EXHIBIT 7.1
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Paramount Resources Ltd.
[ ]% SENIOR NOTES DUE 2010
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INDENTURE
Dated as of October [ ], 2003
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The Bank of Nova Scotia Trust Company of New York
Trustee
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CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
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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).............................................. 2.05
(b).............................................. 12.03
(c).............................................. 12.03
313 (a).............................................. 7.06
(b)(2)........................................... 7.06; 7.07
(c).............................................. 7.06; 12.02
(d).............................................. 7.06
314 (a).............................................. 4.03; 12.02; 12.05
(c)(1)........................................... 12.04
(c)(2)........................................... 12.04
(c)(3)........................................... N.A.
(e).............................................. 12.05
(f).............................................. N.A.
315 (a).............................................. 7.01
(b).............................................. 7.05; 12.02
(c).............................................. 7.01
(d).............................................. 7.01
(e).............................................. 6.11
316 (a) (last sentence).............................. 2.09
(a)(1)(A)........................................ 6.05
(a)(1)(B)........................................ 6.04
(a)(2)........................................... N.A.
(b).............................................. 6.07
(c).............................................. 2.12
317 (a)(1)........................................... 6.08
(a)(2)........................................... 6.09
(b).............................................. 2.04
318 (a).............................................. 12.01
(b).............................................. N.A.
(c).............................................. 12.01
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.................................................................................1
Section 1.02 Other Definitions..........................................................................27
Section 1.03 Incorporation By Reference of Trust Indenture Act..........................................28
Section 1.04 Rules of Construction......................................................................28
ARTICLE II
THE NOTES
Section 2.01 Form and Dating............................................................................29
Section 2.02 Execution and Authentication...............................................................29
Section 2.03 Registrar and Paying Agent.................................................................30
Section 2.04 Paying Agent to Hold Money in Trust........................................................30
Section 2.05 Holder Lists...............................................................................31
Section 2.06 Transfer and Exchange......................................................................31
Section 2.07 Replacement Notes..........................................................................35
Section 2.08 Outstanding Notes..........................................................................35
Section 2.09 Treasury Notes.............................................................................36
Section 2.10 Temporary Notes............................................................................36
Section 2.11 Cancellation...............................................................................36
Section 2.12 Defaulted Interest.........................................................................36
ARTICLE III
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.........................................................................37
Section 3.02 Selection of Notes to Be Redeemed or Purchased.............................................37
Section 3.03 Notice of Redemption.......................................................................38
Section 3.04 Effect of Notice of Redemption.............................................................38
Section 3.05 Deposit of Redemption or Purchase Price....................................................39
Section 3.06 Notes Redeemed or Purchased in Part........................................................39
Section 3.07 Optional Redemption........................................................................39
Section 3.08 Mandatory Redemption.......................................................................40
Section 3.09 Offer to Purchase by Application of Excess Proceeds........................................40
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ARTICLE IV
COVENANTS
Section 4.01 Payment of Notes...........................................................................42
Section 4.02 Maintenance of Office or Agency............................................................42
Section 4.03 Reports....................................................................................43
Section 4.04 Compliance Certificate.....................................................................43
Section 4.05 Taxes......................................................................................44
Section 4.06 Stay, Extension and Usury Laws.............................................................44
Section 4.07 Restricted Payments........................................................................44
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.............................47
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.................................49
Section 4.10 Asset Sales................................................................................52
Section 4.11 Transactions with Affiliates...............................................................54
Section 4.12 Liens......................................................................................55
Section 4.13 Corporate Existence........................................................................55
Section 4.14 Offer to Repurchase upon Change of Control.................................................56
Section 4.15 Payments for Consent.......................................................................57
Section 4.16 [Intentionally Omitted]....................................................................57
Section 4.17 Payment of Additional Amounts..............................................................57
Section 4.18 Designation of Restricted and Unrestricted Subsidiaries....................................59
Section 4.19 Business Activities........................................................................59
Section 4.20 Issuance of Subsidiary Guarantees and Mirror Note Guarantees...............................59
ARTICLE V
SUCCESSORS
Section 5.01 Amalgamation, Merger, Consolidation or Sale of Assets......................................60
Section 5.02 Successor Corporation Substituted..........................................................62
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01 Events of Default..........................................................................63
Section 6.02 Acceleration...............................................................................64
Section 6.03 Other Remedies.............................................................................65
Section 6.04 Waiver of Past Defaults....................................................................65
Section 6.05 Control by Majority........................................................................65
Section 6.06 Limitation on Suits........................................................................65
Section 6.07 Rights of Holders to Receive Payment.......................................................66
Section 6.08 Collection Suit by Trustee.................................................................66
Section 6.09 Trustee May File Proofs of Claim...........................................................66
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Section 6.10 Priorities.................................................................................67
Section 6.11 Undertaking for Costs......................................................................67
ARTICLE VII
TRUSTEE
Section 7.01 Duties of Trustee..........................................................................67
Section 7.02 Rights of Trustee..........................................................................68
Section 7.03 Individual Rights of Trustee; Money Held in Trust..........................................69
Section 7.04 Trustee's Disclaimer.......................................................................69
Section 7.05 Notice of Default..........................................................................69
Section 7.06 Reports by Trustee to Holders..............................................................70
Section 7.07 Compensation and Indemnity.................................................................70
Section 7.08 Replacement of Trustee.....................................................................71
Section 7.09 Successor Trustee by Merger, etc...........................................................72
Section 7.10 Eligibility; Disqualification..............................................................72
Section 7.11 Preferential Collection of Claims Against Company..........................................72
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance...................................72
Section 8.02 Legal Defeasance and Discharge.............................................................72
Section 8.03 Covenant Defeasance........................................................................73
Section 8.04 Conditions to Legal or Covenant Defeasance.................................................73
Section 8.05 Deposited Money and Government Securities to Be Held in Trust; Other
Miscellaneous Provisions..............................................................75
Section 8.06 Repayment to Company.......................................................................75
Section 8.07 Reinstatement..............................................................................76
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes........................................................76
Section 9.02 With Consent of Holders....................................................................77
Section 9.03 Compliance with Trust Indenture Act........................................................79
Section 9.04 Revocation and Effect of Consents..........................................................79
Section 9.05 Notation on or Exchange of Notes...........................................................79
Section 9.06 Trustee to Sign Amendments, etc............................................................79
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ARTICLE X
SUBSIDIARY GUARANTEES
Section 10.01 Subsidiary Guarantee.......................................................................79
Section 10.02 Limitation on Subsidiary Guarantor Liability...............................................81
Section 10.03 Execution and Delivery of Subsidiary Guarantee.............................................81
ARTICLE XI
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.................................................................81
Section 11.02 Application of Trust Money.................................................................82
ARTICLE XII
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls...............................................................83
Section 12.02 Notices....................................................................................83
Section 12.03 Communication by Holders of Notes with Other Holders of Notes..............................84
Section 12.04 Certificate and Opinion as to Conditions Precedent.........................................84
Section 12.05 Statements Required in Certificate or Opinion..............................................85
Section 12.06 Rules by Trustee and Agents................................................................85
Section 12.07 No Personal Liability of Directors, Officers, Employees and Stockholders...................85
Section 12.08 Governing Law..............................................................................85
Section 12.09 No Adverse Interpretation of Other Agreements..............................................85
Section 12.10 Successors.................................................................................86
Section 12.11 Severability...............................................................................86
Section 12.12 Counterpart Originals......................................................................86
Section 12.13 Table of Contents, Headings, etc...........................................................86
Section 12.14 Consent to Jurisdiction....................................................................86
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INDENTURE dated as of October [ ], 2003 between Paramount Resources Ltd., a
corporation incorporated under the laws of the Province of Alberta, Canada (the
"COMPANY"), each Subsidiary Guarantor that becomes a party hereto following the
Issue Date and The Bank of Nova Scotia Trust Company of New York, as trustee
(the "TRUSTEE").
The parties agree as follows for the benefit of each other and for the
equal and ratable benefit of the Holders (as defined) of the [ ]% Senior Notes
due 2010 (the "NOTES"):
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 DEFINITIONS.
"ACQUIRED DEBT" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is amalgamated or merged with or into or became a Restricted
Subsidiary of such specified Person, whether or not such Indebtedness is
incurred in connection with, or in contemplation of, such other Person
amalgamating or merging with or into, or becoming a Restricted Subsidiary
of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person;
PROVIDED that any Indebtedness of such other Person that is redeemed, defeased,
retired or otherwise repaid at the time of or immediately upon consummation of
the transaction by which such other Person is amalgamated or merged with or
into, or becomes a Restricted Subsidiary of, such specified Person, or such
assets are acquired by such specified Person, will not be Acquired Debt.
"ADDITIONAL NOTES" means an unlimited amount of Notes (other than the
Initial Notes) issued under this Indenture in accordance with Sections 2.02 and
4.09, as part of the same series as the Initial Notes.
"ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS" means, without duplication, as
of the date of determination, the sum of:
(1) discounted future net revenues from proved oil and gas reserves
of the Company and its Restricted Subsidiaries calculated in accordance
with SEC guidelines (before any provincial, state or federal income taxes),
as confirmed by a Canadian or United States nationally recognized firm of
independent petroleum engineers (which shall include XxXxxxxx & Associates
Consultants Ltd., Xxxxxxx Associates Limited and Xxxxxxx Associates Inc.)
in a reserve report 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 revenues of (a) estimated proved oil and gas
reserves acquired since the date of such year-end reserve report, and (b)
estimated oil and gas reserves attributable to extensions, discoveries and
other additions and upward revisions of
estimates of proved oil and gas reserves since the date of such year-end
reserve report due to exploration, development or exploitation activities,
in each case, calculated in accordance with SEC guidelines (utilizing the
prices utilized in such year-end reserve report), AND DECREASED BY, as of
the date of determination, the estimated discounted future net revenues of
(c) estimated proved oil and gas reserves produced or disposed of since the
date of such year-end reserve report and (d) reductions in estimated proved
oil and gas reserves attributable to downward revisions of estimates of
proved oil and gas reserves since the date of such year-end reserve report
due to changes in geological conditions or other factors that would, in
accordance with standard industry practice, cause such revisions, in each
case calculated in accordance with SEC guidelines (utilizing the prices in
such year-end reserve report); PROVIDED that, in the case of each of the
determinations made pursuant to clauses (a) through (d), such increases and
decreases shall be as estimated by the Company's petroleum engineers,
unless there is a Material Change as a result of such acquisitions,
dispositions or revisions, in which case the discounted future net revenues
utilized for purposes of this clause (1) shall be confirmed in a written
report of a Canadian or United States nationally recognized firm of
independent petroleum engineers (which shall include XxXxxxxxx & Associates
Consultants Ltd., Xxxxxxx Associates Limited and Xxxxxxx Associates Inc.)
delivered to the Trustee (which report shall be reasonably satisfactory in
form and substance to the Trustee),
(2) the capitalized costs that are attributable to oil and gas
properties of the Company and its Restricted Subsidiaries to which no
proved oil and gas reserves are attributable, based on the Company's books
and records as of a date no earlier than the date of the Company's most
recent available internal annual or quarterly financial statements,
(3) the Consolidated Net Working Capital of the Company on a date no
earlier than the date of the Company's most recently available internal
annual or quarterly financial statements, and
(4) the greater of (a) the net book value of other tangible assets of
the Company on a date no earlier than the date of the Company's most
recently available internal annual or quarterly financial statements or (b)
the appraised value, as estimated by independent appraisers, of other
tangible assets of the Company and its Restricted Subsidiaries, in either
case, as of the date of the Company's most recently available internal
annual or quarterly financial statements,
MINUS, to the extent included in clauses (1) through (4) above, the sum of:
(1) minority interests,
(2) any net gas balancing liabilities of the Company and its
Restricted Subsidiaries reflected in the Company's most recently available
internal annual or quarterly financial statements,
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(3) the discounted future net revenues, calculated in accordance with
SEC guidelines utilizing the prices utilized in the Company's year-end
reserve report, attributable to reserves that are required to be delivered
to third parties to fully satisfy the obligations of the Company and its
Restricted Subsidiaries with respect to Volumetric Production Payments on
the schedules specified with respect thereto,
(4) the discounted future net revenues, calculated in accordance with
SEC guidelines, attributable to reserves subject to Dollar-Denominated
Production Payments that, based on the estimates of production and price
assumptions included in determining the discounted future net revenues
specified in the first clause (1) above, would be necessary to fully
satisfy the payment obligations of the Company and its Restricted
Subsidiaries with respect to Dollar-Denominated Production Payments on the
schedules specified with respect thereto, and
(5) the discounted future net revenues, calculated in accordance with
SEC guidelines utilizing the prices utilized in the Company's year-end
reserve report, attributable to reserves that are subject to participation,
partnership, vendor financing or other agreements then in effect, or that
are otherwise required to be delivered to third parties, but only to the
extent that such third parties are then entitled to such reserves, or in
the case of vendor financing or other encumbrances reduced only by the
value of such encumbrances.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control",
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; PROVIDED that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control unless there is a
Beneficial Owner that is not an Affiliate of such Person holding a greater
percentage of such Voting Stock. For purposes of this definition, the terms
"controlling", "controlled by" and "under common control with" have correlative
meanings.
"AGENT" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"APPLICABLE PROCEDURES" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary that apply to such transfer or exchange.
"ASSET SALE" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, other than sales of inventory in the ordinary course of business
and other than the granting of a Lien in accordance with this Indenture;
PROVIDED that the sale, conveyance or other disposition of all or
substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole will be governed by Section 4.14 and/or
Section 5.01(a) and not by the provisions of Section 4.10; and
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(2) the issuance of Equity Interests in any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Subsidiaries (other than directors' qualifying shares or shares required to
be owned by other Persons pursuant to applicable law).
Notwithstanding the preceding, the following items will not be deemed to be
an Asset Sale:
(1) any single transaction or series of related transactions that
involves assets having a Fair Market Value of less than U.S.$2.5 million;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary;
(4) any disposition of worn-out, obsolete, retired or otherwise
unsuitable or excess assets or equipment or facilities or of assets or
equipment no longer used or useful, in each case, in the ordinary course of
business;
(5) the sale or lease of equipment, inventory, including current
production, accounts receivable or other assets in the ordinary course of
business;
(6) the sale or other disposition of cash or Cash Equivalents;
(7) any transfer of properties or assets (including Capital Stock)
that is governed by Section 5.01; or that is a Restricted Payment that is
permitted by Section 4.07;
(8) the sale or transfer (whether or not in the ordinary course of
business) of oil and gas properties or direct or indirect interests in real
property; PROVIDED that at the time of such sale or transfer such
properties do not have associated with them any proved reserves;
(9) the abandonment, farm-out, lease or sublease of developed or
undeveloped oil and gas properties in the ordinary course of business or
resulting from any pooling, unit or farm-out agreement entered into in the
ordinary course of business;
(10) the trade or exchange by the Company or any Restricted Subsidiary
of any oil and gas property owned or held by the Company or such Restricted
Subsidiary for any oil and gas property owned or held by another Person;
(11) the sale or transfer of hydrocarbons or other mineral products in
the ordinary course of business; and
(12) a Permitted Investment.
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"BANKRUPTCY LAW" means the Bankruptcy and Insolvency Act (Canada), the
Companies' Creditors Arrangement Act (Canada) or any other Canadian federal or
provincial law relating to, or Title 11, U.S. Code or any similar federal or
state law for, the relief of debtors.
"BENEFICIAL OWNER" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"BENEFICIALLY OWNS" and "BENEFICIALLY OWNED" have a corresponding meaning.
"BOARD OF DIRECTORS" means:
(1) with respect to a corporation, the board of directors of the
corporation (or any duly authorized committee thereof);
(2) with respect to a partnership, the board of directors of the
corporation that is the general partner or managing partner of the
partnership; and
(3) with respect to any other Person, the board or committee of such
Person serving a similar function.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other day on
which banking institutions in the City of New York or the Province of Alberta
are authorized or required by law to close.
"CAPITAL LEASE OBLIGATION" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be classified and accounted for as a capitalized lease
obligation on a balance sheet in accordance with GAAP.
"CAPITAL STOCK" means:
(1) in the case of a corporation, association or other business
entity, any and all shares, interests, participations, rights or other
equivalents (however designated and whether or not voting) of corporate
stock;
(2) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(3) any other interest or participation that confers on a Person
rights in, or other equivalents of or interests in, the equity of the
issuing Person or otherwise confers the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
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"CASH EQUIVALENTS" means:
(1) United States or Canadian dollars;
(2) securities issued by or directly and fully guaranteed or insured
by the federal government of Canada or the United States of America or any
agency or instrumentality thereof (PROVIDED that the full faith and credit
of the federal government of Canada or the United States is pledged in
support of those securities) having maturities of not more than 365 days
from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of 365 days or less from the date of acquisition, bankers'
acceptances with maturities not exceeding 365 days and overnight bank
deposits, in each case, with any lender party to the Credit Agreement or
with any United States commercial bank or any Canadian chartered bank
having capital and surplus in excess of U.S.$500 million;
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper rated at least P-1 by Xxxxx'x Investors Service,
Inc. or A-1 by Standard & Poor's Rating Services or R-1 by Dominion Bond
Rating Service and in each case maturing within 270 days after the date of
acquisition; and
(6) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1) through (5) of this
definition.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger, amalgamation or consolidation),
in one or a series of related transactions, of all or substantially all of
the properties or assets of the Company and its Restricted Subsidiaries,
taken as a whole, to any "person" (as that term is used in Section 13(d)(3)
of the Exchange Act);
(2) the adoption or approval by the Board of Directors of the Company
or its stockholders of a plan relating to the liquidation or dissolution of
the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above) (other than a Permitted Holder) becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the Voting
Stock of the Company, measured by voting power rather than number of
shares; or
(4) during any two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with
any new directors whose election by such Board of Directors or whose
nomination for election by the stockholders of the Company was approved
pursuant to a vote of a majority of the directors then still
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in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors then in
office.
"COMPANY" means Paramount Resources Ltd., and any and all successors
thereto.
"CONSOLIDATED CASH FLOW" means with respect to any specified Person for any
period, the Consolidated Net Income of such Person for such period PLUS:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Restricted Subsidiaries in connection
with an Asset Sale, to the extent such losses were deducted in computing
such Consolidated Net Income; PLUS
(2) provision for taxes based on income or profits of such Person and
its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income;
PLUS
(3) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of
all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of
credit or bankers' acceptance financings, and net of the effect of all
payments made or received in respect of interest pursuant to Hedging
Obligations), to the extent that any such expense was deducted in computing
such Consolidated Net Income; PLUS
(4) exploration expenses for such Person and its Restricted
Subsidiaries for such period, to the extent that any such exploration
expenses were deducted in computing such Consolidated Net Income; PLUS
(5) depreciation, depletion, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents an
accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of
such Person and its Restricted Subsidiaries for such period to the extent
that such depreciation, depletion, amortization and other non-cash expenses
were deducted in computing such Consolidated Net Income; MINUS
(6) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course of
business; and MINUS
(7) to the extent included in determining Consolidated Net Income,
the sum of:
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(a) the amount of deferred revenues that are amortized during
such period and that are attributable to reserves that are subject to
Volumetric Production Payments; and
(b) amounts recorded in accordance with GAAP as repayments of
principal and interest pursuant to Dollar-Denominated Production
Payments,
in each case, on a consolidated basis and determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; PROVIDED that
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of dividends
or distributions paid in cash to the specified Person or a Restricted
Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its shareholders;
(3) the cumulative effect of a change in accounting principles will
be excluded;
(4) any non-cash charges related to an impairment test write-down
under GAAP will be excluded; and
(5) to the extent not otherwise included, any gain on the disposition
of a Restricted Investment will be included.
"CONSOLIDATED NET WORKING CAPITAL" of any Person as of any date of
determination means the difference (shown on the balance sheet of such Person
and its Restricted Subsidiaries determined on a consolidated basis in accordance
with GAAP as of the end of the most recent fiscal quarter of such Person for
which internal financial statements are available) between (i) all current
assets of such Person and its Restricted Subsidiaries and (ii) all current
liabilities of such Person and its Restricted Subsidiaries except the current
portion of long-term Indebtedness and Indebtedness under Credit Facilities.
"CONSOLIDATED NET WORTH" means, with respect to any specified Person as of
any date, the consolidated shareholders' equity of such Person and its
consolidated Subsidiaries as of such date determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Stock of such Person.
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"CORPORATE TRUST OFFICE OF THE TRUSTEE" will be at the address of the
Trustee specified in Section 12.02 or such other address as to which the Trustee
may give notice to the Company.
"CREDIT AGREEMENT" means that certain seventh amended and restated credit
agreement, dated as of October [ ], 2003, among the Company, as borrower, the
lenders named therein, Bank of Montreal, as administrative agent, and the other
agents named therein including any related notes, debentures, pledges,
Guarantees, security documents, instruments and agreements executed from time to
time in connection therewith, and in each case as amended, modified, restated,
renewed, replaced or refinanced from time to time, including any agreement
extending the maturity of, refinancing, replacing or otherwise restructuring or
adding Subsidiaries as additional borrowers or guarantors thereunder, and all or
any portion of the Indebtedness and other Obligations under such agreement or
agreements or any successor or replacement agreement or any agreements, and
whether by the same or any other agent, lender or group of lenders. For greater
certainty, it is acknowledged that Interest Rate Agreements, Currency Agreements
and Oil and Gas Hedging Contracts entered into with a Person that at that time
is a lender (or an Affiliate thereof) under the Credit Agreement are separate
from, are not included within and do not form part of any above inclusions of
the Credit Agreement.
"CREDIT FACILITIES" means one or more credit or debt facilities (including,
without limitation, under the Credit Agreement) or commercial paper facilities,
in each case with banks or other institutional lenders providing for, among
other things, revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time.
"CURRENCY AGREEMENT" means any financial arrangement entered into between a
Person (or its Restricted Subsidiaries) and a counterparty on a case by case
basis in connection with a foreign exchange futures contract, currency swap
agreement, currency option or currency exchange or other similar currency
related transactions, the purpose of which is to mitigate or eliminate its
exposure to fluctuations in exchange rates and currency values.
"CUSTODIAN" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"DEFAULT" means the occurrence of any event that is, or with the passage of
time or the giving of notice or both would be, an Event of Default under this
Indenture.
"DEFINITIVE NOTE" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06(c), substantially in
the form of EXHIBIT A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"DEPOSITARY" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
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"DISQUALIFIED STOCK" means, with respect to any Person, any Capital Stock
that, by its terms (or by the terms of any security into which it is
convertible, or for which it is exchangeable, in each case at the option of the
holder of the Capital Stock), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder of the Capital Stock, in whole or in
part, prior to the date on which the Notes mature. Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely
because the holders of the Capital Stock have the right to require the Company
to repurchase such Capital Stock upon the occurrence of a Change of Control or
an Asset Sale will not constitute Disqualified Stock if the provisions
applicable to such Capital Stock either (i) are no more favorable to the holders
of such Capital Stock than the provisions contained in Section 4.10 and Section
4.14 and such Capital Stock specifically provides that the issuer will not
repurchase or redeem any of such Capital Stock pursuant to such provisions prior
to the Company's repurchase of such of the Notes as are required to be
repurchased pursuant to Section 4.10 and Section 4.14, or (ii) provide that the
Company may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with Section 4.07.
"DOLLAR-DENOMINATED PRODUCTION PAYMENTS" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EQUITY OFFERINGS" means any public or private sale of Equity Interests of
the Company (other than Disqualified Stock).
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934, as
amended.
"EXISTING INDEBTEDNESS" means all Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the Issue Date.
"FACILITIES" means any drilling equipment, production equipment and
platforms or mining equipment; pipelines, pumping stations and other pipeline
facilities; terminals, warehouses and storage facilities; bulk plants;
production, separation, dehydration, extraction, treating and processing
facilities; gasification or natural gas liquefying facilities; flares, stacks
and burning towers; floatation xxxxx, crushers and ore handling facilities; tank
cars, tankers, barges, ships, trucks, automobiles, airplanes and other marine,
automotive, aeronautical and other similar moveable facilities or equipment;
computer systems and associated programs or office equipment; roads, airports,
docks (including drydocks); reservoirs and waste disposal facilities; sewers;
generating plants (including power plants) and electric lines; telephone and
telegraph lines, radio and other communications facilities; townsites, housing
facilities, recreation halls, stores and other related facilities; and similar
facilities and equipment of or associated with any of the foregoing.
-10-
"FAIR MARKET VALUE" means, with respect to any asset, property or service,
the price (after taking into account any related liabilities, costs or expenses)
that could be negotiated in an arm's length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under pressure
or compulsion to complete the transaction. Unless otherwise specified in this
Indenture, in the case of a transaction with respect to the Company or any of
its Restricted Subsidiaries exceeding U.S.$10.0 million, Fair Market Value will
be determined by the Board of Directors of the Company acting in good faith.
"FIXED CHARGE COVERAGE RATIO" means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the specified
Person or any of its Restricted Subsidiaries incurs, assumes, guarantees,
repays, repurchases or redeems any Indebtedness (other than ordinary working
capital borrowings) or issues, repurchases or redeems preferred stock subsequent
to the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated and on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "CALCULATION DATE"),
then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect
to such incurrence, assumption, Guarantee, repayment, repurchase or redemption
of Indebtedness, or such issuance, repurchase or redemption of preferred stock,
and the use of the proceeds therefrom as if the same had occurred at the
beginning of the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any
of its Restricted Subsidiaries, including through amalgamations, mergers or
consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on
or prior to the Calculation Date will be given pro forma effect as if they
had occurred on the first day of the four-quarter reference period and
Consolidated Cash Flow for such reference period will be calculated on a
pro forma basis in accordance with Regulation S-X under the Securities Act;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, will be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of prior to the Calculation Date, will be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date.
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"FIXED CHARGES" means, with respect to any specified Person for any period,
the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or
received pursuant to Interest Rate Agreements; PLUS
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; PLUS
(3) any interest expense on Indebtedness of another Person that is
guaranteed by such Person (other than such Person or its Restricted
Subsidiaries) or one of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries, to the extent
the primary obligor is currently in default under such Indebtedness,
whether or not such Guarantee or Lien is called upon; PLUS
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of Disqualified Stock or preferred
stock of such Person or any of its Restricted Subsidiaries, times (b) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, provincial, state and local
statutory tax rate of such Person or any of its Restricted Subsidiaries,
expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP.
"GAAP" means generally accepted accounting principles, consistently
applied, which are in effect in Canada from time to time.
"GLOBAL NOTE LEGEND" means the legend set forth in Section 2.06(f), which
is required to be placed on all Global Notes issued under this Indenture.
"GLOBAL NOTES" means, individually and collectively, the Global Notes,
substantially in the form of EXHIBIT A hereto issued in accordance with Section
2.01 or 2.06.
"GOVERNMENT SECURITIES" means direct non-callable obligations of, or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States is
pledged.
"GUARANTEE" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"GUARANTORS" means the Mirror Note Guarantors and the Subsidiary
Guarantors.
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"HEDGING OBLIGATIONS" means, with respect to any specified Person, the
outstanding amount of all obligations of such Person and its Restricted
Subsidiaries under all Currency Agreements and all Interest Rate Agreements,
together with all interest, fees and other amounts payable thereon or in
connection therewith.
"HOLDER" means a Person in whose name a Note is registered.
"INDEBTEDNESS" means, with respect to any specified Person at any date, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit, letters of guarantee or tender cheques (or reimbursement
agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an accrued
expense or trade payable;
(6) representing any Hedging Obligations;
(7) in respect of Production Payments;
(8) in respect of Oil and Gas Hedging Contracts; or
(9) in respect of all conditional sale obligations and all
obligations under title retention agreements, but excluding a title
retention agreement to the extent it constitutes an operating lease under
GAAP.
In addition, the term "Indebtedness" includes all Indebtedness of others secured
by a Lien on any asset of the specified Person (whether or not such Indebtedness
is assumed by the specified Person) and, to the extent not otherwise included,
the Guarantee by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with any
interest on the Indebtedness that is more than 30 days past due, in the
case of any other Indebtedness.
-13-
For the avoidance of doubt, "Indebtedness" of any Person shall not include:
(1) trade payables incurred in the ordinary course of business and
payable in accordance with customary practice;
(2) deferred tax obligations;
(3) minority interests;
(4) uncapitalized interest; and
(5) non-interest bearing installment obligations and accrued
liabilities incurred in the ordinary course of business.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"INITIAL NOTES" means the first U.S.$150 million aggregate principal amount
of Notes issued under this Indenture on the Issue Date.
"INTEREST RATE AGREEMENT" means any financial arrangement entered into
between a Person (or its Restricted Subsidiaries) and a counterparty on a case
by case basis in connection with interest rate swap transactions, interest rate
options, cap transactions, floor transactions, collar transactions and other
similar interest rate protection related transactions, the purpose of which is
to mitigate or eliminate its exposure to fluctuations in interest rates.
"INVESTMENTS" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the form
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. "Investments"
shall exclude extensions of trade credit in the ordinary course of business on
commercially reasonable terms in accordance with normal trade practices of such
Person. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the Company,
the Company will be deemed to have made an Investment on the date of any such
sale or disposition equal to the Fair Market Value of the Company's Investments
in such Restricted Subsidiary that were not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.07(b). The
acquisition by the Company or any Restricted Subsidiary of the Company of a
Person that holds an Investment in a third Person will be deemed to be an
Investment by the Company or such Restricted Subsidiary in such third Person in
an amount equal to the Fair Market Value of
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the Investment held by the acquired Person in such third Person in an amount
determined as provided in the final paragraph of Section 4.07(b).
"ISSUE DATE" means October [ ], 2003, the date of issuance of the Initial
Notes.
"LIEN" means, with respect to any asset, any mortgage, lien (statutory or
otherwise), pledge, charge, security interest or encumbrance upon or with
respect to any property of any kind, whether or not filed, recorded or otherwise
perfected under applicable law, including any conditional sale or other title
retention agreement but excluding a title retention agreement to the extent it
would constitute an operating lease in accordance with GAAP and generally
accepted accounting principles in the United States, as in effect on the Issue
Date.
"LIQUID SECURITIES" means securities constituting (or immediately
convertible into) no more than 7.5% of the outstanding securities of a class of
securities that is publicly traded on the Toronto Stock Exchange, the New York
Stock Exchange, the American Stock Exchange, the Nasdaq Stock Market, the London
Stock Exchange or the TSX Venture Exchange.
Securities meeting the requirements of the preceding sentence shall be
treated as Liquid Securities from the date of receipt thereof until and only
until the earlier of:
(1) the date on which such securities, or securities exchangeable
for, or convertible into, such securities, are sold or exchanged for cash
or Cash Equivalents, and
(2) 60 days following the date of receipt of such securities;
PROVIDED, that, notwithstanding the foregoing, up to U.S.$2.0 million of
securities (valued as of the date of receipt) received by the Company or a
Restricted Subsidiary in any 12 month period and which the Company or such
Restricted Subsidiary is restricted from selling freely pursuant to the
applicable securities laws of Canada or any province thereof shall not
cease to be Liquid Securities as a result of this clause (2) until 180 days
following the date of receipt of such securities.
"MATERIAL CHANGE" means an increase or decrease (excluding changes that
result solely from changes in prices) of more than 30% during a fiscal quarter
in the estimated discounted future net cash flows from proved oil and gas
reserves of the Company and its Restricted Subsidiaries, calculated in
accordance with the first clause (1) of the definition of Adjusted Consolidated
Net Tangible Assets; PROVIDED that there will be excluded from the calculation
of Material Change the estimated future net cash flows from:
(1) any acquisitions during the fiscal quarter of oil and gas
reserves that have been audited by a Canadian or United States nationally
recognized firm of independent petroleum engineers (which shall include
XxXxxxxx & Associates Consultants Ltd., Xxxxxxx Associates Limited and
Xxxxxxx Associates Inc.) and on which a report or reports exist; and
(2) any disposition of properties held at the beginning of such
quarter that have been disposed of as provided in Section 4.10.
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"MIRROR NOTE GUARANTORS" means each Subsidiary of the Company that has
executed a Mirror Note Guarantee on the Issue Date or that executes a Mirror
Note Guarantee following the Issue Date for so long as any such Mirror Note
Guarantee has not been released in accordance with the provisions of this
Indenture.
"MIRROR NOTE ISSUERS" means Paramount Finance Ltd. and Paramount Resources,
a general partnership.
"MIRROR NOTE PLEDGE AGREEMENTS" means collectively the pledge agreements,
dated the Issue Date, pursuant to which (i) the Mirror Note issued by Paramount
Resources to Paramount Finance Ltd. will be pledged to the Company and (ii) the
Mirror Note issued by Paramount Finance Ltd. to the Company and the Company's
interest in the Mirror Note issued by Paramount Resources are pledged as
security for all Obligations thereunder and under the Notes and this Indenture.
"MIRROR NOTES" means the promissory notes issued by Paramount Finance Ltd.
and Paramount Resources evidencing Indebtedness equal in aggregate principal
amount to that of the Notes outstanding from time to time.
"NET CASH PROCEEDS" means, with respect to any Asset Sale, the proceeds
therefrom in the form of cash or Cash Equivalents, including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents, or stock or other assets when disposed of for cash or Cash
Equivalents, received by the Company or any of the Restricted Subsidiaries from
such Asset Sale, net of:
(1) brokerage commissions and other reasonable out-of-pocket fees and
expenses (including fees and expenses of legal counsel, accountants and
investment banks, sales commissions and relocation expenses) related to
such Asset Sale;
(2) provisions for all taxes payable or required to be accrued in
accordance with GAAP as a result of such Asset Sale;
(3) payments made to retire Indebtedness where payment of such
Indebtedness is secured by a Lien on the assets or properties that are the
subject of such Asset Sale;
(4) amounts required to be paid to any Person owning a beneficial
interest in the assets or properties that are subject to the Asset Sale;
and
(5) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve required in
accordance with GAAP against any liabilities associated with such Asset
Sale and retained by the seller after such Asset Sale, including pension
and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale;
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PROVIDED that cash and/or Cash Equivalents in which the Company or a Restricted
Subsidiary has an individual beneficial ownership shall not be deemed to be
received by the Company or a Restricted Subsidiary until such time as such cash
and/or Cash Equivalents are free from any restrictions under agreements with the
other beneficial owners of such cash and/or Cash Equivalents which prevent the
Company or a Restricted Subsidiary from applying such cash and/or Cash
Equivalents to any use permitted by Section 4.10 or to purchase Notes.
"NET INCOME" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with: (a) any
Asset Sale; or (b) the disposition of any securities by such Person or any
of its Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
"NON-RECOURSE DEBT" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender; and
(2) no default with respect to which (including any rights that the
holders of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both
any holder of any other Indebtedness of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment of the Indebtedness to be accelerated or payable prior to
its Stated Maturity.
"NON-RECOURSE PURCHASE MONEY DEBT" means Indebtedness incurred in
connection with the acquisition by the Company or any Mirror Note Issuer or
Guarantor in the ordinary course of business of Facilities, and renewals and
refinancings of such Indebtedness but only to the extent that the lenders with
respect to such Indebtedness or renewals or refinancings thereof have a claim
solely against the assets acquired with such Indebtedness and any improvements
thereon and not against the Company or any Restricted Subsidiary generally.
"NOTES" has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes and the Additional Notes, if any, shall be treated as a single
class for all purposes under this Indenture.
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"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, costs, damages and other liabilities payable
under the documentation governing any Indebtedness.
"OFFICER" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Section 12.05.
"OIL AND GAS BUSINESS" means:
(1) the acquisition, exploration, development, operation and
disposition of interests in oil, gas and other hydrocarbon properties,
(2) the gathering, marketing, treating, processing, storage, selling
and transporting of any production from such interests or properties,
(3) the exploration for or development, extraction, production,
treatment, processing, storage, transportation, refining or marketing and
sale of oil, gas and other minerals and products produced in association
therewith,
(4) the evaluation, participation in or pursuit of any other activity
or opportunity that is primarily related to clauses (1) through (3) above,
and
(5) any activity that is ancillary to, necessary or appropriate for
or incidental to the activities described in clauses (1) through (4) above,
PROVIDED that, in respect of the Company, the determination of what reasonably
constitutes a permissible Oil and Gas Business pursuant to clauses (1) to (5)
above shall be made in good faith by the Board of Directors of the Company.
"OIL AND GAS HEDGING CONTRACTS" means any transaction, arrangement or
agreement entered into between a Person (or any of its Restricted Subsidiaries)
and a counterparty on a case by case basis, including any futures contract, a
commodity option, a swap, a forward sale or otherwise, the purpose of which is
to mitigate, manage or eliminate its exposure to fluctuations in commodity
prices, including contracts settled by physical delivery of the commodity not
settled within 60 days of the date of any such contract; PROVIDED that
Production Payments will not be treated as Oil and Gas Hedging Contracts for the
purposes of this Indenture.
"OIL AND GAS INVESTMENTS" means any Investments made in the ordinary course
of, and of a nature that is or shall have become customary in, the Oil and Gas
Business as a
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means of actively exploiting, exploring for, acquiring, developing, producing,
processing, gathering, marketing or transporting oil and gas through agreements,
transactions, interests or arrangements which permit one 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:
(1) ownership interests in oil and gas properties, processing
facilities or gathering systems or ancillary real property interests, and
(2) Investments 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 agreements, 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.
"OPINION OF COUNSEL" means an opinion from legal counsel who is reasonably
acceptable to the Trustee that meets the requirements of Section 12.05. The
counsel may be an employee of or counsel to the Company, any Subsidiary of the
Company or the Trustee.
"PARTICIPANT" means, with respect to the Depositary, a Person who has an
account with the Depositary.
"PERMITTED ASSETS" means any and all long-term properties or assets that
are used or useful in an Oil and Gas Business.
"PERMITTED HOLDERS" means (i) any of Xxxxxxx X. Xxxxxxx, his spouse,
ancestors, siblings, descendants (including children or grandchildren by
adoption) and the descendants of any of his siblings; (ii) in the event of the
incompetence or death of any of the Persons described in clause (i), such
Person's estate, executor, administrator, committee or other personal
representative, in each case who at any particular date shall beneficially own
or have the right to acquire, directly or indirectly, Capital Stock of the
Company; (iii) any trust created for the benefit of the Persons described in
clause (i) or (ii) or any trust for the benefit of any such trust; or (iv) any
Person controlled by any of the Persons described in clause (i), (ii) or (iii).
For purposes of this definition, "control," as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through ownership of voting securities or by contract or otherwise.
"PERMITTED INVESTMENTS" means, without duplication:
(1) any Investment in the Company or in a Restricted Subsidiary of
the Company;
(2) any Investment in cash and/or Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of the
Company in a Person, if as a result of such Investment:
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(a) such Person becomes a Restricted Subsidiary of the Company;
or
(b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or
is liquidated into, the Company or a Restricted Subsidiary of the
Company;
(4) any Investment made as a result of the receipt of consideration
from an Asset Sale that was made pursuant to and in compliance with Section
4.10;
(5) any acquisition of assets or other Investments solely in exchange
for the issuance of Equity Interests (other than Disqualified Stock) of the
Company;
(6) Investments resulting from repurchases of the Notes;
(7) any Investments received in compromise of obligations of trade
creditors or customers that were incurred in the ordinary course of
business, including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade creditor or
customer;
(8) Hedging Obligations and Oil and Gas Hedging Contracts;
(9) Oil and Gas Investments;
(10) Investments existing on the Issue Date and Investments made with
the proceeds, including, without limitation, from sales or other
dispositions, of such Investments and any other Investments made pursuant
to this clause (10);
(11) (a) loans or advances made to any officer, director or employee
of the Company or any of its Restricted Subsidiaries in the ordinary course
of business that are approved by the Board of Directors of the Company or a
duly authorized officer, and (b) loans or advances made to refinance loans,
together with accrued interest thereon, made pursuant to this clause (11);
PROVIDED such loans do not exceed U.S.$2.0 million at any one time
outstanding; and
(12) other Investments in any Person having an aggregate Fair Market
Value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (12) that are at the time
outstanding, not to exceed U.S.$15.0 million.
"PERMITTED LIENS" means, as of any date:
(1) Liens on assets of the Company and any Subsidiary securing
Indebtedness under Credit Facilities and Obligations in respect of such
Indebtedness in an aggregate principal amount not to exceed the greater of
the amounts set forth in Section 4.09(b)(1)(i) and (ii) plus U.S.$25.0
million;
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(2) Liens in favor of the Company, any of the Mirror Note Issuers or
any of the Guarantors;
(3) Liens on property of a Person existing at the time such Person is
amalgamated or merged with or into or consolidated with the Company or any
Restricted Subsidiary of the Company; PROVIDED that such Liens were in
existence prior to the contemplation of such amalgamation, merger or
consolidation and do not extend to any assets other than those of the
Person amalgamated or merged into or consolidated with the Company or the
Subsidiary;
(4) Liens securing Hedging Obligations and Oil and Gas Hedging
Contracts;
(5) Liens securing the assets purchased by purchase money
indebtedness;
(6) Liens to secure payment of royalties, revenue interests, net
profits interests and preferential rights of purchase incurred in the
ordinary course of business to the extent of the security interest in those
underlying assets;
(7) Liens for any judgments rendered that do not constitute an Event
of Default;
(8) Liens for any judgment rendered, or claim filed, against the
Company or any Restricted Subsidiary which are being contested in good
faith by appropriate proceedings that do not constitute an Event of Default
if during such contestation a stay of enforcement of such judgment or claim
is in effect;
(9) Liens on property existing at the time of acquisition of the
property by the Company or any Restricted Subsidiary of the Company;
PROVIDED that such Liens were in existence prior to the contemplation of
such acquisition;
(10) Liens incurred or deposits made to secure the performance of or
otherwise in connection with statutory obligations, environmental
reclamation obligations, bids, leases, government contracts, surety or
appeal bonds, performance or return-of-money bonds or other obligations of
a like nature incurred in the ordinary course of business;
(11) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by Section 4.09(b)(4) covering only the assets
acquired with such Indebtedness;
(12) Liens existing on the Issue Date;
(13) Liens for taxes, workers' compensation, unemployment insurance
and other types of social security, assessments or other governmental
charges or claims that are not yet due and payable or, if due and payable
and delinquent, that are being contested by the Company or a Restricted
Subsidiary in good faith by appropriate proceedings promptly instituted and
diligently concluded, PROVIDED that any reserve or other appropriate
provision as is required in conformity with GAAP has been made therefor;
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(14) Liens in pipelines or pipeline facilities that arise by operation
of law;
(15) Liens arising under partnership agreements, oil and natural gas
leases, overriding royalty agreements, net profits agreements, royalty
trust agreements, master limited partnership agreements, farm-out
agreements, division orders, utilization and pooling designations,
declarations, orders and agreements, joint venture agreements, development
agreements, operating agreements, production sales contracts (including
security in respect of take or pay or similar obligations thereunder), area
of mutual interest and other agreements, natural gas balancing or deferred
production agreements, injection, repressuring and recycling agreements,
salt water or other disposal agreements, seismic or geophysical permits or
agreements and other similar agreements, or arising by operation of law,
which in each of the foregoing cases are customary in the Oil and Gas
Business, and easements, rights of way or other similar rights in land;
PROVIDED that such Liens are not given in connection with borrowed money;
(16) Liens in oil, gas or other mineral property or products derived
from such property to secure obligations incurred or Guarantees of
obligations incurred in connection with or necessarily incidental to
commitments of purchase or sale of, or the transportation, storage or
distribution of, such property or the products derived from such property;
PROVIDED that such Indebtedness is not given in connection with borrowed
money;
(17) Liens in respect of any oil, gas or mineral property acquired
after the Issue Date (i) securing the costs and expenses incurred after the
Issue Date in connection with surveying, exploration, drilling,
development, extraction, operation or production relating to or arising in
connection with any such oil, gas or other mineral property or with the
acquisition thereof, including costs incurred for the acquisition,
construction, development, alteration, repair, improvement or operation of
any and all Facilities relating to such property, or to projects, ventures
or other arrangements of which such property forms a part or which relate
to such property, whether or not such Facilities are in whole or in part
located (or from time to time located) at or on such property, and all
related costs of abandonment, or (ii) securing Indebtedness created,
issued, incurred or assumed by the Company or any of its Restricted
Subsidiaries to provide funds for, or otherwise finance (directly or
indirectly), the activities set forth above, if such Indebtedness is
incurred prior to, during or within two years after the acquisition or
completion of construction, development or other relevant activities
referred to in clause (i) above and does not exceed the cost of such
acquisition, construction, development or other activities, as applicable;
PROVIDED that any such Lien shall be limited to the property that is the
subject of the acquisition, construction, development or other relevant
activities referred to above;
(18) Liens in favor of any federal government or any province, state
or territory thereof or any municipality therein or any political
subdivision, department, agency or instrumentality of any of them to secure
the performance of any covenant or obligation to or in favor of or entered
into at the request of such authorities where such security is required
pursuant to any contract, statute or regulation or with respect to any
franchise, grant, license or permit (including related to periodic payments
in connection therewith)
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or arises by operation of law and any defects in title to structures or
other facilities arising solely from the fact that such structures or
facilities are constructed or installed on lands held by the Company, any
of its Restricted Subsidiaries, any Mirror Note Issuer or any Guarantor
under government permits, leases or grants; PROVIDED that such Lien is not
given in connection with borrowed money;
(19) Liens imposed by law that are incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, mechanics', landlords', materialmen's,
employees', laborers', employers', suppliers', banks', builders',
repairmen's and other like Liens;
(20) easements, rights-of-way, zoning restrictions and other similar
charges, restrictions or encumbrances in respect of real property or
immaterial imperfections of title that do not, in the aggregate, impair in
any material respect the ordinary conduct of the business of the Company
and its Restricted Subsidiaries taken as a whole;
(21) Liens in connection with any Production Payments; PROVIDED that
(i) such Liens are limited to the property that is the subject of such
Production Payment; and (ii) either (x) such Production Payments were in
existence on the Issue Date; (y) such Production Payments are entered into
in connection with the acquisition of any property after the Issue Date and
such Lien is created, incurred, issued or assumed in connection with the
financing of, or within 90 days after the acquisition of, such property; or
(z) such Production Payments do not exceed in the aggregate U.S.$5.0
million at any time outstanding;
(22) Liens reserved in oil and gas mineral leases for bonus or rental
payments and for compliance with the terms of such leases;
(23) Liens incurred in the ordinary course of business of the Company
or any Subsidiary of the Company with respect to obligations that do not in
the aggregate exceed U.S.$5.0 million at any one time outstanding;
(24) Liens securing Permitted Refinancing Indebtedness in respect of
Indebtedness that was secured by Permitted Liens and securing similar
property; and
(25) Liens on any intercompany unsecured note of a Restricted
Subsidiary of the Company granted as security for debt securities issued by
the Company; PROVIDED that the principal amount and interest rate of such
intercompany unsecured note shall not exceed the principal amount and
interest rate, respectively, of the debt securities issued by the Company;
PROVIDED that none of the Liens identified in the foregoing clauses (1) through
(12) and (14) through (25) shall constitute Permitted Liens to the extent any
such Liens are on or cover any Mirror Note or Mirror Note Guarantee (other than
Liens in respect of or established by the Mirror Note Pledge Agreements).
In the event that a Lien meets the criteria of more than one of the
categories of Permitted Liens described in clauses (1) through (25) above, the
Company may classify, or
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later reclassify, such Lien in whole or in part in any manner that complies with
this definition, including by allocation to more than one other type of
Permitted Lien.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); PROVIDED that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued interest on the
Indebtedness and the amount of all expenses and premiums incurred in
connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Notes, a Mirror Note, a Mirror Note Guarantee or a Subsidiary Guarantee,
such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of the Notes and is subordinated in right of
payment to the Notes or such Mirror Note, Mirror Note Guarantee or
Subsidiary Guarantee, as the case may be, on terms at least as favorable to
the Holders of Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government, government body or agency or other entity.
"PRODUCTION PAYMENTS" means Dollar-Denominated Production Payments and
Volumetric Production Payments, collectively.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
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"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of such Person
that is not an Unrestricted Subsidiary.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a "significant
subsidiary" as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the Issue
Date.
"STATED MATURITY" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees of the corporation, association
or other business entity is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).
"SUBSIDIARY GUARANTEE" means the unconditional guarantee of all of the
Company's obligations under the Notes and this Indenture by a Subsidiary of the
Company pursuant to a supplemental indenture substantially in the form of
EXHIBIT C.
"SUBSIDIARY GUARANTOR" means each Subsidiary of the Company that issues a
Subsidiary Guarantee following the Issue Date for so long as such Subsidiary
Guarantee has not been released in accordance with the provisions of this
Indenture.
"TAXES" means any present or future tax, levy, impost, assessment or other
government charge (including penalties, interest and any other liabilities
related thereto) imposed or levied by or on behalf of a Taxing Authority.
"TAXING AUTHORITY" means any government or any political subdivision or
territory or possession of any government or any authority or agency therein or
thereof having power to tax.
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"TIA" means the United States Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"TRUSTEE" means the party named as such in the preamble to this Indenture
until a successor replaces it in accordance with the applicable provisions of
this Indenture and thereafter means the successor serving hereunder.
"UNRESTRICTED SUBSIDIARY" means (i) 910083 Alberta Ltd. (unless designated
as a Restricted Subsidiary following the Issue Date in accordance with the terms
of this Indenture) and (ii) any other Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a resolution of such Board of Directors, but only to the
extent that such other Subsidiary:
(1) at the time of such designation, has no Indebtedness other than
(i) Non-Recourse Debt and (ii) Indebtedness that could be guaranteed by the
Company in compliance with Section 4.07 (and the amount of such
Indebtedness under this clause (ii) shall be deemed to be an Investment by
the Company for purposes of Section 4.07);
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Company or any of its Restricted
Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolutions of the Board of Directors of the Company
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the preceding conditions and was permitted by
Section 4.18. If, at any time, any Unrestricted Subsidiary would fail to meet
the preceding requirements as an Unrestricted Subsidiary, it will thereafter
cease to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under Section 4.09, the Company will be
in default of such Section. The Board of Directors of the Company may at any
time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
PROVIDED that such designation will be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of
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such Unrestricted Subsidiary and such designation will only be permitted if (1)
such Indebtedness is permitted under Section 4.09, calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period; (2) no Default or Event of Default would be in existence
following such designation; and (3) if required pursuant to Section 4.20, such
Unrestricted Subsidiary becomes a Guarantor pursuant to such Section within 10
Business Days of the date on which it is so designated.
"VOLUMETRIC PRODUCTION PAYMENTS" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"VOTING STOCK" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (b) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making of
such payment; by
(2) the then outstanding principal amount of such Indebtedness.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of the Company means any Restricted
Subsidiary of which all of the outstanding Voting Stock (other than directors'
qualifying shares or shares required to be owned by other Persons pursuant to
applicable law) is owned by the Company or any other Wholly Owned Restricted
Subsidiary.
Section 1.02 OTHER DEFINITIONS.
Defined in
Term Section
---- ----------
"Additional Amounts"............................... 4.17
"Affiliate Transaction"............................ 4.11
"Asset Sale Offer"................................. 3.09
"Authentication Order"............................. 2.02
"Calculation Period" .............................. 4.01
"Change of Control Offer".......................... 4.14
"Change of Control Payment"........................ 4.14
"Change of Control Payment Date"................... 4.14
"Covenant Defeasance".............................. 8.03
"Defeased Covenants"............................... 8.03
"DTC".............................................. 2.03
"Event of Default"................................. 6.01
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"Excess Proceeds".................................. 4.10
"incur"............................................ 4.09
"Legal Defeasance"................................. 8.02
"Mirror Note Guarantee"............................ 4.20
"Offer Amount"..................................... 3.09
"Offer Period"..................................... 3.09
"Paying Agent"..................................... 2.03
"Payment Default................................... 6.01
"Permitted Debt"................................... 4.09
"Purchase Date".................................... 3.09
"Registrar"........................................ 2.03
"Restricted Payments".............................. 4.07
Section 1.03 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;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Subsidiary Guarantees means the Company and
the Subsidiary Guarantors, respectively, and any successor obligor upon the
Notes and the Subsidiary Guarantees, as applicable.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.04 RULES OF CONSTRUCTION. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" and "including" are not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
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(5) "will" shall be interpreted to express a command;
(6) references to Sections and Articles are to Sections and Articles
of this Indenture;
(7) provisions apply to successive events and transactions; and
(8) references to sections of or rules under the Securities Act will
be deemed to include substitute, replacement or successor sections or rules
adopted by the SEC from time to time.
ARTICLE II
THE NOTES
Section 2.01 FORM AND DATING.
(a) GENERAL. Subject to Section 2.01(b), the Notes and the Trustee's
certificate of authentication will be substantially in the form of EXHIBIT A
hereto. The Notes may have notations, legends or endorsements required by law,
stock exchange rule or usage. Each Note will be dated the date of its
authentication. The Notes shall be in denominations of U.S.$1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes will constitute, and are
hereby expressly made, a part of this Indenture and the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby. However, to the extent any provision of
any Note conflicts with the express provisions of this Indenture, the provisions
of this Indenture shall govern and be controlling.
(b) GLOBAL NOTES. Notes issued in global form will be substantially in the
form of EXHIBIT A attached hereto (including the Global Note Legend thereon and
the "Schedule of Exchanges of Interests in the Global Note" attached thereto).
Notes issued in definitive form will be substantially in the form of EXHIBIT A
attached hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note will represent such of the outstanding Notes as will be specified
therein and each shall provide that it represents the aggregate principal amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby will be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06.
Section 2.02 EXECUTION AND AUTHENTICATION. One Officer must 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 a Note is authenticated, the Note will nevertheless be valid.
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A Note will not be valid until authenticated by the manual signature of an
authorized signatory of the Trustee. The signature will be conclusive evidence
that the Note has been authenticated under this Indenture.
The Trustee will, from time to time, upon receipt of a written order of the
Company signed by an Officer (an "AUTHENTICATION ORDER"), authenticate Notes
(including Additional Notes) for original issue in the aggregate principal
amount stated in the Authentication Order. The aggregate principal amount of
Notes outstanding at any time may not exceed such amount except as provided in
Section 2.07.
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 Holders, the Company or an Affiliate of the
Company.
Section 2.03 REGISTRAR AND PAYING AGENT. The Company will 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 principal Registrar will 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 in such other
locations as it shall determine. 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 will 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 of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Notes.
The Company initially appoints the Trustee at its corporate trust office in
the Borough of Manhattan, City of New York, State of New York to act as the
Registrar and Paying Agent and to act as Custodian with respect to the Notes.
Section 2.04 PAYING AGENT TO HOLD MONEY IN TRUST. The Company will require
each Paying Agent other than the Trustee to agree in writing that the Paying
Agent will, and the Trustee when acting as Paying Agent agrees that it will,
hold in trust for the benefit of Holders or the Trustee all money held by the
Paying Agent for the payment of principal, 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 money
disbursed by it. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent (if other than the Company or a Subsidiary) will have no further liability
for the money. If the Company or a Subsidiary acts as Paying Agent, it will
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it
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as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to
the Company, the Trustee will serve as Paying Agent for the Notes.
Section 2.05 HOLDER LISTS. The Trustee will 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 ss.312(a). If
the Trustee is not the Registrar, the Company will 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 ss.312(a).
Section 2.06 TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the Depositary
that it is unwilling or unable to continue to act as Depositary or that it
is no longer a clearing agency registered under the Exchange Act and, in
either case, a successor Depositary is not appointed by the Company within
120 days after the date of such notice from the Depositary;
(2) the Company in its sole discretion determines that the Global
Notes (in whole but not in part) should be exchanged for Definitive Notes
and delivers a written notice to such effect to the Trustee; or
(3) upon request by any Holder if there has occurred and is
continuing an Event of Default with respect to the Notes.
Upon the occurrence of any of the preceding events in (1), (2) or (3)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 2.07 and 2.10. A Global Note may not be
exchanged for another Note other than as provided in this Section 2.06(a);
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.06(b) or (c).
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL NOTES. The
transfer and exchange of beneficial interests in a Global Note will be effected
through the Depositary, in accordance with the provisions of this Indenture and
the Applicable Procedures. Transfers of beneficial interests in a Global Note
also will require compliance with either subparagraph (1) or (2) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:
(1) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE. A
beneficial interest in any Global Note may be transferred to Persons who
take delivery thereof in the
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form of a beneficial interest in a Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(1).
(2) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS IN
GLOBAL NOTES. In connection with all transfers and exchanges of a
beneficial interest that is not subject to Section 2.06(b)(1) the
transferor of such beneficial interest must deliver to the Registrar
either:
(A) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause
to be credited a beneficial interest in another Global Note in an
amount equal to the beneficial interest to be transferred or
exchanged; and
(ii) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant
account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be
issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or
exchange referred to in 2.06(b)(1).
Upon satisfaction of all of the requirements for transfer or exchange
of beneficial interests in Global Notes contained in this Indenture and
the Notes or otherwise applicable under the Securities Act, the Trustee
shall adjust the principal amount of the relevant Global Note(s)
pursuant to Section 2.06(g).
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE NOTES. If
any holder of a beneficial interest in a Global Note proposes to exchange such
beneficial interest for a Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a Definitive
Note, then, subject to Section 2.06(a), upon satisfaction of the conditions set
forth in Section 2.06(b)(2), the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant to
Section 2.06(g), and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such
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beneficial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Note(s) to the Persons in whose names such Note(s) are
so registered.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL INTERESTS.
(1) A Holder of a Definitive Note may exchange such Note for a beneficial
interest in a Global Note or transfer such Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in a Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the Trustee
shall cancel the applicable Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the Global Notes.
(2) If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected at a time when a Global Note has not yet been issued,
subject to Section 2.06(a), the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02, the Trustee shall
authenticate one or more Global Notes in an aggregate principal amount equal to
the principal amount of such Definitive Note so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES.
(1) Upon request by a Holder of a Definitive Note and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar will
register the transfer or exchange of such Definitive Note. Prior to such
registration of transfer or exchange, the requesting Holder must present or
surrender to the Registrar the Definitive Note duly endorsed or accompanied by a
written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by its attorney, duly authorized in writing.
(2) A Holder of a Definitive Note may transfer such Note to a Person who
takes delivery thereof in the form of a Definitive Note. Upon receipt of a
request to register such a transfer, the Registrar shall register the Definitive
Note pursuant to the instructions from the Holder thereof.
(f) GLOBAL NOTE LEGEND. Each Global Note will bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a)
OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF PARAMOUNT RESOURCES LTD.
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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
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX,
XXX XXXX) ("DTC") 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."
(g) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note will be returned 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
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note or for a Definitive Note,
the principal amount of Notes represented by such Global Note will be reduced
accordingly and an endorsement will be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note will be increased accordingly and an
endorsement will be made on such Global Note by the Trustee or by the Depositary
at the direction of the Trustee to reflect such increase.
(h) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(1) To permit registrations of transfers and exchanges, the Company will
execute and the Trustee will authenticate Global Notes and, subject to Section
2.06(a), Definitive Notes.
(2) No service charge will be made to a Holder of a beneficial interest in
a Global Note or to a Holder of a Definitive Note 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 2.10, 3.06, 3.09, 4.10,
4.15 and 9.05).
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(3) All Global Notes and Definitive Notes issued upon any registration of
transfer or exchange of Global Notes or Definitive Notes will be the valid
obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Global Notes or Definitive Notes
surrendered upon such registration of transfer or exchange.
(4) The Company will not be required:
(A) to issue, to register the transfer of or to exchange any Notes
during a period beginning at the opening of business 15 days before the day
of any selection of Notes for redemption under Section 3.02 and ending at
the close of business on the day of selection;
(B) to register the transfer of or to exchange any Note selected for
redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.
(5) Prior to due presentment for the registration of a transfer 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 principal of and interest on such Notes and for
all other purposes, and none of the Trustee, any Agent or the Company shall be
affected by notice to the contrary.
(6) All certifications and certificates required to be submitted to the
Registrar pursuant to this Section 2.06 to effect a registration of transfer or
exchange may be submitted by facsimile.
Section 2.07 REPLACEMENT NOTES. If any mutilated Note is surrendered to
the Trustee or the Company or the Trustee receives evidence to its satisfaction
of the destruction, loss or theft of any Note, the Company will issue and the
Trustee, upon receipt of an Authentication Order, will 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 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 will
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.08 OUTSTANDING NOTES. The Notes outstanding at any time are all
the Notes authenticated by the Trustee except for those cancelled by it, those
delivered to it for cancellation, 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 this
Section 2.08, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company owns the Note; however, Notes owned by the
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Company or a Subsidiary of the Company shall not be deemed to be outstanding for
purposes of Section 3.07(a).
If a Note is replaced, paid or purchased pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that such Note is owned by a "protected purchaser" within the meaning of Section
8-303 of the Uniform Commercial Code of New York.
If the principal amount of any Note is considered paid under Section 4.01,
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 will
be deemed to be no longer outstanding and will cease to accrue interest.
Section 2.09 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, or by an Affiliate of the Company, will be
considered as though not outstanding, except that for the purposes of
determining whether the Trustee will be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
will be so disregarded. In addition, for purposes of Section 2.08, only Notes
that the Trustee knows to be owned by the Company or a Subsidiary of the Company
shall not be deemed to be outstanding.
Section 2.10 TEMPORARY NOTES. Until certificates representing Notes are
ready for delivery, the Company may prepare and the Trustee, upon receipt of an
Authentication Order, will authenticate temporary Notes. Temporary Notes will be
substantially in the form of certificated Notes but may have variations that the
Company considers appropriate for temporary Notes and as may be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company will prepare
and the Trustee will authenticate certificated Notes in exchange for temporary
Notes.
Holders of temporary Notes will be entitled to all of the benefits of this
Indenture.
Section 2.11 CANCELLATION. The Company at any time may deliver Notes to
the Trustee for cancellation. The Registrar and Paying Agent will forward to the
Trustee any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else will promptly cancel all Notes surrendered
for registration of transfer, exchange, payment, replacement or cancellation and
will dispose of cancelled Notes (subject to the record retention requirement of
the Exchange Act) in accordance with its customary procedures. Certification of
the destruction of all cancelled Notes will be delivered to the Company. Except
as contemplated by Sections 2.06 and 2.07, the Company may not issue new Notes
to replace Notes that it has paid or that have been delivered to the Trustee for
cancellation.
Section 2.12 DEFAULTED INTEREST. If the Company defaults in a payment of
interest on the Notes, it will 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 4.01. The Company
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will 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 will
fix or cause to be fixed each such special record date and payment date;
PROVIDED that no such special record date may 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) will 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.
ARTICLE III
REDEMPTION AND PREPAYMENT
Section 3.01 NOTICES TO TRUSTEE. If the Company elects to redeem Notes
pursuant to the optional redemption provisions of Section 3.07, it must furnish
to the Trustee, at least 30 days but not more than 60 days before a redemption
date, an Officers' Certificate setting forth:
(1) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 SELECTION OF NOTES TO BE REDEEMED OR PURCHASED. If less than
all of the Notes are to be redeemed or purchased in an offer to purchase at any
time, the Trustee will select Notes for redemption or purchase as follows:
(1) if the Notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities
exchange on which the Notes are listed; or
(2) if the Notes are not listed on any national securities exchange,
on a PRO RATA basis, by lot or by such method as the Trustee shall deem
fair and appropriate.
In the event of partial redemption or purchase by lot, the particular Notes
to be redeemed or purchased will be selected, unless otherwise provided herein,
not less than 30 nor more than 60 days prior to the redemption or purchase date
by the Trustee from the outstanding Notes not previously called for redemption
or purchase.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of U.S.$1,000
or whole multiples of U.S.$1,000; except that if all of the Notes of a Holder
are to be redeemed or purchased, the entire outstanding amount of Notes held
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by such Holder, even if not a multiple of U.S.$1,000, shall be redeemed or
purchased. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Notes called for redemption or purchase also apply to
portions of Notes called for redemption or purchase.
Section 3.03 NOTICE OF REDEMPTION. Subject to the provisions of Section
3.09, at least 30 days but not more than 60 days before a redemption date, the
Company will mail or cause to be mailed, by first class mail, to its registered
address, a notice of redemption to each Holder whose Notes are to be redeemed,
except that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of the
Notes or a satisfaction and discharge of this Indenture pursuant to Articles
VIII or XI of this Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) 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 will be issued upon cancellation of the
original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) 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;
(7) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(8) the applicable CUSIP number, if any, and 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.
At the Company's request, the Trustee will give the notice of redemption in
the Company's name and at its expense; PROVIDED that the Company has delivered
to the Trustee, at least 45 days 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 3.04 EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is
mailed in accordance with Section 3.03, 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.
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Section 3.05 DEPOSIT OF REDEMPTION OR PURCHASE PRICE. One Business Day
prior to the redemption or purchase date, the Company will deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption or
purchase price of and accrued and unpaid interest on all Notes to be redeemed or
purchased on that date. The Trustee or the Paying Agent will 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 or purchase
price of, and accrued and unpaid interest on, all Notes to be redeemed or
purchased.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption or purchase date, interest will cease to accrue on the
Notes or the portions of Notes called for redemption or purchase. If a Note is
redeemed or purchased 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 or purchase is
not so paid upon surrender for redemption or purchase because of the failure of
the Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption or purchase 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 Notes and in Section 4.01.
Section 3.06 NOTES REDEEMED OR PURCHASED IN PART. Upon surrender of a Note
that is redeemed or purchased in part, the Company will issue and the Trustee
will authenticate for the Holder at the expense of the Company a new Note equal
in principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 OPTIONAL REDEMPTION. (a) At any time prior to [ ], 2006, the
Company may on any one or more occasions redeem up to 35% of the aggregate
principal amount of Notes issued under this Indenture at a redemption price of
[ ]% of the principal amount, plus accrued and unpaid interest, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings;
PROVIDED that:
(1) at least 65% of the aggregate principal amount of Notes issued
under this Indenture remains outstanding immediately after the occurrence
of such redemption (excluding Notes owned by the Company and its
Subsidiaries); and
(2) the redemption occurs within 90 days of the date of the closing
of such Equity Offering.
(b) If the Company becomes obligated to pay any Additional Amounts as a
result of a change in the laws or regulations of Canada or any Canadian Taxing
Authority, or a change in any official position regarding the application or
interpretation thereof, which is publicly announced or becomes effective on or
after the Issue Date, the Company may, at its option, redeem the Notes, in whole
but not in part, upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to 100% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the redemption date.
(c) Except pursuant to this Section 3.07, the Notes will not be redeemable
at the Company's option prior to [ ], 2007.
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(d) After [ ], 2007, the Company may redeem all or a portion of the Notes
upon not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest, if any, on the Notes redeemed, to the applicable redemption
date, if redeemed during the twelve-month period beginning on [ ] of the years
indicated below:
YEAR PERCENTAGE
---- ----------
2007............................................ [ ]%
2008............................................ [ ]%
2009 and thereafter............................. 100.000%
Section 3.08 MANDATORY REDEMPTION. The Company is not required to make
mandatory redemption or sinking fund payments with respect to the Notes.
Section 3.09 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS. In the
event that, pursuant to Section 4.10, the Company is required to commence an
offer to all Holders to purchase Notes (an "ASSET SALE OFFER"), it will follow
the procedures specified below and in Section 4.10(c).
The Asset Sale Offer shall be made to all Holders and all holders of other
Indebtedness that is PARI PASSU with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets. The Asset Sale Offer will remain open for
a period of at least 20 Business Days following its commencement and not more
than 30 Business Days, except to the extent that a longer period is required by
applicable law (the "OFFER PERIOD"). No later than three Business Days after the
termination of the Offer Period (the "PURCHASE DATE"), the Company will apply
all Excess Proceeds (the "OFFER AMOUNT") to the purchase of Notes and such other
PARI PASSU Indebtedness (on a pro rata basis, if applicable) or, if less than
the Offer Amount has been tendered, all Notes and other Indebtedness tendered in
response to the Asset Sale Offer and any excess remaining may be used by the
Company or a Restricted Subsidiary for any other purpose not prohibited by this
Indenture. Payment for any Notes so purchased will be made in the same manner as
interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest, if
any, will be paid to the Person in whose name a Note is registered at the close
of business on such record date.
Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to the Trustee and each of the Holders. The notice
will contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Asset Sale Offer. The notice, which will govern the
terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 and the length of time the Asset Sale Offer will
remain open;
(2) the Offer Amount, the purchase price and the Purchase Date;
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(3) that any Note not tendered or accepted for payment will continue
to accrue interest;
(4) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer will cease to
accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to the
Asset Sale Offer may elect to have Notes purchased in integral multiples of
U.S.$1,000 only;
(6) that Holders electing to have a Note purchased pursuant to the
Asset Sale Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(7) that Holders will be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
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 his election to have such Note
purchased;
(8) that, if the aggregate principal amount of Notes and other PARI
PASSU Indebtedness surrendered by Holders exceeds the Offer Amount, the
Company will select the Notes and other PARI PASSU Indebtedness to be
purchased on a PRO RATA basis based on the principal amount of Notes and
such other PARI PASSU Indebtedness surrendered (with such adjustments as
may be deemed appropriate by the Company so that only Notes in
denominations of U.S.$1,000, or integral multiples thereof, will be
purchased); and
(9) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a PRO RATA basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company will promptly issue a new Note, and the
Trustee, upon written request from the Company, will authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the
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Company to the Holder thereof. The Company will publicly announce the results of
the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06.
ARTICLE IV
COVENANTS
Section 4.01 PAYMENT OF NOTES. The Company will 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 will
be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary thereof, holds as of 10:00 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 will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace or cure period) at the same rate to the
extent lawful.
For purposes of disclosure under the Interest Act (Canada), the yearly rate
of interest to which interest is calculated under a Note for any period in any
calendar year (the "CALCULATION PERIOD") is equivalent to the rate payable under
a Note in respect of the Calculation Period multiplied by a fraction the
numerator of which is the actual number of days in such calendar year and the
denominator of which is the actual number of days in the Calculation Period.
Section 4.02 MAINTENANCE OF OFFICE OR AGENCY. The Company will 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, Registrar or
co-registrar) where Notes may be 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 will 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 fails to maintain any such required
office or agency or fails 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 that no
such designation or rescission will 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 will 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.
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The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03.
Section 4.03 REPORTS. Whether or not required by the SEC, so long as any
Notes are outstanding, the Company will furnish, or cause the Trustee to
furnish, to the Holders of Notes, within the time periods (except as otherwise
noted below) specified in the SEC's rules and regulations:
(1) (a) all annual financial information that would be required to be
contained in a filing with the SEC on Forms 20-F or 40-F, as applicable (or
any successor forms), containing the information required therein (or
required in such successor form) including a report on the annual financial
statements by the Company's certified independent accountants; and
(b) for the first three quarters of each year, all quarterly
financial information that would be required to be contained in quarterly
reports under the laws of Canada or any province thereof or provided to
securityholders of a company with securities listed on the Toronto Stock
Exchange, whether or not the Company has any of its securities so listed,
in each case including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations"; and
(2) within 10 Business Days after the occurrence of any event that
would give rise to a requirement to file information regarding such event
with the SEC on Form 8-K, all information that would otherwise be required
to be filed with the SEC on Form 8-K if the Company were required to file
such reports.
If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then, to the extent such Unrestricted Subsidiaries in the
aggregate accounted for more than 10% of Consolidated Cash Flow or the
consolidated total assets of the Company and its Restricted Subsidiaries for or
as of the end of the reporting period, the quarterly and annual financial
information required by the preceding paragraph shall include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and in Management's Discussion and Analysis of Financial
Condition and Results of Operations, of the financial condition and results of
operations of the Company and its Restricted Subsidiaries excluding the
Unrestricted Subsidiaries.
In addition, whether or not required by the SEC, the Company will file a
copy of all of the information and reports referred to in clauses (1) and (2) of
this Section 4.03 with the SEC for public availability within the time periods
specified in the SEC's rules and regulations (unless the SEC will not accept
such a filing).
Section 4.04 COMPLIANCE CERTIFICATE. The Company and each Subsidiary
Guarantor (to the extent that such Subsidiary Guarantor is so required under the
TIA) shall deliver to the Trustee, within 90 days after the end of each fiscal
year, an Officers' Certificate stating that a review of the activities of the
Company and its Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing Officers with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under
this Indenture, and
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further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge the Company has kept, observed, performed and
fulfilled each and every covenant 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 has occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action the Company 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 interest on the Notes is 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. So long as any of the Notes are outstanding, the
Company will 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 4.05 TAXES. The Company will pay, and will cause each of its
Subsidiaries to pay, prior to delinquency, all material Taxes 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 4.06 STAY, EXTENSION AND USURY LAWS. The Company and each of the
Subsidiary Guarantors covenants (to the extent that they may lawfully do so)
that it will 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 and each of the
Subsidiary Guarantors (to the extent that they may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.07 RESTRICTED PAYMENTS. (a) The Company will not, and will not
permit any of its Restricted Subsidiaries, directly or indirectly, to:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company's Equity Interests (including,
without limitation, any payment on account of such Equity Interests in
connection with any merger or consolidation involving the Company) or to
the direct or indirect holders of the Company's Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company);
(2) purchase, retract, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any merger or
consolidation involving the Company), in whole or in part, any Equity
Interests of the Company (other than any such Equity Interests owned by the
Company or a Restricted Subsidiary);
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value, any Indebtedness that is
subordinated to the Notes, any Mirror Note, any Mirror Note Guarantee or
any Subsidiary Guarantee, except for
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(i) a payment of interest at the Stated Maturity thereof or of principal
not earlier than one year prior to the Stated Maturity thereof and (ii) any
such Indebtedness owed to the Company or a Restricted Subsidiary; or
(4) make any Restricted Investment
(all such payments and other actions set forth in clauses (1) through (4) above
being collectively referred to as "RESTRICTED PAYMENTS"), unless, at the time of
and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least U.S.$1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a); and
(3) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issue Date (excluding Restricted Payments permitted
by clauses (2), (3) and (8) of Section 4.07(b)), is less than the sum,
without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the
first fiscal quarter after which this Indenture is dated to the end of
the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
loss, less 100% of such loss), PLUS
(b) 100% of the aggregate net cash proceeds received by the
Company since the Issue Date as a contribution to its common equity
capital or from the issue or sale of Equity Interests of the Company
(other than Disqualified Stock and other than sales of Equity
Interests to a Restricted Subsidiary) or from the issue or sale of
convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been converted
into or exchanged for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to a
Subsidiary of the Company) plus the aggregate net cash proceeds
received by the Company at the time of such conversion or exchange,
PLUS
(c) to the extent that any Restricted Investment that was made
after the Issue Date is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (i) the cash return of capital with
respect to such Restricted Investment (less the cost of disposition,
if any) and (ii) the initial amount of such Restricted Investment,
PLUS
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(d) upon a redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary, the lesser of (i) the Fair Market Value of the
Company's proportionate interest in such Subsidiary immediately
following such redesignation, and (ii) the aggregate amount of the
Company's Investments in such Subsidiary to the extent such
Investments were excluded from or otherwise reduced the sum of clauses
(a), (b) and (c) immediately above and were not previously repaid or
otherwise reduced.
(b) So long as no Default has occurred and is continuing or would be caused
thereby, the provisions of Section 4.07(a) will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company, any Mirror
Note Issuer or any Guarantor or of any Equity Interests of the Company in
exchange for, or out of the net cash proceeds of the substantially
concurrent sale (other than to a Restricted Subsidiary of the Company) of,
Equity Interests of the Company (other than Disqualified Stock); PROVIDED
that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement, defeasance or other acquisition
will be excluded from clause (3)(b) of Section 4.07(a);
(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company, any Mirror Note Issuer or any
Guarantor with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness;
(4) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company or any Restricted Subsidiary
of the Company held by any member of the Company's, or any of its
Restricted Subsidiaries', management, directors or employees pursuant to
any management equity subscription agreement, stock option agreement or
similar agreement or upon the death, disability or termination of
employment of such directors, officers or employees; PROVIDED that the
aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests may not exceed U.S.$2.0 million in any calendar
year (with up to an additional U.S.$2.0 million of unused amounts from any
year available to be used in the following year);
(5) repurchases of Equity Interests deemed to occur upon the exercise
of stock options or warrants if the Equity Interests represent a portion of
the exercise price thereof and repurchases of Equity Interests deemed to
occur upon the withholding of a portion of the Equity Interests granted or
awarded to an employee to pay for the taxes payable by such employee upon
such grant or award;
(6) the payment of dividends on Disqualified Stock issued after the
Issue Date pursuant to the terms thereof as in effect on the date of
issuance; PROVIDED that such Disqualified Stock was issued in accordance
with Section 4.09;
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(7) the purchase, redemption, acquisition, cancellation or other
retirement for nominal value per right of any rights granted to all the
holders of common stock of the Company pursuant to any shareholders' rights
plan adopted for the purpose of protecting stockholders from unfair
takeover tactics;
(8) payments by the Company or any Restricted Subsidiary in respect
of Indebtedness of the Company or any Restricted Subsidiary owed to the
Company or another Restricted Subsidiary;
(9) the repurchase of subordinated Indebtedness of the Company at a
purchase price no greater than 101% of the principal amount of such
subordinated Indebtedness in the event of a "Change of Control" in
accordance with Section 4.14; PROVIDED that, prior to or simultaneously
with such repurchase, the Company has made the Change of Control Offer, if
required, with respect to the Notes and has repurchased all Notes validly
tendered for payment in connection with such Change of Control Offer;
(10) the repurchase, redemption or other acquisition or retirement for
value of Equity Interests of the Company or any Restricted Subsidiary of
the Company held by the estate of any Person who had a "key man" life
insurance policy maintained by the Company or any Restricted Subsidiary out
of the proceeds received by the Company or such Restricted Subsidiary under
such policy; or
(11) the making of other Restricted Payments in an aggregate amount
not to exceed U.S.$20.0 million since the Issue Date.
The amount of all Restricted Payments (other than cash) will be the Fair
Market Value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair
Market Value of any assets or securities that are required to be valued by this
Section 4.07 will be determined by the Board of Directors.
Section 4.08 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. (a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital
Stock to the Company or any of its Restricted Subsidiaries or pay any
indebtedness owed to the Company or any of its Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any of
its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) will not apply to encumbrances or
restrictions existing under or by reason of:
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(1) agreements governing Existing Indebtedness or Credit Facilities
as in effect or which come into effect on the Issue Date and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings of those agreements; PROVIDED that
the amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are not materially
less favorable to Holders of Notes, as determined by the Company's Board of
Directors in their reasonable and good faith judgment;
(2) this Indenture, the Notes, the Mirror Notes, the Mirror Note
Guarantees, the Subsidiary Guarantees and the Mirror Note Pledge
Agreements;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness or Capital Stock was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so acquired;
PROVIDED that, in the case of Indebtedness, such Indebtedness was permitted
by the terms of this Indenture to be incurred;
(5) customary non-assignment provisions in contracts and leases
entered into in the ordinary course of business;
(6) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on that property of the nature
described in Section 4.08(a)(3);
(7) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary
pending its sale or other disposition;
(8) Permitted Refinancing Indebtedness, including any encumbrances or
restrictions imposed by any amendments or refinancings of the contracts,
instruments and obligations referred to in this Section 4.08; PROVIDED that
the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially less favorable to Holders of
Notes, as determined by the Company's Board of Directors in their
reasonable and good faith judgment;
(9) agreements existing on the Issue Date;
(10) Liens securing Indebtedness otherwise permitted to be incurred
under Section 4.12 that limit the right of the debtor to dispose of the
assets subject to such Liens;
(11) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, partnership agreements,
asset sale agreements,
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stock sale agreements and other similar agreements entered into in the
ordinary course of business; and
(12) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.
Section 4.09 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(in any such case, "INCUR") any Indebtedness (including Acquired Debt), and the
Company will not issue any Disqualified Stock and will not permit any of its
Restricted Subsidiaries to issue any shares of preferred stock; PROVIDED that
the Company may incur Indebtedness (including Acquired Debt) or issue
Disqualified Stock, and the Mirror Note Issuers and the Guarantors may incur
Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for
the Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock or preferred
stock is issued would have been at least 2.5 to 1, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred or the preferred stock or
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period; PROVIDED FURTHER that a Restricted Subsidiary may issue
preferred stock to the Company or to a Wholly Owned Restricted Subsidiary of the
Company, or in a transaction or series of related transactions consisting of a
sale of such Restricted Subsidiary; PROVIDED that immediately after giving
effect to such sale, neither the Company nor any of its Subsidiaries owns any
Equity Interests of such Restricted Subsidiary and such sale complies with
Section 4.10.
(b) Section 4.09(a) will not prohibit the incurrence of any of the
following items of Indebtedness (collectively, "PERMITTED DEBT"):
(1) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness, letters of guarantee, tender cheques and letters of credit
under Credit Facilities in an aggregate principal amount at any one time
outstanding under this clause (1) (with letters of guarantee, tender
cheques and letters of credit being deemed to have a principal amount equal
to the maximum potential liability of the Company and its Restricted
Subsidiaries thereunder) not to exceed the greater of
(i) Cdn.$215.0 million, LESS the aggregate amount of all Net
Cash Proceeds of Asset Sales that have been applied by the Company or
any of its Restricted Subsidiaries since the Issue Date to permanently
repay any term Indebtedness under a Credit Facility pursuant to
Section 4.10 and LESS the aggregate amount of all commitment
reductions with respect to any revolving credit borrowings under a
Credit Facility that have been made by the Company or any of its
Restricted Subsidiaries since the Issue Date as a result of the
application of Net Cash Proceeds of Asset Sales pursuant to Section
4.10; and
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(ii) Cdn.$20.0 million plus 20% of Adjusted Consolidated Net
Tangible Assets as of the date on which such additional Indebtedness
is incurred, and after giving effect to the incurrence of such
Indebtedness (and including any assets acquired with such
Indebtedness);
(2) Existing Indebtedness;
(3) the incurrence by the Company, the Mirror Note Issuers and the
Guarantors of Indebtedness represented by the Notes to be issued on the
Issue Date, the Mirror Notes, the Mirror Note Guarantees and the Subsidiary
Guarantees;
(4) the incurrence by the Company, any Mirror Note Issuer or any
Guarantor of Indebtedness and Obligations represented by Capital Lease
Obligations, mortgage financings or purchase money obligations, in each
case, incurred for the purpose of financing all or any part of the purchase
price or cost of construction, development or improvement of property,
plant or equipment, including Facilities, used in the business of the
Company, such Mirror Note Issuer or such Guarantor, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any Indebtedness incurred pursuant to this
clause (4), not to exceed U.S.$10.0 million at any time outstanding;
(5) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace Indebtedness
(other than intercompany Indebtedness) that was permitted by this Indenture
to be incurred under Section 4.09(a) or clauses (2), (3) (with respect to
the Notes only) or (5) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness or the issuance of preferred
stock between or among the Company and any of its Restricted Subsidiaries;
PROVIDED that
(a) if the Company, any Mirror Note Issuer or any Guarantor is
the obligor on such Indebtedness or preferred stock, such Indebtedness
or preferred stock must be unsecured; and
(b) (i) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness or preferred stock being held by
a Person other than the Company or a Restricted Subsidiary of the
Company and (ii) any sale or other transfer of any such Indebtedness
or preferred stock to a Person that is not either the Company or a
Restricted Subsidiary of the Company, will be deemed, in each case, to
constitute an incurrence of such Indebtedness or the issuance of
preferred stock by the Company or such Restricted Subsidiary, as the
case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company, any Mirror Note Issuer or any
Guarantor of Hedging Obligations; PROVIDED that such Hedging Obligations
were incurred in the ordinary course of business and not for speculative
purposes;
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(8) the guarantee by the Company, any Mirror Note Issuer or any
Guarantor of Indebtedness of the Company or a Restricted Subsidiary of the
Company that was permitted to be incurred by another provision of this
Section 4.09 or required to be incurred by this Indenture;
(9) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in the
form of additional Indebtedness with the same terms, and the payment of
dividends on Disqualified Stock or preferred stock in the form of
additional shares of the same class of Disqualified Stock or preferred
stock will not be deemed to be an incurrence of Indebtedness or an issuance
of Disqualified Stock or preferred stock for purposes of this Section 4.09;
PROVIDED, in each such case, that the amount thereof is included in Fixed
Charges of the Company as accrued;
(10) the incurrence by the Company, any Mirror Note Issuer or any
Guarantor of Indebtedness and Obligations under Oil and Gas Hedging
Contracts; PROVIDED that such Oil and Gas Hedging Contracts were entered
into in the ordinary course of business and not for speculative purposes;
(11) production imbalances arising in the ordinary course of business;
(12) Indebtedness and Obligations in connection with one or more
standby letters of credit, Guarantees, performance or surety bonds or other
reimbursement obligations, in each case, issued in the ordinary course of
business and not in connection with the borrowing of money or the obtaining
of an advance or credit (other than advances or credit for goods and
services in the ordinary course of business and on terms and conditions
that are customary in the Oil and Gas Business, and other than the
extension of credit represented by such letter of credit, Guarantee or
performance or surety bond itself);
(13) the incurrence by the Company, any Mirror Note Issuer or any
Guarantor of Non-Recourse Purchase Money Debt in an amount not to exceed
U.S.$20.0 million outstanding at any one time;
(14) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (14), not to exceed
U.S.$25.0 million;
(15) Indebtedness of the Company, any Restricted Subsidiary, any
Mirror Note Issuer or any Guarantor arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds in the ordinary course of
business;
(16) Indebtedness arising in connection with endorsement of
instruments for deposit in the ordinary course of business;
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(17) Indebtedness of the Company or any Restricted Subsidiary
(including letters of credit), for the account of the Company or any such
Restricted Subsidiary incurred in order to provide security for
environmental reclamation obligations to governmental agencies, workers'
compensation claims, payment obligations in connection with self-insurance
or similar statutory and other requirements in the ordinary course of
business; and
(18) customary indemnification, adjustment of purchase price or
similar obligations, including title insurance, of the Company or any
Restricted Subsidiary, in each case, incurred in connection with the
acquisition or disposition of any assets of the Company or any such
Restricted Subsidiary (other than Guarantees incurred by any Person
acquiring all or any portion of such assets for the purpose of financing
such acquisition).
For purposes of determining compliance with this Section 4.09, in the event
that an item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (18) above, or is
entitled to be incurred pursuant to Section 4.09(a), the Company will be
permitted to classify, or later reclassify, such item of Indebtedness in whole
or in part in any manner that complies with this Section 4.09, including by
allocation to more than one other type of Indebtedness. Indebtedness under
Credit Facilities outstanding on the date on which Notes are first issued and
authenticated under this Indenture will be deemed to have been incurred on such
date in reliance on the exception provided by clause (1) of this Section
4.09(b).
The maximum amount of Indebtedness that the Company or any Restricted
Subsidiary may incur pursuant to this Section 4.09 will not be deemed to be
exceeded solely as the result of fluctuations in the exchange rates of
currencies. In determining the amount of Indebtedness outstanding under one of
the clauses above, the outstanding principal amount of any particular
Indebtedness of any Person shall be counted only once and any obligation of such
Person or any other Person arising under any Guarantee, Lien, letter of credit
or similar instrument supporting such Indebtedness shall be disregarded so long
as it is permitted to be incurred by the Person or Persons incurring such
obligation.
(c) None of the Company, any Mirror Note Issuer or any Guarantor shall
incur any additional Indebtedness (including Permitted Debt) that is
contractually subordinated in right of payment to any other Indebtedness of such
Person unless such additional Indebtedness is also contractually subordinated in
right of payment to the Notes, the applicable Mirror Note or the applicable
Mirror Note Guarantee or Subsidiary Guarantee, as the case may be, on
substantially identical terms; PROVIDED that no Indebtedness of the Company will
be deemed to be contractually subordinated in right of payment to any other
Indebtedness of the Company solely by virtue of being unsecured.
Section 4.10 ASSET SALES. (a) The Company will not, and will not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
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(1) the Company (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of the Asset Sale at least equal to the
Fair Market Value of the assets, properties or Equity Interests issued or
sold or otherwise disposed of;
(2) the Fair Market Value is set forth in an Officers' Certificate
delivered to the Trustee; and
(3) at least 75% of the consideration received in the Asset Sale by
the Company or such Restricted Subsidiary is in the form of cash, Cash
Equivalents, Liquid Securities or Permitted Assets. For purposes of this
provision, each of the following will be deemed to be cash:
(i) any liabilities, as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet, of the Company or
any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes, any
Mirror Note, any Mirror Note Guarantee or any Subsidiary Guarantee)
that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability; and
(ii) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that
are contemporaneously, subject to ordinary settlement periods,
converted by the Company or such Restricted Subsidiary into cash, to
the extent of the cash received in that conversion.
(b) Within 365 days after the receipt of any Net Cash Proceeds from an
Asset Sale, the Company or the applicable Restricted Subsidiary may apply those
Net Cash Proceeds for any combination of the following purposes:
(1) to repay or prepay Indebtedness of the Company or a Restricted
Subsidiary that is not subordinated to the Notes, any Mirror Note, any
Mirror Note Guarantee or any Subsidiary Guarantee;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Oil and Gas Business;
(3) to make a capital expenditure; or
(4) to acquire other long-term assets or properties that are used or
useful in the Oil and Gas Business.
Pending the final application of any Net Cash Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net Cash
Proceeds in any manner that is not prohibited by this Indenture.
(c) Any Net Cash Proceeds from Asset Sales that are not applied or
invested as provided in Section 4.10(b) will constitute "EXCESS PROCEEDS". When
the aggregate amount of
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Excess Proceeds exceeds U.S.$10.0 million, the Company will make an offer (an
"ASSET SALE OFFER") to all Holders and all holders of other Indebtedness that is
PARI PASSU with the Notes containing provisions similar to those set forth in
this Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets to purchase the maximum principal amount of Notes and such other
PARI PASSU Indebtedness that may be purchased out of the Excess Proceeds. The
offer price in any Asset Sale Offer will be equal to 100% of principal amount
plus accrued and unpaid interest, if any, to the date of purchase, and will be
payable in cash. If any Excess Proceeds remain after consummation of an Asset
Sale Offer, the Company may use those Excess Proceeds for any purpose not
otherwise prohibited by this Indenture. If the aggregate principal amount of
Notes and other PARI PASSU Indebtedness tendered into such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Trustee will select the Notes and
such other PARI PASSU Indebtedness to be purchased on a PRO RATA basis. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset
at zero.
(d) The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
purchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of this Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
conflict.
Section 4.11 TRANSACTIONS WITH AFFILIATES. (a) The Company will not, and
will not permit any of its Restricted Subsidiaries to, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each, an "AFFILIATE TRANSACTION"),
unless:
(1) the Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Restricted Subsidiary than those that would
have reasonably been expected to have been obtained in a comparable
transaction at such time by the Company or such Restricted Subsidiary with
an unrelated Person; and
(2) the Company delivers to the Trustee:
(i) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of U.S.$5.0 million, a resolution of the Board of Directors set
forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with this Section 4.11 and that such Affiliate
Transaction has been approved by a majority of the disinterested
members of the Board of Directors; and
(ii) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of U.S.$15.0 million, an opinion as to the fairness to the
Company or the relevant Restricted Subsidiary of such Affiliate
Transaction from a financial point of view issued by
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an accounting, appraisal or investment banking firm of national
standing in Canada or the United States selected by the Company.
(b) The following items will be deemed not to be Affiliate Transactions
and, therefore, will not be subject to the provisions of Section 4.11(a):
(1) any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Restricted
Subsidiary or approved by a majority of the disinterested members of the
Board of Directors of the Company (or a committee comprised solely of
disinterested directors);
(2) transactions between or among the Company and/or its Restricted
Subsidiaries;
(3) transactions with a Person that is an Affiliate of the Company
solely because the Company owns an Equity Interest in, or controls, such
Person;
(4) payment of reasonable and customary compensation or fees to, or
the execution of customary expense reimbursement, indemnification or
similar arrangements with, the Company or any of its Restricted
Subsidiaries or any of their respective directors and officers in the
ordinary course of business;
(5) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of the Company; and
(6) Restricted Payments and Permitted Investments that are permitted
by Section 4.07.
Section 4.12 LIENS. The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
otherwise cause or suffer to exist or become effective any Lien (other than
Permitted Liens) securing Indebtedness or trade payables upon or with respect to
any of their property or assets, now owned or hereafter acquired, unless all
payments due under this Indenture and the Notes are secured on an equal and
ratable basis with the obligations so secured until such time as such
obligations are no longer secured by a Lien.
Section 4.13 CORPORATE EXISTENCE. Subject to Article V hereof, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect:
(1) its corporate existence, and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of
the Company or any such Subsidiary; and
(2) the rights (charter and statutory), licenses and franchises of
the Company and its Subsidiaries;
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PROVIDED that the Company shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other existence of any of
its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders of the Notes.
Section 4.14 OFFER TO REPURCHASE UPON CHANGE OF CONTROL. (a) Upon the
occurrence of a Change of Control, the Company will make an offer (a "CHANGE OF
CONTROL OFFER") to each Holder to repurchase all or any part (equal to
U.S.$1,000 or an integral multiple of U.S.$1,000) of each Holder's Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest, if any, on the Notes repurchased, to the date of
purchase (the "CHANGE OF CONTROL PAYMENT"). Within 30 days following any Change
of Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in the notice (the "CHANGE OF CONTROL
PAYMENT DATE"), which date will be no earlier than 30 days and no later than 60
days from the date such notice is mailed, pursuant to the procedures required by
this Indenture and described in such notice. The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent those laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control provisions of this Indenture,
the Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under the Change of Control
provisions of this Indenture by virtue of such conflict.
(b) On the Change of Control Payment Date, the Company or its designated
agent will, to the extent lawful:
(1) accept for payment all Notes or portions of Notes properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions of Notes tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions of Notes being purchased by the
Company.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; PROVIDED that each new Note will be in a
principal amount of U.S.$1,000 or an integral multiple thereof. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
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(c) Notwithstanding anything to the contrary in this Section 4.14, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.14 and purchases all Notes validly tendered and not withdrawn under
the Change of Control Offer.
Section 4.15 PAYMENTS FOR CONSENT. The Company will not, and will not
permit any of its Subsidiaries to, directly or indirectly, pay or cause to be
paid any consideration to or for the benefit of any Holder for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture, the Notes, the Mirror Notes, the Mirror Note Guarantees, the
Subsidiary Guarantees or the Mirror Note Pledge Agreements unless such
consideration is offered to be paid and is paid to all Holders of the Notes that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
Section 4.16 [INTENTIONALLY OMITTED].
Section 4.17 PAYMENT OF ADDITIONAL AMOUNTS. (a) All payments made by the
Company or on behalf of the Company with respect to the Notes will be made
without withholding or deduction for any Taxes imposed by any Canadian Taxing
Authority, unless required by law or the interpretation or administration
thereof by the relevant Canadian Taxing Authority. If the Company is obligated
to withhold or deduct any amount on account of Taxes imposed by any Canadian
Taxing Authority from any payment made with respect to the Notes, the Company
will:
(1) make such withholding or deduction;
(2) remit the full amount deducted or withheld to the relevant
government authority in accordance with the applicable law;
(3) pay such additional amounts ("ADDITIONAL AMOUNTS") as may be
necessary so that the net amount received by each Holder (including
Additional Amounts) after such withholding or deduction will not be less
than the amount the Holder would have received if such Taxes had not been
withheld or deducted;
(4) furnish to the Trustee for the benefit of the Holders, within 30
days after the date the payment of any Taxes is due, an official receipt of
the relevant government authorities for all amounts deducted or withheld,
or if such receipts are not obtainable, other evidence of payment by the
Company of those Taxes;
(5) indemnify and hold harmless each Holder, other than as described
below, for the amount of:
(i) any Taxes (including interest and penalties) paid by such
Holder as a result of payments made on or with respect thereto, and
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(ii) any Taxes imposed with respect to any reimbursement under
the preceding clause (i) or this clause (ii), but excluding any such
Taxes on such Holder's net income; and
(6) at least 15 days prior to each date on which any Additional
Amounts are payable, deliver to the Trustee an Officers' Certificate
setting forth the calculation of the Additional Amounts to be paid and such
other information as the Trustee may request to enable the Trustee to pay
such Additional Amounts to Holders on the payment date.
(b) Notwithstanding the foregoing, the Company will not pay Additional
Amounts to a Holder in respect of a Beneficial Owner of a Note:
(1) imposed or withheld by reason of the failure of the Holder or
Beneficial Owner to complete, execute and deliver to the Company any form
or document to the extent applicable to such Holder or Beneficial Owner
that may be required by law or by reason of administration of such law and
which is reasonably requested in writing to be delivered by the Company in
order to enable the Company to make payments on the Notes without deduction
or withholding for Taxes, or with deduction of withholding of a lesser
amount, which form or document shall be delivered within 60 days of a
written request therefor by the Company;
(2) in any case where such Holder or Beneficial Owner is not a
resident (within the meaning of the Canada-United States Income Tax
Convention) of the United States of America, in excess of the amount which
the Company would have been obligated to pay hereunder if such Holder or
Beneficial Owner were resident in the United States of America for the
purposes of such treaty;
(3) where the Company does not deal at arm's length (within the
meaning of the Income Tax Act (Canada)) at the time of making such payment
with such Holder or Beneficial Owner, or
(4) where such Holder or Beneficial Owner is subject to such Taxes by
reason of its being connected with Canada or any province or territory
thereof otherwise than by the mere acquisition, holding or disposition of
Notes or the receipt of payments thereunder.
(c) If, following any payment made by the Company to any Holder under
Section 4.17(a)(3) or any indemnity payment made by the Company to any Holder
under Section 4.17(a)(5), such Holder shall receive or be granted a refund,
credit, allowance or remission in respect of the Taxes resulting in the payment
thereof and such Holder is able to readily identify such refund, credit,
allowance or remission as being attributable to such Taxes, such Holder shall,
to the extent that it can do so without prejudice to the retention of the amount
of such refund, credit, allowance or remission and without prejudice to the
right of such Holder to obtain any other relief or allowance which may be
available to it, reimburse the Company with such amount as such Holder, acting
reasonably, determines to be the amount of money attributable to such refund,
credit, allowance or remission that may be paid by such Holder to leave it
(after such reimbursement) in no worse position than it would have been in had
there been no such
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deduction or withholding or payment of Taxes which resulted in the payment under
Section 4.17(a)(3) or Section 4.17(a)(5). Such Holder may charge to the Company
(and may deduct from amounts reimbursable to the Company hereunder) a fee
reasonably determined by such Holder to compensate it for any additional effort
expended or cost incurred in determining such credit or remission or allocating
it to the Company. Notwithstanding the foregoing, no Holder shall be obligated
to disclose to the Company, or any of its agents, any computation made by such
Holder in connection with this paragraph or any information regarding such
Holder's tax status or affairs.
Any reference in this Indenture to the payment of principal, premium, if
any, interest, Change of Control or Asset Sale purchase price, redemption price
or any other amount payable under or with respect to any Note, will be deemed to
include the payment of Additional Amounts to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof. The
Company's obligation to make payments of Additional Amounts will survive any
termination of this Indenture or the defeasance of any rights thereunder.
Section 4.18 DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES. The
Board of Directors of the Company may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
Fair Market Value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary so designated will be deemed to be an
Investment made as of the time of the designation and will reduce the amount
available for Restricted Payments under Section 4.07(a) or Permitted
Investments, as determined by the Company. That designation will only be
permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors of the Company may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation would
not cause a Default.
Section 4.19 BUSINESS ACTIVITIES. The Company will not, and will not
permit any Restricted Subsidiary to, engage in any business other than the Oil
and Gas Business, except to such extent as would not be material to the Company
and its Restricted Subsidiaries taken as a whole.
Section 4.20 ISSUANCE OF SUBSIDIARY GUARANTEES AND MIRROR NOTE GUARANTEES.
(a) If the Company forms or acquires any Restricted Subsidiary that is not a
Guarantor or a Mirror Note Issuer and that incurs any Indebtedness (other than
Indebtedness owing to the Company, a Mirror Note Issuer or a Guarantor), or if
any Restricted Subsidiary that is not a Guarantor or a Mirror Note Issuer
guarantees any Indebtedness of the Company, a Guarantor or a Mirror Note Issuer
(other than a Guarantee of Indebtedness owing to the Company, a Guarantor or a
Mirror Note Issuer), in each case, in excess of U.S.$2.0 million then the
Company shall:
(1) cause such Restricted Subsidiary to (i) execute and deliver to
the Trustee a supplemental indenture substantially in the form of EXHIBIT C
pursuant to which such Restricted Subsidiary shall issue a Subsidiary
Guarantee or (ii) unconditionally guarantee to the Person to whom the
Mirror Notes are issued (each, a "MIRROR NOTE GUARANTEE") all of the Mirror
Note Issuers' obligations under the Mirror Notes pursuant to documentation
substantially in the form delivered by the Mirror Note Guarantors on the
Issue Date; and
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(2) deliver to the Trustee an Opinion of Counsel (which may contain
customary exceptions) that such supplemental indenture or Mirror Note
Guarantee, as the case may be, has been duly authorized, executed and
delivered by such Restricted Subsidiary and constitutes a legal, valid,
binding and enforceable obligation of such Restricted Subsidiary;
PROVIDED that the foregoing shall not apply to any Restricted Subsidiary
acquired or formed by the Company for so long as it is not a Wholly Owned
Restricted Subsidiary.
(b) Thereafter, such Restricted Subsidiary shall be a Guarantor for all
purposes of this Indenture. The Company may cause any other Restricted
Subsidiary of the Company to issue a Subsidiary Guarantee or Mirror Note
Guarantee and become a Guarantor. At any time the Indebtedness or Guarantee of
Indebtedness referred to in Section 4.20(a) is repaid or released without
further obligation by such Restricted Subsidiary, such Restricted Subsidiary
need no longer be required to be a Guarantor for purposes of this covenant, and
the Trustee shall promptly execute such documents and instruments, as the
Company or such Restricted Subsidiary may request to evidence the termination of
the applicable Subsidiary Guarantee or Mirror Note Guarantee.
ARTICLE V
SUCCESSORS
Section 5.01 AMALGAMATION, MERGER, CONSOLIDATION OR SALE OF ASSETS (a) The
Company may not, directly or indirectly: (1) amalgamate, consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person, unless:
(1) either (a) the Company is the surviving corporation, or (b) the
Person formed by or surviving any such amalgamation, consolidation or
merger (if other than the Company) or to which such sale, assignment,
transfer, conveyance or other disposition has been made is a corporation
organized or existing under the laws of Canada or any province thereof or
the United States, any state thereof or the District of Columbia;
(2) the Person formed by or surviving any such amalgamation,
consolidation or merger (if other than the Company) or the Person to which
such sale, assignment, transfer, conveyance or other disposition has been
made expressly assumes all the obligations of the Company under the Notes,
this Indenture and the Mirror Note Pledge Agreements pursuant to agreements
reasonably satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of Default
exists;
(4) the Company or the Person formed by or surviving any such
amalgamation, consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, conveyance or other disposition has
been made:
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(i) will have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the
Company immediately preceding the transaction; and
(ii) will, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same
had occurred at the beginning of the applicable four-quarter period,
be permitted to incur at least U.S.$1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section
4.09(a);
(5) the transactions will not result in the Company or the surviving
corporation being required to make any deduction or withholding on account
of taxes as described in Section 4.17 that the Company would not have been
required to make had such transactions or series of transactions not
occurred; and
(6) in case the Company shall consolidate, amalgamate or merge with
or into any other Person or, except for conveyances or transfers to one or
more Wholly-Owned Restricted Subsidiaries, convey or transfer its
properties and assets substantially as an entirety to any Person, the
Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, amalgamation,
merger, conveyance or transfer and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture, complies
with this Article V and that all conditions precedent herein provided for
relating to such transaction have been complied with.
(b) In addition, the Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.01 will not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or among
the Company, any Mirror Note Issuer and any Guarantor.
(c) Subject to the following paragraph, a Mirror Note Issuer or a
Guarantor may not sell or otherwise dispose of all or substantially all of its
assets to, or consolidate, amalgamate or merge with or into (whether or not such
Mirror Note Issuer or Guarantor is the surviving Person), another Person, other
than the Company, a Mirror Note Issuer or a Guarantor, unless:
(1) immediately after giving effect to that transaction, no Default
or Event of Default exists;
(2) either:
(i) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such
amalgamation, consolidation or merger, assumes all the obligations of
that Mirror Note Issuer or Guarantor, as the case may be, under this
Indenture, its Mirror Note, Mirror Note Guarantee or Subsidiary
Guarantee, as the case may be, and the Mirror Note Pledge Agreements,
if applicable, pursuant to a supplemental indenture reasonably
satisfactory to the Trustee; or
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(ii) the Net Cash Proceeds of such sale or other disposition are
applied in accordance with Section 4.10; and
(3) in case any Mirror Note Issuer or Guarantor shall consolidate,
amalgamate or merge with or into any other Person or, except for
conveyances, transfers or leases to one or more Wholly-Owned Restricted
Subsidiaries, convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Company has delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, amalgamation, merger, conveyance, transfer
or lease and, if a supplemental indenture is required in connection with
such transaction, such supplemental indenture, complies with this Article V
and that all conditions precedent herein provided for relating to such
transaction have been complied with.
(d) The Mirror Note, Mirror Note Guarantee or Subsidiary Guarantee, as the
case may be, of a Guarantor or a Mirror Note Issuer, as the case may be, will be
released
(1) in connection with any sale or other disposition of all or
substantially all of the assets of that Subsidiary (including by way of
amalgamation, merger or consolidation) to a Person that is not (either
before or after giving effect to such transaction) a Subsidiary of the
Company, if the sale or other disposition complies with Section 4.10; or
(2) in connection with any sale of all of the Capital Stock of a
Subsidiary to a Person that is not (either before or after giving effect to
such transaction) a Subsidiary of the Company, if the sale complies with
Section 4.10; or
(3) if the Company designates any Restricted Subsidiary that is a
Guarantor or a Mirror Note Issuer as an Unrestricted Subsidiary in
accordance with Section 4.18.
Section 5.02 SUCCESSOR CORPORATION SUBSTITUTED. Upon any amalgamation,
consolidation or merger, or any sale, assignment, transfer, conveyance or other
disposition of all or substantially all of the assets of the Company in a
transaction that is subject to, and that complies with the provisions of Section
5.01, the successor corporation formed by such consolidation or into or with
which the Company is amalgamated or merged or to which such sale, assignment,
transfer, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such amalgamation,
consolidation, merger, sale, assignment, transfer, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and such
successor corporation may exercise every right and power of the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein; PROVIDED that the predecessor Company shall not be
relieved from the obligation to pay the principal of and interest on the Notes
except in the case of a sale of all of the Company's assets in a transaction
that is subject to, and that complies with the provisions of, Section 5.01.
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ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01 EVENTS OF DEFAULT. Each of the following is an "EVENT OF
DEFAULT":
(1) default for 30 days in the payment when due of interest on the
Notes;
(2) default in payment when due of the principal of or premium, if
any, on the Notes;
(3) failure by the Company or any of its Restricted Subsidiaries to
comply with Section 4.10, 4.14 or 5.01;
(4) failure by the Company or any of its Restricted Subsidiaries to
comply with any of the other agreements in this Indenture for 60 days after
written notice has been given to the Company by the Trustee or to the
Company and the Trustee by Holders of at least 25% of the outstanding
principal amount of the Notes;
(5) default under any other 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 of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now
exists or is created after the Issue Date, if that default:
(i) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the
applicable grace or cure period provided in such Indebtedness on the
date of such default (a "PAYMENT DEFAULT"); or
(ii) results in the acceleration of such Indebtedness prior to
its express maturity,
and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there
has been a Payment Default, which remains outstanding or the maturity of
which has been so accelerated, aggregates U.S.$10.0 million or more;
PROVIDED that if any such default is cured or waived or any such
acceleration is rescinded, or such Indebtedness is repaid, within a period
of 30 days from the continuation of such default beyond the applicable
grace or cure period or the occurrence of such acceleration, as the case
may be, such Event of Default under this Indenture and any consequential
acceleration of the Notes shall be automatically rescinded, so long as such
rescission does not conflict with any judgment or decree;
(6) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments aggregating in excess of U.S.$10.0 million in cash (net
of amounts covered by
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insurance or bonded), which judgments are not paid, discharged or stayed
for a period of 60 days after the date of entry of such judgment or, in the
event such judgments have been bonded to the extent required pending
appeal, after the date such judgments become non-appealable;
(7) except as permitted by this Indenture, any Mirror Note, Mirror
Note Guarantee or Subsidiary Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to
be in full force and effect and such failure shall not be cured within 10
days (it being understood that if any Mirror Note or Mirror Note Guarantee
becomes invalid or unenforceable, such invalidity may be cured by causing
each obligor under such Mirror Note or Mirror Note Guarantee to directly
guarantee the Notes pursuant to a Subsidiary Guarantee) or any Significant
Subsidiary or any Person acting on behalf of any such Significant
Subsidiary, shall deny or disaffirm its obligations under its Mirror Note,
Mirror Note Guarantee or Subsidiary Guarantee (other than by reason of
release of such Significant Subsidiary from its Subsidiary Guarantee or
Mirror Note Guarantee in accordance with this Indenture);
(8) except as contemplated by their terms, the Mirror Note Pledge
Agreements cease to be in full force and effect or cease to give the
Trustee, in any material respect, the Liens, rights, powers and privileges
purported to be created thereby; and
(9) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary in an involuntary case;
(B) appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary; or
(C) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days.
Section 6.02 ACCELERATION. In the case of an Event of Default specified in
clause (9) of Section 6.01, with respect to the Company, any Subsidiary that is
a Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, all outstanding Notes will become due
and payable immediately without further action or notice. If any other Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable
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immediately by notice to the Company and (if given by the Holders) to the
Trustee in accordance with this Indenture.
Upon any such declaration, the Notes shall become due and payable
immediately. The Holders of 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 an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium, if any, that has become
due solely because of the acceleration) have been cured or waived.
Section 6.03 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 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 6.04 WAIVER OF PAST DEFAULTS. Holders of a majority in aggregate
principal amount of the then outstanding Notes by written 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 hereunder, except a continuing Default or
Event of Default in the payment of the principal of, premium, if any, and
interest on the Notes (including in connection with an Asset Sale Offer or
Change of Control Offer); PROVIDED that the Holders of a majority in aggregate
principal amount of the then outstanding Notes may rescind an acceleration and
its consequences, including any related payment default that resulted from such
acceleration. Upon any such waiver, such 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 impair any right consequent thereon.
Section 6.05 CONTROL BY MAJORITY. Holders of a majority in 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 it. 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.
Section 6.06 LIMITATION ON SUITS. A Holder may pursue a remedy with
respect to this Indenture or the Notes only if:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
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(3) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(4) 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
(5) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
Section 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal, premium, if any, and interest on a Note, on or after the respective
due dates expressed in the Note (including in connection with an offer to
purchase), 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 6.08 COLLECTION SUIT BY TRUSTEE. If an Event of Default specified
in Section 6.01(1) or (2) 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.
Section 6.09 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 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 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 7.07. 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 7.07 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
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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 VI, it shall pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due under
Section 7.07, including payment of all compensation, expenses 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, against any party litigant in the
suit, having due regard to 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 pursuant to Section 6.07, or a suit by Holders of
more than 10% in principal amount of the then outstanding Notes.
ARTICLE VII
TRUSTEE
Section 7.01 DUTIES OF TRUSTEE. (a) If an Event of Default has occurred
and is continuing, the Trustee will 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 such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will 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
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(2) 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,
the Trustee will 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:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(2) the Trustee will 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
(3) the Trustee will 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 6.05.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to Section 7.01 and
Section 7.02.
(e) No provision of this Indenture will require the Trustee to expend or
risk its own funds or incur any liability.
Section 7.02 RIGHTS OF TRUSTEE.
(a) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee will 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.
(b) The Trustee may act through its attorneys and agents and will not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(c) The Trustee will 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.
(d) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company will be sufficient if signed by an
Officer of the Company.
(e) The Trustee will 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 have offered to the Trustee reasonable security
or indemnity satisfactory to it against the costs, losses, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
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(f) Whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate.
(g) The Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(h) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of Indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties.
(i) T he Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of Indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
Section 7.03 INDIVIDUAL RIGHTS OF TRUSTEE; MONEY HELD IN TRUST. (a) 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 it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue as trustee
or resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11.
(b) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall not be
liable for interest on any money received by it hereunder except as otherwise
agreed between the Trustee and the Company.
Section 7.04 TRUSTEE'S DISCLAIMER. The Trustee will 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 will not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it will 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 7.05 NOTICE OF DEFAULT. If a Default or Event of Default occurs
and is continuing and if it is known to the Trustee, the Trustee will mail to
Holders a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on any Note, the Trustee
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may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders.
Section 7.06 REPORTS BY TRUSTEE TO HOLDERS. (a) Within 60 days after each
May 15, beginning with May 15 following the Issue Date, and for so long as Notes
remain outstanding, the Trustee will mail to the Holders a brief report dated as
of such reporting date that complies with TIA ss. 313(a) (but if no event
described in TIA ss. 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also will comply
with TIA ss. 313(b)(2). The Trustee will also transmit by mail all reports as
required by TIA ss. 313(c).
(b) A copy of each report at the time of its mailing to the Holders will
be mailed by the Trustee to the Company and filed by the Trustee with the SEC
and each stock exchange on which the Notes are listed in accordance with TIA ss.
313(d). The Company will promptly notify the Trustee when the Notes are listed
on any stock exchange.
Section 7.07 COMPENSATION AND INDEMNITY. (a) The Company will pay to the
Trustee from time to time compensation agreed to with the Trustee for its
acceptance of this Indenture and services hereunder. The Trustee's compensation
will not be limited by any law on compensation of a trustee of an express trust.
The Company agrees to 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 will include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
(b) The Company and the Subsidiary Guarantors, jointly and severally,
agree to indemnify the Trustee against any and all losses, liabilities or
expenses 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 and the Subsidiary
Guarantors (including this Section 7.07) and defending itself against any claim
(whether asserted by the Company, the Subsidiary Guarantors 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 is caused by its negligence or bad faith. The Trustee will notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company will not relieve the Company or any of the
Subsidiary Guarantors of their obligations hereunder. The Company or such
Subsidiary Guarantor agrees to defend the claim and the Trustee will cooperate
in the defense. The Trustee may have separate counsel and the Company will pay
the reasonable fees and expenses of such counsel. Neither the Company nor any
Subsidiary Guarantor need pay for any settlement made without its consent, which
consent will not be unreasonably withheld.
(c) The obligations of the Company and the Subsidiary Guarantors under
this Section 7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's payment obligations in this Section 7.07, the
Trustee will 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 and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.
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(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(9) hereof 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.
(f) The Trustee will comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
Section 7.08 REPLACEMENT OF TRUSTEE. (a) A resignation or removal of the
Trustee and appointment of a successor Trustee will become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.
(b) 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 a majority
in 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:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) 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;
(3) a custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
(d) 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 at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will 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 7.07.
Notwithstanding replacement of the
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Trustee pursuant to this Section 7.08, the Company's obligations under Section
7.07 will continue for the benefit of the retiring Trustee.
Section 7.09 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 will be the successor Trustee.
Section 7.10 ELIGIBILITY; DISQUALIFICATION. There will 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 a
combined capital and surplus (together with that of its parent) of at least
U.S.$100 million as set forth in its most recent published annual report of
condition.
This Indenture will always have a Trustee who satisfies the requirements of
TIA xx.xx. 310(a)(1), (2) and (5). The Trustee is subject to TIA ss. 310(b).
Section 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee is subject to TIA ss. 311(a), excluding any creditor relationship listed
in TIA ss. 311(b). A Trustee who has resigned or been removed shall be subject
to TIA ss. 311(a) to the extent indicated therein.
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE. The
Company may, at its option and at any time, elect to have either Section 8.02 or
8.03 applied to all outstanding Notes upon compliance with the conditions set
forth below in this Article VIII.
Section 8.02 LEGAL DEFEASANCE AND DISCHARGE. Upon the Company's exercise
under Section 8.01 of the option applicable to this Section 8.02, the Company
will, subject to the satisfaction of the conditions set forth in Section 8.04,
have all of its obligations discharged with respect to the outstanding Notes,
all of the Mirror Note Issuers' obligations discharged with respect to the
Mirror Notes and all obligations of each Guarantor discharged with respect to
its Mirror Note Guarantee or Subsidiary Guarantee, as the case may be ("LEGAL
DEFEASANCE"). For this purpose, Legal Defeasance means that the Company will be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes (including the Mirror Note Issuers' obligations with respect
to the Mirror Notes and all obligations of each Guarantor with respect to its
Mirror Note Guarantee or Subsidiary Guarantee, as the case may be), which will
thereafter be deemed to be "outstanding" only for the purposes of Section 8.05
and the other Sections of this Indenture referred to in clauses (1) and (2)
below, and to have satisfied all their other obligations under such Notes,
Mirror Notes, Mirror Note Guarantee and Subsidiary Guarantee 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 will survive until otherwise terminated or discharged hereunder:
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(1) the rights of Holders to receive payments in respect of the
principal of, or interest or premium, if any, on such Notes when such
payments are due from the trust referred to in Section 8.04;
(2) the Company's obligations with respect to such Notes under
Article II and Section 4.02;
(3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's and the Subsidiary Guarantors' obligations in
connection therewith; and
(4) this Article VIII.
Subject to compliance with this Article VIII, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03.
Section 8.03 COVENANT DEFEASANCE. Upon the Company's exercise under
Section 8.01 of the option applicable to this Section 8.03, the Company and each
of the Subsidiary Guarantors will, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from each of their obligations
under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.14, 4.15, 4.18, 4.19 and 4.20, Section 5.01(a)(4) and Section
5.01(c)(2)(ii) (collectively, the "DEFEASED COVENANTS") with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
hereof are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes will
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 Defeased Covenants, but will continue to be
deemed "outstanding" for all other purposes hereunder (it being understood that
such Notes will not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes
and Subsidiary Guarantees, the Company and the Subsidiary Guarantors may omit to
comply with and will have no liability in respect of any term, condition or
limitation set forth in any such Defeased Covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Defeased
Covenant or by reason of any reference in any such Defeased Covenant to any
other provision herein or in any other document and such omission to comply will
not constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes and
Subsidiary Guarantees will be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03, subject to the satisfaction of the conditions set forth in Section
8.04 hereof, Section 6.01(3) (with respect to any Event of Default resulting
from a violation of the covenants set forth in Sections 4.10, 4.14, 5.01(a)(4)
or 5.01(c)(2)(ii) only), Section 6.01(4) (with respect to the Defeased Covenants
only) and Sections 6.01(5) through 6.01(8) hereof will not constitute Events of
Default.
Section 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE. In order to
exercise either Legal Defeasance under Section 8.02 or Covenant Defeasance under
Section 8.03:
(1) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, Government
Securities, or a
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combination thereof, in such amounts as will be sufficient, in the opinion
of a nationally recognized firm of independent public accountants in Canada
or the United States selected by the Company, to pay the principal of, or
interest and premium, if any, on the outstanding Notes to the Stated
Maturity or 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;
(2) in the case of an election under Section 8.02, the Company has
delivered to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee confirming that:
(A) the Company has received from, or there has been published
by, the Internal Revenue Service and each applicable Canadian Taxing
Authority a ruling; or
(B) since the Issue Date, there has been a change in the
applicable Canadian and United States federal income tax law,
in either case to the effect that, and based thereon such Opinion
of Counsel will 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 Canadian and United States
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;
(3) in the case of an election under Section 8.03, the Company has
delivered to the Trustee (a) an Opinion of Counsel confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss
for U.S. federal income tax purposes as a result of such Covenant
Defeasance and will be subject to U.S. 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 and (b) an Opinion of
Counsel of counsel that is qualified to practice in Canada or a ruling from
the Canada Customs and Revenue Agency to the effect that Holders of the
outstanding Notes who are not resident in Canada will not recognize income,
gain or loss for Canadian federal, provincial or territorial income tax or
other tax purposes as a result of such deposit and defeasance and will only
be subject to Canadian federal, provincial or territorial income tax and
other taxes on the same amounts, in the same manner and at the same times
as would have been the case had such deposit and defeasance not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit);
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any material
agreement or instrument (other
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than this Indenture) to which the Company or any of its Restricted
Subsidiaries is a party or by which the Company or any of its Restricted
Subsidiaries is bound;
(6) the Company must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders over the other creditors of the Company with the
intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and
(7) the Company must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for under this Indenture relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Section 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS. Subject to Section 8.06, all money and
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "TRUSTEE") pursuant to Section 8.04 in respect of the outstanding
Notes will 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 will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or Government Securities
deposited pursuant to Section 8.04 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.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the request of the
Company any money or Government Securities held by it as provided in Section
8.04 which, 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 8.04(1)), are in
excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 REPAYMENT TO COMPANY. 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 (or such shorter period of time for return of such monies to the
Company under applicable abandoned property laws) after such principal, 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) will be discharged from such trust;
and the Holder of such Note will thereafter be permitted to 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, will thereupon cease; PROVIDED that the Trustee or such Paying
Agent, before being required to make any such repayment, may at the
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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 will 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 8.07 REINSTATEMENT. If the Trustee or Paying Agent is unable to
apply any United States dollars or Government Securities in accordance with
Section 8.04, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the obligations of the Company, the Mirror Note Issuers
and the Guarantors under this Indenture, the Notes, the Mirror Notes, the Mirror
Note Guarantees and the Subsidiary Guarantees will be revived and reinstated as
though no deposit had occurred pursuant to Section 8.04 until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 8.04, as the case may be; PROVIDED 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 will 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.
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES. Notwithstanding Section
9.02 of this Indenture, the Company, the Subsidiary Guarantors and the Trustee
may amend or supplement this Indenture, the Subsidiary Guarantees, the Mirror
Notes, the Mirror Note Pledge Agreements, the Mirror Note Guarantees or the
Notes without the consent of any Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) to provide for the assumption of the Company's, a Mirror Note
Issuer's or a Guarantor's obligations pursuant to this Indenture, a
Subsidiary Guarantee, a Mirror Note or a Mirror Note Guarantee as the case
may be, by a successor to the Company, such Mirror Note Issuer or such
Guarantor pursuant to Article V hereof or to comply with Section 4.20;
(4) to release any Guarantor from its obligations under its
Subsidiary Guarantee or Mirror Note Guarantee (to the extent permitted by
this Indenture);
(5) to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal rights
hereunder of any such Holder; or
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(6) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
9.06, the Trustee will 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 will 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 9.02 WITH CONSENT OF HOLDERS. (a) Except as provided below in this
Section 9.02, the Company, the Subsidiary Guarantors and the Trustee may amend
or supplement this Indenture (including, without limitation, Sections 3.09, 4.10
and 4.14), the Subsidiary Guarantees, the Mirror Notes, the Mirror Note
Guarantees, the Mirror Note Pledge Agreements and the Notes with the consent of
the Holders of at least a majority in principal amount of the Notes then
outstanding voting as a single class (including, without limitation, consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes), and, subject to Sections 6.04 and 6.07, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, and interest on the Notes, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of this Indenture, the Subsidiary Guarantees, the Mirror
Notes, the Mirror Note Guarantees, the Mirror Note Pledge Agreements or the
Notes may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes voting as a single class (including
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes). Section 2.08 shall determine which Notes are considered
to be "outstanding" for purposes of this Section 9.02.
However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(2) reduce the principal of or change the time for payment of any
Note or alter the provisions with respect to the redemption of the Notes
except as provided with respect to Sections 3.09, 4.10 and 4.14;
(3) reduce the rate of or change the time for payment of interest on
any Note;
(4) waive a Default or Event of Default in the payment of principal
of or interest or premium, if any, on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the Notes and a waiver of the payment default
that resulted from such acceleration);
(5) make any Note payable in a currency other than that stated in the
Notes;
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(6) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders to receive payments of
principal of or interest or premium, if any, on the Notes;
(7) waive a redemption payment with respect to any Note;
(8) amend, change or modify in any material respect the obligation of
the Company to make and consummate a Change of Control Offer after the
occurrence of a Change of Control or to make or consummate an Asset Sale
Offer with respect to any Asset Sale that has been consummated;
(9) modify or change any provision of this Indenture or the related
definitions affecting the ranking of the Notes, any Subsidiary Guarantee,
any Mirror Note or any Mirror Note Guarantee in any manner adverse to the
Holders;
(10) modify the provisions of Section 4.15 in any manner adverse to a
Holder;
(11) release any Mirror Note Issuer or Guarantor that is a Significant
Subsidiary from any of its obligations under its Mirror Note, Mirror Note
Guarantee or Subsidiary Guarantee, as the case may be, or this Indenture
otherwise than in accordance with the terms of this Indenture;
(12) modify or change any provision of the Mirror Note Pledge
Agreements affecting the priority of the claims of the Trustee and the
Holders of the Notes in and to the Mirror Notes in any manner adverse to
the Holders;
(13) directly or indirectly release any Lien on the Mirror Notes
except in compliance with the terms of this Indenture and the Mirror Note
Pledge Agreements; or
(14) make any change in the preceding amendment and waiver provisions.
Upon the request of the Company accompanied by a 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 as aforesaid, and upon receipt by the
Trustee of the documents described in Section 9.06, the Trustee will join with
the Company and the Subsidiary Guarantors in the execution of such amended or
supplemental indenture unless such amended or supplemental indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but will not be
obligated to, enter into such amended or supplemental indenture.
It is not necessary for the consent of the Holders under this Section 9.02
to approve the particular form of any proposed amendment or waiver, but it
is sufficient if such consent approves the substance thereof.
(b) After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any
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defect therein, will not, however, in any way impair or affect the validity of
any such amended or supplemental indenture or waiver.
Section 9.03 COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment or
supplement to this Indenture or the Notes will be set forth in an amended or
supplemental indenture that complies with the TIA as then in effect.
Section 9.04 REVOCATION AND EFFECT OF CONSENTS. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder 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 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 9.05 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 issue and
the Trustee shall, upon receipt of an Authentication Order, authenticate new
Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee will sign any
amended or supplemental indenture or amendment or supplement to any Mirror Note,
Mirror Note Guarantee or Mirror Note Pledge Agreement authorized pursuant to
this Article IX if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. The Company may not
sign any amended or supplemental indenture or amendment or supplement to any
Mirror Note, Mirror Note Guarantee or Mirror Note Pledge Agreement until the
Board of Directors approves it. In executing any amended or supplemental
indenture or amendment or supplement to any Mirror Note, Mirror Note Guarantee
or Mirror Note Pledge Agreement, the Trustee will be entitled to receive and
(subject to Section 7.01) will be fully protected in relying upon, in addition
to the documents required by Section 12.04, an Officers' Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture or amendment or supplement to any Mirror Note, Mirror Note Guarantee
or Mirror Note Pledge Agreement is authorized or permitted by this Indenture.
ARTICLE X
SUBSIDIARY GUARANTEES
Section 10.01 SUBSIDIARY GUARANTEE. (a) Each Subsidiary that becomes a
Subsidiary Guarantor pursuant to Section 4.20, if any, and subject to this
Article X, jointly and severally, unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee
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and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Notes or the obligations of the
Company hereunder or thereunder, that:
(1) the principal of, and premium, if any, and interest, on the Notes
will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance
with the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and
severally obligated to pay the same immediately. Each Subsidiary Guarantor
agrees that this is a Guarantee of payment and performance and not a Guarantee
of collection.
(b) The Subsidiary Guarantors hereby agree that their obligations
hereunder are unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Subsidiary Guarantor.
Each Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenant that this Subsidiary
Guarantee will not be discharged except by complete performance of the
Obligations contained in the Notes and this Indenture except in accordance with
this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Subsidiary Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
the Subsidiary Guarantors, any amount paid either to the Trustee or such Holder,
this Subsidiary Guarantee, to the extent theretofore discharged, will be
reinstated in full force and effect.
(d) 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.
Each Subsidiary Guarantor further agrees that, as between the Subsidiary
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(1) the maturity of the Obligations guaranteed hereby may be accelerated as
provided in Article VI hereof for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (2) in the
event of any declaration of acceleration of such Obligations as provided in
Article VI hereof, such Obligations (whether or not due and payable) will
forthwith
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become due and payable by the Subsidiary Guarantors for the purpose of this
Subsidiary Guarantee. Each Subsidiary Guarantor will have the right to seek
contribution from any non-paying Subsidiary Guarantor so long as the exercise of
such right does not impair the rights of the Holders under the Subsidiary
Guarantee.
Section 10.02 LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY. Each
Subsidiary Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Subsidiary Guarantor not constitute a fraudulent transfer or
conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar federal, state or
provincial law to the extent applicable to any Subsidiary Guarantee. To
effectuate the foregoing intention, the Trustee, the Holders and the Subsidiary
Guarantors hereby irrevocably agree that the obligations of such Subsidiary
Guarantor will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Subsidiary Guarantor that are relevant
under such laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under this Article X, result in the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee not constituting a fraudulent transfer
or conveyance.
Section 10.03 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE. To evidence
its Subsidiary Guarantee set forth in Section 10.01, each Subsidiary Guarantor
hereby agrees that a notation of such Subsidiary Guarantee substantially in the
form attached as EXHIBIT B hereto may be endorsed by an Officer of such
Subsidiary Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture will be executed on behalf of such Subsidiary Guarantor by
one of its Officers.
Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee set
forth in Section 10.01 will remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, will constitute due delivery of the Subsidiary Guarantee set forth in
this Indenture on behalf of the Subsidiary Guarantors.
In the event that the Company creates or acquires any Subsidiary after the
Issue Date, if required by Section 4.20, the Company will cause such Subsidiary
to comply with the provisions of Section 4.20 and this Article X, to the extent
applicable.
ARTICLE XI
SATISFACTION AND DISCHARGE
Section 11.01 SATISFACTION AND DISCHARGE. This Indenture will be
discharged and will cease to be of further effect as to all Notes issued
hereunder, when:
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(1) either:
(a) all Notes that have been authenticated, except lost, stolen
or destroyed Notes that have been replaced or paid and Notes for whose
payment money has theretofore been deposited in trust and thereafter
repaid to the Company, have been delivered to the Trustee for
cancellation; or
(b) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the mailing of a
notice of redemption or otherwise or will become due and payable
within one year and the Company has irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, Government Securities,
or a combination of cash in U.S. dollars and Government Securities, in
amounts as will be sufficient to pay and discharge the principal,
premium, if any, and accrued interest to the date of maturity or
redemption;
(2) no Default or Event of Default has occurred and is continuing on
the date of the deposit or will occur as a result of the deposit other than
a Default or Event of Default resulting from the borrowing of funds to be
applied to such deposit and the deposit will not result in a breach or
violation of, or constitute a default under, any other instrument to which
the Company or any Restricted Subsidiary is a party or by which the Company
or any Restricted Subsidiary is bound;
(3) the Company or any Subsidiary Guarantor has paid or caused to be
paid all sums payable by it under this Indenture;
(4) the Company has delivered irrevocable instructions to the Trustee
under this Indenture to apply the deposited money toward the payment of the
Notes at maturity or the redemption date, as the case may be; and
(5) the Company has delivered an Officers' Certificate and an Opinion
of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money
has been deposited with the Trustee pursuant to subclause (b) of clause (1) of
this Section, the provisions of Section 11.02 and Section 8.06 will survive. In
addition, nothing in this Section 11.01 will be deemed to discharge those
provisions of Section 7.07, that, by their terms, survive the satisfaction and
discharge of this Indenture.
Section 11.02 APPLICATION OF TRUST MONEY. Subject to the provisions of
Section 8.06, all money deposited with the Trustee pursuant to Section 11.01
shall be held in trust and applied by it, in accordance with the provisions of
the Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited
with the Trustee; but such money need not be segregated from other funds except
to the extent required by law.
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If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 11.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
and any Subsidiary Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 11.01; PROVIDED that if the Company has made any payment of principal
of, premium, if any, or interest on any Notes because of 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 or Government Securities held
by the Trustee or Paying Agent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA
ss. 318(c), the imposed duties will control.
Section 12.02 NOTICES. Any notice or communication by the Company or the
Trustee to the other is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery, to the
other's address:
If to the Company:
Paramount Resources Ltd.
000 0xx Xxxxxx X.X.
Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
With a copy to:
Xxxxxxx Xxxxx LLP
3700 Canterra Tower
000 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Telecopier No.: (000) 000-0000
Attn: Xxxxx Xxxxxxx
and
Torys LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No: (000) 000-0000
Attn: Xxxxxx Xxxx
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If to the Trustee:
The Bank of Nova Scotia Trust Company of New York
Xxx Xxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Trust Officer
The Company or the Trustee, by notice to the other may designate additional
or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) will be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery; PROVIDED that
notices and communications to the Trustee shall not be deemed given until actual
receipt thereof by the Trustee.
Any notice or communication to a Holder will be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar or, in the case of a Depositary, by such means as may be acceptable to
such Depositary. Any notice or communication will also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it will 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 will mail a
copy to the Trustee and each Agent at the same time.
Section 12.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES. Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 12.04 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, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which must include the statements set
forth in Section 12.05) stating that, in the opinion of the signatories
thereto, all conditions precedent and covenants, if any; provided for in
this Indenture relating to the proposed action have been satisfied; and
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(2) an Opinion of Counsel (which must include the statements set
forth in Section 12.05) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
Section 12.05 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 ss. 314(a)(4)) must comply with the provisions of TIA ss. 314(e) and must
include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) 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;
(3) 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
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 12.06 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 12.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS. No director, officer, employee, incorporator or stockholder of the
Company, any Mirror Note Issuer or any Guarantor, as such, will have any
liability for any obligations of the Company, any Mirror Note Issuer or any
Guarantor under the Notes, this Indenture, the Mirror Notes, the Mirror Note
Guarantees, the Subsidiary Guarantees or the Mirror Note Pledge Agreements, or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes.
Section 12.08 GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 12.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. 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.
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Section 12.10 SUCCESSORS. All agreements of the Company in this Indenture
and the Notes will bind its successors. All agreements of the Trustee in this
Indenture will bind its successors.
Section 12.11 SEVERABILITY. In case any provision in this Indenture or in
the Notes is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
Section 12.12 COUNTERPART ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy will be an original, but all of them
together represent the same agreement.
Section 12.13 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 will in no way modify or restrict any of
the terms or provisions hereof.
Section 12.14 CONSENT TO JURISDICTION. Each party irrevocably agrees that
any legal suit, action or proceeding arising out of or based upon this Indenture
or the transactions contemplated hereby ("RELATED PROCEEDINGS") may be
instituted in the federal courts of the United States of America located in the
City of New York or the courts of the State of New York in each case located in
the Borough of Manhattan in the City of New York (collectively, the "SPECIFIED
COURTS"), and irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any such
court (a "RELATED JUDGMENT"), as to which such jurisdiction is non-exclusive) of
such courts in any such suit, action or proceeding. The parties further agree
that service of any process, summons, notice or document by mail to such party's
address in the manner and to the address set forth in Section 12.02 shall be
effective service of process for any lawsuit, action or other proceeding brought
in any such court. The parties hereby irrevocably and unconditionally waive any
objection to the laying of venue of any lawsuit, action or other proceeding in
the Specified Courts, and hereby further irrevocably and unconditionally waive
and agree not to plead or claim in any such court that any such lawsuit, action
or other proceeding brought in any such court has been brought in an
inconvenient forum. Each party not located in the United States hereby
irrevocably appoints Torys LLP, which currently maintains a New York City office
at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx of America, as its
agent to receive service of process or other legal summons for purposes of any
such action or proceeding that may be instituted in any state or federal court
in the City and State of New York.
[Signatures on following page]
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SIGNATURES
Dated as of October [ ], 2003
PARAMOUNT RESOURCES LTD.
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK
By: ____________________________________
Name:
Title:
S-1
EXHIBIT A
[Face of Note]
================================================================================
CUSIP [ ]
[ ]% Senior Notes due 2010
No. ___ U.S.$ [ ]
PARAMOUNT RESOURCES LTD.
promises to pay to CEDE & CO.
or registered assigns,
the principal sum of
Dollars on October [ ], 2010.
Interest Payment Dates: [ ] and [ ]
Record Dates: [ ] and [ ]
Dated: October [ ], 2003
PARAMOUNT RESOURCES LTD.
By: _____________________________________
Name:
Title:
By: _____________________________________
Name:
Title:
(SEAL)
This is one of the Notes referred to
in the within-mentioned Indenture:
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK, as Trustee
By: ________________________________
Authorized Signatory
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[Back of Note]
[ ]% Senior Notes due 2010
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF PARAMOUNT RESOURCES LTD.
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 DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. 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.
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. Paramount Resources Ltd., an Alberta, Canada corporation
(the "COMPANY"), promises to pay interest on the principal amount of this Note
at [ ]% per annum from the date of issuance until maturity. The Company will pay
interest semi-annually in arrears on [ ] and [ ] of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each, an
"INTEREST PAYMENT DATE"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; PROVIDED that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; PROVIDED, FURTHER, that
the first Interest Payment Date shall be [ ], 2004. The Company will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to
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time on demand at a rate that is 1% per annum in excess of the rate then in
effect; it will 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. For purposes of disclosure under the Interest Act
(Canada), the yearly rate of interest to which interest is calculated under a
Note for any period in any calendar year (the "CALCULATION PERIOD") is
equivalent to the rate payable under a Note in respect of the Calculation Period
multiplied by a fraction the numerator of which is the actual number of days in
such calendar year and the denominator of which is the actual number of days in
the Calculation Period.
(2) METHOD OF PAYMENT. The Company will 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 cancelled 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, if any, 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 check mailed to the
Holders at their addresses set forth in the register of Holders; PROVIDED that
payment by wire transfer of immediately available funds will be required with
respect to principal of and interest and premium, if any, on, all Global Notes
and all other Notes the Holders of which will have provided wire transfer
instructions to the Company or the Paying Agent at least 10 days prior to the
applicable payment date. Such payment will 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.
(3) PAYING AGENT AND REGISTRAR. Initially, The Bank of Nova Scotia
Trust Company of New York, the Trustee under the Indenture, will act as
Registrar and Paying Agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
(4) INDENTURE. The Company issued the Notes under an Indenture dated
as of October [ ], 2003 (the "INDENTURE") between the Company 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 xx.xx. 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. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are unsecured obligations of the Company. The Company is
issuing U.S.$150 million in aggregate principal amount on the Issue Date and may
issue Additional Notes in accordance with the terms of the Indenture.
(5) OPTIONAL REDEMPTION. Except as set forth in the second paragraph
of this Paragraph 5, the Company will not have the option to redeem the Notes
prior to [ ], 2007. Thereafter, the Company will have the option to redeem the
Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest, if any, on the
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Notes redeemed, to the applicable redemption date, if redeemed during the
twelve-month period beginning on [ ] of the years indicated below:
YEAR PERCENTAGE
---- ----------
2007................................................ [ ]%
2008................................................ [ ]%
2009 and thereafter................................. 100.000%
Notwithstanding the provisions of the first paragraph of this Paragraph 5, at
any time prior to [ ], 2006 the Company may on any one or more occasions redeem
up to 35% of the aggregate principal amount of Notes issued under the Indenture
at a redemption price of [ ]% of the principal amount, plus accrued and unpaid
interest, if any, to the redemption date, with the net cash proceeds of one or
more equity offerings; PROVIDED that at least 65% in aggregate principal amount
of the Notes issued under the Indenture remains outstanding immediately after
the occurrence of such redemption (excluding Notes held by the Company and its
Subsidiaries), and that such redemption occurs within 90 days of the date of the
closing of such equity offering.
(6) MANDATORY REDEMPTION. The Company will not be required to make
mandatory redemption or sinking fund payments with respect to the Notes.
(7) OFFER TO REPURCHASE. (i) Upon the occurrence of a Change of
Control, the Company will make an offer (a "CHANGE OF CONTROL OFFER") to each
Holder to repurchase all or any part (equal to U.S.$1,000 or an integral
multiple of U.S.$1,000) of each Holder's Notes at a purchase price equal to 101%
of the aggregate principal amount thereof plus accrued and unpaid interest, if
any, on the Notes repurchased to the date of purchase (the "CHANGE OF CONTROL
PAYMENT"). Within 30 days following any Change of Control, the Company will mail
a notice to each Holder setting forth the procedures governing the Change of
Control Offer as required by the Indenture.
(ii) If the Company or a Subsidiary consummates any Asset Sales, and
the aggregate amount of Excess Proceeds exceeds U.S.$10.0 million, the Company
will make an offer (an "ASSET SALE OFFER") to all Holders of Notes and all
holders of other Indebtedness that is PARI PASSU with the Notes containing
provisions similar to those set forth in the Indenture with respect to offers to
purchase or redeem with the proceeds of sales of assets pursuant to Section 3.09
of the Indenture to purchase the maximum principal amount of Notes and other
PARI PASSU Indebtedness that may be purchased out of the Excess Proceeds 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 date of purchase, in
accordance with the procedures set forth in the Indenture. To the extent that
the aggregate amount of Notes and other PARI PASSU Indebtedness tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
(or such Subsidiary) may use such deficiency for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes and
other PARI PASSU Indebtedness surrendered by holders thereof exceeds the amount
of Excess Proceeds, the Trustee shall select the Notes and other PARI PASSU
Indebtedness to be purchased on a PRO RATA basis. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any
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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 will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than U.S.$1,000 may be redeemed in part but only in whole multiples of
U.S.$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 U.S.$1,000 and integral multiples of
U.S.$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, the
Company 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 next succeeding 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 Company, the Subsidiary Guarantors and the Trustee may amend or supplement
the Indenture, the Subsidiary Guarantees, the Mirror Notes, the Mirror Note
Guarantees, the Mirror Note Pledge Agreements and the Notes with the consent of
the Holders of at least a majority in principal amount of the Notes then
outstanding voting as a single class (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, the Notes) and subject to certain provisions of Article 6 of the Indenture,
any existing Default or Event of Default (other than a Default or Event of
Default in the payment of the principal of, premium, if any, and interest on the
Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of the Indenture, the Subsidiary
Guarantees the Mirror Notes, the Mirror Note Guarantees, the Mirror Note Pledge
Agreements or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes voting as a single
class (including consents obtained in connection with a purchase of, or tender
offer or exchange offer for, the Notes). Without the consent of any Holder, the
Company, the Subsidiary Guarantors and the Trustee may amend or supplement the
Indenture, the Subsidiary Guarantees, the Mirror Notes, the Mirror Note
Guarantees, the Mirror Note Pledge Agreements or the Notes 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, a Mirror Note Issuer's or a Guarantor's obligations pursuant to
the Indenture, a Subsidiary Guarantee, a Mirror Note or a Mirror Note Guarantee
as the case may be, by a successor to the Company, such Mirror Note Issuer or
such Guarantor pursuant to Article V of the Indenture or to comply with Section
4.20 of the Indenture,
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to release any Guarantor from its obligations under its Subsidiary Guarantee or
Mirror Note Guarantee (to the extent permitted by the Indenture), 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 the Indenture
of any such Holder, or to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the TIA.
(12) DEFAULTS AND REMEDIES. Events of Default are set forth in the
Indenture. If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default covered by Section 6.01(9) of the
Indenture with respect to the Company or any of its Significant Subsidiaries or
any group of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, all outstanding Notes will become due and payable immediately.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in aggregate
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 then outstanding Notes by written
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 the principal
of, premium, if any, and interest on the Notes (including in connection with an
Asset Sale Offer or Change of Control Offer). The Company and each Subsidiary
Guarantor (to the extent that such Subsidiary Guarantor is so required under the
TIA) is required to deliver to the Trustee, within 90 days after the end of each
fiscal year, an Officers' Certificate stating that a review of the activities of
the Company and its Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing Officers with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under
the Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in the
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of the Indenture (or, if a Default or Event of
Default has occurred, describing all such Defaults or Events of Default of which
he or she may have knowledge and what action the Company 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 interest on the Notes is 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, and so long as any of the Notes
are outstanding, the Company is required upon any Officer becoming aware of any
Default or Event of Default, to deliver to the Trustee an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
(13) TRUSTEE DEALINGS WITH 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.
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(14) NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or any Mirror Note Issuer or
Guarantor, as such, will not have any liability for any obligations of the
Company or such Mirror Note Issuer or Guarantor under the Notes, the Indenture,
the Mirror Notes, the Mirror Note Guarantees, the Subsidiary Guarantees or the
Mirror Note Pledge Agreements or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
(15) AUTHENTICATION. This Note will not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
(16) 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).
(17) 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. The Company will furnish to any
Holder upon written request and without charge a copy of the Indenture: Request
may be made to
Paramount Resources Ltd.
000 0xx Xxxxxx, X.X.
Bankers Hall West, Suite 4700
Calgary, Alberta, Canada T2P 5C2
Attention: Chief Financial Officer
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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 legal name)
________________________________________________________________________________
(Insert assignee's Social Security 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*:________________________________
----------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.14 of the Indenture, check the appropriate box below:
[_] Section 4.10 [_] Section 4.14
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you
elect to have purchased:
U.S.$_______________________
Date: _______________
Your Signature: _________________________________
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.: __________________________
Signature Guarantee*:________________________________
----------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another Global
Note or Definitive Note for an interest in this Global Note, have been made:
Principal
Amount of Amount of Amount of this
decrease in increase in Global Note Signature of
Principal Principal following such authorized
Date of Amount of this Amount of this decrease (or officer of Trustee
Exchange Global Note Global Note Increase) or Custodian
------------------ ------------------ ------------------ ------------------ ------------------
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
* THIS SCHEDULE SHOULD BE INCLUDED ONLY IF THE NOTE IS ISSUED IN GLOBAL FORM.
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EXHIBIT B
FORM OF NOTATION OF SUBSIDIARY GUARANTEE
For value received, each Subsidiary Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in the Indenture and subject
to the provisions in the Indenture, dated as of October [ ], 2003 (the
"INDENTURE"), among Paramount Resources Ltd. (the "COMPANY"), the Guarantors
party thereto, if any, and The Bank of Nova Scotia Trust Company of New York, as
trustee (the "TRUSTEE"), (a) the due and punctual payment of the principal of,
premium, if any, and interest on the Notes (as defined in the Indenture),
whether at maturity, by acceleration, redemption or otherwise, the due and
punctual payment of interest on overdue principal of and interest on the Notes,
if any, if lawful, and the due and punctual performance of all other obligations
of the Company to the Holders or the Trustee all in accordance with the terms of
the Indenture and (b) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise. The
obligations of the Subsidiary Guarantors to the Holders of Notes and to the
Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly set
forth in Article 10 of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Subsidiary Guarantee. Each Holder of a
Note, by accepting the same, (a) agrees to and shall be bound by such provisions
and (b) appoints the Trustee attorney-in-fact of such Holder for such purpose.
Capitalized terms used herein and not otherwise defined shall have the meanings
given such terms by the Indenture.
By: _____________________________________
Name:
Title:
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EXHIBIT C
[FORM OF SUPPLEMENTAL INDENTURE AND SUBSIDIARY GUARANTEE
TO BE DELIVERED BY SUBSEQUENT SUBSIDIARY GUARANTORS]
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of
________________, 200__, among __________________ (the "GUARANTEEING
SUBSIDIARY"), a subsidiary of Paramount Resources Ltd. (or its permitted
successor), an Alberta corporation (the "COMPANY"), the Company, and The Bank of
Nova Scotia Trust Company of New York, as trustee under the Indenture referred
to below (the "TRUSTEE").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of October [ ], 2003 providing for the
issuance of an aggregate principal amount of up to U.S.$150,000,000 of [ ]%
Senior Notes due 2010 (the "NOTES");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "SUBSIDIARY GUARANTEE"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees as
follows:
(a) Along with all Subsidiary Guarantors named in the Indenture, to
jointly and severally Guarantee all Obligations of the Company under the
Indenture and the Notes to the extent and subject to the terms, conditions
and procedures set forth in Section 10.01 of the Indenture and that, from
and after the date of this Supplemental Indenture, except as otherwise
provided in the Indenture, the Guaranteeing Subsidiary shall be bound by
the Indenture to the same extent as if the Guaranteeing Subsidiary had
executed the Indenture on the Issue Date as a Subsidiary Guarantor.
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(b) The Subsidiary Guarantors shall only have the right to seek
contribution from any non-paying Subsidiary Guarantor to the extent set
forth in Article X of the Indenture.
(c) This Subsidiary Guarantee shall be limited to the extent set
forth in Section 10.02 of the Indenture.
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the
Subsidiary Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Except as otherwise provided in Articles IV and V of the Indenture, the
Guaranteeing Subsidiary may not sell or otherwise dispose of all substantially
all of its assets to, or consolidate, amalgamate or merge with or into (whether
or not such Guaranteeing Subsidiary is the surviving Person) another Person,
other than the Company, a Mirror Note Issuer or a Guarantor.
5. RELEASES. The Guaranteeing Subsidiary may only be released from its
Subsidiary Guarantee as provided in the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation.
7. NEW YORK LAW TO GOVERN. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS.
8. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20__
[GUARANTEEING SUBSIDIARY]
By: _____________________________________
Name:
Title:
PARAMOUNT RESOURCES LTD.
By: _____________________________________
Name:
Title:
By: _____________________________________
Name:
Title:
The Bank of Nova Scotia Trust Company of
New York, as Trustee
By: _____________________________________
Authorized Signatory
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