1
EXHIBIT T3C
============================================================
$200,000,000 15% Senior Secured Notes due 2005
INDENTURE
between
TRANSTEXAS GAS CORPORATION,
as Issuer,
and
FIRSTAR BANK, N.A.,
as Trustee
Dated as of [___________ ___, 2000]
============================================================
2
CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
------- ---------
310(a)(1)................................................................. 7.10
(a)(2)................................................................. 7.10
(a)(3)................................................................. N.A.
(a)(4)................................................................. N.A.
(a)(5)................................................................. 7.10
(b) .................................................................. 7.8; 7.10
(c) .................................................................. N.A.
311(a).................................................................... 7.11
(b) .................................................................. 7.11
(c) .................................................................. N.A.
312(a).................................................................... 2.5
(b) .................................................................. 14.3
(c) .................................................................. 14.3
313(a).................................................................... 7.6
(b)(1)................................................................. 7.6
(b)(2)................................................................. 7.6
(c) .................................................................. 7.6; 14.2
(d) .................................................................. 7.6
314(a).................................................................... 4.8; 14.2
(b) .................................................................. 11.3(b)
(c)(1)................................................................. 2.2; 7.2; 14.4
(c)(2)................................................................. 7.2; 14.4
(c)(3)................................................................. N.A.
(d) .................................................................. 11.3(b); 11.4(b); 11.5(b)
(e) .................................................................. 14.6
(f) .................................................................. N.A.
315(a).................................................................... 7.1(b)
(b) .................................................................. 7.5; 14.2
(c) .................................................................. 7.1(a)
(d) .................................................................. 6.11; 7.1(c)
(e) .................................................................. 6.13
316(a)(last sentence)..................................................... 2.9
(a)(1)(A).............................................................. 6.11
(a)(1)(B).............................................................. 6.12
(a)(2)................................................................. N.A.
(b) .................................................................. 6.12; 6.8
(c) .................................................................. 10.5
317(a)(1)................................................................. 6.3
(a)(2)................................................................. 6.4
(b) .................................................................. 2.4
318(a).................................................................... 14.1
--------------
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
3
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE....................................................1
Section 1.1 Definitions.............................................................1
Section 1.2 Incorporation by Reference of TIA......................................24
Section 1.3 Rules of Construction..................................................24
ARTICLE II
THE NOTES....................................................................................25
Section 2.1 Form and Dating........................................................25
Section 2.2 Execution and Authentication...........................................25
Section 2.3 Registrar and Paying Agent.............................................26
Section 2.4 Paying Agent to Hold Assets in Trust...................................26
Section 2.5 Noteholder Lists.......................................................26
Section 2.6 Transfer and Exchange..................................................26
Section 2.7 Replacement Notes......................................................27
Section 2.8 Outstanding Notes......................................................27
Section 2.9 Treasury Notes.........................................................28
Section 2.10 Temporary Notes........................................................28
Section 2.11 Cancellation...........................................................28
Section 2.12 Defaulted Interest.....................................................28
Section 2.13 Computation of Interest................................................29
ARTICLE III
REDEMPTION...................................................................................29
Section 3.1 Right of Redemption....................................................29
Section 3.2 Notices to Trustee.....................................................29
Section 3.3 Selection of Notes to Be Redeemed......................................30
Section 3.4 Notice of Redemption...................................................30
Section 3.5 Effect of Notice of Redemption.........................................31
Section 3.6 Deposit of Redemption Price............................................31
Section 3.7 Notes Redeemed in Part.................................................31
ARTICLE IV
COVENANTS....................................................................................31
Section 4.1 Payment of Notes.......................................................31
Section 4.2 Maintenance of Office or Agency........................................32
Section 4.3 Limitation on Restricted Payments......................................32
Section 4.4 Corporate Existence....................................................32
Section 4.5 Payment of Taxes and Other Claims......................................32
Section 4.6 Maintenance of Properties and Insurance................................33
Section 4.7 Compliance Certificate; Notice of Default..............................33
Section 4.8 SEC Reports and TIA Compliance.........................................34
i
4
Section 4.9 Limitation on Status as Investment Company or Public Utility Company...34
Section 4.10 Limitation on Transactions with Affiliates.............................34
Section 4.11 Limitation on Incurrences of Additional Debt and Issuances of
Disqualified Capital Stock.............................................35
Section 4.12 Limitations on Restricting Subsidiary Dividends........................37
Section 4.13 Limitation on Liens....................................................37
Section 4.14 Limitation on Asset Sales..............................................37
Section 4.15 Waiver of Stay, Extension or Usury Laws................................40
Section 4.16 Guarantee by Subsidiaries..............................................41
Section 4.17 Limitations on Line of Business........................................41
Section 4.18 Separate Existence and Formalities.....................................42
Section 4.19 Limitation on Assets Held by Nominees..................................42
ARTICLE V
SUCCESSOR CORPORATION........................................................................42
Section 5.1 When the Company May Merge, Etc........................................42
Section 5.2 Successor Corporation Substituted......................................43
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES...............................................................44
Section 6.1 Events of Default......................................................44
Section 6.2 Acceleration of Maturity Date; Rescission and Annulment................45
Section 6.3 Collection of Indebtedness and Suits for Enforcement by Trustee........46
Section 6.4 Trustee May File Proofs of Claim.......................................47
Section 6.5 Trustee May Enforce Claims Without Possession of Notes.................47
Section 6.6 Priorities.............................................................47
Section 6.7 Limitation on Suits....................................................48
Section 6.8 Unconditional Right of Holders to Receive Principal, Premium
and Interest...........................................................48
Section 6.9 Rights and Remedies Cumulative.........................................48
Section 6.10 Delay or Omission Not Waiver...........................................49
Section 6.11 Control by Holders.....................................................49
Section 6.12 Waiver of Past Default.................................................49
Section 6.13 Undertaking for Costs..................................................49
Section 6.14 Restoration of Rights and Remedies.....................................50
ARTICLE VII
TRUSTEE......................................................................................50
Section 7.1 Duties of Trustee......................................................50
Section 7.2 Rights of Trustee......................................................51
Section 7.3 Individual Rights of Trustee...........................................51
Section 7.4 Trustee's Disclaimer...................................................52
Section 7.5 Notice of Default......................................................52
Section 7.6 Reports by Trustee to Holders..........................................52
Section 7.7 Compensation and Indemnity.............................................52
ii
5
Section 7.8 Replacement of Trustee.................................................53
Section 7.9 Successor Trustee by Merger, Etc.......................................54
Section 7.10 Eligibility; Disqualification..........................................54
Section 7.11 Preferential Collection of Claims against Company......................54
Section 7.12 No Bond................................................................54
Section 7.13 Condition to Action....................................................54
Section 7.14 Investment.............................................................54
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE.....................................................54
Section 8.1 Option to Effect Legal Defeasance or Covenant Defeasance...............54
Section 8.2 Legal Defeasance and Discharge.........................................54
Section 8.3 Covenant Defeasance....................................................55
Section 8.4 Conditions to Legal or Covenant Defeasance.............................55
Section 8.5 Deposited U.S. Legal Tender and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions..........................56
Section 8.6 Repayment to Issuers...................................................56
Section 8.7 Reinstatement..........................................................57
Section 8.8 Termination of Obligations Upon Cancellation of the Notes..............57
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS..........................................................57
Section 9.1 Supplemental Indentures Without Consent of Holders.....................57
Section 9.2 Amendments, Supplemental Indentures and Waivers with
Consent of Holders.....................................................58
Section 9.3 Compliance with TIA....................................................60
Section 9.4 Revocation and Effect of Consents......................................60
Section 9.5 Notation on or Exchange of Notes.......................................60
Section 9.6 Trustee to Sign Amendments, Etc........................................60
ARTICLE X
MEETINGS OF NOTEHOLDERS......................................................................61
Section 10.1 Purposes for Which Meetings May Be Called..............................61
Section 10.2 Manner of Calling Meetings.............................................61
Section 10.3 Call of Meetings by Company or Holders.................................61
Section 10.4 Who May Attend and Vote at Meetings....................................62
Section 10.5 Regulations May Be Made by Trustee; Conduct of the Meeting;
Voting Rights; Adjournment.............................................62
Section 10.6 Voting at the Meeting and Record to Be Kept............................62
Section 10.7 Exercise of Rights of Trustee or Noteholders May Not Be Hindered or
Delayed by Call of Meeting..........................................................63
ARTICLE XI
SECURITY.....................................................................................63
Section 11.1 Grant of Security Interest.............................................63
iii
6
Section 11.2 Trustee's Execution of Intercreditor Agreements and
Subordination Agreements..............................................63
Section 11.3 Recording; Opinions of Counsel........................................65
Section 11.4 Disposition of Certain Collateral Without Requesting Release..........65
Section 11.5 Requesting Release of Collateral......................................66
Section 11.6 Release Upon Defeasance or Satisfaction and Discharge of
this Indenture........................................................67
Section 11.7 Reliance on Opinion of Counsel........................................67
Section 11.8 Purchaser May Rely....................................................68
Section 11.9 Payment of Expenses...................................................68
Section 11.10 Trustee's Duties......................................................68
Section 11.11 Authorization of Actions to be Taken by the Trustee Under
the Security Documents................................................68
ARTICLE XII
GUARANTEE....................................................................................69
Section 12.1 Guarantee.............................................................69
Section 12.2 Execution and Delivery of Guarantee...................................70
Section 12.3 Limitation of Guarantor's Liability...................................70
Section 12.4 Contribution..........................................................71
Section 12.5 Rights Under the Guarantee............................................71
Section 12.6 Severability..........................................................71
ARTICLE XIII
RIGHT TO REQUIRE REPURCHASE
Section 13.1 Repurchase of Notes at Option of the Holder Upon Change of Control....72
ARTICLE XIV
MISCELLANEOUS................................................................................74
Section 14.1 TIA Controls..........................................................74
Section 14.2 Notices...............................................................74
Section 14.3 Communications by Holders with Other Holders..........................74
Section 14.4 Certificate and Opinion as to Conditions Precedent....................75
Section 14.5 Statements Required in Certificate or Opinion.........................75
Section 14.6 Rules by Trustee, Paying Agent, Registrar.............................75
Section 14.7 Legal Holidays........................................................75
Section 14.8 Governing Law.........................................................75
Section 14.9 No Adverse Interpretation of Other Agreements.........................76
Section 14.10 No Recourse against Others............................................76
Section 14.11 Successors............................................................76
Section 14.12 Duplicate Originals...................................................76
Section 14.13 Severability..........................................................76
Section 14.14 Table of Contents, Headings, Etc......................................76
SIGNATURES............................................................................................77
iv
7
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Guarantee
--------------------------------------------
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of this Indenture.
v
8
INDENTURE, dated as of _________ ___, 2000, between TRANSTEXAS GAS
CORPORATION, a Delaware corporation (the "Company"), and FIRSTAR BANK, N.A., as
Trustee.
Each party hereto agrees as follows for the benefit of each other party
and for the equal and ratable benefit of the Holders of the Company's 15% Senior
Secured Notes due 2005:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Acceleration Notice" shall have the meaning specified in Section 6.2.
"Accounts" means "accounts," as that term is defined in Article 9 of
the Uniform Commercial Code as in effect in the State of New York, together with
the proceeds and products thereof.
"Adjusted Consolidated Net Income" of any Person for any period means
the net income (loss) of such Person and its consolidated Subsidiaries for such
period, determined in accordance with GAAP, excluding (without duplication) (i)
all extraordinary gains (but not losses), (ii) the net income, if positive, of
any other Person, other than a consolidated Subsidiary, in which such Person or
any of its consolidated Subsidiaries has an interest, except to the extent of
the amount of any dividends or distributions actually paid in cash to such
Person or a consolidated Subsidiary of such Person during such period, (iii) the
net income, if positive, of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition, and (iv) the
net income, if positive, of any Subsidiary of such Person to the extent that the
declaration or payment of dividends or similar distributions is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule, or governmental regulation applicable to
such Subsidiary.
"Adjusted Consolidated Tangible Assets" means (without duplication), as
of the date of determination, (A) the sum of (i) discounted future net cash
flows from proved oil and gas reserves of the Company Entities, calculated in
accordance with SEC guidelines (before any state or federal income tax), as
estimated in a Reserve Report as of a date no earlier than the Company's most
recent fiscal year end (or, if such Reserve Report is unavailable, or if the
date of determination is after the end of the first fiscal quarter of the most
recent fiscal year of the Company, as estimated by the Company engineers on the
same basis as of a date no earlier than the end of the most recent fiscal
quarter, which estimates shall be confirmed in writing by a report by nationally
recognized independent petroleum engineers in accordance with SEC guidelines in
the event of a Material Change), (ii) the Net Working Capital of the Company on
a date no earlier than the date of the Company's latest consolidated annual or
quarterly financial statements, and (iii) with respect to all other tangible
assets (which are deemed to include mineral lease-hold interests) of the Company
Entities, the net book value of such other tangible assets on a date no earlier
than the date of the Company's latest consolidated annual or quarterly financial
statements, minus (B) minority interests and, to the extent not otherwise taken
into account in determining Adjusted Consolidated Tangible Assets, any gas
balancing liabilities of the Company Entities. In addition to, but without
duplication of the foregoing, for purposes of this definition, "Adjusted
Consolidated Tangible Assets" shall be calculated after giving effect, on a pro
forma basis, to (1) any Permitted Investment, on or before the date of the
transaction giving rise to the need to calculate Adjusted Consolidated Tangible
Assets (the "Assets Transaction Date"), in any other Person that, as a result of
such investment, becomes a Subsidiary of the Company, (2) the acquisition, on or
1
9
before the Assets Transaction Date (by merger, consolidation, or purchase of
stock or assets), of any business or assets, including, without limitation,
Permitted Investments, and (3) any sales or other dispositions of assets (other
than sales of Hydrocarbons or other mineral products in the ordinary course of
business) occurring on or prior to the Assets Transaction Date. For purposes of
calculating the ratio of the Company's Adjusted Consolidated Tangible Assets to
total consolidated Debt of the Company Entities, Debt of a Subsidiary that is
not a wholly owned Subsidiary of the Company (which Debt is non-recourse to the
Company or any of its other Subsidiaries or any of their assets) shall be
included only to the extent of the Company's pro rata ownership interest in such
Subsidiary.
"Adjusted Net Assets" of a Guarantor means the lesser of (a) the amount
by which the Guarantor's property, at a fair valuation, exceeds the sum of its
debts (including unliquidated or contingent debts), (b) the amount by which the
present fair salable value of the Guarantor's assets exceeds the amount that
will be required to pay its probable liability on its existing debts as they
become absolute and matured, (c) the amount by which the Guarantor's assets
exceed the maximum amount that would constitute unreasonably small capital for
its business, or (d) the amount by which the Guarantor's assets exceed the
amount that such Guarantor should reasonably retain to pay its debts (including
unliquidated or contingent debts) as they mature.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person, (ii) any director or
controlling shareholder of such other Person, or (iii) any officer of such
specified Person or such other Person. For purposes of this definition, the term
"control" means (a) the power to direct the management and policies of a Person,
directly or through one or more intermediaries, whether through the ownership of
voting securities, by contract, or otherwise, or (b) without limiting the
foregoing, the beneficial ownership of 10% or more of the voting power of the
voting common equity of such Person (on a fully diluted basis) or of warrants or
other rights to acquire such equity (regardless of whether presently
exercisable).
"Affiliate Transaction" means, with respect to any Person, any
transaction or series of related transactions with any Affiliate of such Person
(including, without limitation: (i) the sale, lease, transfer or other
disposition of properties, assets or securities to such Affiliate, (ii) the
purchase or lease of any property, assets or securities from such Affiliate
(iii) an Investment in such Affiliate and (iv) entering into or amending any
contract or agreement with or for the benefit of any such Affiliate.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Allowed" shall have the meaning specified in the Plan.
"Allowed Claim" shall have the meaning specified in the Plan.
"Appraisal" means, when used with respect to the valuation of any
property, an appraisal prepared by an Appraiser as to the Appraised Value of
such property.
"Appraised Value" means, with respect to any property at any date, the
then current fair market value of such property as set forth in the most recent
Appraisal.
"Appraiser" means an independent appraiser of national recognition
qualified to appraise the property appraised.
"Asset Sale" means any direct or indirect conveyance, sale, transfer or
other disposition (including through damage or destruction for which Insurance
Proceeds are paid or by condemnation), in one transaction
2
10
or a series of related transactions, of any of the properties, businesses or
assets of the Company or any Subsidiary of the Company, whether owned on the
Issue Date or thereafter acquired; provided, however, that "Asset Sale" shall
not include (i) any disposition of Inventory or Receivables, (ii) any pledge or
disposition of assets (if such pledge or disposition would otherwise constitute
an Asset Sale) to the extent and only to the extent that it results in the
creation of a Permitted Lien (other than the creation of a Permitted Lien in
connection with a Drilling Production Payment or a Drilling Program, which in
either case shall be treated as an Asset Sale hereunder), (iii) any issuance or
disposition of securities that is made pursuant to and in accordance with the
Plan or a Plan Order, or (iv) the Xxxxx Transactions.
"Attributable Debt" in respect of a Sale and Leaseback Transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP,
or, in the event that such rate of interest is not reasonably determinable,
discounted at the rate of interest borne by the Notes) of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such Sale and Leaseback Transaction (including any period for which such
lease has been extended or may, at the option of the lessor, be extended).
"Bankruptcy Code" means Xxxxx 00, Xxxxxx Xxxxxx Code, as amended from
time to time.
"Bankruptcy Law" means the Bankruptcy Code, or any similar Federal,
state or foreign law for the relief of debtors generally.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such Person.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"Borrowing Base" means, as of any date, an amount equal to the sum of
(a) 85% of the book value of all Accounts owned by the Company and its
Subsidiaries (excluding any Accounts that are more than 90 days past due, less
(without duplication) the allowance for doubtful accounts attributable to such
current Accounts) calculated on a consolidated basis and in accordance with
GAAP, and (b) 70% of the current market value of all Inventory owned by the
Company and its Subsidiaries as of such date. To the extent that information is
not available as to the amount of Accounts as of a specific date, the Company
may utilize, to the extent reasonable, the most recent available information for
purposes of calculating the Borrowing Base.
"Business Day" means a day that is not a Legal Holiday.
"Capital Expenditures" of a Person means expenditures (whether paid in
cash or accrued as a liability) by such Person or any of its Subsidiaries that,
in conformity with GAAP, are or would be included in "capital expenditures,"
"additions to property, plant, or equipment" or comparable items in the
consolidated financial statements of such Person consistent with prior
accounting practices.
"Capital Lease" as applied to any Person, means any lease of any
property (whether real, personal, or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capital Stock" means, with respect to any Person, any capital stock of
such Person and shares, interests, participations, or other ownership interests
(however designated) of such Person and any rights (other than debt securities
convertible into corporate stock), warrants or options to purchase any of the
3
11
foregoing, including without limitation, each class of common stock and
preferred stock of such Person, if such Person is a corporation, and each
general or limited partnership interest or other equity interest of such Person,
if such Person is a partnership.
"Capitalized Lease Obligation" means obligations under a lease that are
required to be capitalized for financial reporting purposes in accordance with
GAAP, and the amount of Debt represented by such obligations shall be the
capitalized amount of such obligations, as determined in accordance with GAAP.
"cash" means U.S. Legal Tender.
"Cash Equivalents" means (a) United States dollars, (b) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (c) certificates of deposit
with maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year, and overnight bank deposits,
in each case, with any Eligible Institution, (d) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clauses (b) and (c) entered into with any Eligible Institution, (e)
commercial paper rated "P-1," "A-1" or the equivalent thereof by Xxxxx'x or S&P,
respectively, and in each case maturing within one year after the date of
acquisition, (f) shares of money market funds, including those of the Trustee,
that invest solely in United States dollars and securities of the types
described in clauses (a) through (e), (g) demand and time deposits and
certificates of deposit with any commercial bank organized in the United States
not meeting the qualifications specified in clause (c) above or an Eligible
Institution, provided, however, that such deposits and certificates support
bonds, letters of credit and other similar types of obligations incurred are in
the ordinary course of business, (h) deposits, including deposits denominated in
foreign currency, with any Eligible Institution; provided, however, that all
such deposits do not exceed $10 million in the aggregate at any one time, and
(i) demand or fully insured time deposits used in the ordinary course of
business with commercial banks insured by the Federal Deposit Insurance
Corporation.
"Change of Control" means the occurrence of the following event: during
any period of three consecutive years or less beginning at or after 11:59 p.m.,
New York, New York time on the Issue Date, individuals who at the beginning of
such period constituted the board of directors of the Company (together with any
new directors (a) whose election by such board of directors during such period
or whose nomination by such board of directors, for election by the stockholders
of the Company during such period, was made or approved by a vote of not less
than 60% of the directors of the Company then still in office who were either
directors at the beginning of such period or whose election or nomination for
election during such period was previously so approved, or (b) in the case of
the Class B Director, elected during such period by the holders of the Class B
Common Stock voting separately as a class in such election) cease for any reason
to constitute a majority of the board of directors of the Company then in
office.
"Change of Control Offer" shall have the meaning specified in Section
13.1(b).
"Change of Control Payment Date" shall have the meaning specified in
Section 13.1(a).
"Change of Control Purchase Price" shall have the meaning specified in
Section 13.1(a).
"Claim" shall have the meaning specified in the Plan.
"Class B Common Stock" means the Class B Common Stock, par value $0.01
per share, of the Company.
4
12
"Class B Director" means the Person elected to the board of directors
of the Company by the holders of the Class B Common Stock voting separately as a
class in such election.
"Collateral" means (a) the assets of the Company which are mortgaged or
pledged for the benefit of the Holders pursuant to the terms of the Security
Documents, (b) the assets of any Guarantor (or any other Person) that are
mortgaged or pledged for the benefit of the Holders pursuant to the terms of the
Security Documents, and (c) the Guarantees.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.
"Common Stock" means the Company's common stock, $0.01 par value per
share.
"Company" means TransTexas Gas Corporation, a Delaware corporation,
being the party named as such in this Indenture, until a successor replaces it
pursuant to this Indenture, and thereafter means such successor.
"Company Entities" means the Company and each of its Subsidiaries.
"Confirmation Hearing" means the hearing held in the TransTexas Case
regarding confirmation of the Plan pursuant to Section 1129 of the Bankruptcy
Code.
"Confirmation Order" means the Order Confirming Debtor's Second
Amended, Modified and Restated Plan of Reorganization, dated February ___, 2000,
as the same may be amended or modified.
"Consolidated EBITDA" of any Person for any period, unless otherwise
defined herein, means (a) the Consolidated Net Income of such Person for such
period, plus (b) the sum, without duplication (and only to the extent such
amounts are deducted from net revenues in determining such Consolidated Net
Income), of (i) the provision for income taxes for such period for such Person
and its consolidated Subsidiaries, (ii) depreciation, depletion, and
amortization of such Person and its consolidated Subsidiaries for such period,
and (iii) Consolidated Fixed Charges of such Person for such period, determined,
in each case, on a consolidated basis for such Person and its consolidated
Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" on any date (the
"Transaction Date") means, with respect to any Person, the ratio, on a pro forma
basis, of (i) the aggregate amount of Consolidated EBITDA of such Person
(attributable to continuing operations and businesses and exclusive of the
amounts attributable to operations and businesses discontinued or disposed of,
on a pro forma basis as if such operations and businesses were discontinued or
disposed of on the first day of the Reference Period) for the Reference Period
to (ii) the aggregate Consolidated Fixed Charges of such Person (exclusive of
amounts attributable to discontinued operations and businesses on a pro forma
basis as if such operations and businesses were discontinued or disposed of on
the first day of the Reference Period, but only to the extent that the
obligations giving rise to such Consolidated Fixed Charges would no longer be
obligations contributing to such Person's Consolidated Fixed Charges subsequent
to the Transaction Date) during the Reference Period; provided, however, that
for purposes of such computation, in calculating Consolidated EBITDA and
Consolidated Fixed Charges, (a) the transaction giving rise to the need to
calculate the Consolidated Fixed Charge Coverage Ratio shall be assumed to have
occurred on the first day of the Reference Period, (b) the incurrence of any
Debt or issuance of Disqualified Capital Stock during the Reference Period or
subsequent thereto and on or prior to the Transaction Date shall be assumed to
have occurred on the first day of such Reference Period,
5
13
(c) Consolidated Interest Expense attributable to any Debt (whether existing or
being incurred) bearing a floating interest rate shall be computed as if the
rate in effect on the Transaction Date had been the applicable rate for the
entire period, unless such Person or any of its Subsidiaries is a party to a
Swap Obligation (that remains in effect for the 12-month period after the
Transaction Date) that has the effect of fixing the interest rate on the date of
computation, in which case such rate (whether higher or lower) shall be used,
and (d) if the Company or any Subsidiary of the Company has repaid, repurchased,
defeased or otherwise discharged any Debt or Disqualified Capital Stock since
the beginning of the period measured by the four full fiscal quarters ended
immediately before the Transaction Date or if any Debt is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than Debt
incurred under any revolving credit facility unless such Debt has been
permanently repaid and has not been replaced) on the Transaction Date, EBITDA
and Consolidated Fixed Charges for such period shall be calculated on a pro
forma basis as if such discharge had occurred on the first day of such period
and as if the Company or such Subsidiary has not earned the interest income
which has actually accrued during such period in respect of cash or Cash
Equivalents used to repay, repurchase, defease or otherwise discharge such Debt.
"Consolidated Fixed Charges" of any Person for any period means
(without duplication) the sum of (i) Consolidated Interest Expense of such
Person for such period, (ii) dividend requirements of such Person and its
consolidated Subsidiaries (whether in cash or otherwise (except dividends
payable solely in shares of Qualified Capital Stock)) with respect to Preferred
Stock paid, accrued, or scheduled to be paid or accrued during such period, in
each case to the extent attributable to such period and excluding items
eliminated in consolidation, (iii) one-third of the Consolidated Operating Lease
Obligations for such period, and (iv) fees paid, accrued, or scheduled to be
paid or accrued during such period by such Person and its Subsidiaries in
respect of performance bonds or other guarantees of payment. For purposes of
clause (ii) above, dividend requirements shall be increased to an amount
representing the pre-tax earnings that would be required to cover such dividend
requirements; accordingly, the increased amount shall be equal to a fraction,
the numerator of which is such dividend requirements and the denominator of
which is 1 minus the applicable actual combined effective Federal, state, local,
and foreign income tax rate of such Person and its Subsidiaries (expressed as a
decimal), on a consolidated basis, for the fiscal year immediately preceding the
date of the transaction giving rise to the need to calculate Consolidated Fixed
Charges.
"Consolidated Interest Expense" of any Person means, for any period,
the aggregate interest (without duplication), whether expensed or capitalized,
paid, accrued, or scheduled to be paid or accrued during such period in respect
of all Debt of such Person and its consolidated Subsidiaries (including (i)
amortization of deferred financing costs and original issue discount and
non-cash interest payments or accruals, (ii) the interest portion of all
deferred payment obligations, calculated in accordance with the effective
interest method, and (iii) all commissions, discounts, other fees, and charges
owed with respect to letters of credit and banker's acceptance financing and
costs associated with Swap Obligations, in each case to the extent attributable
to such period determined on a consolidated basis in accordance with GAAP. For
purposes of this definition, (x) interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined to be the
rate of interest implicit in such Capitalized Lease Obligation in accordance
with GAAP (including Statement of Financial Accounting Standards No. 13 of the
Financial Accounting Standards Board), and (y) Consolidated Interest Expense
attributable to any Debt represented by the guarantee by such Person or a
Subsidiary of such Person other than with respect to Debt of such Person or a
Subsidiary of such Person shall be deemed to be the interest expense
attributable to the item guaranteed.
"Consolidated Net Income" of any Person for any period means the net
income (loss) of such Person and its consolidated Subsidiaries for such period,
determined in accordance with GAAP, excluding (without duplication) (i) all
extraordinary, unusual and nonrecurring gains (but not losses), (ii) the net
income, if positive, of any other Person, other than a consolidated Subsidiary,
in which such Person or any of its consolidated Subsidiaries has an interest,
except to the extent of the amount of any dividends or distributions
6
14
actually paid in cash to such Person or a consolidated Subsidiary of such Person
during such period, but not in excess of such Person's pro rata share of such
other Person's aggregate net income earned during such period or earned during
the immediately preceding period and not distributed during such period, (iii)
the net income, if positive, of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition, and (iv) the
net income, if positive, of any Subsidiary of such Person to the extent that the
declaration or payment of dividends or similar distributions is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule, or governmental regulation applicable to
such Subsidiary.
"Consolidated Operating Lease Obligations" means, for any period, the
aggregate amount of all obligations for rental paid or accrued under all
Operating Leases of the Company and its Subsidiaries as lessee (net of sublease
income), all as determined on a consolidated basis in conformity with GAAP.
"Covenant Defeasance" shall have the meaning specified in Section 8.3.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Xxxxx Transactions" shall mean the transfer and conveyance by the
Company of certain properties to Xxxxx Petroleum Corp. and any related
transactions, all as approved by the Order of the Bankruptcy Court dated
November 30, 1999, in case No. 99-21550-C-11, in the United States Bankruptcy
Court for the Southern District of Texas, Corpus Christi Division, as amended.
"Debt" means, with respect to any Person, without duplication (i) all
liabilities, contingent or otherwise, of such Person (a) for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof), (b) evidenced by bonds, notes, debentures,
or similar instruments or letters of credit or representing the balance deferred
and unpaid of the purchase price of any property acquired by such Person or
services received by such Person (other than long-term service or supply
contracts which require minimum periodic payments), (c) evidenced by bankers'
acceptances or similar instruments issued or accepted by banks or Swap
Obligations, (d) for the payment of money relating to a Capitalized Lease
Obligation, and (e) the Attributable Debt associated with any Sale and Leaseback
Transaction; (ii) reimbursement obligations of such Person with respect to
letters of credit; (iii) all liabilities of others of the kind described in the
preceding clause (i) or (ii) that such Person has guaranteed or that is
otherwise its legal liability (to the extent of such guaranty or other legal
liability) other than for endorsements, with recourse, of negotiable instruments
in the ordinary course of business; (iv) all obligations secured by a Lien
(other than Permitted Liens, except to the extent the obligations secured by
such Permitted Liens are otherwise included in clause (i), (ii) or (iii) of this
definition and are obligations of such Person) to which the property or assets
(including, without limitation, leasehold interests and any other tangible or
intangible property rights) of such Person are subject, regardless of whether
the obligations secured thereby shall have been assumed by or shall otherwise be
such Person's legal liability (but, if such obligations are not assumed by such
Person or are not otherwise such Person's legal liability, the amount of such
Debt shall be deemed to be limited to the fair market value of such property or
assets determined as of the end of the preceding fiscal quarter); and (v) any
and all deferrals, renewals, extensions, refinancings, and refundings (whether
direct or indirect) of, or amendments, modifications, or supplements to, any
liability of the kind described in any of the preceding clauses (i) through (iv)
regardless of whether between or among the same parties; provided, however,
that, notwithstanding the foregoing, "Debt" shall include obligations related to
Drilling Production Payments, whether denominated as Dollar-Denominated
Production Payments or Volumetric Production Payments, but shall not include
Dollar-Denominated Production Payments or Volumetric Production Payments related
to Drilling Programs.
7
15
"Default" means an event or condition, the occurrence of which is, or
with the lapse of time or giving of notice or both would be, an Event of
Default.
"Defaulted Interest" shall have the meaning specified in Section 2.12.
"Depository" means the Person specified in Section 2.3 hereof as the
Depository with respect to the Notes issuable in global form, until a successor
shall have been appointed and become such pursuant to the applicable provision
of this Indenture, and, thereafter, "Depository" shall mean or include such
successor.
"Disqualified Capital Stock" means, with respect to any Person, any
Capital Stock of such Person or its Subsidiaries that, by its terms or by the
terms of any security into which it is convertible or exchangeable, is, or upon
the happening of an event or the passage of time would be, required to be
redeemed or repurchased by such Person or its Subsidiaries, including at the
option of the holder, in whole or in part, or has, or upon the happening of an
event or passage of time would have, a redemption or similar payment due, on or
prior to the maturity date of the Notes.
"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Drilling Production Payment" means a Dollar-Denominated Production
Payment or a Volumetric Production Payment conveyed to a third party in
accordance with the provisions of Sections 4.11 and 4.14.
"Drilling Program" means any current or future arrangement between the
Company or any Subsidiary of the Company and another Person pursuant to which
(i) such Person agrees, or has, prior to the Issue Date, agreed, to drill,
complete or perform operations to enhance recovery from, a well or xxxxx on
mineral interests owned by the Company or such Subsidiary and (ii) the Company
or such Subsidiary agrees, or has, prior to the Issue Date, agreed, to convey or
assign to such Person an interest in such well or xxxxx in accordance with
clause (l) of the definition of "Permitted Liens."
"Eligible Institution" means a commercial banking institution that has
combined capital and surplus of not less than $500 million and that is rated "A"
(or higher) according to Xxxxx'x or S&P at the time as of which any investment
or rollover therein is made.
"Equipment" means and includes, as to any Person, all of such Person's
now owned or hereafter acquired Vehicles, drilling rigs, workover rigs, fracture
stimulation equipment, well site compressors, rolling stock and related
equipment and other assets accounted for as equipment by such Person on its
financial statements, all proceeds thereof (from insurance or otherwise), and
all documents of title, books, records, ledger cards, files, correspondence, and
computer files, tapes, disks and related data processing software that at any
time evidence or contain information relating to the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"Event of Default" shall have the meaning specified in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Exchange Assets" means assets acquired by the Company or any
Subsidiary of the Company in exchange for assets of the Company or such
Subsidiary, respectively, in connection with an Asset Sale, which
8
16
acquired assets include proved reserves with a value that, together with the
cash or Cash Equivalents received therefor by the Company or any of its
Subsidiaries, is equal to or greater than the value of the proved reserves
included in the assets disposed of by the Company or such Subsidiary in
connection with such Asset Sale; provided, however, that during any fiscal year
the Company or any of its Subsidiaries can collectively acquire assets (other
than proved reserves, cash or Cash Equivalents) with a fair market value of up
to $20 million in exchange for assets of the Company or such Subsidiaries that
include proved reserves, and such assets acquired by the Company or such
Subsidiaries shall constitute "Exchange Assets" hereunder.
"Existing Officer Agreements" means [see Section 4.10(a)(iii)-(iv)].
"Extended DIP Facility" means the Credit Agreement, dated as of April
27, 1999, among the Company, the lenders party thereto, and Credit Suisse First
Boston Management Corporation as Administrative Agent, as amended to the date
hereof and further amended and extended in accordance with the Plan or a Plan
Order, the obligations of the Company under which are or will be secured by
Liens on the Collateral ranking prior to the Liens securing the Notes and pari
passu with the Liens securing the Post Confirmation Credit Facility.
["Extended DIP Facility Intercreditor Agreement" means ______________.]
"Final Change of Control Put Date" shall have the meaning specified in
Section 13.1(c)(7).
"First Lien Debt" means any Debt or other obligation secured by a Lien
described in one or more of clauses (a) through (o) of this definition,
including, in each case, any refinancings thereof:
[NOTE: the following were previously included by cross reference to
the definition of "Permitted Liens" and appear below as set forth
therein except where indicated by "***". The previously cross
referenced section to the definition of "Permitted Liens"appears
below in "[ ]".]
(a) [c] pledges of assets or deposits of cash or Cash
Equivalents to secure (1) the performance of bids, trade contracts
(other than borrowed money), leases, statutory obligations, surety
bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business (or to secure reimbursement
obligations or letters of credit in support of such bonds) in an
aggregate amount not in excess of 5% of the SEC PV10 indicated on the
Company's most recent Reserve Report at the time such pledges or
deposits are made, (2) appeal or supercedeas bonds (or to secure
reimbursement obligations or letters of credit in support of such
bonds) in an amount not to exceed $10 million at any one time
outstanding, or (3) pledges or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance, and other types of social security legislation, property
insurance and liability insurance;
(b) [d] Liens encumbering customary initial deposits and
margin deposits securing Swap Obligations or Permitted Hedging
Transactions and Liens encumbering contract rights under Permitted
Hedging Transactions;
(c) [e] pledges of assets to secure margin obligations,
settlement obligations, reimbursement obligations or letters of credit
in connection with Permitted Hedging Transactions; provided, however,
that, at the time such pledge is made (or, if such pledge secures
future Permitted Hedging Transactions, at the time any such Permitted
Hedging Transaction is entered into), the maximum
9
17
aggregate exposure under such Permitted Hedging Transactions does not
exceed the greater of (1) $10 million or (2) 5% of the SEC PV10
indicated on the Company's then most recent Reserve Report;
(d) [f] easements, rights-of-way, zoning, similar restrictions
and other similar encumbrances or title defects incurred in the
ordinary course of business which, in the aggregate, are not material
in amount, and which do not in any case materially detract from the
value of the property subject thereto (as such property is used by any
of the Company Entities) or materially interfere with the ordinary
conduct of the business of any of the Company Entities;
***(e) Liens existing on the Issue Date (including extensions
and renewals thereof) encumbering assets owned by Galveston Bay
Processing or by Galveston Bay Pipeline***;
***(f) Liens securing Allowed Claims of prepetition secured
creditors in class 6B under the Plan;***
(g) [j] Liens granted on (1) Equipment to the extent granted
to secure Debt incurred pursuant to Section 4.11 or (2) Inventory or
Receivables;
(h) [k] Liens granted in connection with the Presale of Gas,
provided, however, that all of the proceeds from such Presale of Gas
shall be applied to a Note Repurchase or to a Note Redemption;
(i) [l] Liens created on acreage drilled or to be drilled
pursuant to Drilling Programs, on Hydrocarbons produced therefrom and
on the proceeds of such Hydrocarbons to secure the Company's
obligations thereunder, provided, however, that (1) the number of xxxxx
included in such program commenced in any fiscal year does not exceed
30 per fiscal year (plus the number of xxxxx included in programs
commenced in prior years but not yet completed), (2) such obligations
are limited to a percentage of production from such xxxxx, (3) such
Liens survive only until the Person to whom such Lien was granted has
received production with a value equal to the costs, expenses and fees
related to property and services provided or paid for by such Person
plus an agreed-upon interest component, and (4) such Liens secure
obligations that are nonrecourse to each of the Company or its
Subsidiaries;
(j) [n] any extension, renewal, or replacement of Liens
created or existing pursuant to any of clauses (a) through ***(i) or
(k) through (o)*** of this definition, provided, however, that such
Liens would have otherwise been permitted under such clauses, and
provided further, that the Liens permitted by this clause (j) do not
secure any additional Debt or encumber any additional property;
(k) [o] Liens securing (1) Royalty Payment Obligations and (2)
Drilling Production Payments;
(l) [q] Liens on the proceeds of any property subject to a
Permitted Lien or on deposit accounts containing any such proceeds;
(m) [r] Liens on the proceeds of any property that is not
Collateral;
(n) [s] Liens (including extensions and renewals thereof) on
real or personal property, acquired after the Issue Date ("New
Property"); provided, however, that (1) such Lien is created solely for
the purpose of securing Debt incurred to finance the cost (including
the cost of
10
18
improvements or construction) of New Property subject thereto and such
Lien is created prior to or within six months after the later of the
acquisition, the completion of construction, or the commencement of
full operation of such New Property, (2) the principal amount of the
Debt secured by such Lien does not exceed 100% of such cost including
costs and fees related to the financing thereof, and (3) any such Lien
shall not extend to or cover any property or assets other than such
item of New Property, any improvements on such New Property and any
throughput, capacity or similar agreements related to the operation of
such New Property;
(n) [v] Liens securing the Extended DIP Facility; and
(o) [w] Liens securing the Post Confirmation Credit Facility.
"Funding Guarantor" shall have the meaning specified in Section 12.4.
"GAAP" means generally accepted accounting principles as in effect in
the United States on the Issue Date applied on a basis consistent with that used
in the preparation of the most recent audited financial statements of the
Company.
"Galveston Bay Pipeline" means Galveston Bay Pipeline Company, a
subsidiary of the Company.
"Galveston Bay Processing" means Galveston Bay Processing Company, a
subsidiary of the Company.
"Guarantee" shall have the meaning provided in Section 12.1.
"Guarantor" means (i) each Subsidiary of the Company joining in the
execution of this Indenture and the Notes for the purposes of evidencing its
Guarantee and of agreeing to bound by the terms of this Indenture, (ii) each
Subsidiary of the Company that becomes (or is required to become) a guarantor of
the obligations of the Company under the Notes and this Indenture in accordance
with Section 4.16, and (iii) each Subsidiary of the Company executing a
supplemental indenture in which such Subsidiary agrees to become and be a
guarantor of the obligations of the Company under the Notes and this Indenture
and to be bound by the terms of this Indenture.
"Headquarters Facility" means the real property (including the
improvements thereon, the fixtures, other than trade fixtures, affixed or
attached thereto, and the personal property used in connection with the
operation thereof) owned by the Company and located at 0000 Xxxxx Xxx Xxxxxxx
Xxxxxxx Xxxx, Xxxxxxx, Xxxxx.
"Hedging Subsidiary" means a Subsidiary of the Company engaged solely
in the business of facilitating Permitted Hedging Transactions with the Company
or any of its Subsidiaries.
"Holder" means the Person in whose name a Note is registered on the
Registrar's books.
"Hydrocarbons" means oil, natural gas, condensate, and natural gas
liquids.
"Incur" and "Incurrence"shall have the meaning specified in Section
4.11.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
11
19
"Initial Holders" means the TEC Bondholders, as defined in the Plan.
"Insurance Proceeds" means the interest in and to all proceeds (net of
costs of collection, including attorney's fees) which now or hereafter may be
paid under any insurance policies now or hereafter obtained by or on behalf of
the Company or any Guarantor in connection with any assets thereof, together
with interest payable thereon and the right to collect and receive the same,
including, without limitation, proceeds of casualty insurance, title insurance,
business interruption insurance and any other insurance now or hereafter
maintained with respect to such assets.
"Intercreditor Agreements" means [the Extended DIP Facility
Intercreditor Agreement, the Post Confirmation Credit Facility, and] the
intercreditor agreements permitted by Section 11.2(d).
"Interest Payment Date" means the stated due date of an installment of
interest on the Notes.
"Interest Rate or Currency Agreement" of any Person means any forward
contract, futures contract, swap, option or other financial agreement or
arrangement (including, without limitation, caps, floors, collars, puts and
similar agreements) relating to, or the value of which is dependent upon,
interest rates or currency exchange rates.
"Inventory" means and includes all of the Company's, and each of the
Company's Subsidiaries', now owned or hereafter acquired casing, drill pipe and
other supplies accounted for as inventory by the Company on its consolidated
financial statements (excluding any Hydrocarbons), all proceeds thereof (from
insurance or otherwise), and all documents of title, books, records, ledger
cards, files, correspondence, and computer files, tapes, disks and related data
processing software that at any time evidence or contain information relating to
the foregoing.
"Investment" by any Person in any other Person means (without
duplication) (a) the acquisition (whether for cash, property, services,
securities or otherwise) of Capital Stock, bonds, notes, debentures, partnership
or other ownership interests or other securities issued by such other Person or
any agreement to make any such acquisition; (b) the making by such Person of any
deposit with, or advance, loan or other extension of credit to, such other
Person (including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property to
such other Person) and (without duplication) any amount committed to be
advanced, loaned or extended to such other Person; (c) other than as permitted
under Section 4.16 or Article XII the entering into of any guarantee of, or
other credit support or contingent obligation with respect to, Debt or other
liability of such other Person; (d) the entering into of any Swap Obligation
with such other Person; or (e) the making of any capital contribution by such
Person to such other Person.
"Investment Grade Rating" means, with respect to any Person or issue of
debt securities or preferred stock, a rating in one of the four highest letter
rating categories (without regard to "+" or "-" or other modifiers) by any
rating agency or if any such rating agency has ceased using letter rating
categories or the four highest of such letter rating categories are not
considered to represent "investment grade" ratings, then the comparable
"investment grade" ratings (as designated by any such rating agency).
"Issue Date" means the date of first issuance of the Notes under the
Indenture.
"Junior Preferred Stock" means the Company's junior preferred stock,
$1.00 par value.
"Legal Defeasance" shall have the meaning specified in Section 8.3.
12
20
"Legal Holiday" shall have the meaning provided in Section 14.7.
"Lien" means any mortgage, lien, pledge, charge, security interest, or
other encumbrance of any kind, regardless of whether filed, recorded, or
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement and any lease deemed to constitute a security
interest and any option or other agreement to give any security interest).
"Material Change" means an increase or decrease of more than 10% since
the then most recent Reserve Report in the discounted future net cash flows
(excluding changes that result from changes in prices) from proved oil and gas
reserves of the Company and its consolidated Subsidiaries (before any state or
federal income tax); provided, however, that the following will be excluded from
the Material Change calculation: (i) any acquisitions since the then most recent
Reserve Report of oil and gas reserves that have been estimated by independent
petroleum engineers and on which a report or reports have been prepared by such
independent petroleum engineers within 12 months of the acquisition, (ii) any
reserves added since the then most recent Reserve Report attributable to the
drilling or recompletion of xxxxx not included in previous reserve estimates,
and (iii) any disposition of properties existing on the date of then most recent
Reserve Report that have been disposed of.
"Maturity Date," when used with respect to any Note, means the date on
which the principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity, on a Change of Control Payment Date,
or by declaration of acceleration, call for redemption or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means each mortgage, deed of trust, trust deed, deed to
secure debt, assignment, assignment of production, security agreement, financing
statement or similar document, however styled, executed by the Company and/or
any one or more of the Guarantors, or any other Person, for the benefit of the
Holders primarily for the purpose of creating or granting a Lien on real
property and/or Hydrocarbons, or any interests therein (but excluding Inventory
and Receivables, which shall be excepted from the Lien thereof), to secure all
or any part of (a) the obligations of the Company pursuant to this Indenture,
any one or more of the Security Documents, and/or the Notes, and/or (b) the
obligations of such Guarantor under its Guarantee.
"Net Cash Proceeds" means an amount equal to the aggregate amount of
cash received by the Company and its Subsidiaries in respect of an Asset Sale,
less the sum of (i) all reasonable out-of-pocket fees, commissions, and other
expenses incurred in connection with such Asset Sale, including the amount
(estimated in good faith by the Company) of income, franchise, sales and other
applicable taxes to be paid, payable or accrued by the Company or any Subsidiary
of the Company (in each case as estimated in good faith by the Company or such
Subsidiary without giving effect to tax attributes unrelated to such Asset Sale)
in connection with such Asset Sale, and (ii) the aggregate amount of cash so
received which is used to retire any then existing Debt of the Company or its
Subsidiaries (other than the Notes), as the case may be, which is required by
the terms of such Debt to be repaid in connection with such Asset Sale.
"Net Proceeds" means (a) in the case of any sale by a Person of
Qualified Capital Stock, the aggregate net cash proceeds received by such Person
from the sale of Qualified Capital Stock (other than to a Subsidiary) after
payment of reasonable out-of-pocket expenses, commissions and discounts incurred
in connection therewith, and (b) in the case of any exchange, exercise,
conversion or surrender of any outstanding securities or Debt of such Person for
or into shares of Qualified Capital Stock of such Person, the net book value of
such outstanding securities as adjusted on the books of such Person or Debt of
such Person to the extent recorded in accordance with GAAP, in each case, on the
date of such exchange, exercise,
13
21
conversion or surrender (plus any additional amount required to be paid by the
holder of such Debt or securities to such Person upon such exchange, exercise,
conversion or surrender and less (i) any and all payments made to the holders of
such Debt or securities and (ii) all other expenses incurred by such Person in
connection therewith, in each case, in so far as such payments or expenses are
incident to such exchange, exercise, conversion, or surrender).
"Net Working Capital" of any Person means (i) all current assets of
such Person and its consolidated Subsidiaries, minus (ii) all current
liabilities of such Person and its consolidated Subsidiaries other than the
current portion of long term debt, each item to be determined in conformity with
GAAP.
"Net Worth" of any Person means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of such Person and its Subsidiaries (which
shall be as of a date not more than 90 days prior to the date of such
computation), less any amounts included therein attributable to Disqualified
Capital Stock or any equity security convertible into or exchangeable for Debt,
the cost of treasury stock (not otherwise deducted from stockholder's equity),
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of such Person or any of its Subsidiaries, each item to be
determined in conformity with GAAP.
"New Property" shall have the meaning specified in clause (s) in the
definition of the term "Permitted Liens" set forth in Section 1.1.
"Nominee" means any Person who has or holds any right, title or
interest in any oil and gas or mineral lease as a nominee for the Company or any
of its Subsidiaries.
"Nominee Property" means any property, lease, interest or other asset
with respect to which any Person has or holds any right, title or interest as a
Nominee.
"Non-Officer Affiliate" means, as to any specified Person, any
Affiliate of such Person that is not an Officer Affiliate of such Person.
"Noteholder" means the Person in whose name a Note is registered on the
Registrar's book.
"Note Redemption" means a redemption of Notes by the Company pursuant
to Article III.
"Note Repurchase" means a purchase of Notes by the Company pursuant to
the provisions of Section 4.14(b) et seq.
"Notes" means the 15% Senior Secured Notes due 2005, as supplemented
from time to time in accordance with the terms hereof, issued under this
Indenture.
"NYSE" means the New York Stock Exchange.
"Officer" means, with respect to the Company, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary of the
Company.
"Officer Affiliate" means, as to any specified Person, any other Person
who is an Affiliate of such specified Person by reason of such other Person's
inclusion within the class of Persons described in clause (iii) of the
definition of the term "Affiliate" set forth in this Section 1.1, whether or not
such other Person is included within either or both of the classes of Persons
described in clauses (i) and (ii) of the
14
22
definition of the term "Affiliate" set forth in this Section 1.1, and any
Affiliate of such other Person (other than the Company and the Company's
Subsidiaries).
"Officers' Certificate" means, with respect to the Company, a
certificate signed by two Officers of the Company or by an Officer and an
Assistant Secretary of the Company and otherwise complying with the requirements
of Sections 14.4 and 14.5.
"Operating Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which is not
a Capital Lease or a lease of a mineral interest.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
14.4 and 14.5. Unless otherwise required by the Trustee, the counsel may be
outside counsel to the Company.
"Paying Agent" shall have the meaning specified in Section 2.3.
"Permitted Hedging Transactions" means non-speculative transactions in
futures, forwards, swaps or option contracts (including both physical and
financial settlement transactions) engaged in by the Company or its Subsidiaries
as part of their normal business operations as a risk-management strategy or
hedge against adverse changes in the prices of natural gas, condensate, or oil;
provided, however, that such transactions do not, on a monthly basis, relate to
more than 90% of the Company Entities' average net hydrocarbon production (mcfe)
per month for the most recent 3-month period measured at the time of such
incurrence; and, provided further, that, at the time of such transaction (i) the
counterparty to any such transaction is an Eligible Institution or a Person that
has an Investment Grade Rating, or (ii) such counterparty's obligation pursuant
to such transaction is unconditionally guaranteed in full by, or secured by a
letter of credit issued by, an Eligible Institution or a Person that has an
Investment Grade Rating.
"Permitted Investment" means, when used with reference to the Company
and its Subsidiaries:
(i) trade credit extended to Persons in the ordinary course
of business;
(ii) purchases of Cash Equivalents;
(iii) Investments by the Company or its wholly owned
Subsidiaries in wholly owned Subsidiaries of the Company;
(iv) Swap Obligations;
(v) the receipt of Capital Stock in lieu of cash in
connection with the settlement of litigation;
(vi) advances to officers and employees in connection with the
performance of their duties in the ordinary course of business in an
amount not to exceed $500,000 in the aggregate outstanding at any time;
(vii) margin deposits in connection with Permitted Hedging
Transactions;
(viii) Investments and expenditures made in the ordinary
course of business by the Company and its Subsidiaries, and of a nature
that, at the time of expenditure, is customary in the oil and gas
business as a means of actively exploiting, exploring for, acquiring,
developing,
15
23
processing, gathering, marketing or transporting oil or gas through
agreements, transactions, interests or arrangements which permit a
Person to share risks or costs, comply with regulatory requirements
regarding local ownership or satisfy other objectives customarily
achieved through the conduct of the oil and gas business jointly with
third parties, including, without limitation, (a) ownership interests
in oil and gas properties or gathering systems and (b) Investments and
expenditures in the form of or pursuant to operating agreements,
processing agreements, farm-in agreements, farm-out agreements,
development agreements, area of mutual interest agreements, unitization
agreements, pooling arrangements, joint bidding agreements, service
contracts, joint venture agreements, partnership agreements (whether
general or limited), subscription agreements, stock purchase agreements
and other similar agreements with third parties (including Unrestricted
Subsidiaries); provided, however, that in the case of any joint venture
engaged in processing, gathering, marketing or transporting oil or gas,
(1) all Debt of such joint venture that would not otherwise constitute
Debt of one of the Company Entities shall be deemed Debt of the Company
in proportion to its direct or indirect ownership interest in such
joint venture, and (2) such joint venture shall be reasonably
anticipated, at the time of Investment, to enhance the value of the
reserves of the Company Entities or marketability of production from
such reserves;
(ix) a guaranty by the Company or by any Subsidiary of the
Company that is permitted under Section 4.11(f);
(x) deposits permitted by the definition of Permitted Liens
or any extension, renewal, or replacement of any of them;
(xi) an Investment in Capital Stock resulting from an Asset
Sale pursuant to Section 4.14; and
(xii) other Investments, provided, however, that such
Investments do not exceed $1 million in the aggregate at any time.
"Permitted Liens" means:
(a) Liens imposed by governmental authorities for taxes,
assessments, or other charges not yet due or which are being contested
in good faith and by appropriate proceedings, if adequate reserves with
respect thereto are maintained on the books of any of the Company
Entities in accordance with GAAP;
(b) statutory Liens of landlords, carriers, warehousemen,
mechanics, materialmen, repairmen, mineral interest owners, or other
like Liens arising by operation of law in the ordinary course of
business, provided, however, that (1) the underlying obligations are
not overdue for a period of more than 45 days, or (2) such Liens are
being contested in good faith and by appropriate proceedings and
adequate reserves with respect thereto are maintained on the books of
any of the Company Entities in accordance with GAAP;
(c) pledges of assets or deposits of cash or Cash Equivalents
to secure (1) the performance of bids, trade contracts (other than
borrowed money), leases, statutory obligations, surety bonds,
performance bonds and other obligations of a like nature incurred in
the ordinary course of business (or to secure reimbursement obligations
or letters of credit in support of such bonds) in an aggregate amount
not in excess of 5% of the SEC PV10 indicated on the Company's most
recent Reserve Report at the time such pledges or deposits are made,
(2) appeal or supercedeas bonds (or to secure reimbursement obligations
or letters of credit in support of such bonds) in an amount not to
exceed
16
24
$10 million at any one time outstanding, or (3) pledges or deposits
made in the ordinary course of business in connection with worker's
compensation, unemployment insurance, and other types of social
security legislation, property insurance and liability insurance;
(d) Liens encumbering customary initial deposits and margin
deposits securing Swap Obligations or Permitted Hedging Transactions
and Liens encumbering contract rights under Permitted Hedging
Transactions;
(e) pledges of assets to secure margin obligations, settlement
obligations, reimbursement obligations or letters of credit in
connection with Permitted Hedging Transactions; provided, however,
that, at the time such pledge is made (or, if such pledge secures
future Permitted Hedging Transactions, at the time any such Permitted
Hedging Transaction is entered into), the maximum aggregate exposure
under such Permitted Hedging Transactions does not exceed the greater
of (1) $10 million or (2) 5% of the SEC PV10 indicated on the Company's
then most recent Reserve Report;
(f) easements, rights-of-way, zoning, similar restrictions and
other similar encumbrances or title defects incurred in the ordinary
course of business which, in the aggregate, are not material in amount,
and which do not in any case materially detract from the value of the
property subject thereto (as such property is used by any of the
Company Entities) or materially interfere with the ordinary conduct of
the business of any of the Company Entities;
(g) Liens arising by operation of law in connection with
judgments, only to the extent, for an amount and for a period not
resulting in an Event of Default with respect thereto;
(h) (1) Liens securing Debt or other obligations not in excess
of $3 million, (2) Liens existing on the date of the Indenture, and (3)
Liens encumbering assets owned by Galveston Bay Processing or Galveston
Bay Pipeline;
(i) Liens securing (1) Allowed Priority Tax Claims under the
Plan, (2) Allowed Claims in classes 2, 5, 6A or 6B under the Plan, (3)
Debt incurred pursuant to Section 4.11(j), or (4) refinancing Debt
incurred pursuant to Section 4.11(g) with respect to Liens described in
subsection (1), (2) or (3) of this clause (i);
(j) Liens granted on (1) Equipment to the extent granted to
secure Debt incurred pursuant to Section 4.11, (2) Inventory, or (3)
Receivables;
(k) Liens granted in connection with the Presale of Gas,
provided, however, that all of the proceeds from such Presale of Gas
shall be applied to a Note Repurchase or to a Note Redemption;
(l) Liens created on acreage drilled or to be drilled pursuant
to Drilling Programs, on Hydrocarbons produced therefrom and on the
proceeds of such Hydrocarbons to secure the Company's obligations
thereunder, provided, however, that (1) the number of xxxxx included in
such program commenced in any fiscal year does not exceed 30 per fiscal
year (plus the number of xxxxx included in programs commenced in prior
years but not yet completed), (2) such obligations are limited to a
percentage of production from such xxxxx, (3) such Liens survive only
until the Person to whom such Lien was granted has received production
with a value equal to the costs, expenses and fees related to property
and services provided or paid for by such Person plus an agreed-upon
interest component, and (4) such Liens secure obligations that are
nonrecourse to each of the Company or its Subsidiaries;
17
25
(m) Liens on the assets of any entity existing at the time
such assets are acquired by any of the Company Entities, whether by
merger, consolidation, purchase of assets or otherwise so long as such
Liens (1) are not created, incurred or assumed in contemplation of such
assets being acquired by any of the Company Entities and (2) do not
extend to any other assets of any of the Company or its Subsidiaries;
(n) any extension, renewal, or replacement of Liens created
pursuant to any of clauses (a) through (g), (h)(3), (k) through (m), or
(q) through (s) of this definition, provided, however, that such Liens
would have otherwise been permitted under such clauses, and provided
further, that the Liens permitted by this clause (n) do not secure any
additional Debt or encumber any additional property;
(o) Liens securing (1) Royalty Payment Obligations and (2)
Drilling Production Payments;
(p) Liens on the assets of any of the Company Entities in
favor of another Company Entity;
(q) Liens on the proceeds of any property subject to a
Permitted Lien or on deposit accounts containing any such proceeds;
(r) Liens on the proceeds of any property that is not
Collateral;
(s) Liens (including extensions and renewals thereof) on real
or personal property, acquired after the Issue Date ("New Property");
provided, however, that (1) such Lien is created solely for the purpose
of securing Debt incurred to finance the cost (including the cost of
improvements or construction) of New Property subject thereto and such
Lien is created prior to or within six months after the later of the
acquisition, the completion of construction, or the commencement of
full operation of such New Property, (2) the principal amount of the
Debt secured by such Lien does not exceed 100% of such cost including
costs and fees related to the financing thereof, and (3) any such Lien
shall not extend to or cover any property or assets other than such
item of New Property, any improvements on such New Property and any
throughput, capacity or similar agreements related to the operation of
such New Property;
(t) Liens of the Trustee under this Indenture;
(u) Liens under the Security Documents;
(v) Liens securing the Extended DIP Facility;
(w) Liens securing the Post Confirmation Credit Facility; and
(x) Liens (including extensions and renewals thereof) on the
Headquarters Facility, provided, however, that (1) such Liens are
created solely for the purpose of securing Debt Incurred by the Company
concurrently with the creation of such Liens, (2) the principal amount
of the Debt secured by such Liens at the time of Incurrence does not
exceed 100% of the Appraised Value of the Headquarters Facility as
determined by an Appraisal dated not more than six (6) months prior to
the date on which such Liens are created, and (3) any such Lien shall
not extend to or cover any property or assets other than the
Headquarters Facility and any leases and rents derived from the
ownership and operation of the Headquarters Facility.
18
26
"Person" means any corporation, individual, joint stock company, joint
venture, partnership, unincorporated association, governmental regulatory
entity, country, state, or political subdivision thereof, trust, municipality,
or other entity.
"Plan" means the Company's Second Amended Plan of Reorganization, dated
September 29, 1999, filed in the TransTexas Case, together with any amendments
made at the Confirmation Hearing and incorporated therein, including, without
limitation, the modifications set forth in the Company's Second Amended,
Modified and Restated Plan of Reorganization, dated January 25, 2000, filed in
the TransTexas Case and to which reference is made in the Confirmation Order,
and together with any amendments or modifications made after the entry of the
Confirmation Order in accordance with the provisions of Section 12.04 of the
Plan or of any Plan Order.
"Plan Order" means the Confirmation Order or any other order entered in
the TransTexas Case in accordance with the provisions of Section 12.04 of the
Plan.
"Pledged Stock" means the Capital Stock of the Subsidiaries of the
Company pledged pursuant to any of the Security Documents.
"Post Confirmation Credit Facility" means the $52,500,000 credit
facility between the Company and the Post Confirmation Credit Facility Lenders,
which credit facility is or will be secured by Liens on the Collateral ranking
prior to the Liens securing the Notes and pari passu with the Liens securing the
Extended DIP Facility.
"Post Confirmation Credit Facility Lenders" shall have the meaning
specified in the Plan.
["Post Confirmation Credit Facility Intercreditor Agreement"
means ____________________.]
"Preferred Stock" means, with respect to any Person, any class or
classes (however designated) of Capital Stock of such Person that is preferred
as to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person over shares
of Capital Stock of any other class of such corporation.
"Presale of Gas" means any advance payment agreement or other
arrangement pursuant to which the Company or any Guarantor, having received full
payment of the purchase price for a specified quantity of Hydrocarbons prior to
the first scheduled date of delivery, is required to deliver, in one or more
installments subsequent to the date of such agreement or arrangement, such
quantity of Hydrocarbons to the purchaser of such Hydrocarbons pursuant to and
during the term of such agreement or arrangement; provided, however, that the
term "Presale of Gas" shall not include (i) any such agreement or other
arrangement covering deliveries of Hydrocarbons for a period not exceeding three
calendar months and pursuant to which the Company or such Guarantor has received
full payment of the purchase price within 120 days of the last scheduled date of
delivery, (ii) a transaction to the extent and only to the extent that it
results in the creation of any Permitted Lien under clauses (l) or (o) of the
definition of "Permitted Liens," (iii) Permitted Hedging Transactions, or (iv)
an Asset Sale involving Hydrocarbon reserves.
"Priority Tax Claim" shall have the meaning specified in the Plan.
"principal amount" when used with respect to the Notes means the
principal amount of such Debt as indicated on the face of such Debt instrument.
19
27
"Property" means any right or interest in or to property or assets of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Receivables" means and includes, as to any Person, any and all of such
Person's now owned or hereafter acquired Accounts, all products and proceeds
thereof, and all books, records, ledger cards, files, correspondence, and
computer files, tapes, disks or software that at any time evidence or contain
information relating to such Person's Accounts.
"Record Date" means a Record Date specified in the Notes regardless of
whether such Record Date is a Business Day.
"Redemption Date" means, when used with respect to any Note to be
redeemed, the date fixed for such redemption pursuant to this Indenture and
Paragraph 5 in the form of Note attached hereto as Exhibit A.
"Redemption Price" when used with respect to any Note to be redeemed,
means the redemption price for such redemption pursuant to Paragraph 5 in the
form of Note attached hereto as Exhibit A, which shall include, without
duplication, accrued and unpaid interest to the Redemption Date.
"Reference Period" with regard to any Person means the four full fiscal
quarters of such Person ended on or immediately preceding any date upon which
any determination is to be made pursuant to the terms of the Notes or the
Indenture.
"Refinancing Debt" shall have the meaning specified in Section 4.11(g).
"Refinancing Fees" shall have the meaning specified in Section 4.11(g).
"Registrar" shall have the meaning specified in Section 2.3.
"Registration Rights Agreement" means the Registration Rights Agreement
dated [ ], by and among the Company and the Initial Holders.
"Related Business" means (i) the exploration for, acquisition of,
development of, production, transportation, gathering, and processing (in
connection with natural gas and natural gas liquids only) of, crude oil, natural
gas, condensate, and natural gas liquids; provided, however, that the Related
Business shall not include any refining or distilling of Hydrocarbons other than
processing and fractionating natural gas and natural gas liquids, (ii) the
drilling and energy services business and pipeline services business, (iii)
owning and operating a Hedging Subsidiary, or (iv) owning or operating
facilities designed for separation, dehydration, treatment, stabilization,
processing or storage of Hydrocarbons and related operations.
"Release Request" means a written request of the Company (or with
respect to the Security Documents, the grantor of the Security Interest
thereunder) in the form of an Officers' Certificate delivered pursuant to
Article XI.
"Repurchase Date" shall have the meaning specified in Section
4.14(d)(1).
"Repurchase Offer" shall have the meaning specified in Section 4.14(c).
"Repurchase Offer Amount" shall have the meaning specified in Section
4.14(d)(2).
20
28
"Repurchase Offer Period" shall have the meaning specified in Section
4.14(d)(2).
"Reserve Report" means a report prepared by independent petroleum
engineers with respect to Hydrocarbon reserves in accordance with guidelines
published by the SEC.
"Restricted Investment" means any direct or indirect Investment by the
Company or any Subsidiary of the Company other than a Permitted Investment.
"Restricted Payment" means, with respect to any Person, (i) any
Restricted Investment, (ii) any dividend or other distribution on shares of
Capital Stock of such Person or any Subsidiary of such Person, (iii) any payment
on account of the purchase, redemption, or other acquisition or retirement for
value of any shares of Capital Stock of such Person, and (iv) any defeasance,
redemption, repurchase, or other acquisition or retirement for value, or any
payment in respect of any amendment in anticipation of or in connection with any
such retirement, acquisition, or defeasance, in whole or in part, of any
Subordinated Debt, directly or indirectly, of such Person or a Subsidiary of
such Person prior to the scheduled maturity or prior to any scheduled repayment
of principal in respect of such Subordinated Debt; provided, however, that the
term "Restricted Payment" does not include (i) any dividend, distribution, or
other payment on shares of Capital Stock of a Person solely in shares of
Qualified Capital Stock of such Person that is at least as junior in ranking as
the Capital Stock on which such dividend, distribution, or other payment is to
be made, (ii) any defeasance, redemption, repurchase or other acquisition or
retirement for value of Capital Stock of a Person payable in or from any
combination of (A) shares of Qualified Capital Stock of such Person and (B) the
Net Proceeds of a concurrent sale of Qualified Capital Stock of such Person, in
each case to the extent such Qualified Capital Stock is at least as junior in
ranking as the Capital Stock retired, (iii) any dividends made pursuant to the
certificates of designation of the Senior Preferred Stock and the Junior
Preferred Stock, (iv) any dividend, distribution, or other payment to the
Company from any of its Subsidiaries, (v) any defeasance, redemption,
repurchase, or other acquisition or retirement for value, in whole or in part,
of any Subordinated Debt of such Person payable in or from any combination of
(A) shares of Qualified Capital Stock of such Person and (B) the Net Proceeds of
a concurrent sale of Qualified Capital Stock, or both, (vi) any deposits,
payments or distributions made pursuant to and in accordance with the Plan or a
Plan Order, or (vii) the redemption, purchase, retirement or other acquisition
of any Debt, including any premium paid thereon, with the proceeds of any
refinancing Debt permitted to be incurred pursuant to Section 4.11(g).
"Revolving Credit Facility" means any revolving credit facility, other
than the Post Confirmation Credit Facility, between the Company, on the one
hand, and any one or more banks or other lenders, on the other hand, and
includes any revolving credit facility effected by the Company in extension,
renewal, replacement or refunding of an existing revolving credit facility.
"Royalty Payment Obligations" means (i) royalties, overriding royalties
(including those granted in connection with Drilling Programs), revenue
interests, net revenue interests, net profit interests, and reversionary
interests, (ii) the interests of others in pooling or unitization agreements,
production sales contracts and operating agreements, (iii) Liens arising under,
in connection with or related to farm-out, farm-in, joint operating, pooling,
unitization or area of mutual interest agreements or other similar or customary
arrangements, agreements or interests, and (iv) similar burdens on the property
of the Company or any Subsidiary of the Company; each as incurred in the
ordinary course of business and to the extent such burdens are limited in
recourse to (x) the properties subject to such interests or agreements, (y) the
Hydrocarbons produced from such properties, and (z) the proceeds of such
Hydrocarbons.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
21
29
"Sale and Leaseback Transaction" means an arrangement relating to
property owned on the Issue Date or thereafter acquired whereby the Company or a
Subsidiary of the Company transfers such property to a Person and leases it back
from such Person.
"SEC" means the Securities and Exchange Commission.
"SEC PV10" means the standardized measure of future net cash flows
discounted at 10%, determined in all material respects in accordance with the
rules and regulations of the SEC, including the assumption of the continuation
of existing economic conditions and estimated by applying period-end gas and
condensate prices, adjusted for future price changes as allowed by contract, to
estimated future production of period-end proved reserves.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Security Agreement" means each security agreement, pledge agreement,
assignment, financing statement or similar document, however styled, executed by
the Company and/or any one or more of the Guarantors, or any other Person, for
the benefit of the Holders primarily for the purpose of creating or granting a
Lien on personal property (other than Inventory and Receivables), which shall be
excepted from the Lien thereof) to secure all or any part of (a) the obligations
of the Company pursuant to this Indenture, any one or more of the Security
Documents, and/or the Notes, and/or (b) the obligations of such Guarantor under
its Guarantee.
"Security Documents" means (a) each Mortgage, each Security Agreement,
and each other agreement relating to the mortgage, pledge or assignment of
assets to secure all or any part of (i) the obligations of the Company pursuant
to this Indenture, any one or more of the Security Documents, and/or the Notes,
and/or (ii) the obligations of a Guarantor under its Guarantee, whether executed
before, on or after the Issue Date, and (b) each Intercreditor Agreement.
"Security Interests" means the Liens on the Collateral created by the
Security Documents in favor of the Trustee for the benefit of the Holders.
"Senior Debt" means, with respect to any Person, any Debt that is not
Subordinated Debt.
"Senior Preferred Stock" means the Company's senior preferred stock,
$1.00 par value.
"Services Agreement" means the Services Agreement among TNGC Holdings
and its Subsidiaries, as in effect on the Issue Date.
"Shared Collateral" means the Collateral securing the Notes and the
Extended DIP Facility and/or the Post Confirmation Credit Facility.
"Special Record Date" for payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 2.12.
"Stated Maturity," when used with respect to any Note,
means [_________________].
"Subordinated Debt" means Debt that (i) requires no payment of
principal prior to or on the date on which all principal of and interest on the
Notes is paid in full, and (ii) is subordinate and junior in right of payment to
the Notes in the event of a liquidation.
22
30
"Subordination Agreement" means each instrument of subordination
executed and delivered or to be executed and delivered by the Trustee (and any
trustee or collateral agent under or with respect to any of the Security
Documents) pursuant to Section 11.2(b).
"Subordination Request" means a written request of the Company (or with
respect to the Security Documents, the grantor of the Security Interest
thereunder) in the form of an Officers' Certificate delivered pursuant to
Section 11.2(b).
"Subsidiary" with respect to any Person, means (i) a corporation with
respect to which such Person or its Subsidiaries owns, directly or indirectly,
at least fifty percent of such corporation's Capital Stock with voting power,
under ordinary circumstances, to elect directors, or (ii) a partnership in which
such Person or a subsidiary of such Person is, at the time, a general partner of
such partnership and has more than 50% of the total voting power of partnership
interests entitled (without regard to the occurrence of any contingency) to vote
in the election of managers thereof, or (iii) any other Person (other than a
corporation or a partnership) in which such Person, one or more Subsidiaries of
such Person, or such Person and one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof has the power to
elect or direct the election of a majority of the directors or other governing
body of such other Person; provided, however, that a joint venture an investment
in which would constitute a Permitted Investment under clause (viii) of the
definition thereof shall not be deemed a Subsidiary.
"Surviving Person" shall have the meaning specified in Section 5.1(a).
"Swap Obligation" of any Person means any Interest Rate or Currency
Agreement entered into with one or more financial institutions or one or more
futures exchanges in the ordinary course of business and not for purposes of
speculation that is designed to protect such Person against fluctuations in (x)
interest rates with respect to Debt incurred and which shall have a notional
amount no greater than 105% of the principal amount of the Debt being hedged
thereby, or (y) currency exchange rate fluctuations.
"TIA" means the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the execution of this
Indenture.
"TNGC" means TNGC Holdings Corporation, a Delaware corporation.
"TransTexas Case" means the Company's voluntary case pending as of the
date of this Indenture in the United States Bankruptcy Court for the Southern
District of Texas, Corpus Christi Division, under Chapter 11 of the Bankruptcy
Code as case number 99-21550-C-11.
"Trust Officer" means any officer within the corporate trust department
(or any successor group) of the Trustee including any vice president, assistant
vice president, secretary, assistant secretary or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the Persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust matter, any other officer of
the corporate trust department (or any successor group) of the Trustee to whom
such trust matter is referred because of his knowledge of and familiarity with
the particular subject.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Twelve-Month Period" shall have the meaning specified in Section
11.4(b).
"U.S.C." means the United States Code, as amended.
23
31
"U.S. Government Obligations" means direct non-callable obligations of,
or non-callable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Vehicles" means all trucks, automobiles, trailers and other vehicles
covered by a certificate of title.
"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" means Capital Stock of a Person having generally the
right to vote in the election of directors of such Person.
"Weighted Average Life" means, as of the date of determination, with
respect to any debt instrument, the quotient obtained by dividing (i) the sum of
the products of the numbers of years from the date of determination to the dates
of each successive scheduled principal payment of such debt instrument
multiplied by the amount of such principal payment by (ii) the sum of all such
principal payments.
Section 1.2 Incorporation by Reference of TIA. Whenever this Indenture
refers to a provision of the TIA, such 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:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture securityholder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the Notes means the Company and any other obligor on the
Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
Section 1.3 Rules of Construction. Unless the context otherwise
requires:
(l) 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" is not exclusive;
24
32
(4) words in the singular include the plural, and words in
the plural include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(7) references to Sections or Articles means reference to
such Section or Article in this Indenture, unless
stated otherwise.
ARTICLE II
THE NOTES
Section 2.1 Form and Dating. The Notes and the Trustee's certificate
of authentication, in respect thereof, shall be substantially in the form of
Exhibit A, the terms of which are incorporated in and made a part of this
Indenture. The Notes may have notations, legends or endorsements required by
law, stock exchange rule or usage. The Company and the Trustee shall approve the
form of the Notes and any notation, legend or endorsement on them. Any such
notations, legends or endorsements not contained in the form of Note attached as
Exhibit A hereto shall be delivered in writing to the Trustee. Each Note shall
be dated the date of its authentication.
The terms and provisions contained in the form of Note shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, 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. In the event of any inconsistency between the Notes and this Indenture,
this Indenture controls.
Section 2.2 Execution and Authentication. Two Officers shall sign, or
one Officer shall sign and one Officer or any Assistant Secretary shall attest
to, the Notes for the Company by manual or facsimile signature. The Company's
seal shall be impressed, affixed, imprinted or reproduced on the Notes and may
be in facsimile form.
If an Officer whose signature is on a Note was an Officer at the time
of such execution but no longer holds that office at the time the Trustee
authenticates the Note, the Note shall be valid nevertheless and the Company
shall nevertheless be bound by the terms of the Notes and this Indenture.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note but such signature
shall be conclusive evidence that the Note has been authenticated pursuant to
the terms of this Indenture.
The Trustee shall authenticate Notes for original issue in the
aggregate principal amount of up to $200,000,000 upon a written order of the
Company in the form of an Officers' Certificate. The Officers' Certificate shall
specify the amount of Notes to be authenticated and the date on which the Notes
are to be authenticated. The aggregate principal amount of Notes outstanding at
any time may not exceed $200,000,000, except as provided in Section 2.7. Upon
the written order of the Company in the form of an Officers' Certificate, the
Trustee shall authenticate Notes in substitution of Notes originally issued to
reflect any name change of the Company.
25
33
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless otherwise provided in the appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company, any Guarantor, or any of their respective
Subsidiaries.
Notes shall be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
Section 2.3 Registrar and Paying Agent. The Company shall maintain an
office or agency in the Borough of Manhattan in the City of New York, New York,
where Notes may be presented for registration of transfer or for exchange
("Registrar") and an office or agency in the Borough of Manhattan in the City of
New York, New York, where Notes may be presented for payment ("Paying Agent").
Notices and demands to or upon the Company in respect of the Notes may be served
as is provided in Section 14.2. The Company or any Affiliate of the Company may
act as Registrar or Paying Agent, except that, for the purposes of Articles III
and VIII and Sections 4.14 and 4.16, neither the Company, any Guarantor, nor any
Affiliate of the Company shall act as Paying Agent. The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company may have
one or more co-Registrars and one or more additional Paying Agents. The term
"Paying Agent" includes any additional Paying Agent. The Company hereby
initially appoints the Trustee as Registrar and Paying Agent, and the Trustee
hereby initially agrees so to act.
The Company shall enter into an appropriate written agency agreement
with any Agent not a party to this Indenture, which agreement shall implement
the provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee in writing in advance of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such.
Section 2.4 Paying Agent to Hold Assets in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that each
Paying Agent shall hold in trust for the benefit of Holders or the Trustee all
assets held by the Paying Agent for the payment of principal of, or interest on,
the Notes (whether such assets have been distributed to it by the Company or any
other obligor on the Notes), and shall notify the Trustee in writing of any
Default in making any such payment. If the Company or any Affiliate of the
Company acts as Paying Agent, it shall segregate such assets and hold them as a
separate trust fund for the benefit of the Holders or the Trustee. The Company
at any time may require a Paying Agent to distribute all assets held by it to
the Trustee and account for any assets disbursed and the Trustee may at any time
during the continuance of any payment Default, upon written request to a Paying
Agent, require such Paying Agent to distribute all assets held by it to the
Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent (if other than the Company, or any Affiliate of
the Company) shall have no further liability for such assets.
Section 2.5 Noteholder Lists. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee on or before the third Business Day preceding 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 reasonably may
require of the names and addresses of Holders.
Section 2.6 Transfer and Exchange. When Notes are presented by a
Holder to the Registrar with a request to register the transfer of the Notes or
to exchange such Notes for an equal principal amount of Notes of other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met;
provided, however, that the Notes so presented
26
34
have been duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Registrar duly executed by such Holder or by his
attorney, duly authorized in writing. The signature of the Holder or his duly
authorized attorney must be guaranteed by a participant in the Securities
Transfer Agents Medallion Program, the Stock Exchanges Medallion Program or the
New York Stock Exchange Inc. Medallion Signature Program. To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Notes at the Registrar's request. All Notes issued
upon any registration of transfer or exchange of Notes shall be legal, valid and
binding obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
No service charge shall be made to a Holder for any registration of
transfer or exchange, but the Company or the Trustee 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 (without transfer to another Person)
pursuant to Sections 2.10, 3.7, 4.14 and 9.5 of this Indenture).
The Company shall not be required (i) to issue, register the transfer
of or exchange Notes during a period beginning at the opening of business 15
days before the day of any selection of Notes for redemption under Section 3.2
hereof and ending at the close of business on the day of selection, (ii) to
register the transfer of or exchange any Note so selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed in
part, or (iii) to register the transfer of or exchange a Note between a record
date and the next succeeding interest payment date.
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 all
purposes, and neither the Trustee, any Agent nor the Company shall be affected
by notice to the contrary.
Section 2.7 Replacement Notes. If a mutilated Note is surrendered to
the Trustee or if the Holder of a Note claims and submits an affidavit or other
evidence, satisfactory to the Company and the Trustee, to the Trustee to the
effect that the Note has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Company, such
Holder must provide an indemnity bond or other indemnity, sufficient in the
judgment of both the Company and the Trustee, to protect the Company, the
Trustee or any Agent from any loss which any of them may suffer if a Note is
replaced. The Company and the Trustee may charge such Holder for its reasonable,
out-of-pocket expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company.
Section 2.8 Outstanding Notes. Notes outstanding at any time are all
the Notes that have been authenticated by the Trustee except those canceled by
it, those delivered to it for cancellation, and those described in this Section
2.8 as not outstanding. A Note does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Note, except as provided in
Section 2.9.
If a Note is replaced pursuant to Section 2.7 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.7.
27
35
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company or an Affiliate of the Company) holds U.S. Legal Tender or U.S.
Government Obligations sufficient to pay all of the principal and interest due
on the Notes payable on that date, then on and after that date such Notes cease
to be outstanding and interest on them ceases to accrue.
Section 2.9 Treasury Notes. In determining whether the Holders of the
required principal amount of Notes have concurred in any direction, amendment,
supplement, waiver or consent, Notes owned by the Company and Affiliates of the
Company shall be disregarded, except that, for the purposes of determining
whether the Trustee shall be protected in relying on any such direction,
amendment, supplement, waiver or consent, only Notes that the Trustee knows or
has reason to know are so owned shall be disregarded.
Section 2.10 Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Company reasonably and in good faith considers
appropriate for temporary Notes. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Notes in exchange for
temporary Notes. Until so exchanged, the temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as permanent Notes
authenticated and delivered hereunder.
Section 2.11 Cancellation. The Company at any time may deliver Notes
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent (other than the Company or any Affiliate of the Company), and no
one else, shall cancel and, at the written direction of the Company, shall
dispose of all Notes surrendered for transfer, exchange, payment or
cancellation. Subject to Section 2.7, the Company may not issue new Notes to
replace Notes it has paid or delivered to the Trustee for cancellation. No Notes
shall be authenticated in lieu of or in exchange for any Notes canceled as
provided in this Section 2.11, except as expressly permitted in the form of Note
and as permitted by this Indenture.
Section 2.12 Defaulted Interest. Interest on any outstanding Note
which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that Note (or one or more
predecessor Notes) is registered at the close of business on the Record Date for
such interest.
Any interest on any outstanding Note which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date plus, to the
extent lawful, any interest payable on the defaulted interest (herein called
"Defaulted Interest") shall forthwith cease to be payable to the registered
Holder on the relevant Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes (or their respective
predecessor Notes) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Note and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as provided in this clause (1). Thereupon
the Trustee shall fix a Special Record Date for the payment of such
Defaulted
28
36
Interest which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder at his address set forth upon the registry books of the
Company on the 10th day prior to such Special Record Date. The Trustee
may, in its discretion, in the name and at the expense of the Company,
cause a similar notice to be published at least once in a newspaper,
customarily published in the English language on each Business Day and
of general circulation in the Borough of Manhattan, the City of New
York, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid
to the Persons in whose names the Notes (or their respective
predecessor Notes) are registered on such Special Record Date and shall
no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
clause accompanied by an Opinion of Counsel stating that the manner of
payment complies with this clause, such manner shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Note shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Note.
Section 2.13 Computation of Interest. Interest on the Notes will be
computed on the basis of a 360-day year consisting of twelve 30-day months.
ARTICLE III
REDEMPTION
Section 3.1 Right of Redemption. Redemption of Notes, as permitted or
required by any provision of this Indenture, shall be made in accordance with
such provision and this Article III. The Notes may be redeemed at the election
of the Company, as a whole or from time to time in part, at any time on or after
the Issue Date, at the applicable Redemption Prices specified in Paragraph 5 of
the form of Note attached as Exhibit A hereto, set forth therein under the
caption "Optional Redemption," in each case, including accrued and unpaid
interest to the Redemption Date.
Section 3.2 Notices to Trustee. If the Company elects to redeem Notes
pursuant to Paragraph 5 of the Notes, it shall notify the Trustee in writing of
the Redemption Date and the principal amount of Notes to be redeemed and whether
it wants the Trustee to give notice of redemption to the Holders.
The Company shall give each notice to the Trustee provided for in this
Section 3.2 at least 30 days before the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee).
29
37
Section 3.3 Selection of Notes to Be Redeemed. If less than all of the
Notes are to be redeemed pursuant to Paragraph 5 thereof, the Trustee shall
select the Notes to be redeemed pro rata, by lot or in such other manner as in
its sole discretion it deems appropriate and fair, and in such manner as
complies with any applicable legal and stock exchange requirements.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption and shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be redeemed.
Notes in denominations of $1,000 may be redeemed only in whole. The Trustee may
select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Notes that have denominations larger than $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.4 Notice of Redemption. At least 30 days but not more than
60 days before a Redemption Date, the Company shall mail a notice of redemption
by first class mail, postage prepaid, to the Trustee and each Holder whose Notes
are to be redeemed. At the Company's request, the Trustee shall give the notice
of redemption in the Company's name and at the Company's expense. Each notice of
redemption shall identify the Notes to be redeemed and shall state the following
and such other matters as the Trustee shall deem proper:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of accrued and
unpaid interest to be paid upon such redemption;
(3) the name, address and telephone number of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent at the address specified in such notice to
collect the Redemption Price;
(5) that, unless the Company defaults in its obligation to
deposit U.S. Legal Tender with the Paying Agent in accordance
with Section 3.6, interest on Notes called for redemption
ceases to accrue on and after the Redemption Date and the
only remaining right of the Holders of such Notes is to
receive payment of the Redemption Price, including accrued
and unpaid interest, upon surrender to the Paying Agent of
the Notes called for redemption and to be redeemed;
(6) if any Note is being redeemed in part, the portion of the
principal amount, equal to $1,000 or any integral multiple
thereof, of such Note that will not be redeemed and that,
after the Redemption Date and upon surrender of such Note, a
new Note or Notes in aggregate principal amount equal to the
unredeemed portion thereof will be issued;
(7) if less than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof)
to be redeemed, as well as the aggregate principal amount of
such Notes to be redeemed and the aggregate principal amount
of Notes to be outstanding after such partial redemption;
(8) the CUSIP number of the Notes to be redeemed; and
30
38
(9) that the notice is being sent pursuant to this Section 3.4
and pursuant to the redemption provisions of Paragraph 5 of
the Notes.
Section 3.5 Effect of Notice of Redemption. Once notice of redemption
is mailed in accordance with Section 3.4, Notes called for redemption become due
and payable on the Redemption Date and at the Redemption Price, including
accrued and unpaid interest. Upon surrender to the Trustee or Paying Agent, such
Notes called for redemption shall be paid at the Redemption Price, including
interest, if any, accrued and unpaid on the Redemption Date; provided, however,
that if the Redemption Date is after a regular Record Date and on or prior to
the Interest Payment Date, the accrued interest through the date of redemption
shall be payable to the Holder of the redeemed Notes registered on the relevant
Record Date; and provided, further, that if a Redemption Date is a Legal
Holiday, payment shall be made on the next succeeding Business Day and no
interest shall accrue for the period from such Redemption Date to such
succeeding Business Day.
Upon compliance by the Company with the provisions of this Article III,
including but not limited to Section 3.6, interest on the Notes called for
redemption will cease to accrue on and after the Redemption Date, regardless of
whether such Notes are presented for payment.
Section 3.6 Deposit of Redemption Price. On or prior to the Redemption
Date, the Company shall deposit with the Paying Agent (other than the Company or
an Affiliate of the Company) U.S. Legal Tender sufficient to pay the Redemption
Price of, including accrued and unpaid interest on, all Notes to be redeemed on
such Redemption Date (other than Notes or portions thereof called for redemption
on that date that have been delivered by the Company to the Trustee for
cancellation). The Paying Agent shall promptly return to the Company any U.S.
Legal Tender so deposited which is not required for that purpose upon the
written request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article III, interest on the Notes to be redeemed will cease
to accrue on the applicable Redemption Date, regardless of whether such Notes
are presented for payment. Notwithstanding anything herein to the contrary, if
any Note surrendered for redemption in the manner provided in the Notes shall
not be so paid upon surrender for redemption because of the failure of the
Company to comply with the preceding paragraph, interest shall continue to
accrue and be paid from the Redemption Date until such payment is made on the
unpaid principal and, to the extent lawful, on any interest not paid on such
unpaid principal, in each case at the rate and in the manner provided in Section
4.1 and the Note.
Section 3.7 Notes Redeemed in Part. Upon surrender of a Note that is
to be redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder, without service charge, a new Note or
Notes equal in principal amount to the unredeemed portion of the Note
surrendered.
ARTICLE IV
COVENANTS
Section 4.1 Payment of Notes. The Company shall pay the principal of
and interest on the outstanding Notes on the dates and in the manner provided in
the Notes to the Trustee at its New York agent's office unless otherwise
instructed in writing by the Trustee. An installment of principal of or interest
on the Notes shall be considered paid on the date it is due if the Trustee or
Paying Agent (other than the Company or an Affiliate of the Company) holds for
the benefit of the Holders, on or before 12:00 noon, New York, New York time on
that date, U.S. Legal Tender deposited and designated for and sufficient to pay
the installment.
31
39
The Company shall pay any and all amounts, including without limitation,
liquidated damages, if any, on the dates and in the manner required under the
Registration Rights Agreement.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Notes compounded
semi-annually, to the extent lawful.
Notwithstanding anything to the contrary contained in this Indenture,
the Company or the Trustee may, to the extent required by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal, premium or interest payments on the Notes.
Section 4.2 Maintenance of Office or Agency. The Company shall maintain
in the Borough of Manhattan in the City of New York, New York, an office or
agency where Notes may be presented or surrendered for payment, where Notes may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 14.2.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan in the City of New York, New York, for such purposes. The Company
shall give prior written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby initially designates the corporate trust office of the
Trustee in the Borough of Manhattan in the City of New York, New York, as such
office of the Company.
Section 4.3 Limitation on Restricted Payments. The Company shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly, make
any Restricted Payment.
Section 4.4 Corporate Existence. Subject to Article V, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence and the corporate or other existence of each
of its Subsidiaries in accordance with the respective organizational documents
of each of them and the rights (charter and statutory) and corporate franchises
of the Company and each of its Subsidiaries; provided, however, that the Company
shall not be required to preserve, with respect to itself, any right or
franchise, and with respect to any of its Subsidiaries, any such existence,
right or franchise, if (a) the Board of Directors of the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and (b) the loss thereof is not disadvantageous in any
material respect to the Holders.
Section 4.5 Payment of Taxes and Other Claims. The Company shall, and
shall cause each of its Subsidiaries to, pay or discharge or cause to be paid or
discharged, before the same shall become delinquent all taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon the Company or any of its
Subsidiaries or any of their respective properties and assets; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment or charge whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which disputed amounts adequate reserves have been
established in accordance with GAAP.
32
40
Section 4.6 Maintenance of Properties and Insurance.
(a) Each of the Company and its Subsidiaries shall cause the properties
used or useful to the conduct of its business and the business of each of its
Subsidiaries to be maintained and kept in good condition, repair and working
order (reasonable wear and tear excepted) and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in its reasonable
judgment may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
(b) Each of the Company and its Subsidiaries shall provide, or shall
cause to be provided, for itself and each of its Subsidiaries, insurance
(including appropriate self-insurance) against loss or damage of the kinds that,
in its reasonable, good faith opinion, are adequate and appropriate for the
conduct of its business and the business of such Subsidiaries in a prudent
manner, with reputable insurers or with the government of the United States of
America or an agency or instrumentality thereof, in such amounts, with such
deductibles, and by such methods as is customary, in its reasonable, good faith
opinion, and adequate and appropriate for the conduct of its business and the
business of its Subsidiaries in a prudent manner for companies engaged in a
similar business. In addition, all such insurance shall be payable to the
Trustee as loss payee, as its interests may appear, under a "standard" or
"Texas" loss payee clause. Without limiting the foregoing, each of the Company
and its Subsidiaries shall (i) keep all of its physical property insured with
hazard insurance on an "all risks" basis, with broad form flood and earthquake
coverages, with a full replacement cost endorsement and an "agreed amount"
clause in an amount equal to 100% of the full replacement cost of such property,
(ii) maintain all such workers' compensation or similar insurance as may be
required by law, and (3) maintain, in amounts and with deductibles equal to
those generally maintained by businesses engaged in similar activities in
similar geographic areas, general public liability insurance against claims of
bodily injury, death or property damage occurring on, in or about the properties
of the Company and its Subsidiaries.
All policies of insurance shall provide for at least ten days' prior
written cancellation notice to the Trustee. In the event of failure by the
Company and its Subsidiaries to provide and maintain insurance as described
herein; provided, however, the Trustee may, at its option, provide such
insurance and charge the amount thereof to the Company and its Subsidiaries. The
Company and its Subsidiaries shall furnish the Trustee with certificates of
insurance and policies evidencing compliance with the foregoing insurance
provision.
Section 4.7 Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee within 60 days after the
end of each of its fiscal quarters, or 105 days after the end of a fiscal
quarter that is also the end of a fiscal year, an Officers' Certificate
complying with Section 314(a)(4) of the TIA and stating that a review of its
activities and the activities of its Subsidiaries during the preceding fiscal
quarter has been made under the supervision of the signing Officers with a view
to determining whether the Company and its Subsidiaries have kept, observed,
performed and fulfilled its obligations (excluding those obligations addressed
by Section 11.3) under this Indenture and further stating, as to each such
Officer signing such certificate, regardless of whether the signer knows of any
failure by the Company or any Subsidiary of the Company to comply with any
conditions or covenants in this Indenture, or of the occurrence of any Default,
and, if such signer does know of such a failure to comply or Default, the
certificate shall describe such failure or Default with particularity.
(b) The Company shall deliver to the Trustee within 105 days after the
end of each of its fiscal years a written report of a firm of independent
certified public accountants with an established national reputation stating
that in conducting their audit for such fiscal year, nothing has come to their
attention that caused them
33
41
to believe that the Company or any Subsidiary of the Company was not in
compliance with the provisions set forth in Section 4.3, 4.11, 4.14 or 4.16.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, immediately upon becoming aware of any Default or Event
of Default under this Indenture, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto. The Trustee shall not be deemed to have knowledge of
a Default or an Event of Default unless one of its trust officers receives
notice of the Default giving rise thereto from the Company or any of the
Holders.
(d) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, promptly after the occurrence thereof, an Officers'
Certificate informing the Trustee in reasonable detail of (i) any change in the
composition of the Board of Directors of the Company or any of its Subsidiaries,
and/or (ii) any amendment to the charter or bylaws of the Company or any of its
Subsidiaries.
Section 4.8 SEC Reports and TIA Compliance. Whether or not the Company
is subject to the reporting requirements of Section 13 or Section 15(d) of the
Exchange Act, the Company shall deliver to the Trustee and each Holder, within
15 days after it is or would have been (if the Company were subject to such
reporting requirements) required to file such with the SEC, annual and quarterly
financial statements substantially equivalent to financial statements that would
have been included in the reports filed with the SEC if the Company were subject
to the reporting requirements of Section 13 or Section 15(d) of the Exchange
Act, including, with respect to annual information only, a report thereon by the
Company's independent certified public accountants as such would be required in
such reports to the SEC, and, in each case, together with a management's
discussion and analysis of financial condition and results of operations which
would be so required and, unless the SEC will not accept such reports, file with
the SEC the annual, quarterly and other reports which it is or would have (if it
were subject to such reporting obligations) been required to file with the SEC.
The Company shall also comply with the other provisions of TIA ss. 314(a).
Section 4.9 Limitation on Status as Investment Company or Public
Utility Company. The Company shall not, and shall not permit any of its
Subsidiaries to, become an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended), or a "holding company," or "public
utility company" (as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended) or otherwise become subject to regulation under
the Investment Company Act or the Public Utility Holding Company Act.
Section 4.10 Limitation on Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Subsidiaries
to, enter directly or indirectly into, or permit to exist, any Affiliate
Transaction with any Officer Affiliate, except for (i) transactions that
constitute Permitted Investments under clause (vi) of the definition of the term
"Permitted Investments" set forth in Section 1.1, (ii) employee compensation
arrangements relating to the full-time employment of Officer Affiliates by the
Company or any of its Subsidiaries, (iii) the Existing Officer Agreements, and
(iv) transactions effected pursuant to and in accordance with the terms of the
Existing Officer Agreements.
(b) The Company shall not, and shall not permit any of its Subsidiaries
to, enter directly or indirectly into, or permit to exist, any Affiliate
Transaction with any Non-Officer Affiliate, except for (i) transactions made in
good faith, the terms of which are (x) fair and reasonable to the Company or
such Subsidiary, as the case may be, (y) at least as favorable as the terms
which could be obtained by the Company or such Subsidiary, as the case may be,
in a comparable transaction made on an arm's length basis with Persons who are
not Affiliates and (z) such transaction must first be unanimously approved by
the Board of Directors of
34
42
the Company or its Subsidiary which is the transacting party pursuant to a Board
Resolution, as fair and reasonable to the Company or such Subsidiary, as the
case may be, and on terms which are at least as favorable as the terms which
could be obtained by the Company or such Subsidiary, as the case may be, on an
arm's length basis with Persons who are not Affiliates, (ii) transactions
between the Company and any of its wholly owned Subsidiaries or transactions
between wholly owned Subsidiaries of the Company, (iii) transactions pursuant to
the Notes, the Security Documents, the Services Agreement and the Registration
Rights Agreements, in each case, as amended, and (iv) any employee compensation
arrangement or ordinary course expense advance.
(c) Without limiting the foregoing provisions of Section 4.10(b), with
respect to any Affiliate Transaction or series of Affiliate Transactions (other
than any Affiliate Transaction described clauses (ii), (iii), or (iv) of Section
4.10(b)) with an aggregate value in excess of $5 million, the Company must first
obtain a favorable written opinion as to the fairness of such transaction to the
Company or such Subsidiary, as the case may be, from a financial point of view,
from a nationally recognized investment banking or "big 5" accounting firm.
Section 4.11 Limitation on Incurrences of Additional Debt and Issuances
of Disqualified Capital Stock. Except as set forth in this Section 4.11, from
and after the Issue Date, the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, or
otherwise become liable for, contingently or otherwise (to "Incur" or, as
appropriate, an "Incurrence"), any Debt or issue any Disqualified Capital Stock,
except:
(a) Debt evidenced by the Notes or the Guarantees;
(b) Subordinated Debt of the Company solely to any wholly owned
Subsidiary of the Company, or Debt of any wholly owned Subsidiary of the Company
solely to the Company or to any wholly owned Subsidiary of the Company;
provided, however, that if any Subsidiary holding such Debt, for any reason, is
no longer deemed a Subsidiary of the Company, any outstanding Debt Incurred by
the Company or another Subsidiary pursuant to this Section 4.11(b) shall
constitute a new Incurrence of Debt and be subject to the restrictions of
Section 4.11.
(c) Debt outstanding under a Revolving Credit Facility in an aggregate
principal amount at any one time not to exceed the Borrowing Base as at the time
in effect, plus any amount outstanding under the Revolving Credit Facility to
the extent incurred pursuant to Section 4.11(j);
(d) Debt in an aggregate principal amount outstanding not to exceed at
any one time $120 million, provided, however, that the aggregate principal
amount outstanding under the Extended DIP Facility and/or the Post Confirmation
Credit Facility shall not exceed $52.5 million, plus any amount outstanding
under the Post Confirmation Credit Facility to the extent incurred pursuant to
Section 4.11(j);
(e) Debt of the Company secured by a Permitted Lien that meets the
requirements of clause (c), (d), or (e) of the definition of "Permitted Liens"
set forth in Section 1.1;
(f) (1) any guaranty of Debt permitted by clauses (c), (d), or (j)
hereof, which guaranty shall not be included in the determination of the amount
of Debt which may be incurred pursuant to (c), (d), or (j) hereof, or (2) any
guarantee by the Company of the obligations of any wholly owned Subsidiary of
the Company to the extent such obligations so guaranteed (A) do not constitute
Debt (unless and only to the extent such Debt is otherwise permitted under this
Section 4.11), and (B) except to the extent such obligations constitute Debt
otherwise permitted under this Section 4.11, such obligations are of the type
customarily Incurred by such wholly owned Subsidiary in favor of third parties
in the ordinary course of conducting its Related Business;
35
43
(g) The Company may Incur Debt as an extension, renewal, replacement, or
refunding of any item of the Debt permitted to be incurred by Section 4.11(j),
the Debt existing on the Issue Date, or the Debt permitted to be incurred by
this Section 4.11(g) (each such item of Debt is referred to as "Refinancing
Debt"), provided, however, that (1) the maximum principal amount of each item of
Refinancing Debt (or, if such item of Refinancing Debt is issued with original
issue discount, the original issue price of such item of Refinancing Debt)
permitted under this clause (g) may not exceed the lesser of (x) the principal
amount of the item of Debt being extended, renewed, replaced, or refunded plus
reasonable financing fees and other associated reasonable out-of-pocket expenses
including consent payments, premium, if any, and related fees, in each case
other than those paid to a Affiliate (collectively, "Refinancing Fees"), or (y)
if such item of Debt being extended, renewed, replaced, or refunded was issued
at an original issue discount, the original issue price, plus amortization of
the original issue discount as of the time of the Incurrence of such item of
Refinancing Debt plus Refinancing Fees, (2) each item of Refinancing Debt has a
Weighted Average Life and a final maturity that is equal to or greater than the
related Debt being extended, renewed, replaced, or refunded at the time of such
extension, renewal, replacement, or refunding, and (3) each item of Refinancing
Debt shall rank with respect to the Notes to an extent no less favorable in
respect thereof to the Holders than the related Debt being refinanced;
(h) Debt represented by trade payables or accrued expenses, in each case
incurred on normal, customary terms in the ordinary course of business, not
overdue for a period of more than 45 days (or, if overdue for a period of more
than 45 days, being contested in good faith and by appropriate proceedings and
adequate reserves with respect thereto being maintained on the books of Trans
Texas in accordance with GAAP) and not constituting any amounts due to banks or
other financial institutions;
(i) Swap Obligations of the Company;
(j) Debt of the Company to holders of Allowed Priority Tax Claims under
the Plan, to holders of Allowed Claims in classes 2, 5, 6A or 6B under the Plan,
or under surety bonds, letters of credit or reimbursement obligations related to
or constituting collateral securing the Company's obligations thereunder;
(k) the Company may enter into an agreement for the Presale of Gas for
cash if the net proceeds from such sale are used to make a Note Redemption;
(l) letters of credit and reimbursement obligations relating thereto to
the extent collateralized by cash or Cash Equivalents;
(m) Debt secured by a Permitted Lien that meets the requirements of
clause (x) of the definition of "Permitted Liens" set forth in Section 1.1; and
(n) the Attributable Debt Incurred by the Company in connection with a
Sale and Leaseback Transaction of the Headquarters Facility if the aggregate
principal amount thereof at the time of Incurrence does not exceed 100% of the
appraised Value of the Headquarters Facility as determined by an Appraisal dated
not more than six (6) months prior to the date on which such Sale and Leaseback
Transaction is consummated.
Debt incurred and Disqualified Capital Stock issued by any Person that
is not a Subsidiary of the Company, which Debt or Disqualified Capital Stock is
outstanding at the time such Person becomes a Subsidiary of, or is merged into,
or consolidated with the Company or one of its Subsidiaries, as the case may be,
shall be deemed to have been incurred or issued, as the case may be, at the time
such Person becomes a Subsidiary of, or is merged into, or consolidated with the
Company or one of its Subsidiaries.
36
44
For the purpose of determining compliance with this Section 4.11, (A) if
an item of Debt meets the criteria of more than one of the types of Debt
described in the above clauses, the Company or the Subsidiary in question shall
have the right to determine in its sole discretion the category to which such
Debt applies and shall not be required to include the amount and type of such
Debt in more than one of such categories and may elect to apportion such item of
Debt between or among any two or more of such categories otherwise applicable,
provided, however, that any Refinancing Debt Incurred by the Company as an
extension, renewal, replacement or refunding of Debt existing on the Issue Date
and initially categorized upon Incurrence under Section 4.11(c) or Section
4.11(d) must continue to be categorized under, and apportioned in its entirety
to, Section 4.11(c) or Section 4.11(d), as the case may be, and (B) the amount
of any Debt which does not pay interest in cash or which was issued at a
discount to face value shall be deemed to be equal to the amount of the
liability in respect thereof determined in accordance with GAAP.
Section 4.12 Limitations on Restricting Subsidiary Dividends. The
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create, assume, or suffer to exist any consensual encumbrance or
restriction on the ability of any Subsidiary of the Company to pay dividends or
make other distributions on the Capital Stock of any Subsidiary of the Company,
except encumbrances and restrictions existing under this Indenture, the Extended
DIP Facility, the Post Confirmation Credit Facility or the Revolving Credit
Facility (or any refinancing of any such Debt facilities incurred in accordance
with Section 4.11(g)), and any agreement of a Person acquired by the Company or
a Subsidiary of the Company, which restrictions existed at the time of
acquisition, were not put in place in anticipation of such acquisition and are
not applicable to any Person or property, other than the Person or any property
of the Person so acquired.
Section 4.13 Limitation on Liens. The Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, Incur, or suffer to
exist any Lien upon any of its respective property or assets, whether now owned
or hereafter acquired, which property or assets constitute Collateral, other
than Permitted Liens. For the purpose of determining compliance with this
Section 4.13, if a Lien meets the criteria of more than one of the types of
Permitted Liens, the Company or the Subsidiary in question shall have the right
to determine in its sole discretion the category of Permitted Lien to which such
Lien applies, shall not be required to include such Lien in more than one of
such categories, and may elect to apportion such Lien between or among any two
or more categories otherwise applicable.
Section 4.14 Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any of its Subsidiaries
to, consummate an Asset Sale unless (A) an amount equal to the Net Cash Proceeds
therefrom is (i) applied to a Note Redemption, (ii) used to make cash payments
in the ordinary course of business and consistent with past practices that are
not otherwise prohibited by this Indenture, provided, however, that the
aggregate amount so used pursuant to this clause (ii) from and after the Issue
Date does not exceed $3 million (without duplication of amounts used to acquire
any Capital Assets in accordance with clause (iii) of this Section 4.14(a)
below), (iii) used for Capital Expenditures in a Related Business within 180
days after the date of such Asset Sale; or (iv) with respect to an Asset Sale by
the Company or any of its Subsidiaries resulting from (x) the damage to or
destruction of assets for which insurance proceeds are paid or (y) condemnation,
eminent domain or similar type proceedings, in each case, used for Capital
Expenditures in a Related Business within 360 days after the date of such Asset
Sale; and (B) in the case of any Asset Sale or series of related Asset Sales for
total proceeds in excess of $1 million, at least 85% of the value of the
consideration for such Asset Sale consists of cash, Cash Equivalents or Exchange
Assets, or any combination thereof.
(b) To the extent of the balance of such Net Cash Proceeds remaining
after application in accordance with Section 4.14(a), the Company shall make an
offer to the Holders to purchase Notes pursuant to and subject to the conditions
contained in this Indenture. Notwithstanding the foregoing provision of this
37
45
paragraph, the Company and its Subsidiaries shall not be required to apply any
Net Cash Proceeds in accordance with this Section 4.14(b) except to the extent
that the aggregate Net Cash Proceeds from all Asset Sales which are not applied
in accordance with Section 4.14(a) or with this Section 4.14(b) exceeds $5
million. Pending application of Net Cash Proceeds pursuant to this Section
4.14(b), such Net Cash Proceeds shall be invested in Permitted Investments.
(c) In the event of an Asset Sale that requires the purchase of Notes
pursuant to Section 4.14(b), the Company shall be required to purchase Notes
tendered pursuant to an offer by the Company for the Notes (the "Repurchase
Offer") at a purchase price of 100% of their principal amount (without premium)
plus accrued but unpaid interest in accordance with the procedures (including
prorating in the event of oversubscription) set forth in Section 4.14(d). The
Company shall not be required to make a Repurchase Offer to purchase Notes
pursuant to this Section 4.14 if the Net Cash Proceeds available therefor is
less than $5 million (which lesser amount shall be carried forward for purposes
of determining whether such an Offer is required with respect to the Net Cash
Proceeds from any subsequent Asset Sale).
(d) (1) Promptly, and in any event within 20 days after the Company
becomes obligated to make a Repurchase Offer, the Company shall be obligated to
deliver to the Trustee and send, by first-class mail to each Holder, a written
notice stating that the Holder may elect to have his Notes purchased by the
Company either in whole or in part (subject to prorating as hereinafter
described in the event the Offer is oversubscribed) in integral multiples of
$1,000 of principal amount, at the applicable purchase price. The notice shall
specify a purchase date not less than 30 days nor more than 60 days after the
date of such notice (the "Repurchase Date") and shall contain such information
concerning the business of the Company which the Company in good faith believes
will enable such Holders to make an informed decision (which at a minimum will
include (i) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q of the Company and any Current
Report on Form 8-K of the Company filed subsequent to such Quarterly Report,
other than Current Reports describing Asset Sales otherwise described in the
offering materials (or corresponding successor reports), (ii) a description of
material developments in the Company's. business subsequent to the date of the
latest of such Reports, (iii) if material, appropriate pro forma financial
information, and (iv) all instructions and materials necessary to tender Notes
pursuant to the Repurchase Offer, together with the information contained in
clause (3) of this Section 4.14(d).
(2) Not later than the date upon which written notice of a
Repurchase Offer is delivered to the Trustee as provided below, the Company
shall deliver to the Trustee an Officers' Certificate as to (i) the amount of
the Repurchase Offer (the "Repurchase Offer Amount") , (ii) the allocation of
the Net Cash Proceeds from the Asset Sales pursuant to which such Offer is being
made, and (iii) the compliance of such allocation with the provisions of Section
4.06(b). On such date, the Company shall also irrevocably deposit with the
Trustee or with a paying agent (or, if the Company is acting as its own paying
agent, segregate and hold in trust) in cash or Cash Equivalents, maturing on the
last day prior to the Repurchase Date or on the Repurchase Date if funds are
immediately available by opening of business, an amount equal to the Repurchase
Offer Amount to be held for payment in accordance with the provisions of this
Section 4.14. Upon the expiration of the period for which the Repurchase Offer
remains open (the "Repurchase Offer Period"), the Company shall deliver to the
Trustee for cancellation the Notes or portions thereof which have been properly
tendered to and are to be accepted by the Company. The Trustee shall, on the
Repurchase Date, mail or deliver payment to each tendering Holder in the amount
of the purchase price. In the event that the aggregate purchase price of the
Notes delivered by the Company to the Trustee is less than the Repurchase Offer
Amount applicable to the Notes so delivered, the Trustee shall deliver the
excess to the Company immediately after the expiration of the Repurchase Offer
Period for application in accordance with this Section 4.14, including, during
the period ending 180 days after such delivery, the provisions of Section
4.14(a).
38
46
(3) Holders electing to have a Note purchased shall be required
to surrender the Note, with an appropriate form duly completed, to the Company
at the address specified in the notice at least three Business Days prior to the
Repurchase Date. Holders shall be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
Repurchase Date, a telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Note purchased. If at the expiration of the Offer Period
the aggregate principal amount of Notes surrendered by Holders exceeds the
Repurchase Offer Amount, the Company shall select the Notes to be purchased on a
pro rata basis (with such adjustments as may be deemed appropriate by the
Company so that only Notes in denominations of $1,000, or integral multiples
thereof, shall be purchased). Each Holder whose Notes are purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered by such Holder.
(4) At the time the Company delivers Notes to the Trustee which
are to be accepted for purchase pursuant to this Section 4.14, the Company shall
also deliver to the Trustee an Officers' Certificate stating that such Notes are
to be accepted by the Company pursuant to and in accordance with the terms of
this Section 4.14. A Note shall be deemed to have been accepted for purchase at
the time the Trustee, directly or through an agent, mails or delivers payment
therefor to the surrendering Holder.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14 (e) of the Exchange Act and any other securities laws
or regulations in connection with the purchase of Notes pursuant to this Section
4.14. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section 4.14, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.14 by virtue of such compliance.
(f) Notwithstanding the foregoing limitations on Asset Sales and
restrictions on and requirements for the use of Net Cash Proceeds therefrom, the
Company and its Subsidiaries, as the case may be, may at any time and from time
to time effect any of the following transactions, and the Net Cash Proceeds, if
any, realized from any of the following transactions shall not be subject to the
application requirements of Section 4.14(a) or Section 4.14(b):
(i) the Company or any Subsidiary of the Company may convey,
sell, lease, transfer, or otherwise dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to the Company or to a wholly
owned Subsidiary of the Company;
(ii) the Company and its Subsidiaries may engage in Asset Sales
not otherwise permitted in clauses (i) or (iii) through (vi) of this
Section 4.14(f), provided, however, that the aggregate proceeds from all
such Asset Sales and the fair market value of all assets sold pursuant
to this clause (ii) does not exceed $1 million in any twelve-month
period;
(iii) the Company and its Subsidiaries may engage in Asset Sales
incident to and resulting from a transaction expressly permitted under
Section 5.1;
(iv) the Company and its Subsidiaries may sell, assign, lease,
license, transfer, abandon or otherwise dispose of (a) damaged, worn
out, unserviceable or other obsolete property in the ordinary course of
business, or (b) other property no longer necessary for the proper
conduct of their business;
39
47
(v) the Company and its Subsidiaries may engage in Asset Sales
(a) in connection with the settlement of litigation or the payment of
judgments, or (b) the Net Cash Proceeds of which are used in connection
with the settlement of litigation or for the payment of judgments;
provided, however, that the aggregate value of assets transferred
pursuant to clauses (a) and (b) preceding from and after the Issue Date
does not exceed $10 million;
(vi) the Company and its Subsidiaries may convey, sell, transfer
or otherwise dispose of Hydrocarbons or other mineral products in the
ordinary course of business; and
(vii) the Company and its Subsidiaries may convey, sell, transfer
or otherwise dispose of Drilling Production Payments and interests
related to Drilling Programs; provided, however, that an amount equal to
the Net Cash Proceeds of each such conveyance, sale, transfer or other
disposition shall be used for Capital Expenditures or to make a
Repurchase Offer.
(g) For the purpose of determining compliance with this Section 4.14
with respect to the application or use of the Net Cash Proceeds of any Asset
Sale consummated by the Company or any Subsidiary of the Company, if such Net
Cash Proceeds would be eligible for application or use under or pursuant to more
than one of the categories of application or use permitted under Section 4.14(a)
or Section 4.14(f), without, for purposes of determining such eligibility only,
giving effect to any specific limitation on the amount or the aggregate amount
of Net Cash Proceeds that may be applied or used under any otherwise eligible
category of application or use in effect at the time such application is to be
effected, the Person in question consummating such Asset Sale shall have the
right to determine in its sole discretion the eligible category or categories of
application or use pursuant to which all or any portion of such Net Cash
Proceeds shall be applied or used, and may, at its option and in its sole
discretion, elect either (i) to effect the application or use of the full amount
of such Net Cash Proceeds pursuant to any one of such eligible categories of
application or use permitted under Section 4.14(a) or Section 4.14(f), subject,
however, to any limitation on the amount or the aggregate amount that may be
applied or used under such eligible category of application or use in effect at
the time such application or use is effected, or (ii) to effect the application
or use of such Net Cash Proceeds by apportioning the full amount of such Net
Cash Proceeds to be applied or used between or among any two or more of such
eligible categories of application or use permitted under Section 4.14(a) or
Section 4.14(f) in such amounts and order of application or use as the Person in
question consummating such Asset Sale may determine in its sole discretion,
subject, however, as to each portion of such Net Cash Proceeds apportioned for
application or use under any one of such eligible categories of application or
use, to any limitation on the amount or the aggregate amount of Net Cash
Proceeds that may be applied or used under such eligible category of application
or use in effect at the time such application or use is effected.
Section 4.15 Waiver of Stay, Extension or Usury Laws. The Company and
each Guarantor covenants (to the extent that it 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 or extension law or any usury law or other
law which would prohibit or forgive the Company or any Guarantor from paying all
or any portion of the principal of or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not 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 had been
enacted.
It is the intention of the parties hereto to comply strictly with
applicable usury laws; accordingly, notwithstanding any provision to the
contrary in this Indenture or in any of the documents securing the payment of
the Notes or otherwise relating thereto, in no event shall this Indenture or
such documents require
40
48
or permit the payment, charging, taking, reserving, or receiving of any sums
constituting interest under applicable laws which exceed the maximum amount
permitted by such laws. If any such excess interest is contracted for, charged,
taken, reserved, or received in connection with the Notes or in any of the
documents securing the payment thereof or otherwise relating thereto, or in any
communication by the Holders or any other Person to the Company or any other
Person, or in the event all or part of the principal or interest on the Notes
shall be prepaid or accelerated, so that under any of such circumstances or
under any other circumstance whatsoever the amount of interest contracted for,
charged, taken, reserved, or received on the amount of principal actually
outstanding from time to time under the Notes shall exceed the maximum amount of
interest permitted by applicable usury laws, then in any such event it is agreed
as follows: (i) the provisions of this paragraph shall govern and control, (ii)
any such excess shall be deemed an accidental and bona fide error and canceled
automatically to the extent of such excess, and shall not be collected or
collectible, (iii) any such excess which is or has been paid or received
notwithstanding this paragraph shall be credited against the then unpaid
principal balance on the Notes or refunded to the Company, at the Holders'
option, and (iv) the effective rate of interest shall be automatically reduced
to the maximum lawful rate allowed under applicable laws as construed by courts
having jurisdiction hereof or thereof. Without limiting the foregoing, all
calculations of the rate of interest contracted for, charged, taken, reserved,
or received in connection herewith which are made for the purpose of determining
whether such rate exceeds the maximum lawful rate shall be made to the extent
permitted by applicable laws by amortizing, prorating, allocating and spreading
during the period of the full term of the Notes, including all prior and
subsequent renewals and extensions, all interest at any time contracted for,
charged, taken, reserved, or received. The terms of this paragraph shall be
deemed to be incorporated in every document, security instrument, and
communication relating to this Indenture and the Notes.
Section 4.16 Guarantee by Subsidiaries. If the Company or any of its
Subsidiaries shall make Investments in an aggregate amount, or otherwise
transfer (including by capital contribution) or cause to be transferred, in a
manner otherwise permitted pursuant to this Indenture, any assets (tangible or
intangible), businesses, divisions, real property, or equipment having a book
value as shown in the Company's most recent consolidated balance sheet or the
notes thereto (or if greater, a fair market value at the time of transfer) in
excess of $1 million in or to any Subsidiary of the Company, that is not a
Guarantor, the Company shall cause such transferee Subsidiary (a) to guarantee
payment of the Notes by executing a Guarantee, (b) to execute the appropriate
Security Documents, in substantially the form of the relevant Security Documents
executed and delivered on or about the Issue Date, necessary to grant a security
interest in all of the assets of such Subsidiary (other than Inventory and
Receivables, which shall be excepted from the Lien thereof) to secure such
Guarantee, and (c) to execute a supplemental indenture in which such Subsidiary
agrees to become and be a Guarantor and to be bound by the terms of this
Indenture. If the Company or any of its Subsidiaries shall subsequently sell or
otherwise transfer all of the Capital Stock of such Subsidiary held by the
Company or any of its Subsidiaries, the Guarantee (and the related Security
Documents) required hereby shall be withdrawn or canceled.
The liability of each Guarantor under its Guarantee (and the related
Security Documents) will be limited to the amount of its Adjusted Net Assets.
Each Guarantor that makes a payment under or by reason of its Guarantee of the
Notes shall be entitled to assert a claim for reimbursement from each other
Guarantor of the Notes in an amount not to exceed the product of (x) the other
Guarantor's Adjusted Net Assets multiplied by (y) a fraction, the numerator of
which is the other Guarantor's Adjusted Net Assets and the denominator of which
is the sum of the Adjusted Net Assets of all Guarantors of the Notes.
Section 4.17 Limitations on Line of Business. The Company shall not,
and shall not permit any Subsidiary of the Company to, directly or indirectly
engage to any substantial extent in any line or lines of business activity other
than a Related Business or such other business activities as are reasonably
related or incidental thereto.
41
49
Section 4.18 Separate Existence and Formalities. The Company hereby
covenants and agrees that:
(a) it will maintain procedures designed to prevent commingling of the
funds of the Company and its Subsidiaries.
(b) all actions taken by the Company and its Subsidiaries will be taken
pursuant to authority granted by the Board of Directors of the Company and its
Subsidiaries, to the extent required by law or the Company's and its
Subsidiaries' Certificate of Incorporation or By-laws;
(c) the Company and its Subsidiaries will maintain separate records and
books of account and such records and books of account shall be separate from
those of any other Person in each case in accordance with GAAP;
(d) the Company and its Subsidiaries will maintain correct minutes of
the meetings and other corporate proceedings of the owners of its Capital Stock
and the Board of Directors and otherwise comply with requisite corporate
formalities required by law;
(e) the Company and its Subsidiaries will not knowingly mislead any
other Person as to the identity or authority of the Company and its
Subsidiaries; and
(f) it will maintain procedures designed to assure that all written
communications of the Company and its Subsidiaries, including, without
limitation, letters, invoices, purchase orders, contracts, statements and
applications, will appropriately identify the entity on whose behalf such
communication is made.
Section 4.19 Limitation on Assets Held by Nominees. Within 270 days of
the acquisition of any Nominee Property by any Nominee (to the extent the
aggregate expenditures for all then existing Nominee Property does not exceed
$500,000), the Company shall cause such Nominee to assign and transfer to the
Company, or such of its Subsidiaries, as the case may be, all of such Nominee's
right, title and interest in and to such Nominee Property.
ARTICLE V
SUCCESSOR CORPORATION
Section 5.1 When the Company May Merge, Etc.
(a) The Company shall not, and shall not permit any of its Subsidiaries
to, consolidate with or merge with or into any other Person, or, directly or
indirectly, sell, lease, assign, transfer or convey all or substantially all of
its assets (computed on a consolidated basis), to another Person or group of
Persons acting in concert, whether in a single transaction or through a series
of related transactions, unless:
(1) either (a) the Company or such Subsidiary, as the case may
be, shall be the continuing Person, or (b) the Person (if other than the
Company) formed by such consolidation or into which the Company or such
Subsidiary, as the case may be, is merged or to which all or
substantially all of the properties and assets of the Company or such
Subsidiary, as the case may be, are transferred as an entirety or
substantially as an entirety (the Company or such Subsidiary, as the
case may be, or such other Person being hereinafter referred to as the
"Surviving Person") shall be a corporation or partnership organized and
validly existing under the laws of the United States, any State thereof
or the District of Columbia, and shall expressly assume, by an indenture
supplemental hereto and any supplements to any Security Documents as the
Trustee in its sole discretion may require,
42
50
executed and delivered to the Trustee on or prior to the consummation of
such transaction, in form satisfactory to the Trustee, all the
obligations of the Company or such Subsidiary, as the case may be, under
the Notes, the Security Documents, and this Indenture;
(2) No Default or Event of Default shall exist or shall occur
immediately after giving effect to such transaction;
(3) immediately after giving effect to such transaction, on a pro
forma basis, (x) the Net Worth of the Surviving Person is at least equal
to the Net Worth of such predecessor or transferring entity immediately
prior to such transaction, and (y) the Surviving Person immediately
after giving effect on a pro forma basis to the Consolidated Fixed
Charges of the Surviving Person, (A) the Consolidated Fixed Charge
Coverage Ratio of the Surviving Person for the Reference Period is
greater than 2.5 to 1, and (B) the Surviving Person's Adjusted
Consolidated Tangible Assets are equal to or greater than 150% of the
total consolidated principal amount or accreted value, as the case may
be, of Debt of the Surviving Person;
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, assignment, or transfer and such supplemental
indenture comply with this Article V and that all conditions precedent
herein provided relating to such transaction have been satisfied; and
(5) at the time of or within 120 days after the occurrence of the
event specified above, the Notes have not been or are not downgraded by
S&P, Xxxxx'x, or any successor rating agencies to either entity to a
rating below that which existed immediately prior to the time the event
specified above is first publicly announced.
For purposes of this Section 5.1(a), the Consolidated Fixed Charge Coverage
Ratio shall be determined on a pro forma consolidated basis (giving effect to
such transaction) for the four fiscal quarters immediately preceding such
transaction.
(b) For purposes of Section 5.1(a), the sale, lease, conveyance,
assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company, on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
(c) Notwithstanding anything contained in the foregoing to the contrary,
any Subsidiary of the Company with a Net Worth greater than zero may merge into
the Company (or a wholly owned Subsidiary of the Company) at any time, provided,
however, that the Company shall have delivered to the Trustee an Officers'
Certificate stating that such Subsidiary has a Net Worth greater than zero and
such merger does not result in a Default or an Event of Default hereunder.
Section 5.2 Successor Corporation Substituted. Upon any consolidation or
merger, or any transfer of assets in accordance with Section 5.1, the Surviving
Person formed by such consolidation or into which the Company is merged or to
which such transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture and under
the Security Documents with the same effect as if such Surviving Person had been
named as the Company herein. When a Surviving Person duly assumes all of the
obligations of the Company pursuant hereto and pursuant to the Notes, the
predecessor shall be released from such obligations.
43
51
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be caused voluntarily or involuntarily or
effected, without limitation, by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any interest upon any Note as and when the
same becomes due and payable, and the continuance of such default for a period
of thirty (30) days;
(b) default in the payment of all or any part of the principal of (or
premium, if any, applicable to), the Notes when and as the same becomes due and
payable at maturity, redemption, by acceleration, or otherwise, including any
payment due by reason of the occurrence of a Change of Control;
(c) default in the observance or performance of, or breach of, any
covenant, agreement or warranty of the Company or any of its Subsidiaries
contained in the Notes or this Indenture or any of the Security Documents, and
continuance of such default or breach for the period and after the notice, if
any, specified below;
(d) a default which extends beyond any stated period of grace applicable
thereto, including any extension thereof, under any mortgage, indenture or
instrument under which there is outstanding any Debt of the Company or any of
its Subsidiaries with an aggregate principal amount in excess of $5 million if
by reason of such default the principal of such Debt and all accrued and unpaid
interest thereon have been declared due and payable, or failure to pay such Debt
at its stated maturity, provided, however, that a waiver by all of the lenders
of such debt of such default shall constitute a waiver hereunder for the same
period;
(e) a decree, judgment, or order by a court of competent jurisdiction
shall have been entered adjudging the Company or any of its Subsidiaries as
bankrupt or insolvent, or ordering relief against the Company or any of its
Subsidiaries in response to the commencement of an involuntary bankruptcy case,
or approving as properly filed a petition seeking reorganization or liquidation
of the Company or any of its Subsidiaries under any bankruptcy or similar law,
and such decree or order shall have continued undischarged and unstayed for a
period of 60 days; or a decree or order of a court of competent jurisdiction
over the appointment of a receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency of the Company, any of its Subsidiaries, or of the
property of any such Person, or for the winding up or liquidation of the affairs
of any such Person, shall have been entered, and such decree, judgment, or order
shall have remained in force undischarged and unstayed for a period of 60 days;
(f) the Company or any of its Subsidiaries shall institute voluntary
bankruptcy proceedings, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent seeking
reorganization or liquidation under any bankruptcy or similar law or similar
statute, or shall consent to the filing of any such petition, or shall consent
to the appointment of a Custodian, receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency of it or any of its assets or property, or shall make a
general assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due, or shall, within the
meaning of any Bankruptcy Law, become insolvent, fail generally to pay its debts
as they become due, or take any corporate action in furtherance of or to
facilitate, conditionally or otherwise, any of the foregoing;
44
52
(g) final judgments not covered by insurance for the payment of money,
or the issuance of any warrant of attachment against any portion of the property
or assets of the Company or any Subsidiary, which, in the aggregate, equal or
exceed $5 million at any one time shall, be entered against the Company or any
of its Subsidiaries by a court of competent jurisdiction and not be stayed,
bonded or discharged for a period (during which execution shall not be
effectively stayed) of 60 days (or, in the case of any such final judgment which
provides for payment over time, which shall so remain unstayed, unbonded or
undischarged beyond any applicable payment date provided therein); or
(h) except as caused by a release effected pursuant to and in accordance
with this Indenture, any of the Security Documents shall for any reason cease to
be in full force and effect other than pursuant to the terms thereof (except
where no material adverse effect to the Holders would result), or shall cease to
give the Trustee, for the ratable benefit of the Holders the Liens, rights,
powers and privileges purported to be created thereby including but not limited
to, a perfected security interest in, and Lien on, the Collateral in accordance
with the terms thereof, except where the failure to have such Liens, rights,
powers and privileges shall not have a material adverse effect on the Holders.
If a Default occurs and is continuing and if it is known to the Trustee,
the Trustee must, within 90 days after the occurrence of such default, give to
the Holders notice of such Default; provided, however, that, except in the case
of Default in payment of principal of, premium, if any, or interest on the
Notes, the Trustee will be protected in withholding such notice if it in good
faith determines that the withholding of such notice is in the interest of the
Holders.
A Default under clause (c) above (other than in the case of any Defaults
under Sections 4.3, 4.11, 4.13, 4.14, 4.16 or 5.1, which Defaults shall become
Events of Default without the notice specified in this paragraph or in Section
4.7(c) and upon the passage of 10 days) is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in principal amount
of the outstanding Notes notify the Company and the Trustee of the Default, and
the Company does not cure the Default within 30 days after receipt of the
notice. The notice must specify the Default, demand that it be remedied and
state that the notice is a "Notice of Default." Such notice shall be given by
the Trustee if so requested by the Holders of at least 25% in principal amount
of the Notes then outstanding.
In the case of any Event of Default pursuant to the provisions of this
Section 6.1 occurring by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Company or any Subsidiary with the intention
of avoiding the period of time the Notes are not optionally redeemable or the
payment of the premium which the Company would have to pay if the Company then
had elected to redeem the Notes pursuant to Paragraph 5 of the Notes, an
equivalent premium (or, in the case of an Event of Default prior to the time
optional redemptions are permitted, to the extent permitted by law, a premium
equal to the stated interest rate of the Notes multiplied by the quotient of (i)
the number of full years left to maturity plus one, divided by (ii) five) shall
also become and be immediately due and payable to the extent permitted by law,
anything in this Indenture or in the Notes to the contrary notwithstanding.
Section 6.2 Acceleration of Maturity Date; Rescission and Annulment. If
an Event of Default (other than an Event of Default specified in Section 6.1(e)
or Section 6.1(f) relating to the Company or any of its Subsidiaries) occurs and
is continuing, then, and in every such case, unless the principal of all of the
Notes shall have already become due and payable, either the Trustee or the
Holders of not less than 25% in aggregate principal amount of then outstanding
Notes, by a notice in writing to the Company (and to the Trustee if given by
Holders) (an "Acceleration Notice"), may declare all of the principal of the
Notes, determined as set forth below, including in each case accrued interest
thereon, to be due and payable immediately. If an Event of Default specified in
Section 6.1(e) or (f) relating to the Company or any of its Subsidiaries
45
53
occurs, all principal and accrued interest on the Notes shall be immediately due
and payable on all outstanding Notes without any declaration or other act on the
part of the Trustee or the Holders.
At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of 75% in
aggregate principal amount of then outstanding Notes, by written notice to the
Company and the Trustee, may waive, on behalf of all Holders, any such
declaration of acceleration if:
(a) the Company has paid or deposited with the Trustee a sum sufficient
to pay:
(1) all accrued but unpaid interest on all Notes,
(2) the principal of (and premium, if any, applicable to) any
Notes which would become due otherwise than by such declaration of
acceleration, and accrued but unpaid interest thereon at the rate borne
by the Notes,
(3) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Notes, and
(4) all sums paid or advanced by the Trustee hereunder and the
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel; and
(b) all Events of Default, other than the non-payment of the principal
of, premium, if any, and interest on Notes which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
6.12.
Notwithstanding the previous sentence of this Section 6.2, no waiver
shall be effective for any Event of Default or event which with notice or lapse
of time or both would be an Event of Default with respect to any covenant or
provision which cannot be modified or amended without the consent of (x) 75% in
aggregate principal amount of the Notes, or (y) the affected Holder of each of
the outstanding Notes, unless (x) 75% in aggregate principal amount of the
Notes, or (y) all such affected Holders, respectively, agree, in writing, to
waive such Event of Default or event. No such waiver shall cure or waive any
subsequent default or impair any right consequent thereon.
Section 6.3 Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if an Event of Default in payment of
principal, premium or interest specified in clause (a) or clause (b) of Section
6.1 occurs and is continuing, the Company shall, upon demand of the Trustee, pay
to it, for the benefit of the Holders of such Notes, the whole amount then due
and payable on such Notes for principal, premium (if any) and interest, and, to
the extent that payment of such interest shall be legally enforceable, interest
on any overdue principal (and premium, if any) and on any overdue interest, at
the rate borne by the Notes, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
compensation to, and expenses, disbursements and advances of the Trustee, its
agents and counsel.
If the Company fails to pay such amounts within 10 days of such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon the Notes,
wherever situated.
46
54
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
The Trustee shall also be authorized to take whatever additional action
at law or in equity may appear to be necessary or desirable to collect the
monies necessary to pay the principal, premium (if any) and interest on the
Notes.
Section 6.4 Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Notes or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company or any obligor for the payment of
overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise to take any and all actions under the TIA,
including:
(a) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Notes and to
file such 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 agent and
counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any debtor-in-possession or Custodian or other similar official 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 it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
Section 6.5 Trustee May Enforce Claims Without Possession of Notes. All
rights of action and claims under this Indenture or the Notes may be prosecuted
and enforced by the Trustee without the possession of any of the Notes or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust in favor of the Holders, and any recovery of judgment shall, after
provision for the payment of compensation to, and expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Notes in respect of which such judgment has been recovered.
Section 6.6 Priorities. Subject to the provisions of the Intercreditor
Agreements, any money collected by the Trustee pursuant to this Article VI shall
be applied in the following order, at the date or dates
47
55
fixed by the Trustee and, in case of the distribution of such money on account
of principal, premium (if any) or interest, upon presentation of the Notes and
the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to Section
7.7;
SECOND: To the Holders in payment of the amounts then due and unpaid for
principal of, premium (if any) and interest on, the Notes in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Notes for principal, premium (if any) and interest respectively; and
THIRD: To whomsoever may be lawfully entitled thereto, the remainder,
if any.
Section 6.7 Limitation on Suits. No Holder of any Note shall have any
right to order or direct the Trustee to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of then
outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be incurred
or reasonably probable to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
Section 6.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest. Notwithstanding any other provision of this Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium (if any) and interest on, such
Note on the Interest Payment Date or Maturity Dates of such payments as
expressed in such Note and to institute suit for the enforcement of any such
payment after such respective dates, and such rights shall not be impaired
without the consent of such Holder.
Section 6.9 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Notes in Section 2.7, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to
48
56
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.10 Delay or Omission Not Waiver. No delay or omission by the
Trustee or by any Holder of any Note to exercise any right or remedy arising
upon any Event of Default shall impair the exercise of any such right or remedy
or constitute a waiver of any such Event of Default. Every right and remedy
given by this Article VI or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
Section 6.11 Control by Holders. The Holder or Holders of 662/3% in
aggregate principal amount of then outstanding Notes shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred upon the
Trustee, provided, however, that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture,
(b) the Trustee shall not determine that the action so directed would be
unjustly prejudicial to the Holders not taking part in such direction or that
such action may involve the Trustee in personal liability, and
(c) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 6.12 Waiver of Past Default. Subject to Section 6.8, the Holder
or Holders of not less than 66 2/3% in aggregate principal amount of the
outstanding Notes may, on behalf of all Holders, prior to the declaration of the
maturity of the Notes, waive any past default hereunder and its consequences,
except a default:
(a) in the payment of the principal of, premium, if any, or interest on,
any Note as specified in clauses (a) and (b) of Section 6.1,
(b) which arises because of a violation of the provisions of Section
9.2, or
(c) in respect of a covenant or provision hereof which, under Article
IX, cannot be modified or amended without the consent of the Holder of each
outstanding Note affected or 75% in aggregate principal amount of the Notes at
the time outstanding, as the case may be; provided, however, that such a default
may be waived by the consent of Holders of each outstanding Note affected or 75%
in aggregate principal amount of the Notes outstanding, as the case may be.
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 the exercise of any right arising therefrom.
Section 6.13 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, 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, suffered or omitted to be taken by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall
49
57
not apply to any suit instituted by the Company, to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the outstanding
Notes, or to any suit instituted by any Holder for enforcement of the payment of
principal of, or premium (if any) or interest on, any Note on or after the
respective Maturity Date expressed in such Note (including, in the case of
redemption, on or after the Redemption Date).
Section 6.14 Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every case, subject to any determination in such proceeding, the Company, the
Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been instituted.
ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
Section 7.1 Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no covenants
or obligations shall be implied in or read into this Indenture which are
adverse to the Trustee.
(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 shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability 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 7.1.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.2 or Section 6.11.
50
58
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or at the request, order or direction of the Holders or in
the exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to subsections (a), (b), (c), (d), and (f) of this Section
7.1.
(f) The Trustee shall not be liable for interest on any assets received
by it except as the Trustee may agree in writing with the Company. Assets held
in trust by the Trustee need not be segregated from other assets except to the
extent required by law.
(g) The Trustee shall execute and deliver the Intercreditor Agreements
and any Subordination Agreements as provided in Section 11.2.
Section 7.2 Rights of Trustee. Subject to Section 7.1:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting on any document believed by it to be genuine and to have
been signed or presented by the proper Person. The Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel and may require an Officers' Certificate or an Opinion of Counsel, which
shall conform to Sections 14.4 and 14.5. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such certificate
or opinion.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, 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.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) Whenever by the terms of this Indenture, the Trustee shall be
required to transmit notices or reports to any or all Holders, the Trustee shall
be entitled to rely on the information provided by the Registrar as to the names
and addresses of the Holders as being correct. If the Registrar is other than
the Trustee, the Trustee shall not be responsible for the accuracy of such
information.
Section 7.3 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company, its Subsidiaries, or their
51
59
respective Affiliates with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
Section 7.4 Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Notes and it shall not
be accountable for the Company's use of the proceeds from the Notes, and it
shall not be responsible for (i) the use or application of any funds received by
a Paying Agent other than the Trustee, (ii) any statement in the Notes, other
than the Trustee's certificate of authentication, or (iii) the sufficiency of
the collateral for the Notes.
The Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the part
of the Company hereunder or in any Security Documents, except as specifically
set forth herein or therein.
Section 7.5 Notice of Default. If a Default or an Event of Default
occurs and is continuing and if it is known to the Trustee pursuant to Section
4.7(c), the Trustee shall mail to each Noteholder notice of the uncured Default
or Event of Default within 90 days after such Default or Event of Default
occurs. Except in the case of a Default or an Event of Default in payment of
principal (or premium, if any,) of, or interest on, any Note (including all
payments due on any Maturity Date), the Trustee may withhold the notice if and
so long as the board of directors, the executive committee or a trust committee
of directors and/or responsible officers of the Trustee in good faith determines
that withholding the notice is in the interest of the Holders.
Section 7.6 Reports by Trustee to Holders. Within 60 days after each
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall, if required, mail to each Noteholder a brief report dated as of
such May 15 that complies with TIA ss. 313(a). The Trustee also shall comply
with TIA xx.xx. 313(b) and 313(c).
A copy of each report at the time of its mailing to Noteholders shall be
mailed to the Company and filed with the SEC and each stock exchange, if any, on
which the Notes are listed.
Section 7.7 Compensation and Indemnity. The Company shall pay to the
Trustee from time to time compensation for its services (in whatever capacity
rendered) in accordance with the Trustee's fee schedule, as may be amended from
time to time. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents, accountants, experts and
counsel.
The Company shall indemnify the Trustee (in its capacity as Trustee) and
each of its officers, directors, attorneys-in-fact and agents for, and hold it
harmless against, any claim, demand, expense (including but not limited to,
compensation, disbursements and expenses of the Trustees' agents and counsel),
loss or liability incurred by it without negligence or bad faith on its part,
arising out of or in connection with the administration of this trust and its
rights or duties hereunder including the reasonable costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Trustee shall
notify the Company promptly of any claim asserted against the Trustee for which
it may seek indemnity. The Company shall defend the claim and the Trustee shall
provide reasonable cooperation at the Company's expense in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel; provided, however, that the Company will not be
required to pay such fees and expenses if it assumes the Trustee's defense and
there is no conflict of interest as reasonably determined by the Trustee between
the Company and the Trustee in connection with such defense. The Company need
not pay for any settlement made without its written
52
60
consent, which shall not be unreasonably withheld. The Company need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Notes on all assets held or collected by
the Trustee, in its capacity as Trustee, except assets held in trust to pay
principal (and premium, if any,) or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(e) or Section 6.1(f) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the discharge
of the Company's obligations pursuant to Article VIII and any rejection or
termination of this Indenture under any Bankruptcy Law.
Section 7.8 Replacement of Trustee. The Trustee may resign by so
notifying the Company in writing. The Holder or Holders of a majority in
principal amount of the outstanding Notes may remove the Trustee by so notifying
the Company and the Trustee in writing and may appoint a successor trustee with
the Company's consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver, Custodian, or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder or
Holders of a majority in principal amount of the Notes may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided, however, that all sums owing to the Trustee provided for in
Section 7.7 have been paid, the retiring Trustee shall transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided in
Section 7.7, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder.
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
Holder or Holders of at least 10% in principal amount of the outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
53
61
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Company's obligations under Section 7.7 shall continue for the benefit of
the retiring Trustee.
Section 7.9 Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation, the resulting,
surviving or transferee corporation without any further act shall, if such
resulting, surviving or transferee corporation is otherwise eligible hereunder,
be the successor Trustee.
Section 7.10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA xx.xx. 310(a)(1), 310(a)(2) and 310(a)(5).
The Trustee shall comply with TIA ss. 310(b).
Section 7.11 Preferential Collection of Claims against Company. The
Trustee shall comply with 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.
Section 7.12 No Bond. The Trustee shall not be required to give any
bond or surety in respect to the execution of its trusts, powers, rights and
duties under this Indenture or otherwise in respect of the premises.
Section 7.13 Condition to Action. Notwithstanding anything elsewhere
in this Indenture to the contrary, the Trustee shall have the right, but shall
not be required, to demand, in respect of the authentication of any Notes or any
other action within the purview of this Indenture, any showings, certificates,
opinions, or other information, or corporate action or evidence thereof in
addition to that by the terms hereof required, as a condition of such action by
the Trustee if reasonably deemed desirable by the Trustee for the purpose of
establishing the right to the authentication of any Notes or the taking of any
other action by the Trustee.
Section 7.14 Investment. The Trustee shall not be responsible or
liable for any loss suffered in connection with any investment of funds made by
it at the direction of the Company.
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at its option at any time within the final year of the Stated
Maturity of the Notes, elect to have Section 8.2 or, at any time, Section 8.3
applied to all outstanding Notes upon compliance with the conditions set forth
below in this Article VIII.
Section 8.2 Legal Defeasance and Discharge. Upon the Company's
exercise under Section 8.1 of the option applicable to this Section 8.2, the
Company shall be deemed to have been discharged from its obligations with
respect to all outstanding Notes on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the outstanding Notes, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.5
and the other Sections of this Indenture referred to in (a) and (b) below, and
to have satisfied all its other obligations under such Notes 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 which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of outstanding Notes to receive solely from the trust fund described in
Section 8.4, and as more fully set forth in such section, payments in respect of
the principal of, premium, if any, and interest on such Notes when such payments
are due, (b) the Company's obligations with
54
62
respect to such Notes under Sections 2.4, 2.6, 2.7, 2.10 and 5.2, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company's obligations in connection therewith and (d) this Article VIII. Subject
to compliance with this Article VIII, the Company may exercise its option under
this Section 8.2 notwithstanding the prior exercise of its option under Section
8.3 with respect to the Notes.
Section 8.3 Covenant Defeasance. Upon the Company's exercise under
Section 8.1 of the option applicable to this Section 8.3, the Company shall be
released from its obligations under the covenants contained in Sections 4.3,
4.6, 4.7, 4.8, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18, and 4.19 and
Article V, and in the Security Documents with respect to the outstanding Notes
on and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder. For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Notes, the Company need not comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.1 of the
option applicable to this Section 8.3, Sections 6.1(c) (with respect to the
covenants referenced in the first sentence of this Section 8.3) through 6.1(h)
shall not constitute Events of Default.
Section 8.4 Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to the applicable of either Section 8.2 or Section 8.3
to the outstanding Notes:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 7.10 who shall agree to comply with the provisions of this Article VIII
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Notes, (a) U.S. Legal Tender in an
amount, or (b) U.S. Government Obligations which through the scheduled payment
of principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, U.S. Legal
Tender in an amount, or (c) a combination thereof, in such amounts, as in each
case will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge and which shall be supplied by
the Trustee (or other qualifying trustee) to pay and discharge (i) the principal
of, premium, if any, and interest on the outstanding Notes on the stated
maturity or on the applicable redemption date, as the case may be, of such
principal or installment of principal, premium, if any, or interest; provided
that the Trustee shall have been irrevocably instructed to apply such Legal
Tender and the proceeds of such U.S. Government obligations to said payments
with respect to the Notes.
(b) In the case of an election under Section 8.2, the Company shall have
delivered to the Trustee an Opinion of counsel in the United States reasonably
satisfactory to the Trustee confirming that (i) the Company has received from,
or there has been published by, the Internal Revenue Service a ruling or (ii)
since the date hereof, there has been a change in the applicable Federal income
tax law, in either case to the effect that, and based thereon such opinion shall
confirm that, the Holders of the outstanding Nots will not recognize income,
gain or loss for Federal income tax purposes as a result of such Legal
Defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance has not occurred;
(c) In the case of an election under Section 8.3, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States to the
effect that the Holders of the outstanding Notes will
55
63
not recognize income, gain or loss for Federal income tax purposes as a result
of such Covenant Defeasance and will be subject to Federal income tax in the
same amount, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;
(d) No Default or Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit or, in so far as Sections
6.2(e) or 6.2(f) is concerned, at any time in the period ending on the 91st day
after the date of such deposit (it being understood that this condition shall
not be deemed satisfied until the expiration of such period);
(e) Such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company, the Guarantors, or
any of their Subsidiaries is a party or by which it or its properties is bound;
(f) In the case of an election under either Section 8.2 or 8.3, the
Company shall have delivered to the Trustee an Officers' Certificate stating
that the deposit made by the Company pursuant to its election under Section 8.2
or 8.3 was not made by the Company with the intent of preferring the Holders
over other creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others; and
(g) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating that
all conditions precedent providing for relating to either the Legal Defeasance
under Section 8.2 or the Covenant Defeasance under Section 8.3 (as the case may
be) have been complied with as contemplated by this Section 8.4.
Section 8.5 Deposited U.S. Legal Tender and U.S. Government
Obligations to be Held in Trust; Other Miscellaneous Provisions. Subject to
Section 8.6, all U.S. Legal Tender and U.S. Government Obligations (including
the proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 8.5, the "Trustee") pursuant to
Section 8.4 in respect of the outstanding Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent as the
Trustee may determine, to the Holders of such Nots 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.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any U.S. Legal Tender or U.S. Government Obligations held by it
as provided in Section 8.4 which, in the opinion of a nationally recognized firm
of independent public accountants expressed in written certification thereto
delivered to the Trustee (which may be the opinion delivered upon Section
8.4(a)), are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.6 Repayment to Issuers. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment for the principal of premium, if any, or interest on any Notes and
remaining unclaimed for two years after such principal, and premium, if any, or
interest has become due and payable shall be paid to the Company on its request;
and the Holder of such Notes shall thereafter look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
Trustee or such Paying Agent before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from
56
64
the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Issuers.
Section 8.7 Reinstatement. If the Trustee or Paying Agent is unable
to apply any U.S. Legal Tender or U.S. Government Obligations in accordance with
Section 8.2 or 8.3, 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, the Company's obligations under this Indenture and
the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.2 or Section 8.3 until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 8.2 or
Section 8.3, as the case may be; provided, however, that if the Company makes
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 Cash held
by the Trustee or Paying Agent.
Section 8.8 Termination of Obligations Upon Cancellation of the Notes.
In addition to the Company's rights under Sections 8.2 and 8.3, the Company and
the Guarantors may terminate all of their obligations under this Indenture and
this Indenture shall be deemed satisfied and discharged (in each case subject to
Section 8.7) when:
(1) all Notes theretofore authenticated and delivered (other than
Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.7) have been delivered to the
Trustee for cancellation, and the Company or a Guarantor has paid or
caused to be paid all sums payable hereunder by the Company; or
(2) (i) all Notes not heretofore delivered to the Trustee for
cancellation otherwise have become due and payable or, within 30 days
will become due and payable or subject to redemption as set forth under
Article III and the Company has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in the trust for such purpose
an amount of money sufficient to pay and discharge the entire
indebtedness on the Notes not heretofore delivered to the Trustee for
cancellation, including all principal, premium, if any, and accrued
interest (and liquidated damages, if any), (ii) the Company has paid all
sums payable by it under this Indenture, (iii) the Company has delivered
irrevocable instructions to the Trustee to apply the deposited money
toward the payment of the Notes at the Maturity Date, and (iv) the
Holders of the Notes have a valid perfected, exclusive security interest
in such trust.
In addition, the Company shall deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel (who is not in-house counsel to the
Company or any of its Subsidiaries), each stating that all conditions precedent
specified herein relating to the satisfaction and discharge of this Indenture
have been complied with and that such satisfaction and discharge will not result
in a breach or violation of, or constitute a Default under, this Indenture or
any other instrument to which the Company, any Guarantor or any of their
Subsidiaries is a party or by which it or their property is bound.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Supplemental Indentures Without Consent of Holders. Without
the consent of any Holder, the Company, when authorized by Board Resolutions,
and the Trustee, at any time and from time to
57
65
time, may enter into one or more indentures supplemental hereto or a restatement
hereof or amendments to or restatements of any one or more of the Security
Documents, in form satisfactory to the Trustee, for any of the following
purposes:
(a) to cure any ambiguity, defect, or inconsistency, or to make
any other provisions with respect to matters or questions arising under
this Indenture or any one or more of the Security Documents which shall
not be inconsistent with the provisions of this Indenture, provided,
however, that such action pursuant to this clause (a) shall not
adversely affect the interests of any Holder in any respect;
(b) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company or to make any other change that does not adversely affect the
rights of any Holder, provided, however, that the Company has delivered
to the Trustee an Opinion of Counsel stating that such change does not
adversely affect the rights of any Holder;
(c) to provide for additional collateral for the Notes;
(d) to evidence the succession of another Person to the Company
and the assumption by any such successor of the obligations of the
Company herein and in the Notes in accordance with Article V;
(e) to comply with the TIA; or
(f) to restate this Indenture or any one or more of the Security
Documents so that it reflects this Indenture or such Security Document,
as the case may be, as originally executed as amended by all amendments
and supplements hereto or thereto through the date of such restatement
and contains only the then effective provisions of this Indenture or
such Security Document, as the case may be.
Section 9.2 Amendments, Supplemental Indentures and Waivers with
Consent of Holders. Subject to Section 6.8 and the last sentence of this
paragraph, with the consent of the Holders of not less than 662/3% in aggregate
principal amount of then outstanding Notes, by written act of said Holders
(including an electronic mechanism utilized by the Depository Trust Company as a
means of receiving consents or tenders of securities) delivered to the Company
and the Trustee, the Company, when authorized by Board Resolutions, and the
Trustee may amend or supplement this Indenture, the Notes or any of the Security
Documents or enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating, or
waiving compliance with, any of the provisions of this Indenture or the Notes or
of modifying in any manner the rights of the Holders under this Indenture or the
Notes, provided, however, that no such amendment, waiver or modification may,
without the consent of the Holders of not less than 75% in aggregate principal
amount of the Notes at the time outstanding, (i) amend, waive or modify the
provisions (including the definitions of the defined terms used therein) of
Sections 4.3, 4.11, 4.13, 4.14 or 4.16, or of Articles XI or XII, in a manner
adverse to the Holders, or (ii) amend or supplement any of the Security
Documents in a manner adverse to the Holders. Notwithstanding any of the above,
however, no such amendment, supplemental indenture or waiver shall, without the
consent of the Holder of each outstanding Note affected thereby:
58
66
(a) change the Stated Maturity or the payment date of any installment of
principal of, or the payment date of any installment of interest on, any Note;
(b) reduce the principal amount of any Note or the rate of interest
thereon or any premium payable upon the redemption thereof;
(c) make the principal of, or the interest on, any Note payable with
anything or in any manner other than as provided for in this Indenture
(including changing the place of payment where, or the coin or currency in
which, any Note or any premium or the interest thereon is payable) and the Notes
as in effect on the date hereof;
(d) reduce the percentage of principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver of any provision of this
Indenture or the Notes;
(e) reduce the rate or extend the time for payment of interest on any
Note;
(f) (i) alter the redemption provisions (including the definitions of
the defined terms used therein) of Article III or of Paragraph 5 of the Notes,
or (ii) after the date upon which a Change of Control Offer (as defined in
Section 13.1(b)) is required to be made, reduce the Change of Control Purchase
Price (as defined in Section 13.1(a)) or otherwise alter the terms or provisions
of Article XIII; in any case, in a manner adverse to any Holder;
(g) make any changes in the provisions concerning waivers of Defaults or
Events of Default by Holders of the Notes (except to increase any required
percentage or to provide that certain other provisions hereof cannot be modified
or waived without the consent of the Holders of each outstanding Note affected
thereby) or the rights of Holders to recover the principal or premium of,
interest on, or redemption payment with respect to, any Note;
(h) make any changes that would subordinate the Notes in right of
payment to the payment of any other Debt of the Company or any of its
Subsidiaries (except as expressly provided in Section 11.2 or Section 11.5); or
(i) make any changes in Section 6.4, 6.7 or this third sentence of this
Section 9.2.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall 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 defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or waiver.
After an amendment, supplement or waiver under this Section 9.2 or
Section 9.4 becomes effective, it shall bind each Holder.
59
67
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, consideration for such
Holder's consent to such amendment, supplement or waiver; provided, that such
consideration is offered to all Holders and paid to all Holders who consent; and
provided further, that notwithstanding the preceding proviso, the Company shall
only be required to offer such consideration for the consent of a Holder if the
solicitation of such consent does not require registration under the Exchange
Act or any applicable state securities laws.
Section 9.3 Compliance with TIA. Every amendment, waiver or supplement
of this Indenture or the Notes shall comply with the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents. Until an amendment,
waiver or supplement 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 or subsequent Holder may revoke the consent as to his Note or portion of
his Note by written notice to the Company or the Person designated by the
Company as the Person to whom consents should be sent if such revocation is
received by the Company or such Person before the date on which the Trustee
receives an Officers' Certificate certifying that the Holders of the requisite
principal amount of Notes have consented (and not theretofore revoked such
consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, regardless of whether such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Noteholder; provided, however, that any such waiver shall not impair
or affect the right of any Holder to receive payment of principal and premium of
and interest on a Note, on or after the respective dates set for such amounts to
become due and payable expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates.
Section 9.5 Notation on or Exchange of Notes. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder of the Note to deliver it to the Trustee or require the Holder to put an
appropriate notation on the Note. The Trustee may place an appropriate notation
on the Note about the changed terms and return it to the Holder. Alternatively,
if the Company or the Trustee so determines, the Company in exchange for the
Note shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms. Any failure to make the appropriate notation or to issue a new
Note shall not affect the validity of such amendment, supplement or waiver.
Section 9.6 Trustee to Sign Amendments, Etc. The Trustee shall execute
any amendment, supplement, restatement or waiver authorized pursuant to this
Article IX, provided, however, that the Trustee may, but shall not be obligated
to, execute any such amendment, supplement, restatement or waiver which affects
the Trustee's own rights, duties or immunities under this Indenture. The Trustee
at the expense of the
60
68
Company shall be entitled to receive, and shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of any amendment,
supplement, restatement or waiver authorized pursuant to this Article IX is
authorized or permitted by this Indenture.
ARTICLE X
MEETINGS OF NOTEHOLDERS
Section 10.1 Purposes for Which Meetings May Be Called. A meeting of
Noteholders may be called at any time and from time to time pursuant to the
provisions of this Article X for any of the following purposes:
(a) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to waive or to consent to the waiving of any
Default or Event of Default hereunder and its consequences, or to take any other
action authorized to be taken by Noteholders pursuant to any of the provisions
of Article VI;
(b) to remove the Trustee or appoint a successor Trustee pursuant to the
provisions of Article VII;
(c) to consent to an amendment, supplement or waiver pursuant to the
provisions of Section 9.2; or
(d) to take any other action (i) authorized to be taken by or on behalf
of the Holder or Holders of any specified aggregate principal amount of the
Notes under any other provision of this Indenture, or authorized or permitted by
law, or (ii) which the Trustee deems necessary or appropriate in connection with
the administration of this Indenture.
Section 10.2 Manner of Calling Meetings. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.1, to
be held at such time and at such place in the City of New York, New York or
elsewhere as the Trustee shall determine. Notice of every meeting of
Noteholders, setting forth the time and place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be mailed by the
Trustee, first-class postage prepaid, to the Company and to the Holders at their
last addresses as they shall appear on the registration books of the Registrar,
not less than 10 nor more than 60 days prior to the date fixed for a meeting.
Any meeting of Noteholders shall be valid without notice if the Holders
of all Notes then outstanding are present in Person or by proxy, or if notice is
waived before or after the meeting by the Holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 10.3 Call of Meetings by Company or Holders. In case at any time
the Company, pursuant to a Board Resolution, or the Holders of not less than 25%
in aggregate principal amount of the Notes then outstanding, shall have
requested the Trustee to call a meeting of Noteholders to take any action
specified in Section 10.1, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or the Holders of Notes in the amount above specified may
determine the time and place in the City of New York, New York or elsewhere for
such meeting and may call such meeting for the purpose of taking such action, by
mailing or causing to be mailed notice thereof as provided in Section 10.2, or
by causing notice thereof to be published at least once in each of two
successive calendar weeks (on any
61
69
Business Day during such week) in a newspaper or newspapers printed in the
English language, customarily published at least five days a week of a general
circulation in the City of New York, State of New York, the first such
publication to be not less than 10 nor more than 60 days prior to the date fixed
for the meeting.
Section 10.4 Who May Attend and Vote at Meetings. To be entitled to vote
at any meeting of Noteholders, a Person shall (a) be a registered Holder of one
or more Notes, or (b) be a Person appointed by an instrument in writing as proxy
for the registered Holder or Holders of Notes. The only Persons who shall be
entitled to be present or to speak at any meeting of Noteholders shall be the
Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 10.5 Regulations May Be Made by Trustee; Conduct of the Meeting;
Voting Rights; Adjournment. Notwithstanding any other provision of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any action by or any meeting of Noteholders, in regard to proof of
the holding of Notes and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, and submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think appropriate.
Such regulations may fix a record date and time for determining the Holders of
record of Notes entitled to vote at such meeting, in which case those and only
those Persons who are Holders of Notes at the record date and time so fixed, or
their proxies, shall be entitled to vote at such meeting regardless of whether
they shall be such Holders at the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the Holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote.
At any meeting each Noteholder or proxy shall be entitled to one vote
for each $1,000 principal amount of Notes held or represented by him; provided,
however that no vote shall be cast or counted at any meeting in respect of any
Notes challenged as not outstanding and ruled by the chairman of the meeting to
be not then outstanding. The chairman of the meeting shall have no right to vote
other than by virtue of Notes held by him or instruments in writing as aforesaid
duly designating him as the proxy to vote on behalf of other Noteholders. Any
meeting of Noteholders duly called pursuant to the provisions of Section 10.2 or
Section 10.3 may be adjourned from time to time by vote of the Holder or Holders
of a majority in aggregate principal amount of the Notes represented at the
meeting and entitled to vote, and the meeting may be held as so adjourned
without further notice.
Section 10.6 Voting at the Meeting and Record to Be Kept. The vote upon
any resolution submitted to any meeting of Noteholders shall be by written
ballots on which shall be subscribed the signatures of the Holders of Notes or
of their representatives by proxy and the principal amount of the Notes voted by
the ballot. The permanent chairman of the meeting shall appoint two inspectors
of votes, who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A record
in duplicate of the proceedings of each meeting of Noteholders shall be prepared
by the secretary of the meeting and there shall be attached to such record the
original reports of the inspectors of votes on any vote by ballot taken
62
70
thereat and affidavits by one or more Persons having knowledge of the facts,
setting forth a copy of the notice of the meeting and showing that such notice
was mailed as provided in Section 10.2 or published as provided in Section 10.3.
The record shall be signed and verified by the affidavits of the permanent
chairman and the secretary of the meeting and one of the duplicates shall be
delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.7 Exercise of Rights of Trustee or Noteholders May Not Be
Hindered or Delayed by Call of Meeting. Nothing contained in this Article X
shall be deemed or construed to authorize or permit, by reason of any call of a
meeting of Noteholders or any rights expressly or impliedly conferred hereunder
to make such call, any hindrance or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the Noteholders under any of the
provisions of this Indenture or of the Notes.
ARTICLE XI
SECURITY
Section 11.1 Grant of Security Interest. In order to secure the payment
and performance of all obligations of the Company with respect to the Notes
including the due and punctual payment of the principal of, interest on and
premium, if any, on the Notes when and as the same shall become due and payable,
whether on an interest payment date, at a Maturity Date, by acceleration, call
for redemption or otherwise, and interest on the overdue principal and interest,
if any, of the Notes, each of the Company and each Guarantor hereby covenants to
execute, deliver and file of record for the benefit of the Holders, the Security
Documents to which it is a party and this Indenture. The Security Documents
shall grant to the Trustee a security interest in the collateral therein
described and when filed shall be deemed hereby incorporated by reference herein
to the same extent and as fully as if set forth in their entirety at this place,
and reference is made hereby to each Security Document for a more complete
description of the terms and provisions thereof. Each Holder, by accepting a
Note, agrees to all of the terms and provisions of the Security Documents and
the Trustee agrees to all of the terms and provisions of the Security Documents
signed by it.
Section 11.2 Trustee's Execution of Intercreditor Agreements and
Subordination Agreements.
(a) The Trustee, at the Company's expense, will execute, deliver, file
and record, all instruments and do all acts and other things as may be
reasonably necessary to provide pursuant to the Intercreditor Agreement(s) among
other things, that (i) the Liens securing the Security Interests will be junior
to the Liens on Shared Collateral securing the Debt and other obligations of the
Company under the Extended DIP Facility and under the Post Confirmation Credit
Facility, (ii) that in the event of any judicial or non-judicial foreclosure (or
conveyance in lieu thereof), any cash or other assets paid by reason thereof
will be applied, after payment of reasonable costs and expenses relating to
obtaining such proceeds, to the payment of the Debt outstanding under the
Extended DIP Facility and to the payment of the Debt outstanding under the Post
Confirmation Credit Facility, as the case may be, and only after the Debt
outstanding under the Extended DIP Facility and to the payment of the Debt
outstanding under the Post Confirmation Credit Facility, as the case may be, has
been paid in full, to the payment of the Notes, and (iii) that determinations
regarding the exercise of remedies against the Shared Collateral will be made by
the holders of not less than 75% of the outstanding principal amount of [ ]. The
Intercreditor Agreements will provide that
63
71
nothing contained therein will impair or affect the right of the Holders of the
Notes to institute suit for the enforcement of any payment thereon as and when
due.
(b) Upon receipt of a Subordination Request, the Trustee (and any
lender, trustee or collateral agent under or with respect to any of the Security
Documents), at the Company's expense, will execute and deliver, within five
Business Days from the receipt of such Subordination Request, any instruments
deemed by the Company (or with respect to the Security Documents, the grantor of
the Security Interest thereunder) to be reasonably necessary or reasonably
appropriate to subordinate the Security Interests to any Lien accorded priority
over the Security Interests by the Plan or by a Plan Order, but only to the
extent, and only with respect to such Collateral as to which, such priority is
accorded, if the provisions of this Section 11.2(b) have been complied with. Any
such Subordination Request shall request the Trustee (and any such lender,
trustee or collateral agent under or with respect to any of the Security
Documents) to execute one or more specifically described instruments of
subordination (which instruments of subordination accompany such Subordination
Request) and shall certify that (i) the Lien to which the Security Interests are
to be subordinated is a Lien accorded priority over the Security Interests by
the Plan or a Plan Order, and (ii) that the subordination requested effects a
subordination of the Security Interests only to the extent, and only with
respect to Collateral as to which such subordination is, contemplated by the
provision of the Plan or the Plan Order on which the subordination requested is
based.
(c) Upon receipt of a Subordination Request, the Trustee (and any
lender, trustee or collateral agent under or with respect to any of the Security
Documents), at the Company's expense, will execute and deliver, within five
Business Days from the receipt of such Subordination Request, any instruments
deemed by the Company (or with respect to the Security Documents, the grantor of
the Security Interest thereunder) to be reasonably necessary or reasonably
appropriate to subordinate the Security Interests to Permitted Liens securing
any First Lien Debt, if the provisions of this Section 11.2(c) have been
complied with. Any such Subordination Request shall request the Trustee (and any
such lender, trustee or collateral agent under or with respect to any of the
Security Documents) to execute one or more specifically described instruments of
subordination (which instruments of subordination accompany such Subordination
Request) and shall certify (1) that no Event of Default has occurred and is
continuing, and (2) that one of the conditions set forth below in clause (i) or
clause (ii) of this Section 11.2(b) has been, or simultaneously with or
immediately following the subordination will be, fulfilled:
(i) the Company (or with respect to the Security Documents, the
grantor of the Security Interest thereunder) represents in the
Subordination Request that the Lien to which the Security Interests are
to be subordinated is a Permitted Lien securing only a Debt or other
obligation that constitutes First Lien Debt; or
(ii) Holders of not less than 75% of principal amount of the then
outstanding Notes have consented in writing to the subordination of the
Security Interests to such Lien.
(d) The Trustee, at the Company's expense, will cooperate reasonably
with the Company (or with respect to the Security Documents, the grantor of the
Security Interest thereunder) in doing all such acts and things required by the
preceding provisions of this Section 11.2.
64
72
(e) The subordination of the Security Interests pursuant to or in
accordance with the provisions of the Intercreditor Agreements or of Section
11.2(b) or Section 11.2(c) shall be deemed not to impair the Security Interests
in contravention of the provisions of this Indenture.
Section 11.3 Recording; Opinions of Counsel.
(a) The Company has executed, delivered, filed and recorded and shall
execute, deliver, file and record, all instruments and documents, and has done
and shall do all such acts and other things, at the expense of the Company, as
are reasonably necessary to subject the Collateral to the Security Interests. As
soon as practicable, the Company shall execute, deliver, file and record all
instruments and do all acts and other things as may be reasonably necessary or
advisable to perfect, maintain and protect the Security Interests.
(b) The Company shall cause TIA ss. 314(b), relating to Opinions of
Counsel regarding the Lien of the Security Documents, and TIA ss. 314(d),
relating to (x) the release of Collateral from the Lien of the Security
Documents and (y) Officers' Certificates or other documents regarding fair value
of the Collateral, to be complied with to the extent applicable. Any certificate
or opinion required by TIA ss. 314(d) may be made by an Officer of the Company
or any other obligor upon the Notes, as applicable, to the extent permitted by
TIA ss. 314(d).
(c) The Company shall furnish to the Trustee, within 30 days after the
end of the Company's first fiscal year after the date hereof, within 30 days
after the end of each fiscal year thereafter, and at least 30 days prior to the
expiration of any financing statements filed in connection with the Security
Interests, an Officers' Certificate, dated as of such date, (i) stating that
either (A) all action has been taken with respect to the recording, registering,
filing, rerecording and refiling of this Indenture, all supplemental indentures,
the Security Documents, financing statements, continuation statements and all
other instruments of further assurance as are necessary and desirable fully to
maintain, protect and preserve the Security Interests and the rights of the
Holders and the Trustee hereunder and under the Security Documents and reciting
the details of such action or referring to prior Officers' Certificates in which
such details are given, or (B) no such action is necessary to maintain, preserve
and protect the Security Interests and the rights of the Holders and the Trustee
hereunder and under the Security Documents during such period, (ii) stating
either (A) that, with respect to the trademarks and service marks, all filings
with the United States Patent and Trademark Office, any state office or other
appropriate governmental body necessary to maintain, protect and preserve the
Security Interests in the trademarks and service marks have been made, or (B)
that no such action is necessary, and (iii) stating what, if any, action of the
forgoing character is necessary during the fiscal year so as to maintain,
protect and preserve the rights of the Holders and the Trustee hereunder and
under the Security Documents.
Section 11.4 Disposition of Certain Collateral Without Requesting
Release.
(a) Notwithstanding the provisions of Sections 11.5, 11.6 and 11.12, the
Company (or with respect to the Security Documents, the grantor of the Security
Interest thereunder) may, without requesting or receiving the consent of the
Trustee (and any lender, trustee or collateral agent under any of the Security
Documents), (i) make cash payments (including repayments of Debt permitted to be
incurred hereby) that are not otherwise prohibited by this Indenture, and (ii)
dispose of Collateral, free from the Security Interests, pursuant to Sections
4.14(f)(ii), 4.14(f)(iv) or 4.14(f)(vi).
(b) Notwithstanding the provisions of subsection (a) above: (x) the
Company (or with respect to the Security Documents, the grantor of the Security
Interest thereunder) shall not dispose of or transfer (by
65
73
lease, assignment, sale or otherwise) Collateral in a transaction or series of
transactions described in Section 4.14(f)(iv) pursuant to the provisions of
Section 11.4(a), having, in the good faith judgment of the Company (or with
respect to the Security Documents, the grantor of the Security Interest
thereunder) and, if required by the TIA, an Appraiser, a fair value of 5% or
more of the aggregate fair value of all Collateral then existing in any
transaction or any series of related transactions without complying with Section
11.5, and (y) the right of the Company (or with respect to the Security
Documents, the grantor of the Security Interest thereunder) to rely upon the
provisions of Sections 11.4(a) with respect to transactions described in Section
4.14(f)(iv) from the date of this Indenture to December 31, 2000, and for each
twelve-month period thereafter beginning on January 1 (a "Twelve-Month Period")
shall be conditioned upon the Company (or with respect to the Security
Documents, the grantor of the Security Interest thereunder) delivering to the
Trustee, on or before January 30, 2001, and thereafter within 30 days following
the end of such Twelve-Month Period, an Officers' Certificate to the effect that
the proceeds of all of such dispositions which involve Collateral during such
Twelve-Month Period (other than those such dispositions wherein the Company (or
with respect to the Security Documents, the grantor of the Security Interests
thereunder) has complied with Section 11.5) were used by the Company (or with
respect to the Security Documents, the grantor of the Security Interest
thereunder) in connection with their businesses and in accordance with the terms
of Section 4.14 herein.
(c) Any disposition of Collateral made in compliance with the provisions
of this Section 11.4 shall be deemed not to impair the Security Interests in
contravention of the provisions of this Indenture.
Section 11.5 Requesting Release of Collateral.
(a) Upon receipt of a Release Request, the Trustee shall execute and
deliver, within five Business Days from the receipt of such Release Request, any
instruments deemed by the Company (or with respect to the Security Documents,
the grantor of the Security Interests thereunder) to be reasonably necessary or
reasonably appropriate to release all or a part of the Collateral from the
Security Interests, if the provisions of this Section 11.5 have been complied
with. Any such Release Request shall request the Trustee to execute one or more
specifically described release instruments (which release instruments shall
accompany such Release Request) and shall certify (i) that no Event of Default
has occurred and is continuing (or with respect to a Release Request relating to
any of the Security Documents, that no event of default has occurred and is
continuing under the applicable Security Document) and (ii) that one of the
conditions of this Section 11.5(a) set forth below (specifying such condition)
has been fulfilled, and if such specified condition is described in clause (i)
below, that the conditions of Section 11.4, if applicable, have been, or
simultaneously with or immediately following the release will be, fulfilled:
(i) the Collateral will be disposed of in compliance with Section
11.4;
(ii) the Collateral to be released will be used within five
business days either to make redemptions or purchases of Notes which
will be delivered to the Trustee for cancellation;
(iii) the Collateral is to be released in connection with an
Asset Sale made in compliance with Section 4.14;
(iv) all of the conditions precedent to the termination of the
Security Document under which the Lien in the Collateral to be released
was created, or to the release of such Collateral from the Lien created
by such Security Document, as set forth in such Security Document, have
been satisfied;
66
74
(v) Holders of not less than 75% in principal amount of the then
outstanding Notes have consented in writing to such release of
Collateral from the Security Interests;
(vi) the Collateral to be released secures debt or other
obligations that constitute First Lien Debt and the Company (or with
respect to releases under the Security Documents, the grantor of the
Security Interest thereunder) has satisfied all the requirements for
obtaining subordination of the Security Interests therein pursuant to
Section 11.2(b) and such Collateral is (or will be, upon obtaining such
release) encumbered by a Lien permitted pursuant to the terms of clauses
(j), (l), or (o) of the definition of Permitted Liens; or
(vii) the release of the Collateral to be released is required
pursuant to, or is required in order to effect compliance with, the Plan
or a Plan Order.
(b) As a condition to any release of Collateral under this Section 11.5,
the Company shall deliver to the Trustee any certificate or opinion required by
TIA ss. 314(d), as to the fair value of any Collateral to be released, or by TIA
ss. 314(c), as to the fulfillment of any condition precedent to such release,
dated as of a date not more than 60 days prior to the date of substitution or
release. Such certificate or opinion shall state that the proposed release of
Collateral will not impair the Security Interests in contravention of the
provisions of this Indenture. The Person delivering such certificate or opinion
must be independent with respect to the Company if required by TIA ss. 314(d).
(c) At the request of the Company (or with respect to releases under the
Security Documents, the grantor of the Security Interest thereunder), the
Trustee shall, in lieu of releasing any Collateral pursuant to this Section
11.5, execute and deliver a Subordination Agreement with respect to such
Collateral.
(d) Any release or subordination of Collateral made in compliance with
the provisions of this Section 11.5 shall be deemed not to impair the Security
Interests in contravention of the provisions of this Indenture.
Section 11.6 Release Upon Defeasance or Satisfaction and Discharge of
this Indenture.
(a) In the event that the Company delivers an Officers' Certificate
certifying that all of the provisions of either Section 8.2, Section 8.3 or
Section 8.8 have been satisfied, the Trustee shall disclaim and give up any and
all rights it has in or to the Collateral, and any rights it has under the
Security Documents (subject to Section 8.7).
(b) Any release of Collateral made in compliance with the provisions of
this Section 11.6 shall be deemed not to impair the Security Interests in
contravention of the provisions of this Indenture.
Section 11.7 Reliance on Opinion of Counsel. The Trustee shall, before
taking any action under this Article XI, be entitled to receive an Opinion of
Counsel at the expense of the Company, stating the legal effect of such action,
and that such action will not be in contravention of the provisions hereof, and
such opinion shall be full protection to the Trustee for any action taken or
omitted to be taken in reliance thereon; provided, however, that the Trustee's
action under this Article XI shall at all times be and remain subject to its
duties and protections under Article VII.
67
75
Section 11.8 Purchaser May Rely. A purchaser in good faith of the
Collateral or any part thereof or interest therein which is purported to be
transferred, granted or released by the Trustee as provided in this Article XI
(i) shall not be obligated to ascertain the validity of the transfer, grant or
release, and may rely on the authority of the Trustee to execute the document
evidencing such transfer, grant or release, (ii) shall not be obligated to
inquire as to the satisfaction of any conditions precedent to the exercise of
such authority, and (iii) shall not be obligated to determine whether the
application of the purchase price therefor complies with the terms hereof.
Section 11.9 Payment of Expenses. Without limiting Section 7.7, on
demand of the Trustee, the Company forthwith shall pay or satisfactorily provide
for all reasonable expenditures incurred by the Trustee under this Article XI.
In the event that the Company (or with respect to any Security Documents, the
grantor of the Security Interest thereunder) makes a Release Request more often
than once a month, the Trustee and the Company shall negotiate an additional
reasonable fee for each such request. All such sums referred to in this Section
11.9 shall be a Lien upon the Collateral and shall be secured thereby.
Section 11.10 Trustee's Duties. The powers and duties conferred upon the
Trustee by this Article XI are solely to protect the Security Interests and
shall not impose any duty upon the Trustee to exercise any such powers except as
expressly provided in this Indenture. The Trustee shall be under no duty to the
Company (or with respect to any Security Documents, the grantor of the Security
Interest thereunder) whatsoever to make or give any presentment, demand for
performance, notice of non-performance, protest, notice of protest, notice of
dishonor, or other notice or demand in connection with any Collateral, or to
take any steps necessary to preserve any rights against prior parties except as
expressly provided in this Indenture. The Trustee shall not be liable to the
Company (or with respect to any Security Documents, the grantor of the Security
Interest thereunder) for failure to collect or realize upon any or all of the
Collateral, or for any delay in so doing, nor shall the Trustee be under any
duty to the Company (or with respect to any Security Documents, the grantor of
the Security Interest thereunder) to take any action whatsoever with regard
thereto. The Trustee shall have no duty to the Company (or with respect to any
Security Documents, the grantor of the Security Interest thereunder) to comply
with any recording, filing, or other legal requirements necessary to establish
or maintain the validity, priority or enforceability of the Security Interests
in, or the Trustee's rights in or to, any of the Collateral.
Section 11.11 Authorization of Actions to be Taken by the Trustee Under
the Security Documents. The Trustee may, in its sole discretion and without the
consent of the Holders, but subject to Article VII and the terms of the
Intercreditor Agreements, take all actions it deems necessary or appropriate in
order to enforce or effect the Security Documents. Such actions shall include,
but not be limited to, enforcing or effecting any term or provision of the
Security Documents or advising, instructing or otherwise directing the
collateral agent or other appropriate Person under any Intercreditor Agreement
with respect to the enforcement of any right or remedy with respect to
Collateral and/or any term or provision of the Security Documents. Subject to
the provisions of the Security Documents (and the Intercreditor Agreements), the
Trustee shall have the power to institute and to maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the Collateral
by any acts which may be unlawful or in violation of the Security Documents or
this Indenture, and such suits and proceedings as the Trustee may deem expedient
to preserve or protect its interests and the interests of the Holders in the
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the security hereunder or be prejudicial to the interests of the
Holders or of the Trustee). In addition, the Trustee may act upon any
Subordination
68
76
Request or Release Request by the Company (or with respect to any Security
Documents, the grantor of the Security Interest thereunder) on behalf of the
Company.
ARTICLE XII
GUARANTEE
Section 12.1 Guarantee.
(a) In consideration of good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each Subsidiary of the Company
joining in the execution of this Indenture and the Notes for the purpose of
evidencing its Guarantee and its agreement to be bound by the terms of this
Indenture, and each Subsidiary of the Company that becomes a Guarantor in
accordance with Section 4.16 and/or that executes a supplemental indenture in
which such Subsidiary agrees to become and be a Guarantor and to be bound by the
terms of this Indenture, jointly and severally, hereby unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee, irrespective of the validity or enforceability of this
Indenture, the Notes or the obligations of the Company under this Indenture or
the Notes, that: (i) the principal of and interest (and premium, if any) on the
Notes will be paid in full when due, whether at the maturity or interest payment
date, on any Change of Control Payment Date, by acceleration, call for
redemption, purchase or otherwise, and interest on the overdue principal and
interest, if any, of the Notes, if lawful, and all other obligations of the
Company to the Holders or the Trustee under this Indenture or the Notes will be
promptly paid in full or performed, all in accordance with the terms of this
Indenture and the Notes, and (ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, they will be paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at maturity, on any Change of Control Payment Date, by acceleration,
call for redemption, purchase or otherwise (such guarantees being the
"Guarantee"). Each Guarantor acknowledges and agrees with and for the benefit of
the Holders of the Notes that the Guarantee of such Guarantor shall be secured
by a perfected security interests in substantially all of the assets of the
Guarantor (except Inventory and Receivables), subject, however, to the rights of
the holders of Permitted Liens encumbering such assets, and provided, however,
that no Guarantor shall be obligated to grant any such security interest in any
asset encumbered by a Permitted Lien if the granting of such security interest
would constitute a default under or with respect to such Permitted Lien. The
Guarantee is a guarantee of payment and not of collection.
Failing payment when due of any amount so guaranteed for whatever
reason, the Guarantors shall be jointly and severally obligated to pay the same
whether or not the failure to so pay is or becomes an Event of Default.
(b) Each Guarantor agrees that (i) its obligations with regard to this
Guarantee shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any delays in obtaining or realizing upon (or failures to
obtain or realize upon) collateral, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstances that might
otherwise constitute a legal or equitable discharge or defense of a guarantor,
and (ii) this Guarantee will not be discharged except by complete performance of
the obligations contained in the Notes and this Indenture. Each of the
Guarantors 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 or right to require the
prior disposition of the assets of the Company to meet its obligations, protest,
notice and all demands whatsoever and covenants that
69
77
this Guarantee will not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise
to return to either the Company or any Guarantor, or to any Custodian, trustee,
or similar official acting in relation to either the Company or any Guarantor,
any amount paid by either the Company or any of the Guarantors to the Trustee or
such Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each of the Guarantors 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 all of such obligations are
paid in full.
(d) Each of the Guarantors agrees that (i) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Section 6.2 for
the purposes of the Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration as to the Company of any of the
obligations guaranteed by the Guarantee, and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.2,
those obligations (regardless of whether due and payable) will forthwith become
due and payable by each of the Guarantors for the purpose of the Guarantee.
Section 12.2 Execution and Delivery of Guarantee. To evidence the
Guarantee and its obligations thereunder as set forth in Section 12.1, each of
the Guarantors agrees that a notation of such Guarantee substantially in the
form annexed hereto as Exhibit B shall be endorsed on each Note authenticated
and delivered by the Trustee, and that this Indenture (or a supplement hereto)
shall be executed on behalf of such Guarantor by two Officers or an Officer and
an Assistant Secretary of such Guarantor.
Each of the Guarantors agrees that the Guarantee and its obligations
thereunder as set forth in Section 12.1 shall remain in full force and effect
and apply to all the Notes notwithstanding any failure to endorse on each Note a
notation of such Guarantee.
If an Officer whose facsimile signature is on a Note no longer holds
that office at the time the Trustee authenticates the Note on which the
Guarantee is endorsed, the Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee set forth in
this Indenture on behalf of the Guarantors.
Section 12.3 Limitation of Guarantor's Liability. Each Guarantor and,
by its acceptance hereof, each Holder hereby confirms that it is the intention
of all such parties that the guarantee by such Guarantor pursuant to the
Guarantee not constitute a fraudulent transfer or conveyance for purposes of any
federal or state law. To effectuate the foregoing intention, the Holders and
each Guarantor hereby irrevocably agree that the obligations of each Guarantor
under the Guarantee shall be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such Guarantor and after
giving effect to any collections from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to Section 12.4, result in the obligations of such
Guarantor under the Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under federal or state law. This Section 12.3 is for the
benefit of the creditors of each Guarantor. The provisions of this Section 12.3
shall survive until the Notes have been fully paid or deemed to have been fully
paid within the meaning of this Indenture.
70
78
Section 12.4 Contribution. In order to provide for just and equitable
contribution among the Guarantors, the Guarantors agree, inter se, that in the
event any payment or distribution is made by any Guarantor (a "Funding
Guarantor") under the Guarantee, such Funding Guarantor shall be entitled to a
contribution from each other Guarantor in a pro rata amount based on the
Adjusted Net Assets of each Guarantor (including the Funding Guarantor) for all
payments, damages and expenses incurred by that Funding Guarantor in discharging
the Company's obligations with respect to the Notes or any other Guarantor's
obligations with respect to the Guarantee.
Section 12.5 Rights Under the Guarantee.
(a) No payment by any Guarantor pursuant to the provisions hereof to the
Trustee shall entitle such Guarantor to any payment out of any Collateral held
by the Trustee under the Indenture or any Security Documents.
(b) Each of the Guarantors waives notice of the issuance, sale and
purchase of the Notes and notice from the Trustee or the Holders from time to
time of any of the Notes of their acceptance and reliance on this Guarantee.
(c) Notwithstanding any payment or payments made by the Guarantors by
reason of the Guarantee, the Guarantors shall not be subrogated to any rights of
the Trustee or any Holder of the Notes against the Company until all the Notes
shall have been fully paid or deemed to have been fully paid within the meaning
of this Indenture. Any payment made by the Guarantors by reason of this
Guarantee shall be in all respects subordinated to the full and complete payment
or discharge under the Indenture of all obligations guaranteed hereby, and no
payment by the Guarantors by reason of this Guarantee shall give rise to any
claim of the Guarantors against the Trustee or any Holder. Unless and until the
Notes shall have been fully paid or deemed to have been fully paid within the
meaning of the Indenture, neither the Guarantors nor any of them will assign or
otherwise transfer any such claim against the Company to any other Person.
(d) No set-off, counterclaim, reduction or diminution of any obligation
or any defense of any kind or nature (other than performance by the Guarantor of
its obligation hereunder) which the Guarantor may have or assert against the
Trustee or any Holder of any Notes shall be available hereunder to the Guarantor
against the Trustee.
(e) The Guarantor agrees to pay all costs, expense and fees, including
all reasonable attorneys' fees, which may be incurred by the Trustee in
enforcing or attempting to enforce the Guarantee or protecting the rights of the
Trustee or the Holders of Notes, if any, in accordance with this Indenture.
Section 12.6 Severability. In case any provision of the Guarantee shall
be invalid, illegal or unenforceable, that portion of such provision that is not
invalid, illegal or unenforceable shall remain in effect, and the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
71
79
ARTICLE XIII
RIGHT TO REQUIRE REPURCHASE
Section 13.1 Repurchase of Notes at Option of the Holder Upon Change of
Control.
(a) In the event that a Change of Control occurs, each Holder shall have
the right, at such Holder's option, upon the terms and conditions of this
Article XIII, to require the Company to repurchase all or any part of such
Holder's Notes (provided, however, that the principal amount of such Notes at
maturity must be $1,000 or an integral multiple thereof) on a date that is no
later than 60 Business Days after the occurrence of a Change of Control (the
date on which the repurchase is effected being referred to herein as the "Change
of Control Payment Date"), at a cash purchase price (the "Change of Control
Purchase Price") equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, on and including the Change of Control Payment Date.
(b) Within 20 Business Days after the Company knows, or reasonably
should know, of the occurrence of a Change of Control, the Company shall make an
irrevocable unconditional offer (a "Change of Control Offer") to the Holders to
purchase for U.S. Legal Tender all of the Notes pursuant to the offer described
in clause (c) of this Section 13.1 at the Change of Control Purchase Price.
Within five Business Days after each date upon which the Company knows, or
reasonably should know, of the occurrence of a Change of Control requiring the
Company to make a Change of Control Offer pursuant to this Section 13.1, the
Company shall so notify the Trustee.
(c) Notice of a Change of Control Offer shall be sent, at least 20
Business Days prior to the Final Change of Control Put Date (as defined below),
by first class mail, by the Company to each Holder at its registered address,
with a copy to the Trustee. The notice to the Holders shall contain all
instructions and materials required by applicable law and shall contain or make
available to Holders other information material to such Holders' decision to
tender Notes pursuant to the Change of Control Offer. The notice, which shall
govern the terms of the Offer, shall state:
(1) that a Change of Control has occurred and that such Holder
has the right to require the Company to purchase such Holder's Notes at
a purchase price in cash equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date
to receive interest on the relevant interest payment date);
(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical
income, cash flow and capitalization, each after giving effect to such
Change of Control);
(3) that the Change of Control Offer is being made pursuant to
such notice and this Section 13.1 and that all Notes, or portions
thereof, tendered will be accepted for payment;
(4) the Change of Control Purchase Price, the Change of Control
Payment Date and the Final Change of Control Put Date (as defined
below);
72
80
(5) that any Note, or portion thereof, not tendered or accepted
for payment will continue to accrue interest, if interest is then
accruing;
(6) that, unless the Company defaults in depositing U.S. Legal
Tender with the Paying Agent in accordance with the provisions of
Section 11(d), or payment is otherwise prevented, any Note, or portion
thereof, accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date;
(7) that Holders electing to have a Note, or portion thereof,
purchased pursuant to a Change of Control Offer will be required to
surrender the Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, to the Paying Agent
(which may not for purposes of this Section 11.1, notwithstanding
anything in this Indenture to the contrary, be the Company or any
Affiliate of the Company) at the address specified in the notice prior
to the close of business on the third Business Day prior to the Change
of Control Payment Date (the "Final Change of Control Put Date");
(8) that Holders will be entitled to withdraw their election if
the Paying Agent receives, prior to the close of business on the Final
Change of Control Put Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Notes the Holder is withdrawing and a statement containing a facsimile
signature that such Holder is withdrawing his election to have such
principal amount of Notes purchased;
(9) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered; and
(10) a brief description of the events resulting in such Change
of Control.
(d) On or before the Change of Control Payment Date, the Company shall
(i) accept for payment Notes or portions thereof properly tendered pursuant to
the Change of Control Offer prior to the close of business on the Final Change
of Control Put Date, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the Change of Control Purchase Price (including accrued and
unpaid interest) of all Notes so tendered, and (iii) deliver or cause to be
delivered to the Trustee Notes so accepted together with an Officers'
Certificate listing the Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Notes so
accepted payment in an amount equal to the Change of Control Purchase Price
(including accrued and unpaid interest), and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Note equal in principal
amount to any unpurchased portion of the Note surrendered. Any Notes not so
accepted shall be promptly mailed or delivered by the Company or the Paying
Agent to the Holder thereof. The Company shall publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date. Any such Change of Control Offer shall comply with all
applicable provisions of Federal and state laws, rules and regulations,
including, if and to the extent applicable, with the requirements of Section
14(a) of the Exchange Act and any other securities laws or regulations
applicable in connection with the repurchase of Securities pursuant to this
Section 11.1, and, if such laws, rules or regulations require or prohibit any
action inconsistent with the foregoing, compliance by the Company with such
laws, rules and regulations will not constitute a breach of the Company's
obligations with respect to the foregoing.
73
81
ARTICLE XIV
MISCELLANEOUS
Section 14.1 TIA Controls. If any provision of this Indenture limits,
qualifies, or conflicts with the duties imposed by operation of the TIA, the
imposed duties, upon qualification of this Indenture under the TIA, shall
control.
Section 14.2 Notices. Any notices or other communications to the
Company or the Trustee required or permitted hereunder shall be in writing, and
shall be sufficiently given if made by hand delivery, by telex, by telecopier or
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Company:
TransTexas Gas Corporation
0000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx
if to the Trustee:
Firstar Bank, N.A.
Corporate Trust Department
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
The Company or the Trustee by notice to each other party may designate
additional or different addresses as shall be furnished in writing by such
party. Any notice or communication to the Company or the Trustee shall be deemed
to have been given or made as of the date so delivered, if personally delivered;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
five Business Days after mailing if sent by registered or certified mail,
postage prepaid (except that a notice of change of address shall not be deemed
to have been given until actually received by the addressee).
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail or other equivalent means at his address as it appears
on the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect
in it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, regardless of whether the addressee receives it.
Section 14.3 Communications by Holders with Other Holders. Noteholders
may communicate pursuant to TIA Section 312(b) with other Noteholders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and any other Person shall have the protection of TIA
Section 312(c).
74
82
Section 14.4 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) an Opinion of Counsel (in form and substance reasonably satisfactory
to the Trustee) stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
Section 14.5 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall 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 has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to regardless of whether such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each such Person, such
condition or covenant has been complied with; provided, however, that with
respect to matters of fact an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
Section 14.6 Rules by Trustee, Paying Agent, Registrar. The Trustee may
make reasonable rules for action by or at a meeting of Noteholders. The Paying
Agent or Registrar may make reasonable rules for its functions.
Section 14.7 Legal Holidays. A "Legal Holiday" used with respect to a
particular place of payment is a Saturday, a Sunday or a day on which banking
institutions at such place are not required to be open. If a payment date is a
Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
Section 14.8 Governing Law. THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. INSOFAR AS THIS INDENTURE RELATES TO
THE SECURITY DOCUMENTS OR THE CREATION, PERFECTION OR FORECLOSURE OF LIENS AND
THE ENFORCEMENT OF RIGHTS AND REMEDIES AGAINST THE COLLATERAL UNDER THE SECURITY
DOCUMENTS, IT SHALL BE GOVERNED BY THE LAWS OF THE JURISDICTION SPECIFIED IN
SUCH DOCUMENTS. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW
YORK OR ANY FEDERAL COURT SITTING
75
83
IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE NOTES
AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE COMPANY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW,
TRIAL BY JURY AND ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE TRUSTEE OR ANY NOTEHOLDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.
Section 14.9 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of any of the Company or any of its Subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
Section 14.10 No Recourse against Others. A director, officer,
employee, stockholder or incorporator, as such, of the Company or any of its
Subsidiaries shall not have any liability for any obligations of the Company or
such Subsidiary under the Notes, the Guarantee, or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creations. Each Noteholder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.
Section 14.11 Successors. All agreements of the Company and each
Guarantor in this Indenture and the Notes shall bind its successor. All
agreements of the Trustee in this Indenture shall bind its successor.
Section 14.12 Duplicate Originals. All parties may sign any number of
copies or counterparts of this Indenture. Each signed copy or counterpart shall
be an original, but all of them together shall represent the same agreement.
Section 14.13 Severability. In case any one or more of the provisions
in this Indenture or in the Notes shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions shall not in any way be affected or impaired thereby, it being
intended that all of the provisions hereof shall be enforceable to the full
extent permitted by law.
Section 14.14 Table of Contents, Headings, Etc. The Table of Contents,
Cross-Reference Table and headings of the Articles and the Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
or provisions hereof.
76
84
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
TRANSTEXAS GAS CORPORATION
By:
-------------------------------------
Name:
Title:
[Seal]
Attest: _______________________________
GALVESTON BAY PROCESSING COMPANY
By:
-------------------------------------
Name:
Title:
[Seal]
Attest: _______________________________
GALVESTON BAY PIPELINE COMPANY
By:
-------------------------------------
Name:
Title:
[Seal]
Attest: _______________________________
FIRSTAR BANK, N.A.,
as Trustee
By:
-------------------------------------
Name:
Title:
85
EXHIBIT A
[FORM OF SENIOR SECURED NOTE]
TRANSTEXAS GAS CORPORATION
15% SENIOR SECURED NOTE DUE 2005
No. [_____________] $[_________________]
CUSIP[_____________]
TransTexas Gas Corporation, a Delaware corporation (hereinafter called
the "Company," which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______________________, or registered assigns, the principal sum of
________________ Dollars, on [_____ __, ____].
Interest Payment Dates: [______] 15 and [______] 15, commencing [______]
15, [_____].
Record Dates: [______] 1 and [______] 1.
Reference is made to the further provisions of this Note on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Dated:
TRANSTEXAS GAS CORPORATION
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
Trustee's Certificate of Authentication:
This is one of the Notes referred to in the within-mentioned Indenture:
Firstar Bank, N.A., as Trustee
By:
--------------------------------
Authorized Signature
A-1
86
(BACK OF NOTE)
TRANSTEXAS GAS CORPORATION
15% Senior Secured Note due 2005
1. Interest.
TransTexas Gas Corporation, a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at a rate of 15%
per annum. To the extent it is lawful, the Company promises to pay interest on
any interest payment due but unpaid on such principal amount at a rate of [---]%
per annum compounded semi-annually.
The Company will pay interest semi-annually on [______] 15 and [______]
15 of each year (each, an "Interest Payment Date"), commencing [______] 15,
2000. 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 of the Notes. Interest on the Notes will be computed on the basis of a
360-day year consisting of twelve 30-day months.
2. Method of Payment.
The Company shall pay interest on the Notes (except defaulted interest)
to the Persons who are the registered Holders at the close of business on the
Record Date immediately preceding the Interest Payment Date. Holders must
surrender Notes to a Paying Agent to collect principal payments. Except as
provided below, the Company shall pay principal and interest in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for payment of public and private debts ("U.S. Legal Tender").
However, the Company may pay principal and interest by wire transfer of Federal
funds, or interest by its check payable in such U.S. Legal Tender. The Company
shall deliver any such interest payment to the Paying Agent who shall remit such
payment to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, Firstar Bank of Minnesota, N.A. (the "Trustee") will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders. The Company or an Affiliate of it
may, subject to certain exceptions, act as Paying Agent, Registrar or
co-Registrar.
4. Indenture.
The Company issued the Notes under an Indenture, dated as of [________
___, 2000] (the "Indenture"), among the Company and the Trustee. Capitalized
terms herein are used as defined in the Indenture unless otherwise defined
herein. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
in effect on the date of the Indenture. The Notes are subject to all such terms,
and Holders of Notes are referred to the Indenture and said Act for a statement
of them. The Notes are senior secured obligations of the Company limited in
aggregate principal amount to $200,000,000.
A-2
87
5. Optional Redemption.
The Notes may be redeemed in whole or from time to time in part at any
time, at the option of the Company, at the Redemption Price (expressed as a
percentage of principal amount) set forth below with respect to the indicated
Redemption Date, in each case, together with any accrued but unpaid interest to
the Redemption Date.
If redeemed during
the 12-month period
beginning [______, ___]: Redemption Price
------------------------ ----------------
2000 . . . . . . . . . . . . . . . . . . . .115%
2001 . . . . . . . . . . . . . . . . . . . .112%
2002 . . . . . . . . . . . . . . . . . . . .109%
2003 . . . . . . . . . . . . . . . . . . . .106%
2004 . . . . . . . . . . . . . . . . . . . .103%
Any such redemption will comply with Article III of the Indenture.
6. Notice of Redemption.
Notice of redemption will be mailed by first class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at his registered address. Notes in denominations larger
than $1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Notes called for redemption shall have
been deposited with the Paying Agent on such Redemption Date the Notes called
for redemption will cease to bear interest and the only right of the Holders of
such Notes will be to receive payment of the Redemption Price and any accrued
and unpaid interest to the Redemption Date.
7. Denominations; Transfer; Exchange.
The Notes are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder may register the transfer of,
or exchange Notes in accordance with, the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any Notes
selected for redemption.
8. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it for
all purposes.
X-0
00
0. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee and the Paying Agent(s) will pay the money back to the
Company at its written request. Thereafter, all liability of the Trustee and
such Paying Agent(s) with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Company at any time deposits into an irrevocable trust with the
Trustee U.S. Legal Tender or U.S. Government Obligations sufficient to pay the
principal of and interest on the Notes to redemption or maturity and complies
with the other provisions of the Indenture relating thereto, the Company will be
discharged from certain provisions of the Indenture and the Notes (including the
financial covenants, but excluding its obligation to pay the principal of and
interest on the Notes).
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the written consent of the Holders of at least 66
2/3% in aggregate principal amount of the Notes then outstanding, and any
existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of at least 66 2/3% in aggregate
principal amount of the Notes then outstanding. Without notice to or consent of
any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency
(provided, however, that such amendment or supplement does not adversely affect
the rights of any Holder of a Note).
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the Company
and its Subsidiaries to, among other things, Incur additional Debt or issue
Disqualified Capital Stock, make payments in respect of its Capital Stock, enter
into transactions with Affiliates, incur Liens, sell assets, change the nature
of its business, merge or consolidate with any other Person and sell, lease,
transfer or otherwise dispose of substantially all of its properties or assets.
The limitations are subject to a number of important qualifications and
exceptions. The Company must deliver a quarterly report to the Trustee on
compliance with such limitations.
13. Change of Control.
In the event there shall occur any Change of Control, each Holder of
Notes shall have the right, at such Holder's option but subject to the
limitations and conditions set forth in the Indenture, to require the Company to
purchase on the Change of Control Payment Date in the manner specified in the
Indenture, all or any part (in integral multiples of $1,000) of such Holder's
Notes at a Change of Control Purchase Price equal to 101% of the principal
amount thereof, together with accrued and unpaid interest, if any, on and
including the Change of Control Payment Date.
14. Successors.
When a successor assumes all the obligations of its predecessor under
the Notes and the Indenture, the predecessor will be released from those
obligations.
X-0
00
00. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate combined principal amount of the Notes and
the Company's Senior Secured Discount Notes then outstanding may declare all the
Notes to be due and payable immediately in the manner and with the effect
provided in the Indenture. Holders of Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of a majority in aggregate principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal, premium,
if any, or interest, including a Default at any Maturity Date), if it determines
that withholding notice is in their interest.
16. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as such,
past, present or future, of the Company or any of its Subsidiaries or any
successor corporation shall have any liability for any obligation of the Company
or such Subsidiary under the Notes or the Indenture or for any claim based on,
in respect of or by reason of, such obligations or their creation. Each Holder
of a Note 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.
17. Authentication.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
18. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Note
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). Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Indenture.
19. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
A-5
90
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
--------------------------------------------------------------------------------
Date: Signature
--------------------- -------------------------------------
(Sign exactly as your name appears on
the face of this Note)
Signature Guarantee*
---------------------
* NOTICE: The signature must be guaranteed by an institution which
is a member of one of the following recognized signature
guarantee programs:
(1) The Securities Transfer Agent Medallion Program (STAMP);
(2) The New York Stock Exchange Medallion Program (MSP);
(3) The Stock Exchange Medallion Program (SEMP).
A-6
91
OPTION OF HOLDER TO ELECT PURCHASE
[ ] CHECK HERE, if you want to elect to have this Note purchased in
its entirety by the Company pursuant to Section 4.14 or Section
13.1 of the Indenture.
[ ] CHECK HERE, if the principal amount of this Note exceeds $1,000
and you want to elect to have only part of this Note purchased by
the Company pursuant to Section 4.14 or Section 13.1 of the
Indenture, and state the principal amount (in an integral
multiple of $1,000) of this Note that you want to be purchased:
$-----------------------
Date: Signature
---------------------- ---------------------------------------
(Sign exactly as your name appears on
the face of this Note)
Your Social Security or Tax Identification Number: _______________________
Signature Guarantee:*
---------------------
* NOTICE: The signature must be guaranteed by an institution which
is a member of one of the following recognized signature
guarantee programs:
(1) The Securities Transfer Agent Medallion Program (STAMP);
(2) The New York Stock Exchange Medallion Program (MSP);
(3) The Stock Exchange Medallion Program (SEMP).
A-7
92
EXHIBIT B
FORM OF GUARANTEE
For value received, [__________________________], a [___________]
corporation, hereby unconditionally guarantees jointly and severally with any
current and future guarantors to the Holder of the Note upon which this
Guarantee is endorsed the due and punctual payment of the principal of,
premium, if any, and interest on such Note when and as the same shall become
due and payable according to the terms of such Note. The Guarantee of the Note
upon which this Guarantee is endorsed will not become effective until the
Trustee signs the certificate of authentication on such Note.
[______________________________________]
By:
-------------------------------------
Attest:
--------------
B-1
