENANT
DEFEASANCE"), and such Notes shall thereafter be deemed not "outstanding" for
the purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed "outstanding" for all other purposes hereunder (it
being understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to
the outstanding Notes, the Company and each Subsidiary Guarantor may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason
53
of any reference in any such covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or
an Event of Default under SECTION 6.1(iii) or SECTION 6.1(iv) (as
applicable), but, except as specified above, the remainder of this Indenture
and such Notes shall be unaffected thereby.
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
SECTIONS 8.2 OR 8.3 to the outstanding Notes:
(a) the Company shall irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders, (i) cash in United States dollars, (ii) non-callable
Government Securities which through the payment of interest and principal will
provide, no later than one day before the due date of payment in respect of such
Notes, cash in United States dollars in an amount, or (iii) or a combination
thereof, in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay and discharge the
principal of, premium, if any, and interest on the outstanding Notes on the
stated date for payment thereof or on the applicable redemption date, as the
case may be, and the Company must specify whether the Notes are being defeased
to maturity or to a particular redemption date;
(b) in the case of an election under SECTION 8.2, the Company shall have
delivered to the Trustee an Opinion of Independent Counsel in the United States
stating that (i) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (ii) since the date of this Indenture,
there has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Independent Counsel shall
confirm that, the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under SECTION 8.3, the Company shall have
delivered to the Trustee an Opinion of Independent Counsel in the United States
stating that the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit or insofar as SECTION 6.1(viii) OR 6.1(ix) is
concerned, at any time in the period ending on the 91st day (or, if such
irrevocable deposit may be subject to set aside or avoidance under then
applicable bankruptcy or insolvency laws for a period of time longer than 90
days, then one day after the conclusion of such longer period of time) after the
date of the irrevocable deposit referred to in SECTION 8.4(a) (it being agreed
and understood that this condition shall not be satisfied until the expiration
of such period);
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Independent Counsel to the effect that, as of the date such opinion, (i) such
Legal Defeasance or Covenant
54
Defeasance shall not result in the Company, any Subsidiary Guarantor, the
trust arising from the irrevocable deposit referred to in SECTION 8.4(a) or
the Trustee being subject to regulation under, or constituting an investment
company within the meaning of, the Investment Company Act of 1940, as
amended, and (ii) assuming no intervening bankruptcy of the Company between
the date of deposit and the 91st day following the deposit or if a longer
period, the day following the end of such other preference period in effect
at the time of such opinion, as applicable, following the deposit, the trust
funds irrevocably deposited pursuant to SECTION 8.4(a) will not be subject to
the effects of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally under any applicable
United States or state law;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the irrevocable deposit referred in SECTION 8.4(a) was
not made by the Company with the intent of preferring the Holders of Notes over
any other creditors of the Company or any Subsidiary Guarantor with the intent
of defeating, hindering, delaying or defrauding creditors of the Company, any
Subsidiary Guarantor or others;
(h) no event or condition shall exist that would prevent the Company from
making payments of the principal of, or premium, if any, or interest on, the
Notes on the date of the irrevocable deposit referred to in SECTION 8.4(a) or at
any time during and ending on the 91st day (or such longer period as referred to
in SECTIONS 8.4(d) and (f)(ii)) after the date of such deposit; and
(i) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, which, taken together, state that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to SECTION 8.6, all money and non-callable Government Securities
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this SECTION 8.5, the "TRUSTEE") pursuant
to SECTION 8.4 in respect of the outstanding Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Notes of all sums due and to become due thereon in respect
of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to SECTION 8.4 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the outstanding Notes.
Anything in this ARTICLE 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in SECTION 8.4 that, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under
SECTION 8.4(a)), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
55
SECTION 8.6 REPAYMENT TO THE COMPANY.
Subject to the applicable escheat and abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, premium, if any, or interest on any
Note and remaining unclaimed for two years after such principal, and premium, if
any, or interest has become due and payable shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Notes shall thereafter, as a secured creditor, look only
to the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in The New York Times and
The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance
of such money then remaining will be repaid to the Company.
SECTION 8.7 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States dollars
or non-callable Government Securities in accordance with SECTION 8.5 by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Notes and the Subsidiary Guarantors'
obligations under this Indenture and the Subsidiary Guarantees shall be revived
and reinstated as though no deposit had occurred pursuant to SECTIONS 8.2 OR 8.3
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with SECTION 8.5; PROVIDED, HOWEVER, that, if the Company
makes any payment of principal of, premium, if any, or interest on any Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
SECTION 8.8 SATISFACTION AND DISCHARGE OF INDENTURE.
In addition to the options to effect Legal Defeasance and Covenant
Defeasance, and the effects thereof, this Indenture shall cease to be of further
effect (subject to SECTION 8.7) when all outstanding Notes theretofore
authenticated and issued hereunder have been delivered (other than any Notes
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in SECTION 2.7) to the Trustee for cancellation and
the Company has paid all sums payable hereunder and under the Notes.
Notwithstanding the satisfaction and discharge referred to in this SECTION 8.8,
the provisions of this Indenture referred to at CLAUSES (i) THROUGH (v) of
SECTION 8.2 shall survive until otherwise terminated or discharged hereunder.
For the avoidance of doubt, in addition to and distinct from this SECTION 8.8,
the Company may elect Legal Defeasance or Covenant Defeasance (or both) as
provided for in SECTION 8.1 THROUGH 8.4.
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ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES.
(a) Notwithstanding SECTION 9.2, the Company, the Subsidiary Guarantors
and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder of a Note:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(iii) to provide for the assumption of the Company's obligations
to the Holders of the Notes pursuant to ARTICLE 5 or SECTION 10.4(b);
(iv) to secure the Notes;
(v) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights under this Indenture of any such Holder;
(vi) to add any Restricted Subsidiary as an additional Subsidiary
Guarantor as provided in SECTION 10.2 or to evidence the succession of
another Person to any Subsidiary Guarantor pursuant to SECTION 10.4 and the
assumption by any such successor of the covenants and agreements of such
Subsidiary Guarantor contained herein and in the Subsidiary Guarantee of
such Subsidiary Guarantor;
(vii) to release a Subsidiary Guarantor from its obligations under
this Indenture and its Subsidiary Guarantee pursuant to SECTION 10.5, or
(viii) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA.
(b) Upon the request of the Company accompanied by a Board Resolution of
its Board of Directors authorizing the execution of any such amendment or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in SECTION 9.6, the Trustee shall join with the Company and the
Subsidiary Guarantors in the execution of any amended or supplemental Indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this SECTION 9.2, the Company and the Trustee
may amend or supplement this Indenture, the Subsidiary Guarantees or the Notes
with the consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes) and, subject to SECTIONS 6.4 AND 6.7, any existing Default or Event
of Default (other than a Default or Event of Default in the payment of the
principal of,
57
premium, if any, or interest on the Notes, except a payment default resulting
from an acceleration that has been rescinded) or compliance with any
provision of this Indenture or the Notes may be waived with the consent of
the Holders of a majority in aggregate principal amount of the then
outstanding Notes (including consents obtained in connection with a purchase
of, tender offer or exchange offer for Notes).
Upon the request of the Company accompanied by a Board Resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as herein provided, and upon
receipt by the Trustee of the documents described in SECTION 9.6, the Trustee
shall join with the Company and the Subsidiary Guarantors in the execution of
such amended or supplemental Indenture unless such amended or supplemental
Indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.
Subject to SECTIONS 6.4 AND 6.7, the Holders of a majority in aggregate
principal amount of the Notes then outstanding may waive compliance in a
particular instance by the Company and the Subsidiary Guarantors with any
provision of this Indenture or the Notes. However, without the consent of each
Holder affected, an amendment or waiver may not (with respect to any Notes held
by a non-consenting Holder):
(i) change the Stated Maturity Date or the date specified in any
Note as the fixed date on which any principal thereof, or any installment
of interest thereon, is due and payable, or change to an earlier date any
redemption date of, or waive a default in the payment of the principal or
interest on, any such Note or reduce the principal amount thereof or the
rate of interest thereon or any premium payable upon the redemption
thereof, or change the coin or currency in which the principal of any Note
or any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity Date or the date specified in any Note as the fixed date on
which any principal thereof or any installment of interest thereon is due
and payable (or, in the case of redemption, on or after the redemption
date);
(ii) after the date upon which a Change of Control Offer or Excess
Cash Offer, as the case may be, is required to be made, amend, change or
modify the obligation of the Company to make and consummate an Excess Cash
Offer with respect to any Asset Sale in accordance with SECTION 4.11 or the
obligation of the Company to make and consummate a Change of Control Offer
in the event of a Change of Control in accordance with SECTION 4.17,
including, in each case, amending, changing or modifying any provisions of
such Sections or any definitions relating thereto;
(iii) reduce the percentage in principal amount of the outstanding
Notes, the consent of whose Holders is required for any such amendment,
supplemental indenture, or the consent of whose Holders is required for any
waiver or compliance with certain provisions of this Indenture;
(iv) modify any of the provisions of this SECTION 9.2 OR SECTION
6.4, except to increase the percentage of such outstanding Notes required
for any such actions or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of
each such Note affected thereby;
58
(v) except as otherwise permitted under ARTICLE FIVE, consent to
the assignment or transfer by the Company or any Subsidiary Guarantor of
any of its rights and obligations hereunder;
(vi) alter, modify or change the ranking of any of the Notes or any
Subsidiary Guarantee relative to the payment of other Indebtedness or
obligations of the Company or any Subsidiary Guarantor, or otherwise
adversely affect the ranking of the Notes or Subsidiary Guarantees; or
(vii) release any Subsidiary Guarantee in any manner otherwise
than in accordance with the terms of this Indenture, or amend, modify or
change any provision of this Indenture (including the Subsidiary Guarantee)
which provides for the release of any Subsidiary Guarantee.
In addition, without the consent of Holders of not less than 66-2/3% in
aggregate principal amount of the Notes then outstanding, no such amendment,
supplement or waiver may, prior to the date on which a Change of Control Offer
or Excess Cash Offer, as the case may be, is required to be made, amend, change
or modify the obligation of the Company to make and consummate a Change of
Control Offer in the event of a Change of Control or make and consummate an
Excess Cash Offer with respect to any Asset Sale or modify any of the provisions
or definitions with respect thereto (including SECTIONS 4.11 AND 4.17).
It shall not be necessary for the consent of the Holders of Notes under
this SECTION 9.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this SECTION 9.2 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver.
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in an amended or supplemental Indenture that complies with the TIA as then
in effect.
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may
59
issue and the Trustee shall authenticate new Notes that reflect the
amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.6 TRUSTEE TO SIGN AMENDMENT ETC.
The Trustee shall sign any amendment or supplemental indenture to this
Indenture authorized pursuant to this ARTICLE 9 if the amendment or supplement
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. The Company may not sign an amendment or supplemental indenture to
this Indenture until its Board of Directors approves it. In executing any
amendment or supplemental indenture to this Indenture, the Trustee shall be
entitled to receive, and (subject to SECTION 7.1) shall be fully protected in
relying upon, in addition to the documents required by SECTION 11.4, Officers'
Certificates and Opinions of Counsel stating that the execution of such
amendment or supplemental indenture to this Indenture is authorized or permitted
by this Indenture.
ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.1 SUBSIDIARY GUARANTEES.
(a) Each of the Subsidiary Guarantors and each Subsidiary of the Company
that in accordance with SECTION 10.2 is required to guarantee the obligations of
the Company under the Notes and this Indenture hereby jointly and severally and
unconditionally guarantees, on a senior basis (each such guarantee being a
"SUBSIDIARY GUARANTEE"), to each Holder of a Note authenticated and delivered by
the Trustee irrespective of the validity or enforceability of this Indenture,
the Notes or the obligations of the Company under this Indenture or the Notes,
that: (i) the principal of, premium, if any, and interest on the Notes shall be
paid in full when due, whether at the maturity or interest payment or optional
or mandatory redemption date, by acceleration, call for redemption or otherwise,
and interest on the overdue principal and interest, if any, of the Notes and all
other obligations of the Company to the Holders or the Trustee under this
Indenture or the Notes shall be promptly paid in full or performed, all in
accordance with the terms of this Indenture and the Notes and (ii) in case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, they shall be paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed for whatever
reason, each Subsidiary Guarantor shall be obligated to pay the same whether or
not such failure to pay has become an Event of Default that could cause
acceleration pursuant to SECTION 6.2. Each Subsidiary Guarantor agrees that
this is a guarantee of payment not a guarantee of collection.
(b) Each Subsidiary Guarantor hereby agrees that its obligations with
regard to its Subsidiary Guarantee shall be unconditional, irrespective of the
validity or enforceability of the Notes or the obligations of the Company under
this Indenture, the absence of any action to enforce the same, the recovery of
any judgment against the Company or any other obligor with respect to this
Indenture, the Notes or the obligations of the Company under this Indenture or
the Notes, any action to enforce the same or any other circumstances (other than
complete performance) that might otherwise constitute a legal or equitable
discharge or defense of a Subsidiary Guarantor. Each Subsidiary Guarantor
further, to the extent permitted by
60
law, waives and relinquishes all claims, rights and remedies accorded by
applicable law to guarantors and agrees not to assert or take advantage of
any such claims, rights or remedies, including but not limited to: (i) any
right to require the Trustee, the Holders or the Company (each, a "BENEFITTED
PARTY") to proceed against the Company or any other Person or to proceed
against or exhaust any security held by a Benefitted Party at any time or to
pursue any other remedy in any Benefitted Party's power before proceeding
against such Subsidiary Guarantor; (ii) the defense of the statute of
limitations in any action hereunder or in any action for the collection of
any Indebtedness or the performance of any obligation hereby guaranteed;
(iii) any defense that may arise by reason of the incapacity, lack of
authority, death or disability of any other Person or the failure of a
Benefitted Party to file or enforce a claim against the estate (in
administration, bankruptcy or any other proceeding) of any other Person; (iv)
demand, protest and notice of any kind, including but not limited to, notice
of the existence, creation or incurring of any new or additional Indebtedness
or obligation or of any action or non-action on the part of such Subsidiary
Guarantor, the Company, any Benefitted Party, any creditor of such Subsidiary
Guarantor, the Company or on the part of any other Person whomsoever in
connection with any Indebtedness or obligations hereby guaranteed; (v) any
defense based upon an election of remedies by a Benefitted Party, including
but not limited to, an election to proceed against such Subsidiary Guarantor
for reimbursement; (vi) any defense based upon any statute or rule of law
that provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal;
(vii) any defense arising because of a Benefitted Party's election, in any
proceeding instituted under any Bankruptcy Law, of the application of Section
1111(b)(2) under the Bankruptcy Law; (viii) any defense based on any
borrowing or grant of a security interest under Section 364 under the
Bankruptcy Law or (ix) any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever. Each Subsidiary
Guarantor hereby covenants that its Subsidiary Guarantee will not be
discharged except by complete performance of all of the obligations contained
in its Subsidiary Guarantee, the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise to
return to either the Company or any Subsidiary Guarantor, or any custodian,
trustee, or similar official acting in relation to either the Company or such
Subsidiary Guarantor, any amount paid by the Company or such Subsidiary
Guarantor to the Trustee or such Holder, the applicable Subsidiary Guarantee, to
the extent theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor agrees that it will 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.
(d) Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (i) the maturity of the obligations guaranteed hereby may be
accelerated as provided in SECTION 6.2 for the purposes of this Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration as to the Company or any other obligor on the Notes of the
obligations guaranteed hereby and (ii) in the event of any declaration of
acceleration of those obligations as provided in SECTION 6.2, those obligations
(whether or not due and payable) will forthwith become due and payable by such
Subsidiary Guarantor for the purpose of this Subsidiary Guarantee.
SECTION 10.2 ADDITIONAL SUBSIDIARY GUARANTEES.
(a) Simultaneously with (i) the acquisition (by merger, consolidation,
acquisition of assets, stock or properties or otherwise) or formation of a
Person which, directly or indirectly, becomes a Subsidiary of the Company, or
(ii) the occurrence of any other event, circumstance or transaction pursuant to
which, directly or indirectly, a Person becomes a Subsidiary of the
61
Company, in each case referred to in the immediately preceding CLAUSES (i)
AND (ii), other than a Person then designated an Unrestricted Subsidiary of
the Company in accordance with SECTION 4.14, the Company then shall (y) cause
such Person to execute a supplemental indenture to this Indenture agreeing to
be bound by its terms applicable to a Subsidiary Guarantor and providing for
a Subsidiary Guarantee of the Notes by such Person, in accordance with the
terms of this Indenture and (z) deliver such supplemental indenture to the
Trustee, accompanied by the Opinion of Counsel and Officers' Certificate
required pursuant to SECTION 9.6.
(b) In furtherance of SECTION 10.2(a), but in no regard diminishing the
immediacy of its requirement that upon a Person becoming a Subsidiary it
simultaneously becomes a Subsidiary Guarantor, in no event whatsoever shall the
Company permit any of its Restricted Subsidiaries, other than a Subsidiary
Guarantor, directly or indirectly, to (i) incur any Indebtedness or guarantee or
secure through the granting of Liens the payment of any Indebtedness of the
Company or any other Restricted Subsidiary or (ii) pledge any intercompany notes
representing obligations of any of its Restricted Subsidiaries to secure the
payment of its or any of the Company's or other Restricted Subsidiary's
Indebtedness, in each case, unless the Company shall (y) cause such Restricted
Subsidiary to execute a supplemental indenture to this Indenture agreeing to be
bound by its terms applicable to a Subsidiary Guarantor and providing for a
Subsidiary Guarantee of the Notes by such Person in accordance with the terms of
this Indenture and (z) deliver such supplemental indenture to the Trustee,
accompanied by the Opinion of Counsel and an Officers' Certificate, required
pursuant to SECTION 9.6.
SECTION 10.3 LIMITATION OF SUBSIDIARY GUARANTORS' LIABILITY.
(a) Each Subsidiary Guarantor and by its acceptance hereof, each
beneficiary hereof, hereby confirm that it is its intention that the Subsidiary
Guarantee by such Subsidiary Guarantor not constitute a fraudulent transfer or
conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to
the extent applicable to any of the Subsidiary Guarantees. To effectuate the
foregoing intention, each such Person hereby irrevocably agrees that the
obligations of such Subsidiary Guarantor under its Subsidiary Guarantee under
this ARTICLE 10 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 Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to
its contribution obligations under this Indenture, result in the obligations of
such Subsidiary Guarantor under the Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law.
(b) For purposes of such limitations and the applicable fraudulent
conveyance laws, any indebtedness of a Subsidiary Guarantor incurred from time
to time pursuant to a Permitted Bank Credit Facility and secured by a perfected
Lien on the assets of such Subsidiary Guarantor (assuming, for purposes of such
determination, that the incurrence of any such indebtedness and the granting of
any such security interest did not violate any such fraudulent conveyance laws)
shall be deemed, to the extent of the value of the assets subject to such Lien,
to have been incurred prior to the incurrence by such Subsidiary Guarantor of
liability under its Subsidiary Guarantee.
(c) Each beneficiary under the Subsidiary Guarantees, by accepting the
benefits hereof, confirms its intention that, in the event of a bankruptcy,
reorganization or other similar proceeding of the Company or any Subsidiary
Guarantor in which concurrent claims
62
are made upon such Subsidiary Guarantor hereunder, to the extent such claims
will not be fully satisfied, each such claimant with a valid claim against
the Company shall be entitled to a ratable share of all payments by such
Subsidiary Guarantor in respect of such concurrent claims.
SECTION 10.4 SUBSIDIARY GUARANTORS MAY CONSOLIDATE ETC., ON CERTAIN TERMS.
(a) No Subsidiary Guarantor may consolidate with or merge with or into
(whether or not such Subsidiary Guarantor is the surviving Person) another
Person or, subject to SECTION 10.5, sell, convey or otherwise transfer all or
substantially all of its assets to another Person or group, unless (i) subject
to the provisions of the following paragraph, the Person formed by or surviving
any such consolidation or merger (if other than such Subsidiary Guarantor)
(A) is a corporation organized and existing under the laws of the United States
of America, any state thereof or the District of Columbia, and (B) expressly
assumes all the obligations of such Subsidiary Guarantor by executing and
delivering a supplemental indenture to this Indenture to the Trustee agreeing to
be bound by its terms applicable to a Subsidiary Guarantor and providing for a
Subsidiary Guarantee of the Notes by such Person, in accordance with the terms
of this Indenture; (ii) immediately before and after giving effect to such
transaction, no Default or Event of Default exists and immediately after giving
effect to such transaction, the resulting, surviving or transferee entity could
Incur $1.00 of additional Indebtedness pursuant to SECTION 4.7(A); and
(iii) such Subsidiary Guarantor, or any Person formed by or surviving any such
consolidation or merger, would have a Net Worth (immediately after giving effect
to such transaction), equal to or greater than the Net Worth of such Subsidiary
Guarantor immediately preceding the transaction. In connection with any
consolidation, merger or sale, conveyance or other transfer contemplated by this
provision, the Subsidiary Guarantor shall deliver, or cause to be delivered, to
the Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or sale, conveyance or other transfer and the supplemental
indenture in respect thereto comply with this provision and that all conditions
precedent in this Indenture provided for relating to such transaction or
transactions have been complied with.
(b) Notwithstanding the foregoing, (i) a Subsidiary Guarantor may
consolidate with or merge with or into, or sell, convey or otherwise transfer
all or substantially all of its assets to, the Company, PROVIDED THAT the
surviving corporation (if other than the Company) shall expressly assume by
supplemental indenture complying with the requirements of this Indenture, the
due and punctual payment of the principal of, premium, if any, and interest on
all of the Notes, and the due and punctual performance and observance of all the
covenants and conditions of this Indenture to be performed by the Company and
(ii) a Subsidiary Guarantor may consolidate with or merge with or into, or sell,
convey or otherwise transfer all or substantially all of its assets to, any
other Subsidiary Guarantor.
SECTION 10.5 RELEASES OF SUBSIDIARY GUARANTORS.
In the event of (i) the designation of any Subsidiary Guarantor as an
Unrestricted Subsidiary of the Company pursuant to the provisions of
SECTION 4.14 or (ii) a sale, conveyance, transfer or other disposition of all or
substantially all of the properties or assets of any Subsidiary Guarantor to a
Person other than the Company or any other Subsidiary Guarantor or an
Unrestricted Subsidiary of the Company, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the Capital Stock of any
Subsidiary Guarantor, in either case, in a transaction or manner that does not
violate any of the covenants or other provision of this Indenture, then such
Subsidiary Guarantor (in the event of such a designation or a sale, conveyance,
transfer or other disposition (other than a lease), by way of such a merger,
63
consolidation or otherwise, or a disposition of all of the Capital Stock of
such Subsidiary Guarantor) or the Person acquiring such properties or assets
(in the event of a sale, conveyance, transfer or other disposition (other
than a lease) of all or substantially all of the properties or assets of such
Subsidiary Guarantor) will be released from and relieved of any obligations
under this Indenture and its Subsidiary Guarantee, PROVIDED that (y) any Net
Cash Proceeds of such sale or other disposition are applied in accordance
with SECTION 4.11 as evidenced by an Officers' Certificate to such effect,
and (z) all obligations of such Subsidiary Guarantor under all of its
guarantees of, and under all of its pledges of assets or other security
interests that secure, any other Indebtedness of the Company or its
Restricted Subsidiaries shall also terminate upon such release, sale or
disposition.
SECTION 10.6 "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this ARTICLE 10 shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully and for all intents and purposes as if such Paying Agent were
named in this ARTICLE 10 in place of the Trustee.
SECTION 10.7 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 a Subsidiary Guarantee, such Funding Guarantor shall
be entitled to a contribution from all other Subsidiary Guarantors in a PRO RATA
amount based on the Adjusted Net Assets (as defined below) of each Subsidiary
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Notes or any other Subsidiary Guarantor's
obligations with respect to such Subsidiary Guarantee. "ADJUSTED NET ASSETS" of
such Subsidiary Guarantor at any date shall mean the lesser of the amount by
which (x) the fair value of the property of such Subsidiary Guarantor exceeds
the total amount of liabilities, including, without limitation, contingent
liabilities, but excluding liabilities under the Subsidiary Guarantee of such
Subsidiary Guarantor at such date and (y) the present fair salable value of the
assets of such Subsidiary Guarantor at such date exceeds the amount that will be
required to pay the probable liability of such Subsidiary Guarantor on its debts
(after giving effect to all other fixed and contingent liabilities incurred or
assumed on such date and after giving effect to any collection from any
Subsidiary of such Subsidiary Guarantor in respect of the obligations of such
subsidiary under the Subsidiary Guarantees), excluding debt in respect of the
Subsidiary Guarantees, as they become absolute and matured.
SECTION 10.8 EXECUTION OF SUBSIDIARY GUARANTEES.
To evidence its guarantee to each Holder of Notes, each of the Subsidiary
Guarantors hereby agrees to execute its Subsidiary Guarantee in substantially
the form of EXHIBIT A recited to be endorsed on each Note ordered to be
authenticated and delivered by the Trustee. Each Subsidiary Guarantor hereby
agrees that its Subsidiary Guarantee set forth in SECTION 10.1 shall remain in
full force and effect notwithstanding any failure to endorse on each Note a
notation of such Subsidiary Guarantee. Each such Subsidiary Guarantee shall be
signed on behalf of each Subsidiary Guarantor by one Officer of such Subsidiary
Guarantor who shall have been duly authorized by all requisite corporate
actions, and the delivery of such Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of such Subsidiary Guarantee on
behalf of such Subsidiary Guarantor. Such signatures upon
64
the Subsidiary Guarantee may be by manual or facsimile signature of such
Officer and may be imprinted or otherwise reproduced on the Subsidiary
Guarantee, and in case any such Officer who shall have signed the Subsidiary
Guarantee shall cease to be such Officer before the Note on which such
Subsidiary Guarantee is endorsed shall have been authenticated and delivered
by the Trustee or disposed of by the Company, such Note nevertheless may be
authenticated and delivered or disposed of as though the person who signed
the Subsidiary Guarantee had not ceased to be such officer of the Subsidiary
Guarantor.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 11.2 NOTICES.
Any notice or communication by the Company, any of the Subsidiary
Guarantors or the Trustee to any of the others is duly given if in writing and
delivered in person or mailed by first class mail (registered or certified,
return receipt requested), facsimile or overnight air courier guaranteeing next-
day delivery, to such other's address:
If to the Company or any Subsidiary Guarantor:
RAM Energy, Inc.
------------------------------
------------------------------
Facsimile No.:
-------------------
Attention:
-------------------
with a copy to:
C. Xxxxx Xxxxxxx, Esq.
McAfee & Xxxx
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
PROVIDED, HOWEVER, the failure to provide or any delay in providing any
"with a copy to" notice or communication shall not impair the effect and
validity of any notice or communication made to the Company, in person, by
first class mail, facsimile or overnight air courier, in each case as
provided in this SECTION 11.2, at its address above or otherwise designated
pursuant to the provisions of this SECTION 11.2.
65
If to the Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Trust Department
Xx. Xxxxxxxx Xxxxxxx
The Company, any of the Subsidiary Guarantors or the Trustee, by notice
to the others, may designate additional or different addresses for subsequent
notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if
personally delivered; 5 Business Days after being deposited in the United
States mail, postage prepaid, if mailed; when receipt acknowledged, if sent
by facsimile; the next Business Day after timely delivery to the courier, if
sent for overnight delivery by a courier guaranteeing next-day delivery; and
the second Business Day after timely delivery to the courier, if sent for
second-day delivery by a courier guaranteeing second-day delivery.
Any notice or communication to a Holder shall be mailed by first class
U.S. mail to its address shown on the register kept by the Registrar. Any
notice or communication shall also be so mailed to any Person described in
TIA Section 313(c), to the extent required by the TIA. Failure to mail a
notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.
SECTION 11.3 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Subsidiary Guarantors, the Trustee, the Registrar and anyone
else shall have the protection of TIA Section 312(c).
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, such requesting entity shall furnish to the
Trustee:
(i) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in SECTION 11.5) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in SECTION 11.5)
66
stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(i) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of such Person, he or
she has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(iv) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 11.6 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS.
NO STOCKHOLDER, OFFICER OR DIRECTOR, AS SUCH, PAST, PRESENT OR FUTURE,
OF THE COMPANY OR ANY SUBSIDIARY GUARANTOR, SHALL HAVE ANY PERSONAL LIABILITY
FOR ANY OBLIGATIONS OF THE COMPANY OR SUCH SUBSIDIARY GUARANTOR UNDER THE
NOTES, THIS INDENTURE OR THE SUBSIDIARY GUARANTEES, AS THE CASE MAY BE, BY
REASON OF HIS OR HER OR ITS STATUS AS SUCH STOCKHOLDER, OFFICER OR DIRECTOR.
EACH HOLDER BY ACCEPTING A NOTE WAIVES AND RELEASES ALL SUCH LIABILITY. THE
WAIVER AND RELEASE ARE PART OF THE CONSIDERATION FOR ISSUANCE OF THE NOTES
AND THE SUBSIDIARY GUARANTEES. SUCH WAIVER MAY NOT BE EFFECTIVE TO WAIVE
LIABILITIES UNDER THE FEDERAL SECURITIES LAWS, AND IT IS THE VIEW OF THE
COMMISSION THAT SUCH A WAIVER IS AGAINST PUBLIC POLICY.
SECTION 11.8 GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
SECTION 11.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
67
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.01 SUCCESSORS.
All agreements of the Company or any Subsidiary Guarantor in this
Indenture, the Subsidiary Guarantees and the Notes shall bind its successors
and as provided herein, its assigns. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 11.11 SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 11.12 COUNTERPART ORIGINALS.
The parties hereto may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Indenture as
of the date first written above.
"COMPANY"
RAM ENERGY, INC.,
a Delaware corporation
By
---------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
68
"SUBSIDIARY GUARANTORS"
RB OPERATING COMPANY,
a Delaware corporation
By
---------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
RLP GULF STATES, L.L.C.,
a Oklahoma limited liability company
By
----------------------------------------
[its sole] [a] Member
By
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
69
"TRUSTEE"
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By
---------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
70
EXHIBIT A
[FORM OF NOTE]
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX
XXXX) ("XXX"), 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 SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER
ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), 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.(1)
_____% SENIOR NOTES DUE 2008
REGISTERED CUSIP: ____________
No. $
RAM ENERGY, INC., a Delaware corporation (the "COMPANY", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, promises to pay to ____________ ___________________ or
registered assigns, the principal sum of _____________________ Dollars [or such
lesser amount as may be set forth in APPENDIX 1 hereto in accordance with the
Indenture](2) on __________, 2008.
Interest Payment Dates: ________ ____ and _______ ____
Record Dates: ________ ____ and _________ ____
-------------------
(1) This paragraph should be included in the Note only if issued in global form.
(2) This paragraph should be included in the Note only if issued in global form.
A-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.
Dated: RAM ENERGY, INC.
---------------------------
By
-----------------------------------
Name:
--------------------------------
Title:
-------------------------------
ATTEST:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the _________% Notes referred to in the within-mentioned
Indenture:
Dated:
------------------------------
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:
---------------------------------
Authorized Signatory
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[REVERSE OF NOTE]
RAM ENERGY, INC.
______% SENIOR NOTES DUE 2008
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. RAM Energy, Inc., a Delaware corporation (the "COMPANY",
which term includes any successor Person under the Indenture hereinafter
referred to), promises to pay interest on the principal amount of this Note at
______% per annum from ______________ ____, ______, until maturity. The Company
shall pay interest semi-annually on ___________ ____ and ___________ ____ 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 shall
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance; PROVIDED that if
there is no existing Default or Event of Default in the payment of interest, and
if this Note is authenticated between a record date referred to in the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date, except in the case of the original
issuance of Notes, in which case interest shall accrue from the date of
authentication. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 1% per annum in
excess of the rate then in effect on this Note to the extent lawful; it shall
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) 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 shall pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the ____________ ____ or ___________ ____ next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes
will be payable as to principal, premium and interest at the office or agency of
the Company maintained for such purpose within or without the City and State of
New York, [or, at the option of the Company, payment of interest may be made by
wire transfer or check mailed to the Holders at their addresses set forth in the
register of Holders,](a) and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of,
and interest and premium on, all Global Notes and all other Notes the Holders
of which shall have provided written wire transfer instructions to the
Company or the Paying Agent at least 10 Business Days prior to the applicable
payment date. Such payment shall be in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.
--------------------------
(a) This bracketed clause will be inserted in Notes in the event the Notes do
not remain in global form, and in such instance, the proviso completing
this sentence will, to the extent it refers to Global Notes, be deleted.
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3. PAYING AGENT AND REGISTRAR. Initially, United States Trust Company of
New York, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any domestically incorporated Wholly Owned
Subsidiary Guarantor may act in any such capacity.
4. INDENTURE AND SUBSIDIARY GUARANTEES. The Company issued the Notes
under an Indenture dated as of February ____, 1998 (the "INDENTURE"), among the
Company, the Subsidiary Guarantors and the Trustee. 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, as amended (15 U.S. Code Sections
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. The Notes
are general unsecured obligations of the Company limited to $115,000,000 in
aggregate principal amount in the case of Notes issued on the Issue Date.
Payment on each Note is guaranteed on a senior unsecured basis, jointly and
severally, by the Subsidiary Guarantors pursuant to Article 10 of the Indenture.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in SUBPARAGRAPH (b) of this PARAGRAPH 5, the
Company shall not have the option to redeem the Notes prior to
____________ ____, 2003. Thereafter, the Company shall have the option to
redeem the Notes, in whole or in part, upon not less than 30 nor more than 60
days' written notice, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest thereon, if
any, to the applicable redemption date, if redeemed during the 12-month period
beginning on ____________ ____ of the years indicated below:
YEAR PERCENTAGE
---- ----------
2003............................................. __________%
2004............................................. __________%
2005............................................. __________%
2006 and thereafter.............................. 100.0000%
(b) Notwithstanding the provisions of SUBPARAGRAPH (a) of this
PARAGRAPH 5, at any time on or prior to ____________ ____, 2001, the Company may
redeem up to an aggregate of 35% of the aggregate principal amount of Notes
originally issued, in cash, at a redemption price of ________% of the principal
amount thereof, together with accrued and unpaid interest thereon to the
redemption date, with the net proceeds of a Public Equity Offering; PROVIDED
that (i) at least 65% of the aggregate principal amount of Notes originally
issued remains outstanding immediately after the occurrence of each such
redemption and (ii) each such redemption shall occur within 60 days of the date
of the closing of each such Public Equity Offering.
6. MANDATORY REDEMPTION. The Company shall not be required to make
mandatory redemption payments or sinking fund payments with respect to the
Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company shall be
required to make an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of the aggregate principal amount thereof, plus
accrued and any unpaid interest thereon, if any, to the Change of Control
Payment Date (the "CHANGE OF CONTROL PAYMENT"). Within 5
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Business Days after the occurrence of a Change of Control, the Company shall
notify the Trustee in writing of such proposed occurrence and shall, not
later than 20 Business Days after the occurrence of the Change of Control,
make a Change of Control Offer to the Holders of all of the outstanding Notes
by sending written notice to each Holder at its registered address setting
forth the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sale, within 10 days following each Excess Cash Offer Trigger Date, the Company
shall commence an offer to all Holders of Notes (an "EXCESS CASH OFFER")
pursuant to Section 3.9 of the Indenture to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Cash at an offer price
in cash in an amount equal to 100% of the principal amount thereof plus accrued
and unpaid interest thereon, if any, to the Excess Cash Purchase Date in
accordance with the procedures set forth in the Indenture. To the extent that
the aggregate amount of Notes tendered pursuant to an Excess Cash Offer is less
than the Excess Cash, the Company (or any Subsidiary Guarantor) may use such
excess for any of their respective general corporate purposes PROVIDED THAT no
such purpose is prohibited or restricted by the Indenture. Holders of Notes
that are the subject of an offer to purchase will receive an Excess Cash Offer
from the Company prior to any related purchase date and may elect to have such
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least
30 days but not more than 60 days before a redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND 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 aggregate principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes. Without
the consent of any Holder of a Note, the Indenture or the Notes may be amended
or supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the
A-5
Holders of the Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, to secure the Notes, to add or release any
Subsidiary Guarantor pursuant to the terms of the Indenture or to comply with
the requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the TIA.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on the Notes; (ii) default in payment
when due of principal of or premium, if any, on the Notes whether the same
becomes due and payable at maturity, upon redemption (including in connection
with an offer to purchase) or otherwise, (iii) a default in the performance or
breach of Section 4.11, 4.17 or 5.1 of the Indenture; (iv) a default in the
observance or performance of any other covenant or agreement, which default
continues for 30 days after written notice thereof to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding; (v) default under certain other
agreements relating to Indebtedness of the Company or any Restricted Subsidiary
of the Company, which default (A) extends beyond a stated period of grace
applicable thereto (including any extensions thereof) or (B) is caused by a
failure to pay principal of or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in such Indebtedness on the
date of such default, and in each case, the outstanding principal amount of such
Indebtedness aggregates in excess of $1,000,000, and PROVIDED, FURTHER, that if
any such default is waived by all obligees thereof, then such Event of Default
under the Indenture shall be deemed waived and any consequential acceleration of
the Notes shall be automatically rescinded, so long as such rescission does not
conflict with any judgment or decree; (vi) certain final judgments for the
payment of money that remain undischarged for a period of 60 consecutive days;
(vii) any of the Indenture, the Notes or the Subsidiary Guarantees shall for any
reason cease to be, or be asserted by the Company or any Subsidiary Guarantor,
as applicable, not to be, in full force and effect (except pursuant to the
release of any Subsidiary Guarantee in accordance with the Indenture),or shall
be declared null and void or unenforceable, or the validity or enforceability
thereof shall be denied or contested; and (viii) certain events of bankruptcy or
insolvency with respect to the Company or any Subsidiary Guarantor. If any
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in aggregate principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to the Company or any Subsidiary
Guarantor, all outstanding Notes will become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes. The Company is required to deliver
to the Trustee quarterly (other than for the final quarter of its fiscal year)
and annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
13. DISCHARGE AND DEFEASANCE. Subject to the continuance of certain
administrative obligations with respect to the Notes, the Indenture (including
the Subsidiary Guarantees) shall be discharged and cancelled upon the payment of
all of the Notes. Further, subject to certain conditions of the Indenture, the
Company and the Subsidiary Guarantors may be
A-6
discharged from all of their respective obligations under the Indenture, the
Notes and the Subsidiary Guarantees, except for the continuance of certain
administrative obligations with respect to the Notes, or may be released from
the compliance with restrictive covenants of the Indenture, upon the
irrevocable deposit with the Trustee of funds or Government Securities
sufficient for payment.
14. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. NO PAST, PRESENT OR FUTURE STOCKHOLDER,
OFFICER OR DIRECTOR OF THE COMPANY OR ANY SUBSIDIARY GUARANTOR, AS SUCH, SHALL
HAVE ANY PERSONAL LIABILITY FOR ANY OBLIGATIONS OF THE COMPANY OR SUCH
SUBSIDIARY GUARANTOR UNDER THE NOTES, THE INDENTURE OR THE SUBSIDIARY
GUARANTEES, AS THE CASE MAY BE, BY REASON OF HIS OR HER OR ITS STATUS AS SUCH
STOCKHOLDER, OFFICER OR DIRECTOR. EACH HOLDER BY ACCEPTING THIS NOTE WAIVES AND
RELEASES ALL SUCH LIABILITY. THE WAIVER AND RELEASE ARE PART OF THE
CONSIDERATION FOR THE ISSUANCE OF THE NOTES AND THE SUBSIDIARY GUARANTEES. SUCH
WAIVER MAY NOT BE EFFECTIVE TO WAIVE LIABILITIES UNDER THE FEDERAL SECURITIES
LAWS, AND IT IS THE VIEW OF THE COMMISSION THAT SUCH A WAIVER IS AGAINST PUBLIC
POLICY.
16. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee.
17. 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).
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. GOVERNING LAW. THIS NOTE AND THE GUARANTEE NOTATION HEREON SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
RAM Energy, Inc.
__________________________
__________________________
______________, _______ _______
Facsimile No.: (______) ______-________
Attention: Chief Financial Officer
A-7
[FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEES]
For value received, each of the undersigned hereby, jointly and severally,
unconditionally guarantees to the Holder of this Note the payment of all
principal of, premium, if any, and interest on this Note, upon which this
Subsidiary Guarantee is endorsed, in the amounts and at the time when due and
payable, whether at the maturity or interest payment or mandatory redemption
date, by acceleration, call for redemption or repurchase or otherwise, and
interest on the overdue principal and interest, if any, of this Note, if lawful,
and all other obligations of the Company to the Holders or the Trustee under the
Indenture, all in accordance with, and subject to the terms and limitations of,
this Note and Article 10 of the Indenture. Each Subsidiary Guarantor agrees
that this is a guarantee of payment, not a guarantee of collection. Capitalized
terms used herein have the meanings assigned to them in the Indenture unless
otherwise indicated. The Subsidiary Guarantees shall not be valid or obligatory
for any purpose until the certificate of authentication on this Note on which
this Subsidiary Guarantee is noted shall have been executed by the Trustee.
THIS SUBSIDIARY GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES
THEREOF. The Indebtedness evidenced by this Subsidiary Guarantee is, to the
extent and in the manner provided in the Indenture, the senior unsecured
obligation of each Subsidiary Guarantor.
By each of the following, and any other Subsidiary Guarantor as may be
added or substituted from time to time, as Subsidiary Guarantors:
SUBSIDIARY GUARANTORS:
-----------------------------
---------------------------------------------
By
-------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
(for each of the above-listed Subsidiary
Guarantors)
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
----------------------------
Your Signature:
---------------------------------------
(Sign exactly as your name appears on the face of this
Note)
Signature Guarantee.
A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.11 or 4.17 of the Indenture, check the box below:
/ / Section 4.11 / / Section 4.17
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.11 or Section 4.17 of the Indenture, state the amount you
elect to have purchased:
$ (Must be in $1,000 Denominations)
--------------
Date:
--------------------------
Your Signature:
---------------------------------------
(Sign exactly as your name appears on the face of this
Note)
Signature Guarantee:
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APPENDIX 1
SCHEDULE OF ADJUSTMENTS TO GLOBAL NOTE(3)
The following increases or decreases in the principal amount of this Global
Note in accordance with the Indenture have been made:
Amount of Signature of
decrease in Principal Amount of authorized
Principal Amount of increase this Global Note signatory of
Date of Amount of this in Principal Amount following such Trustee or Note
Exchange Global Note of this Global Note decrease (or increase) Custodian
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(3) This schedule should be included only if the Note is issued in global form.
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