EXHIBIT 4.2
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XXXXXXX PETROLEUM CORPORATION,
THE GUARANTORS NAMED ON THE SIGNATURE PAGE HEREOF
and
X.X. XXXXXX TRUST COMPANY, NATIONAL ASSOCIATION,
As Trustee
FIRST SUPPLEMENTAL INDENTURE
dated as of April 19, 2005
to
SUBORDINATED INDENTURE
dated as of April 19, 2005
Providing for Issuance of
7 1/4% SENIOR SUBORDINATED NOTES DUE 2013
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions....................................................................... 2
Section 1.02. Other Definitions................................................................. 24
Section 1.03. Rules of Construction............................................................. 25
ARTICLE 2 THE NOTES
Section 2.01. Creation and Form................................................................. 25
Section 2.02. Execution and Authentication...................................................... 26
Section 2.03. Outstanding Notes................................................................. 26
Section 2.04. CUSIP Numbers..................................................................... 26
Section 2.05. Issuance of Additional Notes...................................................... 26
ARTICLE 3 REDEMPTION AND PURCHASE
Section 3.01. Redemption and Purchase........................................................... 27
Section 3.02. Optional Redemption............................................................... 27
Section 3.03. Mandatory Redemption.............................................................. 28
Section 3.04. Offer to Purchase by Application of Excess Proceeds............................... 28
ARTICLE 4 COVENANTS
Section 4.01. Payment of Notes.................................................................. 30
Section 4.02. Maintenance of Office or Agency................................................... 30
Section 4.03. Reports........................................................................... 30
Section 4.04. Compliance Certificate............................................................ 31
Section 4.05. Taxes............................................................................. 31
Section 4.06. Stay, Extension and Usury Laws.................................................... 32
Section 4.07. Limitation on Restricted Payments................................................. 32
Section 4.08. Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries...... 35
Section 4.09. Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock.......... 36
Section 4.10. Limitation on Asset Sales......................................................... 39
Section 4.11. Limitation on Transactions with Affiliates........................................ 40
Section 4.12. Limitation on Liens............................................................... 41
Section 4.13. Additional Subsidiary Guarantees.................................................. 42
Section 4.14. Corporate Existence............................................................... 42
Section 4.15. Offer to Repurchase Upon Change of Control........................................ 42
Section 4.16. No Inducements.................................................................... 44
Section 4.17. Permitted Business Activities..................................................... 44
Section 4.18. Sale and Leaseback Transactions................................................... 45
Section 4.19. Anti-Layering..................................................................... 45
Section 4.20. Designation of Restricted and Unrestricted Subsidiaries........................... 45
ARTICLE 5 SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.......................................... 46
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Section 5.02. Successor Corporation Substituted................................................. 46
ARTICLE 6 DEFAULTS AND REMEDIES
Section 6.01. Events of Default................................................................. 47
Section 6.02. Acceleration...................................................................... 49
Section 6.03. Priorities........................................................................ 49
Section 6.04. Waiver of Usury, Stay or Extension of Laws........................................ 49
ARTICLE 7 TRUSTEE; REPORTS
Section 7.01. Notice of Defaults................................................................ 49
Section 7.02. Reports by Company and Subsidiary Guarantors...................................... 50
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.......................... 50
Section 8.02. Legal Defeasance and Discharge.................................................... 50
Section 8.03. Covenant Defeasance............................................................... 51
Section 8.04. Conditions to Legal or Covenant Defeasance........................................ 51
Section 8.05. Deposited Money and Government Securities
to be Held in Trust; Other Miscellaneous Provisions............................... 53
Section 8.06. Repayment to Company.............................................................. 53
Section 8.07. Reinstatement..................................................................... 54
Section 8.08. Discharge......................................................................... 54
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes............................................... 54
Section 9.02. With Consent of Holders of Notes.................................................. 55
Section 9.03. Revocation and Effect of Consents................................................. 57
ARTICLE 10 GUARANTEES OF NOTES
Section 10.01. Subsidiary Guarantees............................................................. 58
Section 10.02. Notation of Subsidiary Guarantees................................................. 59
Section 10.03. Guarantors May Consolidate, Etc., on Certain Terms................................ 59
Section 10.04. Releases of Subsidiary Guarantees................................................. 59
Section 10.05. [Reserved]........................................................................ 60
Section 10.06. Limitation on Guarantor Liability................................................. 60
Section 10.07. "Trustee" to Include Paying Agent................................................. 60
ARTICLE 11 MISCELLANEOUS
Section 11.01. First Supplemental Indenture Controls............................................. 60
Section 11.02. No Personal Liability of Directors, Officers, Employees and Stockholders.......... 60
Section 11.03. Governing Law..................................................................... 61
Section 11.04. No Adverse Interpretation of Other Agreements..................................... 61
Section 11.05. Table of Contents and Headings.................................................... 61
Section 11.06. Counterparts...................................................................... 61
ARTICLE 12 SUBORDINATION
Section 12.01. Agreement to Subordinate.......................................................... 61
Section 12.02. Liquidation, Dissolution, Bankruptcy.............................................. 62
Section 12.03. Default on Senior Debt............................................................ 62
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Section 12.04. Acceleration of Payment of Notes.................................................. 63
Section 12.05. When Distribution Must Be Paid Over; Reinstatement of Senior Debt................. 63
Section 12.06. Subrogation....................................................................... 63
Section 12.07. Relative Rights................................................................... 63
Section 12.08. Subordination May Not Be Impaired by Company...................................... 64
Section 12.09. Rights of Trustee and Paying Agent; Rights of Holders of Senior Debt.............. 64
Section 12.10. Distribution or Notice to Representative.......................................... 65
Section 12.11. Not to Prevent Events of Default or Limit Right to Accelerate..................... 65
Section 12.12. Trust Moneys Not Subordinated..................................................... 65
Section 12.13. Trustee Entitled to Rely.......................................................... 65
Section 12.14. Trustee to Effectuate Subordination............................................... 66
Section 12.15. Trustee Not Fiduciary for Holders of Senior Debt.................................. 66
Section 12.16. Reliance by Holders of Senior Debt on Subordination Provisions.................... 66
ARTICLE 13 SUBORDINATION OF SUBSIDIARY GUARANTEES
Section 13.01. Agreement to Subordinate.......................................................... 66
Section 13.02. Liquidation, Dissolution, Bankruptcy.............................................. 67
Section 13.03. Default on Senior Debt............................................................ 67
Section 13.04. Demand for Payment................................................................ 68
Section 13.05. When Distribution Must Be Paid Over; Reinstatement of Senior Debt................. 68
Section 13.06. Subrogation....................................................................... 68
Section 13.07. Relative Rights................................................................... 68
Section 13.08. Subordination May Not Be Impaired by Guarantors................................... 69
Section 13.09. Rights of Trustee and Paying Agent; Rights of Holders of Senior Debt.............. 69
Section 13.10. Distribution or Notice to Representative.......................................... 70
Section 13.11. Article 13 Not to Prevent Events of Default or Limit Right to Demand Payment...... 70
Section 13.12. Trust Moneys Not Subordinated..................................................... 70
Section 13.13. Trustee Entitled to Rely.......................................................... 70
Section 13.14. Trustee to Effectuate Subordination............................................... 71
Section 13.15. Trustee Not Fiduciary for Holders of Senior Debt of Guarantors.................... 71
Section 13.16. Reliance by Holders of Senior Debt of Guarantors on Subordination Provisions...... 71
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EXHIBITS
EXHIBIT A Form of Note........................................... A - 1
EXHIBIT B Form of Supplemental Indenture......................... B - 1
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This First Supplemental Indenture, dated as of April 19, 2005 (this "First
Supplemental Indenture"), supplements and amends the Subordinated Indenture,
dated as of April 19, 2005 (the "Original Indenture"), among Xxxxxxx Petroleum
Corporation, a Delaware corporation (the "Company"), the guarantors listed on
the signature page thereof (each, a "Guarantor" and, collectively, the
"Guarantors") and X.X. Xxxxxx Trust Company, National Association, a national
banking association, as trustee (the "Trustee").
RECITATIONS OF THE COMPANY
WHEREAS, the Company, the Guarantors and the Trustee have heretofore
executed and delivered the Original Indenture to provide for the issuance of the
Company's subordinated debt securities to be issued in one or more series;
WHEREAS, Section 901 of the Original Indenture provides, among other
things, that the Company, the Guarantors and the Trustee may without the consent
of Holders enter into indentures supplemental to the Original Indenture to,
among other things, (a) add to, change or eliminate any of the provisions of the
Original Indenture in respect of one or more series of Securities, provided that
any such addition, change or elimination (i) shall neither (A) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (B) modify the
rights of the Holder of any such Security with respect to such provision or (ii)
shall become effective only when there is no such Security Outstanding and (b)
establish the form or terms of Securities of any series as permitted by Sections
201 and 301;
WHEREAS, the Company desires to provide for the issuance of the initial
series of Securities to be designated as the "7 1/4% Senior Subordinated Notes
due 2013" (the "Notes"), and to set forth the form and terms thereof;
WHEREAS, the Company proposes in and by this First Supplemental Indenture
to supplement and amend the Original Indenture, but only insofar as it will
apply to the Notes; and
WHEREAS, all action on the part of the Company necessary to authorize the
creation and issuance of the Notes, and all action on the part of each of the
Guarantors necessary to authorize its guarantee of the Notes under the Original
Indenture and this First Supplemental Indenture (the Original Indenture, as
supplemented and amended by this First Supplemental Indenture, being hereinafter
called the "Indenture"), have been duly taken.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
That, in order to establish the designation, form and terms of, and to
authorize the authentication and delivery of the Notes, and in consideration of
the acceptance of the Notes by the Holders thereof and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
(a) Capitalized terms used herein and not otherwise defined shall have
the respective meanings assigned thereto in the Original Indenture.
(b) Section 101 of the Original Indenture is amended and supplemented by
inserting or restating, as the case may be, in their appropriate alphabetical
position, the following definitions:
"ACNTA" means (without duplication), as of the date of determination:
(1) the sum of:
(a) discounted future net revenue from proved crude oil and
natural gas reserves of the Company and its Restricted Subsidiaries
calculated in accordance with SEC guidelines before any state or
federal income taxes, as estimated in a reserve report prepared as
of the end of the Company's most recently completed fiscal year,
which reserve report is prepared or reviewed by independent
petroleum engineers as to reserves accounting for at least 80% of
all such discounted future net revenue and by the Company's
petroleum engineers with respect to any other reserves covered by
such report, as increased by, as of the date of determination, the
discounted future net revenue from:
(i) estimated proved crude oil and natural gas
reserves of the Company and its Restricted Subsidiaries
attributable to acquisitions consummated since the date of
such year-end reserve report, and
(ii) estimated crude oil and natural gas reserves of
the Company and its Restricted Subsidiaries attributable to
extensions, discoveries and other additions and upward
determinations of estimates of proved crude oil and natural
gas reserves (including previously estimated development costs
incurred during the period and the accretion of discount since
the prior year end) due to exploration, development or
exploitation, production or other activities which reserves
were not reflected in such year-end reserve report,
in each case calculated in accordance with SEC guidelines (utilizing
the prices utilized in such year-end reserve report), and decreased
by, as of the date of determination, the discounted future net
revenue attributable to
(iii) estimated proved crude oil and natural gas
reserves of the Company and its Restricted Subsidiaries
reflected in such year-end reserve report produced or disposed
of since the date of such year-end reserve report and
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(iv) reductions in the estimated proved crude oil and
natural gas reserves of the Company and its Restricted
Subsidiaries reflected in such year-end reserve report since
the date of such year-end reserve report attributable to
downward determinations of estimates of proved crude oil and
natural gas reserves due to exploration, development or
exploitation, production or other activities conducted or
otherwise occurring since the date of such year-end reserve
report,
in each case calculated in accordance with SEC guidelines (utilizing
the prices utilized in such year-end reserve report); provided,
however, that, in the case of each of the determinations made
pursuant to clauses (i) through (iv), such increases and decreases
shall be as estimated by the Company's engineers, except that if as
a result of such acquisitions, dispositions, discoveries, extensions
or revisions, there is a Material Change, then such increases and
decreases in the discounted future net revenue shall be confirmed in
writing by an independent petroleum engineer;
(b) the capitalized costs that are attributable to crude oil
and natural gas properties of the Company and its Restricted
Subsidiaries to which no proved crude oil and natural gas reserves
are attributed, based on the Company's books and records as of a
date no earlier than the date of the Company's latest annual or
quarterly financial statements;
(c) the Net Working Capital on a date no earlier than the
date of the Company's latest annual or quarterly financial
statements; and
(d) the greater of (I) the net book value on a date no
earlier than the date of the Company's latest annual or quarterly
financial statements and (II) the appraised value, as estimated by
independent appraisers, of other tangible assets of the Company and
its Restricted Subsidiaries as of a date no earlier than the date of
the Company's latest audited financial statements;
(2) minus, to the extent not otherwise taken into account in the
immediately preceding clause (1), the sum of:
(a) minority interests;
(b) any net gas balancing liabilities of the Company and its
Restricted Subsidiaries reflected in the Company's latest audited
financial statements;
(c) the discounted future net revenue, calculated in
accordance with SEC guidelines (utilizing the same prices utilized
in the Company's year-end reserve report), attributable to reserves
subject to participation interests, overriding royalty interests or
other interests of third parties, pursuant to participation,
partnership, vendor financing or other agreements then in effect, or
which otherwise are required to be delivered to third parties;
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(d) the discounted future net revenue, calculated in
accordance with SEC guidelines (utilizing the same prices utilized
in the Company's year-end reserve report), attributable to reserves
that are required to be delivered to third parties to fully satisfy
the obligations of the Company and its Restricted Subsidiaries with
respect to Volumetric Production Payments on the schedules specified
with respect thereto; and
(e) the discounted future net revenue, calculated in
accordance with SEC guidelines, attributable to reserves subject to
Dollar-Denominated Production Payments that, based on the estimates
of production included in determining the discounted future net
revenue specified in the immediately preceding clause (1)(a)
(utilizing the same prices utilized in the Company's year-end
reserve report), would be necessary to satisfy fully the obligations
of the Company and its Restricted Subsidiaries with respect to
Dollar-Denominated Production Payments on the schedules specified
with respect thereto.
If the Company changes its method of accounting for its oil and gas properties
from the successful efforts method to the full cost method or a similar method
of accounting, ACNTA will continue to be calculated as if the Company were still
using the successful efforts method of accounting.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person was merged with or into or became a Subsidiary of such
specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with or
into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired
by such specified Person.
"Additional Assets" means:
(1) any assets used or useful in the Oil and Gas Business;
(2) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the
Company or another Restricted Subsidiary; or
(3) Capital Stock constituting a minority in any Person that at
such time is a Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary described in clause (2)
or (3) is primarily engaged in the Oil and Gas Business.
"Additional Notes" means, subject to the Company's compliance with Section
4.09 of the First Supplemental Indenture, 7 1/4% Senior Subordinated Notes due
2013 of the Company as may be originally issued from time to time after the
Initial Issuance Date under the terms of this
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Indenture, together with all other Notes issued upon registration of transfer
of, or in exchange for, such Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"Applicable Law," except as the context may otherwise require, means all
applicable laws, rules, regulations, ordinances, judgments, decrees,
injunctions, writs and orders of any court or governmental or congressional
agency or authority and rules, regulations, orders, licenses and permits of any
United States federal, state, municipal, regional, or other governmental body,
instrumentality, agency or authority.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any
properties or assets (including by way of a Production Payment or sale and
leaseback transaction); provided that the disposition of all or
substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by the
provisions of Section 4.15 of the First Supplemental Indenture and/or the
provisions of Section 5.01 of the First Supplemental Indenture and not by
the provisions of Section 4.10 of the First Supplemental Indenture; and
(2) the issuance of Equity Interests in any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Restricted Subsidiaries.
Notwithstanding the preceding, the following items will not be deemed to
be Asset Sales:
(1) any single transaction or series of related transactions that
involves properties or assets having a fair market value of less than $2.5
million;
(2) a transfer of assets between or among any of the Company and
its Restricted Subsidiaries,
(3) an issuance or sale of Equity Interests by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary;
(4) the sale, lease or other disposition of equipment, inventory,
accounts receivable or other properties or assets in the ordinary course
of business, including, without limitation, any abandonment, farm-in,
farm-out, lease or sublease of any oil and gas properties or the
forfeiture or other disposition of such properties pursuant to standard
form operating agreements, in each case in the ordinary course of business
in a manner customary in the Oil and Gas Business;
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(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment that is permitted by Section 4.07 of the
First Supplemental Indenture or a Permitted Investment;
(7) any trade or exchange by the Company or any Restricted
Subsidiary of oil and gas properties or other properties or assets for oil
and gas properties or other properties or assets owned or held by another
Person, provided that the fair market value of the properties or assets
traded or exchanged by the Company or such Restricted Subsidiary (together
with any cash) is reasonably equivalent to the fair market value of the
properties or assets (together with any cash) to be received by the
Company or such Restricted Subsidiary, and provided further that any net
cash received must be applied in accordance with the provisions of Section
4.10 of the First Supplemental Indenture;
(8) the creation or perfection of a Lien (but not the sale or
other disposition of the properties or assets subject to such Lien); and
(9) surrender or waiver of contract rights or the settlement,
release or surrender of contract, tort or other claims of any kind.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value 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. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, as may be amended
from time to time, or any similar federal or state law for the relief of
debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have correlative meanings.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the board of directors of the
general partner of the partnership; and
(3) with respect to any other Person, the board or committee of
such Person serving a similar function.
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"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the applicable Person to have been duly adopted by
the Board of Directors of such Person and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day" means each day that is not a Saturday, Sunday or other day
on which banking institutions in Denver, Colorado or in New York, New York or
another place of payment are authorized or required by law to close.
"Capital Lease Obligation" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured
by the United States government or any agency or instrumentality of the
United States government (provided that the full faith and credit of the
United States is pledged in support of those securities) having maturities
of not more than six months from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any lender party to the Credit Agreement or
with any domestic commercial bank having capital and surplus in excess of
$500.0 million and a Thomson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
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(5) commercial paper having the highest rating obtainable from
Moody's or S&P and in each case maturing within six months after the date
of acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through
(5) of this definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, lease, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one
or a series of related transactions, of all or substantially all of the
properties or assets (including Capital Stock of the Restricted
Subsidiaries) of the Company and its Restricted Subsidiaries taken as a
whole, to any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act);
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as that term is used in Section 13(d)(3) of the Exchange Act)
becomes the Beneficial Owner, directly or indirectly, of more than 50% of
the Voting Stock of the Company, measured by voting power rather than
number of shares; or
(4) the first day on which a majority of the members of the Board
of Directors of the Company are not Continuing Directors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" or "SEC" means the Securities and Exchange Commission.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Restricted Subsidiaries in
connection with an Asset Sale, to the extent such losses were deducted in
computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net
Income; plus
(3) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (excluding any interest attributable to
Dollar-Denominated Production Payments but including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts
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and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings), and net of the effect of all payments
made or received pursuant to Hedging Obligations, to the extent that any
such expense was deducted in computing such Consolidated Net Income; plus
(4) depreciation, depletion and amortization (including
amortization of intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period), impairment and other non-cash
expenses (excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future period
or amortization of a prepaid cash expense that was paid in a prior period)
of such Person and its Restricted Subsidiaries for such period to the
extent that such depreciation, depletion and amortization, impairment and
other non-cash expenses were deducted in computing such Consolidated Net
Income; plus
(5) unrealized non-cash losses resulting from foreign currency
balance sheet adjustments required by GAAP to the extent such losses were
deducted in computing such Consolidated Net Income; minus
(6) non-cash items increasing such Consolidated Net Income for
such period, other than items that were accrued in the ordinary course of
business; minus (to the extent included in determining Consolidated Net
Income):
(7) the sum of (x) the amount of deferred revenues that are
amortized during such period and are attributable to reserves that are
subject to Volumetric Production Payments and (y) amounts recorded in
accordance with GAAP as repayments of principal and interest pursuant to
Dollar-Denominated Production Payments,
in each case, on a consolidated basis and determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included, but only to the extent of the amount of
dividends or distributions paid in cash to the specified Person or a
Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded
to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders, partners or
members;
(3) the cumulative effect of a change in accounting principles
will be excluded;
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(4) income resulting from transfers of assets (other than cash)
between the Company or any of its Restricted Subsidiaries, on the one
hand, and an Unrestricted Subsidiary, on the other hand, will be excluded;
(5) any write-downs of non-current assets will be excluded;
provided that any ceiling limitation write-downs under Commission
guidelines shall be treated as capitalized costs, as if such write-downs
had not occurred; and
(6) any unrealized non-cash gains or losses or charges in respect
of hedge or non-hedge derivatives (including those resulting from the
application of FAS 133) will be excluded.
In addition, notwithstanding the preceding, for the purposes of Section 4.07 of
the First Supplemental Indenture only, there shall be excluded from Consolidated
Net Income any nonrecurring charges relating to any premium or penalty paid,
write off of deferred finance costs or other charges in connection with
redeeming or retiring any Indebtedness prior to its Stated Maturity.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the Initial
Issuance Date; or
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who
were members of such Board at the time of such nomination or election.
"Credit Agreement" means that certain Second Amended and Restated Credit
Agreement, dated as of September 23, 2004, among Xxxxxxx, the Company, the
financial institutions parties thereto, and JPMorgan Chase Bank, N.A., as
Administrative Agent, providing for revolving credit borrowings, including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, restated,
modified, renewed, refunded, replaced or refinanced from time to time.
"Credit Facilities" means one or more debt facilities (including, without
limitation, the Credit Agreement), commercial paper facilities or secured
capital markets financings, in each case with banks or other institutional
lenders or institutional investors providing for revolving credit loans, term
loans, receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from (or sell
receivables to) such lenders against such receivables), letters of credit or
secured capital markets financings, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced (including refinancing with
any capital markets transaction) in whole or in part from time to time.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
10
"Designated Senior Debt" means:
(1) any Indebtedness outstanding from time to time under the
Credit Facilities; and
(2) any other Senior Debt permitted under this Indenture the
principal amount of which is $25.0 million or more and that is from time
to time designated by the Company as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase or redeem such Capital Stock upon the occurrence of a
change of control or an asset sale will not constitute Disqualified Stock if the
terms of such Capital Stock provide that the Company may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with Section 4.07 of the First Supplemental Indenture.
"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company other
than a Foreign Subsidiary.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any public or private sale of Capital Stock (other
than Disqualified Stock) made for cash on a primary basis by the Company after
the Initial Issuance Date.
"Existing Indebtedness" means the aggregate principal amount of
Indebtedness of the Company and its Restricted Subsidiaries (other than
Indebtedness under the Credit Agreement which is considered incurred under the
first paragraph of Section 4.09 of the First Supplemental Indenture) in
existence on Initial Issuance Date, until such amounts are repaid.
"Fixed Charge Coverage Ratio" means with respect to any specified Person
for any four-quarter reference period, the ratio of the Consolidated Cash Flow
of such Person for such period to the Fixed Charges of such Person for such
period. In the event that the specified Person or any of its Restricted
Subsidiaries incurs, assumes, guarantees, repays, repurchases or redeems any
Indebtedness (other than ordinary working capital borrowings) or issues,
repurchases or redeems preferred stock subsequent to the commencement of the
applicable four-quarter
11
reference period and on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect
to such incurrence, assumption, guarantee, repayment, repurchase or redemption
of Indebtedness, or such issuance, repurchase or redemption of preferred stock,
and the use of the proceeds therefrom as if the same had occurred at the
beginning of such period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person or
any of its Restricted Subsidiaries, including through mergers or
consolidations and including any related financing transactions,
subsequent to the commencement of the applicable four-quarter reference
period and on or prior to the Calculation Date will be given pro forma
effect as if they had occurred on the first day of such period, including
any Consolidated Cash Flow and any pro forma expense and cost reductions
that have occurred or are reasonably expected to occur, in the reasonable
judgment of the chief financial or accounting officer of the Company
(regardless of whether those cost savings or operating improvements could
then be reflected in pro forma financial statements in accordance with
Regulation S-X promulgated under the Securities Act or any other
regulation or policy of the Commission related thereto);
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, will be excluded;
and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of prior to the Calculation Date, will be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued
(excluding any interest attributable to Dollar-Denominated Production
Payments but including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions, discounts
and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings), and net of the effect of all payments
made or received pursuant to Hedging Obligations; plus
(2) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period; plus
12
(3) any interest expense on Indebtedness of another Person that is
guaranteed by such Person or one of its Restricted Subsidiaries or secured
by a Lien on assets of such Person or one of its Restricted Subsidiaries,
whether or not such guarantee or Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of such Person or
any of its Restricted Subsidiaries, other than dividends on Equity
Interests payable solely in Equity Interests of the Company (other than
Disqualified Stock) or to the Company or a Restricted Subsidiary of the
Company, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person, expressed as a decimal,
in each case, on a consolidated basis and in accordance with GAAP.
"First Supplemental Indenture" means the First Supplemental Indenture,
dated as of the Initial Issuance Date, among the Company, the Guarantors named
on the signature page thereof and the Trustee relating to the Notes.
"Foreign Subsidiary" means any Restricted Subsidiary of the Company that
was not formed under the laws of the United States or any state of the United
States or the District of Columbia and that conducts substantially all of its
operations outside the United States.
"GAAP" means generally accepted accounting principles in the United
States, which are in effect on the Initial Issuance Date.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
The term "guarantee" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness. When used as a verb,
"guarantee" has a correlative meaning.
"Guarantor" or "Subsidiary Guarantor" means (a) each Restricted Subsidiary
of the Company named on the signature page hereof, (b) any other Restricted
Subsidiary of the Company that executes a supplement to this Indenture in
accordance with Section 4.13 or 10.03 of the First Supplemental Indenture and
(c) the respective successors and assigns of such Restricted Subsidiaries, as
required under Article 10 of the First Supplemental Indenture, in each case
until such time as any such Restricted Subsidiary shall be released and relieved
of its obligations pursuant to Section 8.02, 8.03 or 10.04 of the First
Supplemental Indenture.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person incurred in the normal course of business and
consistent with past practices and not for speculative purposes under:
13
(1) interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements entered into with one of more
financial institutions and designed to protect the Person or any of its
Restricted Subsidiaries entering into the agreement against fluctuations
in interest rates with respect to Indebtedness incurred and not for
purposes of speculation;
(2) foreign exchange contracts and currency protection agreements
entered into with one of more financial institutions and designed to
protect the Person or any of its Restricted Subsidiaries entering into the
agreement against fluctuations in currency exchanges rates with respect to
Indebtedness incurred and not for purposes of speculation;
(3) any commodity futures contract, commodity option or other
similar agreement or arrangement designed to protect against fluctuations
in the price of oil, natural gas or other commodities used, produced,
processed or sold by that Person or any of its Restricted Subsidiaries at
the time; and
(4) other agreements or arrangements designed to protect such
Person or any of its Restricted Subsidiaries against fluctuations in
interest rates, commodity prices or currency exchange rates.
"Holder" or "Noteholder" means a Person in whose name a Note is
registered.
"Income Fund Partnerships" means Whiting-Park Production Partnership,
Ltd., Xxxxxxx-Xxxxxxx Production Partnership, Ltd. and Xxxxxxx 1988 Production
Limited Partnership, Ltd., each a Texas limited partnership.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of bankers' acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an accrued
expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is
14
assumed by the specified Person) and, to the extent not otherwise included, the
guarantee by the specified Person of any Indebtedness of any other Person
(including, with respect to any Production Payment, any warranties or guarantees
of production or payment by such Person with respect to such Production Payment,
but excluding other contractual obligations of such Person with respect to such
Production Payment). Subject to the preceding sentence, neither
Dollar-Denominated Production Payments nor Volumetric Production Payments shall
be deemed to be Indebtedness.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(2) in the case of any Hedging Obligation, the termination value
of the agreement or arrangement giving rise to such Hedging Obligation
that would be payable by such Person at such date; and
(3) the principal amount of the Indebtedness, together with any
interest on the Indebtedness that is more than 30 days past due, in the
case of any other Indebtedness.
"Initial Issuance Date" means April 19, 2005.
"Initial Notes" means the 7 1/4% Senior Subordinated Notes due 2013 of the
Company issued on the Initial Issuance Date, together with all other Notes
issued upon registration of transfer of, or in exchange for, such Notes.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company will be deemed to
have made an Investment on the date of any such sale or disposition in an amount
equal to the fair market value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of in an amount determined as provided in the
final paragraph of Section 4.07 of the First Supplemental Indenture. The
acquisition by the Company or any Subsidiary of the Company of a Person that
holds an Investment in a third Person will be deemed to be an Investment made by
the Company or such Subsidiary in such third Person in an amount equal to the
fair market value of the Investment held by the acquired Person in such third
Person on the date of any such acquisition in an amount determined as provided
in the final paragraph of Section 4.07 of the First Supplemental Indenture.
15
"Legal Holiday" means any calendar day other than a Business Day. If a
payment date is a Legal Holiday, payment may be made on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under Applicable Law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction other
than a precautionary financing statement not intended as a security agreement.
"Material Change" means an increase or decrease (excluding changes that
result solely from changes in prices and changes resulting from the incurrence
of previously estimated future development costs) of more than 25% during a
fiscal quarter in the discounted future net revenues from proved crude oil and
natural gas reserves of the Company and its Restricted Subsidiaries, calculated
in accordance with clause (1)(a) of the definition of ACNTA; provided, however,
that the following will be excluded from the calculation of Material Change:
(1) any acquisitions during the fiscal quarter of oil and gas
reserves that have been estimated by independent petroleum engineers and
with respect to which a report or reports of such engineers exist; and
(2) any disposition of properties existing at the beginning of
such fiscal quarter that have been disposed of in compliance with Section
4.10 of the First Supplemental Indenture.
"Material Domestic Subsidiary" means any one Domestic Subsidiary, or any
group of two or more Domestic Subsidiaries, that is not a Guarantor at the time
of determination and that at such time has either assets or quarterly revenues
in excess of 3.0% of the consolidated assets or quarterly revenues of the
Company and its Restricted Subsidiaries, in each case based upon the most recent
quarterly financial statements available to the Company.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related provision
for taxes on such gain (but not loss), realized in connection with: (a)
any Asset Sale; or (b) the disposition of any securities by such Person or
any of its Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any
related provision for taxes on such extraordinary gain (but not loss).
16
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of:
(1) the direct costs relating to such Asset Sale, including,
without limitation, legal, accounting and investment banking fees, and
sales commissions, and any relocation expenses incurred as a result of the
Asset Sale,
(2) taxes paid or payable as a result of the Asset Sale, in each
case, after taking into account any available tax credits or deductions
and any tax sharing arrangements,
(3) amounts required to be applied to the repayment of
Indebtedness, other than under the Credit Facilities, secured by a Lien on
the properties or assets that were the subject of such Asset Sale, and
(4) any reserve for adjustment in respect of the sale price of
such properties or assets established in accordance with GAAP.
"Net Working Capital" means:
(1) all current assets of the Company and its Restricted
Subsidiaries, minus
(2) all current liabilities of the Company and its Restricted
Subsidiaries, except current liabilities included in Indebtedness;
in each case, on a consolidated basis and determined in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable as a guarantor or otherwise, or (c)
is the lender;
(2) no default with respect to which (including any rights that
the holders of the Indebtedness may have to take enforcement action
against an Unrestricted Subsidiary) would permit upon notice, lapse of
time or both any holder of any other Indebtedness (other than the Notes)
of the Company or any of its Restricted Subsidiaries to declare a default
on such other Indebtedness or cause the payment of the Indebtedness to be
accelerated or payable prior to its Stated Maturity; and
(3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company or
any of its Restricted Subsidiaries.
"Notes" means the Initial Notes and the Additional Notes, treated as a
single class.
17
"Obligations" means any principal, premium, if any, interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization, whether or not a claim for post-filing interest is allowed in
such proceeding), penalties, fees, charges, expenses, indemnifications,
reimbursement obligations, damages, guarantees, and other liabilities or amounts
payable under the documentation governing any Indebtedness or in respect
thereto.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary, any Assistant Secretary or any Vice President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 102 hereof.
"Oil and Gas Business" means:
(1) the acquisition, exploration, development, operation and
disposition of interests in oil, natural gas and other hydrocarbon
properties;
(2) the gathering, marketing, treating, processing (but not
refining), storage, selling and transporting of any production from those
interests; and
(3) any activity necessary, appropriate or incidental to the
activities described above.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 102 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.
The term "outstanding," when used with respect to the Notes, has the
meaning provided in Section 2.03 of the First Supplemental Indenture.
"Pari Passu Indebtedness" means, with respect to any Excess Proceeds from
Asset Sales, Indebtedness of the Company or any Guarantor that ranks equally in
right of payment with the Notes or the Subsidiary Guarantees, as the case may
be, and the terms of which require the Company or such Restricted Subsidiary to
apply such Excess Proceeds to offer to repurchase such Indebtedness.
"Permitted Business Investments" means Investments made in the ordinary
course of, and of a nature that is or shall have become customary in, the Oil
and Gas Business, including through agreements, transactions, interests or
arrangements that permit one to share risk 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:
18
(1) direct or indirect ownership of crude oil, natural gas, other
related hydrocarbon and mineral properties or any interest therein or
gathering, transportation, processing, storage or related systems; and
(2) the entry into operating agreements, joint ventures,
processing agreements, working interests, royalty interests, mineral
leases, farm-in agreements, farm-out agreements, development agreements,
production sharing agreements, area of mutual interest agreements,
contracts for the sale, transportation or exchange of crude oil and
natural gas and related hydrocarbons and minerals, unitization agreements,
pooling arrangements, joint bidding agreements, service contracts,
partnership agreements (whether general or limited), or other similar or
customary agreements, transactions, properties, interests or arrangements
and Investments and expenditures in connection therewith or pursuant
thereto, in each case made or entered into in the ordinary course of the
Oil and Gas Business, excluding, however, Investments in corporations and
publicly-traded limited partnerships.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary of
the Company;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the
Company; or
(b) such Person is merged, consolidated or amalgamated with
or into, or transfers or conveys substantially all of its properties
or assets to, or is liquidated into, the Company or a Restricted
Subsidiary of the Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 of the First Supplemental Indenture;
(5) any Investment in any Person solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the
Company;
(6) any Investments received in compromise of obligations of trade
creditors or customers that were incurred in the ordinary course of
business, including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade creditor or
customer;
(7) Hedging Obligations permitted to be incurred under the
"Incurrence of Indebtedness and Issuance of Preferred Stock" covenant;
(8) Permitted Business Investments; and
19
(9) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (9) that are at
the time outstanding, not to exceed the greater of $20.0 million and 2.5%
of ACNTA.
"Permitted Junior Securities" means:
(1) Equity Interests in the Company or any Guarantor; or
(2) debt securities that are subordinated to all Senior Debt and
any debt securities issued in exchange for Senior Debt to substantially
the same extent as, or to a greater extent than, the Notes and the
Subsidiary Guarantees are subordinated to Senior Debt pursuant to this
Indenture.
"Permitted Liens" means:
(1) Liens securing any Indebtedness under any of the Credit
Facilities or any other Senior Debt;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property of a Person existing at the time such Person
is merged with or into or consolidated with the Company or any Restricted
Subsidiary of the Company, provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not
extend to any assets other than those of the Person merged into or
consolidated with the Company or the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition of the
property by the Company or any Restricted Subsidiary of the Company,
provided that such Liens were in existence prior to the contemplation of
such acquisition;
(5) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (4) of the second paragraph of Section
4.09 of the First Supplemental Indenture covering only the assets acquired
with such Indebtedness and proceeds and products thereof;
(6) Liens existing on the Initial Issuance Date; and
(7) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed $10.0 million at any one time outstanding.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
20
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded (plus all
accrued interest on the Indebtedness and the amount of all expenses and
premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Notes or the Subsidiary Guarantees, such Permitted Refinancing
Indebtedness is subordinated in right of payment to the Notes or the
Subsidiary Guarantees on terms at least as favorable to the Noteholders as
those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is not incurred by a Restricted Subsidiary
of the Company if the Company is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; provided,
however, that a Restricted Subsidiary that is also a Guarantor may
guarantee Permitted Refinancing Indebtedness incurred by the Company,
whether or not such Restricted Subsidiary was an obligor or guarantor of
the Indebtedness being extended, refinanced, renewed, replaced, defeased
or refunded.
Notwithstanding the preceding, any Indebtedness incurred under Credit Facilities
pursuant to Section 4.09 of the First Supplemental Indenture shall be subject
only to the refinancing provision in the definition of Credit Facilities and not
pursuant to the requirements set forth in the definition of Permitted
Refinancing Indebtedness.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Production Payments" means, collectively, Dollar-Denominated Production
Payments and Volumetric Production Payments.
"Representative" means the trustee, agent or other representative
expressly authorized to act in such capacity with respect to any issue of Senior
Debt.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors.
21
"Sale and Leaseback Transaction" means an arrangement relating to property
owned by the Company or a Restricted Subsidiary on the Initial Issuance Date or
thereafter acquired by the Company or a Restricted Subsidiary whereby the
Company or a Restricted Subsidiary transfers such property to a Person and the
Company or a Restricted Subsidiary leases it from such Person.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Senior Debt" means
(1) all Indebtedness of the Company or any of its Restricted
Subsidiaries outstanding under Credit Facilities and all Hedging
Obligations with respect thereto;
(2) any other Indebtedness of the Company or any of its Restricted
Subsidiaries permitted to be incurred under the terms of this Indenture,
unless the instrument under which such Indebtedness is incurred expressly
provides that it is on a parity with or subordinated in right of payment
to the Notes or any Subsidiary Guarantee; and
(3) all Obligations with respect to the items listed in the
preceding clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding sentence, Senior
Debt will not include:
(a) any intercompany Indebtedness of the Company or any of its
Subsidiaries to the Company or any of its Affiliates;
(b) the 2012 Notes; or
(c) any Indebtedness that is incurred in violation of this Indenture.
For the avoidance of doubt, "Senior Debt" will not include any trade payables or
taxes owed or owing by the Company or any Restricted Subsidiary.
"Senior Subordinated Debt" of the Company means the Notes, the 2012 Notes
and any other subordinated Indebtedness of the Company that specifically
provides that such Indebtedness is to rank equally in right of payment with the
Notes and is not subordinated by its terms to any other Indebtedness of the
Company that is not Senior Debt. "Senior Subordinated Debt" of any Guarantor has
a correlative meaning and includes its guarantee of the 2012 Notes.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the Initial
Issuance Date.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any
22
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity (other
than a partnership) of which more than 50% of the total voting power of
Voting Stock is at the time owned or controlled, directly or through
another Subsidiary, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof), but only if such
Person and its Subsidiaries are entitled to receive more than 20% of the
assets of such partnership upon its dissolution.
"Subsidiary Guarantees" means the joint and several guarantees issued by
all of the Guarantors pursuant to Article 10 of the First Supplemental
Indenture.
"TIA" means the Trust Indenture Act.
"2012 Notes" means the Company's 7 1/4% Senior Subordinated Notes due
2012.
"Uniform Commercial Code" means the New York Uniform Commercial Code as in
effect from time to time.
"Unrestricted Subsidiary" means any Subsidiary of the Company (other than
Xxxxxxx) that is designated by the Board of Directors as an Unrestricted
Subsidiary pursuant to a Board Resolution, but only to the extent that such
Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect obligation (a)
to subscribe for additional Equity Interests or (b) to maintain or
preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of its
Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee the Board
Resolution giving effect to such
23
designation and an Officers' Certificate certifying that such designation
complied with the preceding conditions and was permitted by Section 4.07 of the
First Supplemental Indenture. If, at any time, any Unrestricted Subsidiary would
fail to meet the preceding requirements as an Unrestricted Subsidiary, it will
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of such Subsidiary will be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date and, if such Indebtedness
is not permitted to be incurred as of such date under Section 4.09 of the First
Supplemental Indenture, the Company will be in default of such covenant.
"Volumetric Production Payments" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all related
undertakings and obligations.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled (without regard to the occurrence of
any contingency) to vote in the election of the Board of Directors of such
Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount
of each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (b) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making of
such payment; by
(2) the then outstanding principal amount of such Indebtedness.
"Xxxxxxx" means Xxxxxxx Oil and Gas Corporation, a Delaware corporation,
and its successors.
Section 1.02. Other Definitions.
Term Defined in Section
--------------------------------------------------------------------- ------------------
"Affiliate Transaction".............................................. 4.11
"Asset Sale Offer"................................................... 3.04
"Change of Control Offer"............................................ 4.15
"Change of Control Payment".......................................... 4.15
"Change of Control Purchase Date".................................... 4.15
"Change of Control Settlement Date".................................. 4.15
"Covenant Defeasance"................................................ 8.03
"Discharge".......................................................... 8.08
"Event of Default"................................................... 6.01
"Excess Proceeds".................................................... 4.10
"incur".............................................................. 4.09
"Legal Defeasance"................................................... 8.02
"Offer Amount"....................................................... 3.04
24
"Offer Period"....................................................... 3.04
"Payment Blockage Notice"............................................ 12.03
"Payment Default".................................................... 6.01
"Permitted Debt"..................................................... 4.09
"Restricted Payments"................................................ 4.07
"Settlement Date".................................................... 3.04
"Subsidiary Guarantee Payment Blockage Notice"....................... 13.03
"Termination Date"................................................... 3.04
Section 1.03. Rules of Construction.
Unless the context otherwise requires, in construing this First
Supplemental Indenture:
(1) a term has the meaning assigned to it herein or, if not
assigned herein, then in the Original Indenture;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) references to sections of or rules under the Securities Act or
the Exchange Act shall be deemed to include substitute, replacement or
successor sections or rules adopted by the SEC from time to time; and
(7) "herein," "hereof" and other words of similar import refer to
this First Supplemental Indenture as a whole (as amended or supplemented
from time to time) and not to any particular Article, Section or other
subdivision.
ARTICLE 2
THE NOTES
Section 2.01. Creation and Form.
Pursuant to Sections 201 and 301 of the Original Indenture, there is
hereby created a new series of Securities designated as the "7 1/4% Senior
Subordinated Notes due 2013" (which are herein referred to as the "Notes" for
purposes of this First Supplemental Indenture). The Notes shall be substantially
in the form specified in Exhibit A to this First Supplemental Indenture, shall
have the terms set forth therein and shall be entitled to the benefits of the
other provisions of the Original Indenture as modified by this First
Supplemental Indenture and specified herein.
25
Section 2.02. Execution and Authentication.
On the Initial Issuance Date, the Trustee shall authenticate and deliver
$220 million of Initial Notes and, at any time and from time to time thereafter,
the Trustee shall authenticate and deliver Additional Notes for original issue,
in each case upon the Trustee's receipt of a Company Order in accordance with
Section 303 of the Original Indenture. Such order shall specify the aggregate
principal amount of the Notes to be authenticated and the date on which the
original issue of Notes is to be authenticated and, in the case of an issuance
of Additional Notes pursuant to Section 2.05 of this First Supplemental
Indenture after the Initial Issuance Date, shall certify that such issuance is
in compliance with such Section 2.05 and Section 4.09 hereof.
Section 2.03. Outstanding Notes.
Notes outstanding at any time are all Notes authenticated by the Trustee
except for those canceled by it, those delivered to it for cancellation and
those described in this Section as not outstanding. Except as otherwise provided
in TIA Section 316(a), a Note does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 306 of the Original Indenture,
it ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that the replaced Note is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with the
Indenture, by 11:00 a.m. New York time, on a Redemption Date or other maturity
date money sufficient to pay all principal, premium, if any, and interest
payable on that date with respect to the Notes (or portions thereof) to be
redeemed or otherwise maturing, as the case may be, then on and after that date
such Notes (or portions thereof) cease to be outstanding and interest on them
ceases to accrue.
Section 2.04. CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers and corresponding
"ISINs" (if then generally in use) and, if so, the Trustee shall use "CUSIP"
numbers and corresponding "ISINs" in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Notes or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Notes, and any
such redemption shall not be affected by any defect in or omission of such
numbers.
Section 2.05. Issuance of Additional Notes.
The Company shall be entitled, subject to its compliance with Section 4.09
of this First Supplemental Indenture, to issue Additional Notes under the
Indenture which shall have identical terms as the Initial Notes issued on the
Initial Issuance Date, other than with respect to the date of issuance and issue
price; provided, however, that no Additional Notes may be issued at a price that
would cause such Additional Notes to have "original issue discount" within the
meaning of Section 1273 of the Code. The Initial Notes issued on the Initial
Issuance Date and any Additional Notes shall be treated as a single class for
all purposes under the Indenture.
26
ARTICLE 3
REDEMPTION AND PURCHASE
Section 3.01. Redemption and Purchase.
The Notes shall be subject to redemption and purchase by the Company
pursuant to the provisions of Article Twelve of the Original Indenture and this
Article 3.
Section 3.02. Optional Redemption.
(a) Except as set forth in clause (b) of this Section 3.02, the Company
shall not have the option to redeem the Notes pursuant to this Section 3.02
prior to May 1, 2009. Thereafter, the Company shall have the option to redeem
the Notes, in whole or in part, at the Redemption Prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest, if any, to the applicable Redemption Date (subject to the right of
Holders of record on the relevant record date to receive interest due on an
Interest Payment Date that is on or prior to the Redemption Date), if redeemed
during the twelve-month period beginning on May 1 of the years indicated below:
Year Percentage
---- ----------
2009 .............................................. 103.6250%
2010 .............................................. 101.8125%
2011 and thereafter................................ 100.0000%
(b) Notwithstanding the provisions of clause (a) of this Section 3.02,
at any time on or prior to May 1, 2008, the Company may on one or more occasions
redeem up to 35% of the aggregate principal amount of Notes (including any
Additional Notes) issued under the Indenture at a Redemption Price of 107.25% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on an Interest Payment Date that is on or
prior to the Redemption Date), with the net cash proceeds of one or more Equity
Offerings, provided that:
(1) at least 65% of the aggregate principal amount of Notes
(including any Additional Notes) issued under the Indenture remains
outstanding immediately after the occurrence of each such redemption; and
(2) each such redemption occurs within 120 days of the date of the
closing of each such Equity Offering.
(c) If an Event of Default with respect to the Notes occurs by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding payment of the premium that the Company
would have had to pay if the Company then had elected to redeem the Notes
pursuant to clause (a) of this Section 3.02, an equivalent premium shall also
become and be immediately due and payable to the extent permitted by law upon
the acceleration of the Notes. If an Event of Default with respect to the Notes
occurs prior to May 1, 2009 by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Notes prior to that date, then the premium
specified in clause (a) of this Section 3.02 with respect to the first
27
year that the Notes may be redeemed at the Company's option pursuant to clause
(a) of this Section 3.02 will also become immediately due and payable to the
extent permitted by law upon the acceleration of the Notes.
Section 3.03. Mandatory Redemption.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company shall
not be required to make mandatory redemption or sinking fund payments with
respect to the Notes or to repurchase the Notes at the option of the Holders.
Section 3.04. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by Applicable Law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Settlement Date"),
the Company shall purchase and pay for the principal amount of Notes required to
be purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less
than the Offer Amount has been tendered, all Notes validly tendered in response
to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the
manner prescribed in the Notes.
Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to each of the Holders, with a copy to the Trustee.
The notice shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer
shall be made to all Holders. The notice, which shall govern the terms of the
Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.04 and Section 4.10 hereof and the length of time the Asset Sale
Offer shall remain open, including the time and date the Asset Sale Offer
will terminate (the "Termination Date");
(b) the Offer Amount and the purchase price;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest after the Settlement Date;
(e) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and may
not elect to have only a portion of such Note purchased;
28
(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Company or a Paying Agent at the address specified in
the notice, before the Termination Date;
(g) that Holders shall be entitled to withdraw their election if
the Company or the Paying Agent, as the case may be, receives, prior to
the Termination Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Note the
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered
by Holders, and Pari Passu Indebtedness surrendered by holders or lenders,
collectively, exceeds the amount the Company is required to repurchase,
the Trustee shall select the Notes and Pari Passu Indebtedness to be
purchased on a pro rata basis on the basis of the aggregate principal
amount of tendered Notes and Pari Passu Indebtedness (with such
adjustments as may be deemed appropriate by the Trustee so that only Notes
in denominations of $1,000, or integral multiples thereof, shall be
purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
If any of the Notes subject to an Asset Sale Offer is in the form of a
Global Note, then the Company shall modify such notice to the extent necessary
to accord with the procedures of the Depository applicable to repurchases.
Promptly after the Termination Date, the Company shall, to the extent
lawful, accept for payment Notes or portions thereof tendered pursuant to the
Asset Sale Offer in the aggregate principal amount required by Section 4.10
hereof, and prior to the Settlement Date it shall deliver to the Trustee an
Officers' Certificate stating that such Notes or portions thereof were accepted
for payment by the Company in accordance with the terms of this Section 3.04 and
Section 4.10 hereof. On the Settlement Date, the Company or the Paying Agent, as
the case may be, shall mail or deliver to each tendering Holder an amount equal
to the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company shall issue a new Note, and the Trustee
shall authenticate and mail or deliver such new Note to such Holder, in a
principal amount equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce the results of the Asset
Sale Offer on or before the Settlement Date.
ARTICLE 4
COVENANTS
Except for Section 1003, the provisions of Article Ten of the Original
Indenture shall not apply to the Notes, and in lieu thereof the following
provisions of this Article 4 shall apply to the Notes.
29
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Guarantor, holds as
of 11:00 a.m. New York time on the due date money deposited by the Company or a
Guarantor in immediately available funds and designated for and sufficient to
pay all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
the interest rate on the Notes to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace
period), at the same rate to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain an office or agency (which may be an office of
the Trustee or an affiliate of the Trustee) where Notes may be presented or
surrendered for payment and where notices and demands to or upon the Company in
respect of the Notes and the Indenture may be served. The Company shall give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations. Further, if at any
time there shall be no such office or agency in the City of New York where the
Notes may be presented or surrendered for payment, the Company shall forthwith
designate and maintain such an office or agency in the City of New York, in
order that the Notes shall at all times be payable in the City of New York. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby appoints the Trustee as Paying Agent and designates the
Corporate Trust Office of the Trustee as one such office or agency of the
Company in accordance with Section 301 of the Original Indenture.
Section 4.03. Reports.
(a) Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, so long as any Notes
are outstanding, the Company will file with the SEC (unless the SEC will not
accept such a filing) for public availability within the time periods specified
in the SEC's rules and regulations under the Exchange Act and, within five
Business Days of filing, or attempting to file, the same with the SEC, furnish
to the Trustee and, upon its request, to any of the Holders of the Notes:
30
(1) all quarterly and annual financial and other information with
respect to the Company and its Subsidiaries that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company
were required to file such forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with
respect to the annual information only, a report thereon by the Company's
certified independent accountants; and
(2) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports.
The Company shall at all times comply with TIA Section 314(a).
(b) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by paragraph (a) of this Section 4.03 shall include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes to the financial statements and in Management's Discussion and
Analysis of Financial Condition and Results of Operations, of the financial
condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries.
Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Restricted Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under the Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of his or her knowledge
the Company has kept, observed, performed and fulfilled each and every covenant
contained in the Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of the Indenture (or,
if a Default or Event of Default with respect to the Notes shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action the Company is taking or proposes to take with respect
thereto) and that to the best of his or her knowledge no event has occurred and
remains in existence by reason of which payments of interest on the Notes are
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) [Reserved].
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default with respect to the Notes, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
Section 4.05. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are
31
contested in good faith and by appropriate proceedings or where the failure to
effect such payment is not adverse in any material respect to the Holders of the
Notes.
Section 4.06. Stay, Extension and Usury Laws.
Each of the Company and each of the Guarantors covenants (to the extent
that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of the Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law has been enacted.
Section 4.07. Limitation on Restricted Payments.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Company or
any of its Restricted Subsidiaries) or to the direct or indirect holders
of the Company's or any of its Restricted Subsidiaries' Equity Interests
in their capacity as such (other than dividends or distributions payable
in Equity Interests (other than Disqualified Stock) of the Company or
payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company
or any direct or indirect parent of the Company;
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes or the Subsidiary Guarantees, except a payment
of interest or principal at the Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and other
actions set forth in these clauses (1) through (4) above being
collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing
or would occur as a consequence of such Restricted Payment;
32
(2) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the first paragraph
of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted
by clauses (2), (3), (4), (6) and (7) of the next succeeding paragraph),
is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for
the period (taken as one accounting period) from April 1, 2004 to
the end of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the time of
such Restricted Payment (or, if such Consolidated Net Income for
such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the
Company (including the fair market value of any Additional Assets to
the extent acquired in consideration of Equity Interests of the
Company (other than Disqualified Stock)) since May 11, 2004 as a
contribution to its common equity capital or from the issue or sale
of Equity Interests of the Company (other than Disqualified Stock)
or from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt securities of
the Company that have been converted into or exchanged for such
Equity Interests (other than Equity Interests (or Disqualified Stock
or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was
made after May 11, 2004 is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (i) the cash return of capital with
respect to such Restricted Investment (less the cost of disposition,
if any) and (ii) the initial amount of such Restricted Investment,
plus
(d) to the extent that any Unrestricted Subsidiary of the
Company is redesignated as a Restricted Subsidiary after May 11,
2004, the lesser of (i) the fair market value of the Company's
Investment in such Subsidiary as of the date of such redesignation
or (ii) such fair market value as of the date on which such
Subsidiary was originally designated as an Unrestricted Subsidiary.
So long as no Default or Event of Default has occurred and is continuing
or would be caused thereby, the preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of the Indenture;
33
(2) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or any
Guarantor or of any Equity Interests of the Company in exchange for, or
out of the net cash proceeds of the substantially concurrent sale (other
than to a Subsidiary of the Company) of, Equity Interests of the Company
(other than Disqualified Stock); provided that the amount of any such net
cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition will be excluded from clause
(3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other
acquisition of subordinated Indebtedness of the Company or any Guarantor
with the net cash proceeds from an incurrence of, or in exchange for,
Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of the
Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company or any Restricted
Subsidiary of the Company held by any current or former director or
employee of the Company or any of its Restricted Subsidiaries pursuant to
any director or employee equity subscription agreement or plan, stock
option agreement or similar agreement or plan; provided that the aggregate
price paid for all such repurchased, redeemed, acquired or retired Equity
Interests may not exceed $1.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in
connection with the exercise of stock options or stock appreciation rights
by way of cashless exercise;
(7) the payment of cash in lieu of fractional shares of Capital
Stock in connection with any transaction otherwise permitted under this
Section 4.07; or
(8) other Restricted Payments in an aggregate amount since May 11,
2004 not to exceed $10.0 million.
The amount of all Restricted Payments (other than cash) will be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
covenant will be determined by the Board of Directors, whose determination shall
be evidenced by a Board Resolution. The Board of Directors' determination must
be based upon an opinion or appraisal issued by an accounting, appraisal or
investment banking firm of national standing if the fair market value exceeds
$10.0 million. Not later than the date of making any Restricted Payment
(excluding any Restricted Payment described in the preceding clause (2), (3),
(4), (6) or (7)) the Company will deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
the Indenture. For purposes of determining compliance with this Section 4.07, in
the event that a Restricted Payment meets the criteria of more than one of the
categories of
34
Restricted Payments described in the preceding clauses (1) - (8), the Company
will be permitted to classify (or later classify or reclassify in whole or in
part in its sole discretion) such Restricted Payment in any manner that complies
with this Section 4.07.
Section 4.08. Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital
Stock to the Company or any of its Restricted Subsidiaries, or pay any
Indebtedness or other obligations owed to the Company or any of its
Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries.
However, the preceding restrictions of this Section 4.08 will not apply to
encumbrances or restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit
Facilities as in effect on the Initial Issuance Date and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of those agreements, provided that the
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are not materially more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in those agreements on the
Initial Issuance Date;
(2) the Indenture, the Notes and the Subsidiary Guarantees;
(3) Applicable Law;
(4) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition, which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person, so
acquired, provided that, in the case of Indebtedness, such Indebtedness
was permitted by the terms of the Indenture to be incurred;
(5) customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past practices;
(6) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on that property of
the nature described in clause (3) of the preceding paragraph;
35
(7) any agreement for the sale or other disposition of a
Restricted Subsidiary of the Company that restricts distributions by that
Restricted Subsidiary pending its sale or other disposition;
(8) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness
being refinanced;
(9) Liens securing Indebtedness otherwise permitted to be incurred
under the provisions of Section 4.12 hereof that limit the right of the
debtor to dispose of the assets subject to such Liens;
(10) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements,
stock sale agreements, agreements respecting Permitted Business
Investments and other similar agreements entered into in the ordinary
course of business; and
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.
Section 4.09. Limitation on Incurrence of Indebtedness and Issuance of Preferred
Stock.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), neither the Company nor any Guarantor will issue any Disqualified Stock,
and the Company will not permit any of its other Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that the Company and any
Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified
Stock, if the Fixed Charge Coverage Ratio for the Company's most recently ended
four full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock is issued would have been at least 2.0 to 1.0,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.
The first paragraph of this Section 4.09 will not prohibit the incurrence
of any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness (including letters of credit)
under one or more Credit Facilities in an aggregate principal amount at
any one time outstanding under this clause (1) (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of the Company and its Subsidiaries thereunder) not to exceed an
amount equal to the greater of (a) $210.0 million and (b) 15% of ACNTA as
of the date of such incurrence;
36
(2) the incurrence by the Company or any of its Restricted
Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes issued and sold on the Initial
Issuance Date and the related Subsidiary Guarantees issued on the Initial
Issuance Date;
(4) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Company or such Restricted Subsidiary, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (4), not to exceed $10.0 million at any time
outstanding;
(5) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted by
the Indenture to be incurred under the first paragraph of this Section
4.09 or clause (2) or (3) of this paragraph or this clause (5);
(6) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; provided, however, that:
(a) if the Company is the obligor on such Indebtedness and a
Guarantor is not the obligee, such Indebtedness must be expressly
subordinated to the prior payment in full in cash of all Obligations
with respect to the Notes, or if a Guarantor is the obligor on such
Indebtedness and neither the Company nor another Guarantor is the
obligee, such Indebtedness must be expressly subordinated to the
prior payment in full in cash of all Obligations with respect to the
Subsidiary Guarantee of such Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a
Person other than the Company or a Restricted Subsidiary of the
Company and (ii) any sale or other transfer of any such Indebtedness
to a Person that is neither the Company nor a Restricted Subsidiary
of the Company will be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company or such Restricted
Subsidiary, as the case may be, that was not permitted by this
clause (6);
(7) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations;
(8) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or any Guarantor that was permitted to be
incurred by another provision of this Section 4.09;
37
(9) the incurrence by the Company or any of its Restricted
Subsidiaries of obligations relating to net gas balancing positions
arising in the ordinary course of business and consistent with past
practice;
(10) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness ceases
to be Non-Recourse Debt of an Unrestricted Subsidiary, such event will be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Company that was not permitted by this clause (10);
(11) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in respect of bid, performance, surety and
similar bonds issued for the account of the Company and any of its
Restricted Subsidiaries in the ordinary course of business, including
guarantees and obligations of the Company and any of its Restricted
Subsidiaries with respect to letters of credit supporting such obligations
(in each case other than an obligation for money borrowed);
(12) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness arising from agreements of the Company or any
of its Restricted Subsidiaries providing for indemnification, adjustment
of purchase price or similar obligations, in each case, incurred or
assumed in connection with the disposition of any business, assets or
Capital Stock of a Subsidiary, provided that the maximum aggregate
liability in respect of all such Indebtedness shall at no time exceed the
gross proceeds actually received by the Company and its Restricted
Subsidiaries in connection with such disposition; and
(13) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, not to exceed
$25.0 million.
For purposes of determining compliance with this Section 4.09, in the
event that an item of Indebtedness (including Acquired Debt) meets the criteria
of more than one of the categories of Permitted Debt described in clauses (1)
through (13) above, or is entitled to be incurred pursuant to the first
paragraph of this Section 4.09, the Company will be permitted to classify (or
later classify or reclassify in whole or in part in its sole discretion) such
item of Indebtedness in any manner that complies with this covenant. Any
indebtedness under Credit Facilities on the Initial Issuance Date shall be
considered incurred under the first paragraph of this Section 4.09.
The accrual of interest, the accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
will not be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Stock for purposes of this Section 4.09; provided, in each such
case, that the amount thereof is included in Fixed Charges of the Company as
accrued.
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Section 4.10. Limitation on Asset Sales.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of the Asset Sale at least equal to the
fair market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(2) the fair market value is determined by the Company's Board of
Directors and evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee; and
(3) at least 75% of the consideration received in the Asset Sale by
the Company or such Restricted Subsidiary is in the form of cash. For
purposes of this provision, each of the following will be deemed to be
cash:
(a) any liabilities, as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet, of the Company or
any Subsidiary (other than contingent liabilities and liabilities
that are by their terms subordinated to the Notes or any Subsidiary
Guarantee) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Company
or such Subsidiary from further liability; and
(b) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that
are contemporaneously, subject to ordinary settlement periods,
converted by the Company or such Subsidiary into cash, to the extent
of the cash received in that conversion.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company or any such Restricted Subsidiary may apply those Net Proceeds at
its option to any combination of the following:
(I) to repay Senior Debt and, if the Senior Debt repaid is revolving
credit Indebtedness, to correspondingly reduce commitments with respect thereto;
(II) to acquire all or substantially all of the properties or assets of
one or more other Persons primarily engaged in the Oil and Gas Business, and,
for this purpose, a division or line of business of a Person shall be treated as
a separate Person;
(III) to acquire a majority of the Voting Stock of one or more other
Persons primarily engaged in the Oil and Gas Business;
(IV) to make one or more capital expenditures; or
(V) to acquire other long-term assets that are used or useful in the Oil
and Gas Business.
39
Pending the final application of any Net Proceeds, the Company or any such
Restricted Subsidiary may temporarily reduce revolving credit borrowings or
otherwise invest the Net Proceeds in any manner that is not prohibited by the
Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "Excess Proceeds."
On the 361st day after the Asset Sale (or, at the Company's option, any
earlier date), if the aggregate amount of Excess Proceeds then exceeds $20.0
million, the Company will make an Asset Sale Offer to all Holders of Notes, and
to all holders of Pari Passu Indebtedness then outstanding, to purchase the
maximum principal amount of Notes and such Pari Passu Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer
will be equal to 100% of principal amount plus accrued and unpaid interest, if
any, to the Settlement Date, subject to the right of Holders of record on the
relevant record date to receive interest due on an Interest Payment Date that is
on or prior to the Settlement Date, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
those Excess Proceeds for any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount of Notes and Pari Passu Indebtedness tendered
into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee
will select the Notes and such Pari Passu Indebtedness to be purchased on a pro
rata basis. Upon completion of each Asset Sale Offer, the amount of Excess
Proceeds will be reset at zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section 4.10, the Company will comply with the applicable securities laws
and regulations and will not be deemed to have breached its obligations under
such provisions by virtue of such conflict.
Section 4.11. Limitation on Transactions with Affiliates.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $15.0 million, a resolution of the Board of Directors set
forth in an Officers' Certificate
40
certifying that such Affiliate Transaction complies with this
Section 4.11 and that such Affiliate Transaction has been approved
by a majority of the disinterested members of the Board of
Directors; and
(b) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $25.0 million, a written opinion as to the fairness to the
Holders of such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal or investment banking firm of
national standing.
The following items will not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraph of this
Section 4.11:
(1) any employment or severance agreement or other employee
compensation agreement, arrangement or plan, or any amendment thereto,
entered into by the Company or any of its Restricted Subsidiaries in the
ordinary course of business;
(2) transactions between or among any of the Company and its
Restricted Subsidiaries;
(3) transactions with a Person that is an Affiliate of the Company
solely because the Company owns an Equity Interest in such Person;
(4) payment of reasonable directors' fees and other benefits to
persons who are not otherwise Affiliates of the Company;
(5) provision of officers' and directors' indemnification and
insurance in the ordinary course of business to the extent permitted by
law;
(6) transactions with any Income Fund Partnership in the ordinary
course of business and consistent with past practices;
(7) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of the Company; and
(8) Restricted Payments that are permitted by Section 4.07 hereof.
Section 4.12. Limitation on Liens.
The Company will not and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind (other than Permitted Liens) securing
Indebtedness or Attributable Debt upon any of their property or assets, now
owned or hereafter acquired, unless the Notes or any Subsidiary Guarantee of
such Restricted Subsidiary, as applicable, is secured on an equal and ratable
basis (or on a senior basis to, in the case of obligations subordinated in right
of payment to the Notes or such Subsidiary Guarantee, as the case may be) with
the obligations so secured until such time as such obligations are no longer
secured by a Lien.
41
Section 4.13. Additional Subsidiary Guarantees.
If the Company or any of its Restricted Subsidiaries acquires or creates
another Material Domestic Subsidiary after the Initial Issuance Date, or if any
Restricted Subsidiary that is not already a Guarantor guarantees any other
Indebtedness of the Company after such date, then in either case that Subsidiary
will become a Guarantor by executing a supplemental indenture substantially in
the form of Exhibit B hereto and delivering it to the Trustee within 20 Business
Days of the date on which it was acquired or created or guaranteed Indebtedness
of the Company, as the case may be, together with any Opinion of Counsel
described in Section 903 of the Original Indenture; provided, however, that the
foregoing shall not apply to Subsidiaries of the Company that have properly been
designated as Unrestricted Subsidiaries in accordance with the Indenture for so
long as they continue to constitute Unrestricted Subsidiaries.
Section 4.14. Corporate Existence.
Except as otherwise permitted pursuant to the terms hereof (including
consolidation and merger permitted by Section 5.01 hereof), 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, partnership or other
existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Company or any such Restricted Subsidiary; provided, however, that
the Company shall not be required to preserve the existence of any of its
Restricted Subsidiaries if the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Restricted Subsidiaries taken as a whole and that the loss thereof is not
adverse in any material respect to the Holders of the Notes.
Section 4.15. Offer to Repurchase Upon Change of Control.
(1) Within 30 days following the occurrence of a Change of Control,
the Company shall make an offer (a "Change of Control Offer") to
repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of each Holder's Notes at a purchase price (the "Change of
Control Payment") in cash equal to 101% of the aggregate principal amount
of Notes repurchased, plus accrued and unpaid interest, if any, thereon to
the date of settlement (the "Change of Control Settlement Date"), subject
to the right of Holders of record on the relevant record date to receive
interest due on an Interest Payment Date that is on or prior to the Change
of Control Settlement Date. Within 30 days following a Change of Control,
the Company shall mail a notice of the Change of Control Offer to each
Holder and the Trustee describing the transaction that constitutes the
Change of Control and stating:
(a) that the Change of Control Offer is being made pursuant to
this Section 4.15 and that all Notes validly tendered and not
withdrawn will be accepted for payment;
(b) the purchase price and the purchase date, which shall be
no earlier than 30 days but no later than 60 days from the date such
notice is mailed (the "Change of Control Purchase Date");
42
(c) that the Change of Control Offer will expire as of the
time specified in such notice on the Change of Control Purchase Date
and that the Company shall pay the Change of Control Purchase Price
for all Notes purchased as of the Change of Control Purchase Date
promptly thereafter on the Change of Control Settlement Date;
(d) that any Note not tendered will continue to accrue
interest;
(e) that, unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant
to the Change of Control Offer shall cease to accrue interest after
the Change of Control Settlement Date;
(f) that Holders electing to have any Notes purchased pursuant
to a Change of Control Offer will be required to surrender the
Notes, properly endorsed for transfer, together with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes completed and such customary documents as the Company may
reasonably request, to the Paying Agent at the address specified in
the notice prior to the termination of the Change of Control Offer
on the Change of Control Purchase Date;
(g) that Holders will be entitled to withdraw their election
if the Paying Agent receives, prior to the termination of the Change
of Control Offer, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
Notes delivered for purchase, and a statement that such Holder is
withdrawing its election to have the Notes purchased; and
(h) 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, which unpurchased
portion must be equal to $1,000 in principal amount or an integral
multiple thereof.
If any of the Notes subject to a Change of Control Offer is in the form of
a Global Note, then the Company shall modify such notice to the extent
necessary to accord with the procedures of the Depository applicable to
repurchases. Further, the Company shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Notes as a result of a
Change of Control. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this Section 4.15, the
Company will comply with the applicable securities laws and regulations
and will not be deemed to have breached its obligations under such
provisions by virtue of such conflict.
(2) On the Change of Control Purchase Date, the Company shall, to
the extent lawful, accept for payment all Notes or portions thereof (in
integral multiples of $1,000) properly tendered pursuant to the Change of
Control Offer. Promptly thereafter on the Change of Control Settlement
Date the Company shall:
43
(a) deposit with the Paying Agent by 11:00 a.m., New York City
time, an amount equal to the Change of Control Payment in respect of
all Notes or portions thereof so tendered; and
(b) deliver or cause to be delivered to the Trustee the Notes
so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions of Notes being
purchased by the Company.
On the Change of Control Settlement Date, the Paying Agent shall mail to
each Holder of Notes properly tendered the Change of Control Payment for
such Notes (or, if all the Notes are then in global form, make such
payment through the facilities of the Depository) and the Trustee shall
authenticate and mail (or cause to be transferred by book entry) to each
Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided, however, that each such new Note
will be in a principal amount of $1,000 or an integral multiple of $1,000.
The Company shall publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Purchase
Date.
(3) The Change of Control provisions described above shall be
applicable whether or nor any other provisions of the Indenture are
applicable.
(4) Prior to complying with any of the provisions of this Section
4.15, but in any event no later than the Change of Control Purchase Date,
the Company shall either repay all outstanding Senior Debt or obtain the
requisite consents, if any, under all agreements governing outstanding
Senior Debt to permit the repurchase of Notes required by this Section
4.15.
(5) The Company shall not be required to make a Change of Control
Offer following a Change of Control if a third party makes the Change of
Control Offer in the manner, at the time and otherwise in compliance with
the requirements set forth in the Indenture applicable to a Change of
Control Offer made by the Company and purchases all Notes properly
tendered and not withdrawn under such Change of Control Offer.
Section 4.16. No Inducements.
The Company shall not, and the Company shall not permit any of its
Subsidiaries, either directly or indirectly, to pay (or cause to be paid) any
consideration, whether by way of interest, fee or otherwise, to any Beneficial
Owner or Holder of the Notes for or as an inducement to any consent to any
waiver, amendment or supplement of any terms or provisions of the Indenture or
the Notes, unless such consideration is offered to be paid (or agreed to be
paid) to all Beneficial Owners and Holders of the Notes which so consent in the
time frame set forth in the solicitation documents relating to such consent.
Section 4.17. Permitted Business Activities.
The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business other than the Oil and Gas Business, except to such
extent as would not be material to the Company and its Restricted Subsidiaries
taken as a whole.
44
Section 4.18. Sale and Leaseback Transactions.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction; provided that
the Company or any Guarantor may enter into a Sale and Leaseback Transaction if:
(1) the Company or that Guarantor, as applicable, could have (a)
incurred Indebtedness in an amount equal to the Attributable Debt relating
to such sale and leaseback transaction under the Fixed Charge Coverage
Ratio test in the first paragraph of Section 4.09 hereof and (b) incurred
a Lien to secure such Indebtedness pursuant to Section 4.12 hereof;
(2) the gross cash proceeds of that Sale and Leaseback Transaction
are at least equal to the fair market value, as determined in good faith
by the Board of Directors and set forth in an Officers' Certificate
delivered to the Trustee, of the property that is the subject of that Sale
and Leaseback Transaction; and
(3) the transfer of assets in that Sale and Leaseback Transaction is
permitted by, and the Company applies the proceeds of such transaction in
compliance with, Section 4.10 hereof.
Section 4.19. Anti-Layering.
The Company will not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any Senior Debt of the Company and senior in any respect in right of
payment to the Notes. No Guarantor will incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to the Senior Debt of such Guarantor and senior in any respect
in right of payment to such Guarantor's Subsidiary Guarantee.
Section 4.20. Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted
Subsidiary of the Company to be an Unrestricted Subsidiary if that designation
would not cause a Default. If a Restricted Subsidiary of the Company is
designated as an Unrestricted Subsidiary, the aggregate fair market value of all
outstanding Investments owned by the Company and its Restricted Subsidiaries in
the Subsidiary properly designated will be deemed to be an Investment made as of
the time of the designation and will reduce the amount available for Restricted
Payments under the first paragraph of Section 4.07 hereof or represent Permitted
Investments, as determined by the Company. That designation shall only be
permitted if the Investment would be permitted at that time and if the
Subsidiary so designated otherwise meets the definition of an Unrestricted
Subsidiary.
The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary of the Company; provided
that such designation will be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation will only be permitted if (1) such
Indebtedness is permitted under Section 4.09 hereof, calculated on a pro
45
forma basis as if such designation had occurred at the beginning of the
four-quarter reference period, and (2) no Default or Event of Default would be
in existence following such designation.
ARTICLE 5
SUCCESSORS
The provisions of Article Eight of the Original Indenture shall not apply
to the Notes, and in lieu thereof the following provisions of this Article 5
shall apply to the Notes.
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company shall not, directly or indirectly, (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation), or (2) sell, assign, transfer, lease, convey or otherwise dispose
of all or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions
to, another Person, unless:
(a) either (1) the Company is the surviving corporation or (2) the
Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a corporation
organized or existing under the laws of the United States, any state of
the United States or the District of Columbia;
(b) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have
been made assumes all the obligations of the Company under the Notes and
the Indenture pursuant to a supplemental indenture or other agreement in a
form reasonably satisfactory to the Trustee;
(c) immediately after such transaction no Default or Event of
Default exists;
(d) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall
have been made will, at the time of such transaction and after giving pro
forma effect thereto and any related financing transaction as if the same
had occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or disposition and such supplemental indenture (if
any) comply with the Indenture.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
properties or assets of the Company and its Restricted Subsidiaries taken as a
whole in accordance with Section 5.01 hereof, the successor
46
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and may exercise every right and power of,
the Company under the Indenture with the same effect as if such successor
corporation had been named as the Company herein and shall be substituted for
the Company (so that from and after the date of such consolidation, merger,
sale, assignment, transfer, lease, conveyance or other disposition, the
provisions of the Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company); and thereafter, if the
Company is dissolved following a transfer of all or substantially all of the
properties or assets of the Company and its Restricted Subsidiaries take as a
whole in accordance with the Indenture, the Company shall be discharged and
released from all obligations and covenants under the Indenture and the Notes.
The Trustee shall enter into a supplemental indenture to evidence the succession
and substitution of such successor Person and such discharge and release of the
Company.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
In accordance with Section 301(19) of the Original Indenture, Section 501
of the Original Indenture is hereby amended to read as follows with respect to
the Notes:
"An `Event of Default' occurs if one of the following shall have occurred
and be continuing (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article 12 or 13 of the First
Supplemental Indenture or be involuntary or be effected by operation of law):
(1) the Company defaults in the payment when due of interest with
respect to the Notes, and such default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of or
premium, if any, on the Notes when due at its Stated Maturity, upon
optional redemption, upon required repurchase, upon declaration or
otherwise;
(3) the Company fails to comply with the provisions of Section 4.07,
4.09, 4.10, 4.15 or 5.01 of the First Supplemental Indenture;
(4) the Company fails to comply with any other covenant or other
agreement in the Indenture or the Notes for 60 days after notice to the
Company by the Trustee or the Holders of at least 25% in principal amount
of the Notes then outstanding of such failure;
(5) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries), whether such Indebtedness
or guarantee now exists or is created after the Initial Issuance Date, if
such default:
47
(a) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of any
grace period provided in such Indebtedness (a "Payment Default"); or
(b) results in the acceleration of such Indebtedness prior to
its Stated Maturity
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $15.0 million or more;
(6) the Company or any of its Subsidiaries fails to pay final
judgments aggregating in excess of $15.0 million, which judgments are not
paid, discharged or stayed (including a stay pending appeal) for a period
of 60 days after the date of such final judgment (or, if later, the date
when payment is due pursuant to such judgment);
(7) except as permitted by this Indenture, any Subsidiary Guarantee
is held in any judicial proceeding to be unenforceable or invalid or
ceases for any reason to be in full force and effect or any Guarantor, or
any Person acting on behalf of any Guarantor, denies or disaffirms its
obligations under its Subsidiary Guarantee; and
(8) the Company, any Significant Subsidiary of the Company or any
group of Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
(a) commences a voluntary case,
(b) consents in writing to the entry of an order for relief
against it in an involuntary case,
(c) consents in writing to the appointment of a Custodian of
it or for all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) admits in writing it generally is not paying its debts as
they become due; or
(9) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company, any Significant
Subsidiary of the Company or any group of Subsidiaries of the
Company that, taken together, would constitute a Significant
Subsidiary in an involuntary case;
(b) appoints a Custodian of the Company, any Significant
Subsidiary of the Company or any group of Subsidiaries of the
Company that, taken together,
48
would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company, any Significant
Subsidiary of the Company or any group of Subsidiaries of the
Company, that, taken together, would constitute a Significant
Subsidiary; or
(c) orders the liquidation of the Company, any Significant
Subsidiary of the Company or any group of Subsidiaries of the
Company that, taken together, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days."
Section 6.02. Acceleration.
Also as permitted by Section 301(19) of the Original Indenture, the first
paragraph of Section 502 of the Original Indenture is hereby amended to read as
follows with respect to the Notes:
"If any Event of Default occurs and is continuing, the Trustee, by notice
to the Company, or the Holders of at least 25% in principal amount of the then
outstanding Notes, by notice to the Company and the Trustee, may declare all the
Notes to be due and payable immediately. Upon any such declaration, the Notes
shall become due and payable immediately, together with all accrued and unpaid
interest and premium, if any, thereon. Notwithstanding the preceding, if an
Event of Default specified in clause (8) or (9) of Section 501 hereof occurs
with respect to the Company, any Significant Subsidiary of the Company or any
group of Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary, all outstanding Notes shall become due and payable
without further action or notice, together with all accrued and unpaid interest
and premium, if any, thereon."
Section 6.03. Priorities.
With respect to the Notes only, the reference in clause second of Section
506 of the Original Indenture to "Article Twelve and Article Fourteen" is hereby
amended to read: "Article 12 and Article 13 of the First Supplemental
Indenture."
Section 6.04. Waiver of Usury, Stay or Extension of Laws.
Section 515 of the Original Indenture shall not apply to the Notes
inasmuch as it is duplicative of Section 4.06 of this First Supplemental
Indenture.
ARTICLE 7
TRUSTEE; REPORTS
Section 7.01. Notice of Defaults.
With respect to the Notes only, the reference in Section 602 of the
Original Indenture to "Section 501(5)" is hereby amended to read: "Section
501(4)."
49
Section 7.02. Reports by Company and Subsidiary Guarantors.
Section 704 of the Original Indenture shall not apply to the Notes
inasmuch as its requirements are duplicative of those set forth in Section
4.03(a) of this First Supplemental Indenture.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The provisions of Article Fifteen of the Original Indenture shall not
apply to the Notes, and in lieu thereof the following provisions of this Article
8 shall apply to the Notes.
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, exercise its
rights under either Section 8.02 or 8.03 hereof with respect to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have discharged
its obligations with respect to all outstanding Notes, and each Guarantor shall
be deemed to have discharged its obligations with respect to its Subsidiary
Guarantee, on the date the conditions set forth in Section 8.04 below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, and each Guarantor shall be
deemed to have paid and discharged its Subsidiary Guarantee (which in each case
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.05 hereof and the other Sections of this First Supplemental Indenture and the
Sections of the Original Indenture referred to in (a) and (b) below) and to have
satisfied all its other obligations under such Notes or Subsidiary Guarantee and
the Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of and premium,
if any, and interest on such Notes when such payments are due, (b) the Company's
obligations with respect to such Notes under Sections 304, 305, 306 and 1003 of
the Original Indenture and Section 4.02 hereof, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's obligations in
connection therewith and (d) the Legal Defeasance provisions of this Article 8.
Subject to compliance with this Article 8, the Company may exercise its option
under this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.
If the Company exercises its Legal Defeasance option, each Guarantor will
be released and relieved of any obligations under its Subsidiary Guarantee and
any security for the Notes (other than the trust) will be released.
50
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Article 4 hereof (other than those
in Sections 4.01, 4.02, 4.06 and 4.14 hereof) and in clause (d) of Section 5.01
hereof 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 (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company and
any Guarantor may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default with respect to the Notes under
Section 501 of the Original Indenture, but, except as specified above, the
remainder of the Indenture and such Notes shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 501(5) through 501(7) of
the Original Indenture shall not constitute Events of Default with respect to
the Notes.
If the Company exercises its Covenant Defeasance option, each Guarantor
will be released and relieved of any obligations under its Subsidiary Guarantee
and any security for the Notes (other than the trust) will be released.
Section 8.04. Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will
be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any,
and interest on the outstanding Notes on the date of fixed maturity or on
the applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to the date of fixed maturity
or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee confirming that:
(1) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling; or
51
(2) since the Initial Issuance Date, there has been a change
in the applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Covenant Defeasance
had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness or the grant of
Liens securing such Indebtedness, all or a portion of the proceeds of
which will be used to defease the Notes pursuant to this Article 8
concurrently with such incurrence or within 30 days thereof) or insofar as
Events of Default described in clause (8) or (9) of Section 501 of the
Original Indenture are concerned, at any time in the period ending on the
91st day after the day of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any material
agreement or instrument (other than the Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be based on such solvency certificates or solvency
opinions as counsel deems necessary or appropriate) to the effect that
after the 91st day following the deposit (or, if any Holder or Beneficial
Owner of Notes is an insider of the Company, such later date as counsel
may specify in such opinion), the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
52
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee pursuant
to Section 8.04 or 8.08 hereof 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 the Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 or 8.08 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 or 8.08 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance, Covenant
Defeasance or Discharge, as the case may be.
Section 8.06. Repayment to Company.
Subject to applicable escheat and abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of or premium or interest on any Note and
remaining unclaimed for two years after such principal, premium or interest has
become due and payable shall be paid to the Company on its request or (if then
held by the Company) shall be discharged from such trust; and the Holder of such
Note shall thereafter, as a secured creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
53
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.05
hereof, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's obligations under the Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.05 hereof; provided, however, that, if
the Company makes any payment of principal of, premium, if any, or interest on
any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
Section 8.08. Discharge.
The Indenture shall be satisfied and discharged (a "Discharge") and shall
cease to be of further effect as to all Notes issued hereunder, upon the terms
and conditions, and subject to the exceptions, set forth in Article Four of the
Original Indenture.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Section 901 of the Original Indenture is hereby amended to read as follows
with respect to the Notes:
"Notwithstanding Section 902 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(c) to provide for the assumption of the Company's obligations to
the Holders of Notes pursuant to Article 5 of the First Supplemental
Indenture;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder, provided that any change to conform
this Indenture to the prospectus of the Company relating to the offering
of the Notes shall not be deemed to adversely affect the legal rights
hereunder of any Holder;
(e) to secure the Notes or the Subsidiary Guarantees pursuant to the
requirements of Section 4.12 of the First Supplemental Indenture or
otherwise;
54
(f) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture;
(g) to add any additional Guarantor with respect to the Notes or to
evidence the release of any Guarantor from its Subsidiary Guarantee in
accordance with Article 10 of the First Supplemental Indenture;
(h) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(i) to evidence or provide for the acceptance of appointment under
this Indenture of a successor Trustee;
(j) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that
any such addition, change or elimination (A) shall neither (i) apply to
any Security of any series created prior to the execution of such
supplemental indenture and entitled to the benefit of such provision nor
(ii) modify the rights of the Holder of any such Security with respect to
such provision or (B) shall become effective only when there is no such
Security Outstanding; or
(k) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301.
"Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the Opinion of Counsel described
in Section 903 hereof, the Trustee shall join with the Company and the
Guarantors in the execution of such amended or supplemental indenture authorized
or permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall
not be obligated to enter into such amended or supplemental Indenture that
affects its own rights, duties or immunities under this Indenture or otherwise."
Section 9.02. With Consent of Holders of Notes.
Section 902 of the Original Indenture is hereby amended to read as follows
with respect to the Notes:
"Except as provided above in Section 901 and below in this Section 902,
the Company, the Guarantors and the Trustee may amend or supplement this
Indenture and the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the Notes then outstanding
(including consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes), and, subject to Sections 508 and 513 hereof, any
existing Default or Event of Default with respect to the Notes or compliance
with any provision of this Indenture or the Notes may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a purchase of, tender offer or
exchange offer for Notes).
55
"Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the Opinion of Counsel described in Section 903 hereof, the
Trustee shall join with the Company and the Guarantors in the execution of such
amended or supplemental indenture unless such amended or supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental indenture.
"It shall not be necessary for the consent of the Holders of Notes under
this Section 902 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 of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 508 and 513 hereof and to the last
paragraph of this Section 902, the Holders of a majority in principal amount of
the Notes then outstanding may waive compliance in a particular instance by the
Company with any provision of this Indenture or the Notes. However, without the
consent of each Holder affected, an amendment, supplement or waiver may not
(with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note or
alter any of the provisions with respect to the redemption or repurchase of the
Notes (except as provided in Sections 3.04, 4.10 and 4.15 of the First
Supplemental Indenture);
(c) reduce the rate of or change the time for payment of interest on any
Note;
(d) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on the Notes (except a rescission of acceleration
of the Notes by the Holders of at least a majority in principal amount of the
Notes and a waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or Events of Default or the rights of Holders of Notes
to receive payments of principal of or premium, if any, or interest on the Notes
(except as permitted in clause (g) below);
(g) waive a redemption or repurchase payment with respect to any Note
(other than a payment required by Sections 3.04, 4.10 and 4.15 of the First
Supplemental Indenture);
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(h) release any Guarantor from any of its obligations under its Subsidiary
Guarantee or this Indenture, except in accordance with the terms of this
Indenture; or
(i) make any change in the preceding amendment, supplement and waiver
provisions.
"In addition, any amendment or supplement to, or waiver of, the provisions
of this Indenture relating to subordination of the Notes or the Subsidiary
Guarantees to Senior Debt that adversely affects the rights of the Holders of
the Notes shall require the consent of the Holders of at least 75% in principal
amount of Notes then outstanding."
Section 9.03. Revocation and Effect of Consents.
A consent to any amendment, supplement or waiver under the Indenture by
any Holder given in connection with a purchase, tender or exchange of such
Holder's Notes shall not be rendered invalid by such purchase, tender or
exchange.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
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. 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 (or their duly designated proxies), and only those Persons,
shall be entitled to consent to such amendment or waiver or revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No consent shall be valid or effective for more than 90 days after
such record date except to the extent that the requisite number of consents to
the amendment, supplement or waiver have been obtained within such 90-day period
or as set forth in the next paragraph of this Section 9.03.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder, unless it makes a change described in any of clauses (a) through
(i) of Section 902 of the Indenture, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same
indebtedness as the consenting Holder's Note.
ARTICLE 10
GUARANTEES OF NOTES
The Notes shall have the benefit of Subsidiary Guarantees. The provisions
of Article Thirteen of the Original Indenture shall not apply to the Notes, and
in lieu thereof the following provisions of this Article 10 shall apply to the
Notes.
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Section 10.01. Subsidiary Guarantees.
Subject to this Article 10, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees, on a senior subordinated basis in
accordance with Article 13 of this First Supplemental Indenture, to each Holder
of a Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
First Supplemental Indenture or the Indenture, the Notes held thereby and the
Obligations of the Company hereunder and thereunder, that: (a) the principal of
and premium, if any, and interest on the Notes will be promptly paid in full
when due, subject to any applicable grace period, whether at Stated Maturity, by
acceleration, upon repurchase or redemption or otherwise, and interest on the
overdue principal of and premium, if any, and (to the extent permitted by law)
interest on the Notes, and all other payment Obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full and
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
Obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, subject to any applicable
grace period, whether at Stated Maturity, by acceleration, upon repurchase or
redemption or otherwise. Failing payment when so due of any amount so guaranteed
for whatever reason, the Guarantors will be jointly and severally obligated to
pay the same immediately, subject to the provisions of Article 13 hereof. An
Event of Default with respect to the Notes under the Indenture shall constitute
an event of default under the Subsidiary Guarantees, and shall entitle the
Holders to accelerate the obligations of the Guarantors hereunder in the same
manner and to the same extent as the Obligations of the Company.
The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this First Supplemental Indenture or the Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder with respect to
any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance (other than
complete performance) which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each Guarantor further, to the extent
permitted by law, hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenants that its Subsidiary Guarantee
will not be discharged except by complete performance of the Obligations
contained in the Notes and the Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors, or any Custodian, Trustee or other
similar official acting in relation to either the Company or the Guarantors, any
amount paid by the Company or any Guarantor to the Trustee or such Holder, the
Subsidiary Guarantees, to the extent theretofore discharged, shall be reinstated
in full force and effect. Each Guarantor agrees that it shall not be entitled
to, and hereby waives, any right of subrogation in relation to the Holders in
respect of any Obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one
hand, and the Holders and the Trustee, on the other hand, (a) the maturity of
the Obligations guaranteed hereby
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may be accelerated as provided in Article Five of the Original Indenture for the
purposes of its Subsidiary Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Obligations
guaranteed thereby, and (b) in the event of any declaration of acceleration of
such Obligations as provided in Article Five of the Original Indenture, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantor for the purpose of its Subsidiary Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Subsidiary Guarantees. Section 10.02. Notation of
Subsidiary Guarantees.
Section 10.02. Notation of Subsidiary Guarantees.
No notation of any Subsidiary Guarantee need be endorsed on any Note,
notwithstanding any contrary provision of the Original Indenture.
Section 10.03. Guarantors May Consolidate, Etc., on Certain Terms.
(a) No Guarantor shall sell or otherwise dispose of all or substantially
all of its properties or assets to, or consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person), another Person (other
than the Company or another Guarantor), unless, (i) either (1) the Person
acquiring the properties or assets in any such sale or other disposition or the
Person formed by or surviving any such consolidation or merger (if other than
such Guarantor) unconditionally assumes all the obligations of such Guarantor,
pursuant to a supplemental indenture, substantially in the form of Exhibit B
hereto, under the Notes, the Indenture and its Subsidiary Guarantee on terms set
forth therein, or (2) the Net Proceeds of such sale or other disposition are
applied in accordance with the provisions of Section 4.10 hereof, and (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists.
(b) In the case of any such consolidation or merger and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and substantially in the form of Exhibit B hereto, of
the Subsidiary Guarantee and the due and punctual performance of all of the
covenants of the Indenture to be performed by the Guarantor, such successor
Person shall succeed to and be substituted for the Guarantor with the same
effect as if it had been named herein as a Guarantor.
Section 10.04. Releases of Subsidiary Guarantees.
The Subsidiary Guarantee of a Guarantor shall be released: (1) in
connection with any sale or other disposition of all or substantially all of the
properties or assets of such Guarantor (including by way of merger or
consolidation) to a Person that is not (either before or after giving effect to
such transaction) a Subsidiary of the Company, if the sale or other disposition
complies with Section 4.10 hereof; or (2) in connection with any sale or other
disposition of all of the Capital Stock of such Guarantor to a Person that is
not (either before or after giving effect to such transaction) a Subsidiary of
the Company, if the sale or other disposition complies with Section 4.10 hereof;
or (3) if the Company designates any Restricted Subsidiary that is a Guarantor
as an Unrestricted Subsidiary in accordance with the applicable provisions of
the Indenture; or (4) upon Legal Defeasance or Covenant Defeasance or Discharge
in accordance with Article 8 hereof.
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Upon delivery by the Company to the Trustee of an Officers' Certificate to
the effect that any of the foregoing clauses (1) - (4) has occurred, the Trustee
shall execute any documents reasonably requested by the Company in order to
evidence the release of any Guarantor from its obligations under its Subsidiary
Guarantee. Any Guarantor not released from its obligations under its Subsidiary
Guarantee shall remain liable for the full amount of principal of, premium, if
any, and interest on the Notes and for the other obligations of such Guarantor
under the Indenture as provided in this Article 10.
Section 10.05. [Reserved].
Section 10.06. Limitation on Guarantor Liability.
The obligations of each Guarantor under its Subsidiary Guarantee will 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 Subsidiary
Guarantee or pursuant to its contribution obligations under the Indenture,
result in the obligations of such Guarantor under its Subsidiary Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law and not otherwise being void or voidable under any similar laws
affecting the rights of creditors generally.
Section 10.07. "Trustee" to Include Paying Agent.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 10 shall in each case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 10 in place of the Trustee.
ARTICLE 11
MISCELLANEOUS
Section 11.01. First Supplemental Indenture Controls.
To the extent that there is any conflict or inconsistency between the
Original Indenture and this First Supplemental Indenture, the provisions of this
First Supplemental Indenture shall control.
Section 11.02. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator or
stockholder or other owner of Capital Stock of the Company or any Guarantor, as
such, shall have any liability for any obligations of the Company or any
Guarantor under the Notes, the Subsidiary Guarantees or the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
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Section 11.03. Governing Law.
THIS FIRST SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 11.04. No Adverse Interpretation of Other Agreements.
The Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret the
Indenture.
Section 11.05. Table of Contents and Headings.
The Table of Contents and headings of the Articles and Sections of this
First Supplemental Indenture have been inserted for convenience of reference
only, are not to be considered a part of this First Supplemental Indenture and
shall in no way modify or restrict any of the terms or provisions hereof.
Section 11.06. Counterparts.
This First Supplemental Indenture may be signed in counterparts and by the
different parties hereto in separate counterparts, each of which shall
constitute an original and all of which together shall constitute one and the
same instrument.
ARTICLE 12
SUBORDINATION
In accordance with Section 301(3) of the Original Indenture, the following
provisions of this Article 12 shall apply to the Notes in lieu of the provisions
of Article Twelve of the Original Indenture.
Section 12.01. Agreement to Subordinate.
The Company agrees, and each Noteholder by accepting a Note agrees, that
the payment of the principal of, premium, if any, and interest on the Notes and
any other Obligation of the Company in respect of the Notes (including any
obligation to purchase Notes) is subordinated in right of payment, to the extent
and in the manner provided in this Article 12, to the prior payment in full in
cash of all Obligations in respect of Senior Debt of the Company, including the
Obligations of the Company under the Credit Agreement, whether outstanding on
the date of this First Supplemental Indenture or thereafter incurred, and that
the subordination is for the benefit of and shall be enforceable directly by the
holders of such Senior Debt. The Notes shall rank equally in right of payment
with the 2012 Notes and all other Senior Subordinated Debt of the Company, and
only Indebtedness of the Company that is Senior Debt of the Company shall rank
senior in right of payment to the Notes in accordance with the provisions set
forth herein. All provisions of this Article 12 shall be subject to Section
12.12 hereof. All references to "Senior Debt" in this Article 12 are to Senior
Debt of the Company.
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Section 12.02. Liquidation, Dissolution, Bankruptcy.
Upon any payment or other distribution of the assets of the Company to
creditors upon a liquidation or dissolution of the Company, or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property, or in an assignment for the benefit of creditors or in
any marshaling of the Company's assets and liabilities:
(1) holders of Senior Debt of the Company shall be entitled to receive
payment in full in cash of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any bankruptcy proceeding at the
rate specified in the applicable Senior Debt, whether or not an allowable claim
in such proceeding) before Noteholders shall be entitled to receive any payment
with respect to the Notes; and
(2) until all Obligations with respect to such Senior Debt are paid in
full in cash, any payment or other distribution to which Noteholders would be
entitled but for this Article 12 shall be made to holders of such Senior Debt as
their interests may appear, except that Noteholders may receive and retain
Permitted Junior Securities and payments made from a trust already established
pursuant to Article 8 of this First Supplemental Indenture or Article Four of
the Original Indenture.
Section 12.03. Default on Senior Debt.
The Company shall not pay the principal of, premium, if any, or interest
on the Notes or make any deposit pursuant to Article 8 of this First
Supplemental Indenture or Article Four of the Original Indenture and shall not
purchase, redeem or otherwise retire any Notes or make any other payment with
respect to the Notes (collectively, "pay the Notes"), except that Noteholders
may receive and retain Permitted Junior Securities and payments made from a
trust already established pursuant to Article 8 hereof or Article Four of the
Original Indenture, if either:
(1) a default (a "payment default") in the payment of the principal of,
premium, if any, or interest on, or any other Obligation in respect of, any
Designated Senior Debt occurs and is continuing beyond any applicable grace
period; or
(2) any other default (a "nonpayment default") occurs and is continuing
with respect to any Designated Senior Debt that permits holders of such
Designated Senior Debt to accelerate its maturity (or that would permit such
holders to accelerate with the giving of notice or the passage of time or both)
and the Trustee receives a notice of such default (a "Payment Blockage Notice")
from the Company or the holders of such Designated Senior Debt.
Except as provided in Section 12.02 hereof, payments on the Notes may and
shall be resumed:
(1) in the case of a payment default, upon the date on which such default
is cured or waived; and
(2) in the case of a nonpayment default, upon the earlier of the date on
which such nonpayment default is cured or waived or 179 days after the date on
which the applicable Payment Blockage Notice is received, unless the maturity of
any Designated Senior Debt has
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been accelerated.
No new Payment Blockage Notice may be delivered unless and until 360 days
have elapsed since the delivery of the immediately prior Payment Blockage
Notice. No nonpayment default that existed or was continuing with respect to any
Designated Senior Debt on the date of delivery of any Payment Blockage Notice to
the Trustee with respect to such Designated Senior Debt shall be, or be made,
the basis for a subsequent Payment Blockage Notice unless such default has been
cured or waived for a period of not less than 90 days.
Section 12.04. Acceleration of Payment of Notes.
If payment of the Notes is accelerated because of an Event of Default, the
Company shall promptly notify the holders of Designated Senior Debt (or their
Representatives) of the acceleration.
Section 12.05. When Distribution Must Be Paid Over; Reinstatement of Senior
Debt.
If a payment or other distribution is made to the Trustee or any of the
Noteholders that because of this Article 12 should not have been made to them,
the Trustee or any of the Noteholders who receive the distribution shall hold it
in trust for holders of Senior Debt of the Company and pay it over and deliver
it to them (or their Representatives) as their interests may appear.
To the extent any payment of or distribution in respect of Senior Debt
(whether by or on behalf of the Company as proceeds of security or enforcement
of any right of setoff or otherwise) is declared to be fraudulent or
preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then
if such payment or distribution is recovered by, or paid over to, such receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar Person, the
Senior Debt or part thereof originally intended to be satisfied shall be deemed
to be reinstated and outstanding as if such payment had not occurred.
Section 12.06. Subrogation.
After all Senior Debt of the Company is paid in full (and all commitments
with respect to such Senior Debt have terminated) and until the Notes are paid
in full, Noteholders shall be subrogated to the rights of holders of such Senior
Debt to receive distributions applicable to such Senior Debt. A distribution
made under this Article 12 to holders of such Senior Debt which otherwise would
have been made to Noteholders is not, as between the Company and Noteholders, a
payment by the Company on such Senior Debt.
Section 12.07. Relative Rights.
This Article 12 defines the relative rights of Noteholders and holders of
Senior Debt of the Company. Nothing in the Indenture shall:
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(1) impair, as between the Company and Noteholders, the obligation of the
Company, which is absolute and unconditional, to pay principal of, premium, if
any, and interest on the Notes in accordance with their terms; or
(2) prevent the Trustee or any Noteholder from exercising its available
remedies upon an Event of Default, subject to the rights of holders of Senior
Debt to receive payments and distributions otherwise payable to Noteholders and
to block payments on the Notes as provided in this Article 12.
Section 12.08. Subordination May Not Be Impaired by Company.
No right of any present or future holders of any Senior Debt to enforce
subordination as provided in this Article 12 will at any time in any way be
prejudiced or impaired by noncompliance by the Company with the terms of the
Indenture, regardless of any knowledge thereof that any such holder of Senior
Debt may have or otherwise be charged with.
Section 12.09. Rights of Trustee and Paying Agent; Rights of Holders of Senior
Debt.
Notwithstanding Section 12.03 hereof, the Trustee or Paying Agent shall
continue to make payments on the Notes and shall not be charged with knowledge
of the existence of facts that under this Article 12 would prohibit the making
of any such payments unless, not less than one Business Day prior to the date of
such payment, a Trust Officer of the Trustee receives notice that such payments
are prohibited by this Article 12. The Company, the Registrar, the Paying Agent,
a Representative or a holder of Senior Debt shall be entitled to give the
notice; provided, however, that, if an issue of Senior Debt has a
Representative, only the Representative shall be entitled to give the notice.
The Trustee in its individual or any other capacity shall be entitled to
hold Senior Debt with the same rights it would have if it were not Trustee. The
Registrar and the Paying Agent shall be entitled to do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 12 with respect to any Senior Debt which may at any time be held by it,
to the same extent as any other holder of such Senior Debt; and nothing in
Article Six of the Original Indenture shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article 12 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 607 of the Original
Indenture.
The holders of Senior Debt may, at any time and from time to time subject
to the terms of such Senior Debt, without the consent of or notice to the
Trustee or the Noteholders, without incurring responsibility to the Noteholders
and without impairing or releasing the subordination provided in the Indenture
or the obligations hereunder of the Noteholders to the holders of Senior Debt,
do any one or more of the following:
(1) change the manner, place or terms of payment or extend the time of
payment of, or renew or alter, Senior Debt or any instrument evidencing the same
or any agreement under which Senior Debt is outstanding or secured;
(2) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Debt;
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(3) release any Person liable in any manner for the collection of Senior
Debt; and
(4) exercise or refrain from exercising any rights against the Company and
any other Person.
Section 12.10. Distribution or Notice to Representative.
Whenever any Person is to make a distribution or give a notice to holders
of Senior Debt of the Company, such Person shall be entitled to make such
distribution or give such notice to their Representative (if any).
Section 12.11. Not to Prevent Events of Default or Limit Right to Accelerate.
The failure to make a payment pursuant to the Notes by reason of any
provision in this Article 12 shall not be construed as preventing the occurrence
of a Default. Nothing in this Article 12 shall have any effect on the right of
the Noteholders or the Trustee to accelerate the maturity of the Notes.
Section 12.12. Trust Moneys Not Subordinated.
Notwithstanding anything contained herein to the contrary, payments from
money or the proceeds of Government Securities held in trust under Article 8
hereof or Article Four of the Original Indenture by the Trustee for the payment
of principal of, premium, if any, and interest on the Notes shall not be
subordinated to the prior payment of any Senior Debt or subject to the
restrictions set forth in this Article 12, and none of the Noteholders shall be
obligated to pay over any such amount to the Company or any holder of Senior
Debt or any other creditor of the Company.
Section 12.13. Trustee Entitled to Rely.
Upon any payment or distribution pursuant to this Article 12, the Trustee
and the Noteholders shall be entitled to rely (1) upon any order or decree of a
court of competent jurisdiction in which any proceedings of the nature referred
to in Section 12.02 hereof are pending, (2) upon a certificate of the
liquidating trustee or agent or other Person making such payment or distribution
to the Trustee or to the Noteholders or (3) upon the Representatives of Senior
Debt for the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of such Senior Debt and other Debt of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 12.
In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article 12, the
Trustee shall be entitled to request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior Debt held
by such Person, the extent to which such Person is entitled to participate in
such payment or distribution and other facts pertinent to the rights of such
Person under this Article 12, and, if such evidence is not furnished, the
Trustee shall be entitled to defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 601 and 603 of the Original Indenture shall be applicable
to all actions or omissions of actions by the Trustee pursuant to this Article
12.
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Section 12.14. Trustee to Effectuate Subordination.
Each Noteholder by accepting a Note authorizes and directs the Trustee on
its behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Article 12 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
Section 12.15. Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Debt and, subject to Section 601 of the Original Indenture, shall not
be liable to any such holders if it shall mistakenly pay over or distribute to
Noteholders or the Company or any other Person, money or assets to which any
holders of Senior Debt shall be entitled by virtue of this Article 12 or
otherwise.
Section 12.16. Reliance by Holders of Senior Debt on Subordination Provisions.
Each Noteholder by accepting a Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Debt, whether such Senior Debt
was created or acquired before or after the issuance of the Notes, to acquire
and continue to hold, or to continue to hold, such Senior Debt, and such holder
of such Senior Debt shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Debt.
ARTICLE 13
SUBORDINATION OF SUBSIDIARY GUARANTEES
In accordance with Section 301(3) of the Original Indenture, the following
provisions of this Article 13 shall apply to the Notes in lieu of the provisions
of Article Fourteen of the Original Indenture.
Section 13.01. Agreement to Subordinate.
Each Guarantor agrees, and each Noteholder by accepting a Note agrees,
that the payment of such Guarantor's Subsidiary Guarantee (including any amounts
in respect of the principal of, premium, if any, or interest on the Notes and
any other Obligation in respect of the Notes, including any obligation of the
Company to purchase Notes) is subordinated in right of payment, to the extent
and in the manner provided in this Article 13, to the prior payment in full in
cash of all Obligations in respect of Senior Debt of such Guarantor, including
such Guarantor's Obligations under the Credit Agreement, whether outstanding on
the date of this First Supplemental Indenture or thereafter incurred, and that
the subordination is for the benefit of and shall be enforceable directly by the
holders of such Senior Debt. The Subsidiary Guarantee of a Guarantor shall rank
equally in right of payment with its guarantee of the 2012 Notes and all other
Senior Subordinated Debt of such Guarantor, and only Indebtedness of such
Guarantor that is Senior Debt of such Guarantor shall rank senior in right of
payment to the Subsidiary Guarantee of such Guarantor in accordance with the
provisions set forth herein. All provisions of this Article 13 shall be subject
to Section 13.12 hereof. All references to "Senior Debt" in this Article 13 are
to Senior Debt of the Guarantors.
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Section 13.02. Liquidation, Dissolution, Bankruptcy.
Upon any payment or other distribution of the assets of any Guarantor to
creditors upon a liquidation or dissolution of such Guarantor, or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to such Guarantor or its property, or in an assignment for the benefit
of creditors or in any marshaling of such Guarantor's assets and liabilities:
(1) holders of Senior Debt of such Guarantor shall be entitled to receive
payment in full in cash of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any bankruptcy proceeding at the
rate specified in the applicable Senior Debt, whether or not an allowable claim
in such proceeding) before Noteholders shall be entitled to receive any payment
pursuant to the Subsidiary Guarantee of such Guarantor; and
(2) until all Obligations with respect to the Senior Debt of such
Guarantor are paid in full in cash, any payment or other distribution to which
Noteholders would be entitled but for this Article 13 shall be made to holders
of such Senior Debt as their interests may appear, except that Noteholders may
receive and retain Permitted Junior Securities and payments made from a trust
already established pursuant to Article 8 of this First Supplemental Indenture
or Article Four of the Original Indenture.
Section 13.03. Default on Senior Debt.
No Guarantor shall make any payment under its Subsidiary Guarantee,
whether in respect of the principal of, premium, if any, or interest on the
Notes or make any deposit pursuant to Article 8 of this First Supplemental
Indenture or Article Four of the Original Indenture and shall not purchase,
redeem or otherwise retire any Notes or make any other payment with respect to
the Notes (collectively, "pay its Subsidiary Guarantee"), except that
Noteholders may receive and retain Permitted Junior Securities and payments made
from a trust already established pursuant to Article 8 of this First
Supplemental Indenture or Article Four of the Original Indenture, if either:
(1) a default (a "payment default") in the payment of the principal of,
premium, if any, or interest on, or any other Obligation in respect of, any
Designated Senior Debt of such Guarantor occurs and is continuing beyond any
applicable grace period; or
(2) any other default (a "nonpayment default") occurs and is continuing
with respect to any Designated Senior Debt of such Guarantor that permits
holders of such Designated Senior Debt to accelerate its maturity (or that would
permit such holders to accelerate with the giving of notice or the passage of
time or both) and the Trustee receives a notice of such default (a "Subsidiary
Guarantee Payment Blockage Notice") from such Guarantor or the holders of such
Designated Senior Debt.
Except as provided in Section 13.02 hereof, payments on the Subsidiary
Guarantees may and shall be resumed:
(1) in the case of a payment default, upon the date on which such default
is cured or waived; and
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(2) in the case of a nonpayment default, upon the earlier of the date on
which such nonpayment default is cured or waived or 179 days after the date on
which the applicable Subsidiary Guarantee Payment Blockage Notice is received,
unless the maturity of any Designated Senior Debt has been accelerated.
No new Subsidiary Guarantee Payment Blockage Notice may be delivered
unless and until 360 days have elapsed since the delivery of the immediately
prior Subsidiary Guarantee Payment Blockage Notice. No nonpayment default that
existed or was continuing with respect to any Designated Senior Debt on the date
of delivery of any Subsidiary Guarantee Payment Blockage Notice to the Trustee
with respect to such Designated Senior Debt shall be, or be made, the basis for
a subsequent Subsidiary Guarantee Payment Blockage Notice unless such default
has been cured or waived for a period of not less than 90 days.
Section 13.04. Demand for Payment.
If a demand for payment is made by the Trustee on a Guarantor pursuant to
Article 10, such Guarantor shall promptly notify the holders of Designated
Senior Debt of such Guarantor (or their Representatives) of such demand.
Section 13.05. When Distribution Must Be Paid Over; Reinstatement of Senior
Debt.
If a distribution is made to the Trustee or any of the Noteholders that
because of this Article 13 should not have been made to them, the Trustee or any
of the Noteholders who receive the distribution shall hold it in trust for
holders of Senior Debt of the applicable Guarantor and pay it over and deliver
it to them (or their Representatives) as their interests may appear.
To the extent any payment of or distribution in respect of Senior Debt
(whether by or on behalf of any Guarantor as proceeds of security or enforcement
of any right of setoff or otherwise) is declared to be fraudulent or
preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then
if such payment or distribution is recovered by, or paid over to, such receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar Person, the
Senior Debt or part thereof originally intended to be satisfied shall be deemed
to be reinstated and outstanding as if such payment had not occurred.
Section 13.06. Subrogation.
After all Senior Debt of a Guarantor is paid in full (and all commitments
with respect to such Senior Debt have terminated) and until the Notes are paid
in full, Noteholders shall be subrogated to the rights of holders of such Senior
Debt to receive distributions applicable to Senior Debt of such Guarantor. A
distribution made under this Article 13 to holders of such Senior Debt which
otherwise would have been made to Noteholders is not, as between the relevant
Guarantor and Noteholders, a payment by such Guarantor on such Senior Debt.
Section 13.07. Relative Rights.
This Article 13 defines the relative rights of Noteholders and holders of
Senior Debt of a Guarantor. Nothing in the Indenture shall:
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(1) impair, as between a Guarantor and Noteholders, the obligation of such
Guarantor, which is absolute and unconditional, to pay its Subsidiary Guarantee
to the extent set forth in Article 10; or
(2) prevent the Trustee or any Noteholder from exercising its available
remedies upon a default by such Guarantor under its Subsidiary Guarantee,
subject to the rights of holders of Senior Debt of such Guarantor to receive
payments and distributions otherwise payable to Noteholders and to block
payments on the Notes as provided in this Article 13.
Section 13.08. Subordination May Not Be Impaired by Guarantors.
No right of any present or future holders of any Senior Debt of any
Guarantor to enforce subordination as provided in this Article 13 will at any
time in any way be prejudiced or impaired by noncompliance by such Guarantor
with the terms of the Indenture, regardless of any knowledge thereof that any
such Holder of Senior Debt may have or otherwise be charged with.
Section 13.09. Rights of Trustee and Paying Agent; Rights of Holders of
Senior Debt.
Notwithstanding Section 13.03 hereof, the Trustee or Paying Agent shall
continue to make payments on any Subsidiary Guarantee and shall not be charged
with knowledge of the existence of facts that under this Article 13 would
prohibit the making of any such payments unless, not less than one Business Day
prior to the date of such payment, a Trust Officer of the Trustee receives
written notice that such payments are prohibited by this Article 13. The
Company, the relevant Guarantor, the Registrar, the Paying Agent, a
Representative or a holder of Senior Debt of such Guarantor shall be entitled to
give the notice; provided, however, that, if an issue of Senior Debt of any
Guarantor has a Representative, only the Representative shall be entitled to
give the notice.
The Trustee in its individual or any other capacity shall be entitled to
hold Senior Debt of any Guarantor with the same rights it would have if it were
not the Trustee. The Registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 13 with respect to any Senior Debt of any Guarantor which may at any
time be held by it, to the same extent as any other holder of such Senior Debt;
and nothing in Article Six of the Original Indenture shall deprive the Trustee
of any of its rights as such holder. Nothing in this Article 13 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 607 of the
Original Indenture.
The holders of Senior Debt may, at any time and from time to time subject
to the terms of such Senior Debt, without the consent of or notice to the
Trustee or the Noteholders, without incurring responsibility to the Noteholders
and without impairing or releasing the subordination provided in the Indenture
or the obligations hereunder of the Noteholders to the holders of Senior Debt,
do any one or more of the following:
(1) change the manner, place or terms of payment or extend the time of
payment of, or renew or alter, Senior Debt or any instrument evidencing the same
or any agreement under which Senior Debt is outstanding or secured;
69
(2) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Debt;
(3) release any Person liable in any manner for the collection of Senior
Debt; and
(4) exercise or refrain from exercising any rights against any Guarantor
and any other Person.
Section 13.10. Distribution or Notice to Representative.
Whenever any Person is to make a distribution or give a notice to holders
of Senior Debt of any Guarantor, such Person shall be entitled to make such
distribution or give such notice to their Representative (if any).
Section 13.11. Article 13 Not to Prevent Events of Default or Limit Right to
Demand Payment.
The failure to make a payment pursuant to a Subsidiary Guarantee by reason
of any provision in this Article 13 shall not be construed as preventing the
occurrence of a Default. Nothing in this Article 13 shall have any effect on the
right of the Noteholders or the Trustee to make a demand for payment on any
Guarantor pursuant to its Subsidiary Guarantee.
Section 13.12. Trust Moneys Not Subordinated.
Notwithstanding anything contained herein to the contrary, payments from
money or the proceeds of Government Securities held in trust under Article 8
hereof or Article Four of the Original Indenture by the Trustee for the payment
of principal of, premium, if any, and interest on the Notes shall not be
subordinated to the prior payment of any Senior Debt of any Guarantor or subject
to the restrictions set forth in this Article 13, and none of the Noteholders
shall be obligated to pay over any such amount to any Guarantor or any holder of
Senior Debt of any Guarantor or any other creditor of any Guarantor.
Section 13.13. Trustee Entitled to Rely.
Upon any payment or distribution pursuant to this Article 13, the Trustee
and the Noteholders shall be entitled to rely (1) upon any order or decree of a
court of competent jurisdiction in which any proceedings of the nature referred
to in Section 13.02 hereof are pending, (2) upon a certificate of the
liquidating trustee or agent or other Person making such payment or distribution
to the Trustee or to the Noteholders or (3) upon the Representatives for the
holders of Senior Debt of any Guarantor for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
such Senior Debt and other Debt of such Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 13. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Debt of any Guarantor to participate in any
payment or distribution pursuant to this Article 13, the Trustee shall be
entitled to request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt of such Guarantor
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this
70
Article 13, and, if such evidence is not furnished, the Trustee shall be
entitled to defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of Sections
601 and 603 of the Original Indenture shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 13.
Section 13.14. Trustee to Effectuate Subordination.
Each Noteholder by accepting a Note authorizes and directs the Trustee on
its behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Article 13 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
Section 13.15. Trustee Not Fiduciary for Holders of Senior Debt of Guarantors.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Debt of any Guarantor and, subject to Section 601 of the Original
Indenture, shall not be liable to any such holders if it shall mistakenly pay
over or distribute to Noteholders or the Company or any other Person, money or
assets to which any holders of such Senior Debt shall be entitled by virtue of
this Article 13 or otherwise.
Section 13.16. Reliance by Holders of Senior Debt of Guarantors on Subordination
Provisions.
Each Noteholder by accepting a Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Debt of any Guarantor, whether
such Senior Debt was created or acquired before or after the issuance of the
Notes, to acquire and continue to hold, or to continue to hold, such Senior Debt
and such holder of Senior Debt shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Debt.
[Signatures on following page]
71
SIGNATURES
XXXXXXX PETROLEUM CORPORATION
By: ____________________________
Xxxxx X. Xxxxxx
Chairman, President and
Chief Executive Officer
XXXXXXX OIL AND GAS CORPORATION
EQUITY OIL COMPANY
XXXXXXX PROGRAMS, INC.
By: ____________________________
Xxxxx X. Xxxxxx
Chairman, President and
Chief Executive Officer
X.X. XXXXXX TRUST COMPANY,
NATIONAL ASSOCIATION, as
TRUSTEE
By: ____________________________
Name: __________________________
Title: _________________________
72
EXHIBIT A
[FORM OF FACE OF NOTE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY IS A GLOBAL SECURITY AS REFERRED TO IN THE INDENTURE
HEREINAFTER REFERENCED. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
XXXXXXX PETROLEUM CORPORATION
No. __ $
CUSIP No. 000000 XX 0
XXXX Xx. XX000000XX00
7 1/4% Senior Subordinated Note due 2013
Xxxxxxx Petroleum Corporation, a Delaware corporation, promises to pay to
__________, or registered assigns, the principal sum of __________ Dollars on
May 1, 2013 [or such greater or lesser amount as may be indicated on Schedule A
hereto].(1)
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
Additional provisions of this Note are set forth on the other side of this
Note.
XXXXXXX PETROLEUM CORPORATION
By: __________________________
Name:
Title:
----------
(1) If this Note is a Global Security, add this provision.
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ATTEST:
___________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
X.X. XXXXXX TRUST COMPANY,
NATIONAL ASSOCIATION, As Trustee
By _______________________________
Authorized Officer
Dated:
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[FORM OF REVERSE SIDE OF NOTE]
7 1/4% Senior Subordinated Note due 2013
Capitalized terms used herein but not defined shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
1. Interest. Xxxxxxx Petroleum Corporation, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
7.25% per annum from April 19, 2005 until maturity. The Company will pay
interest semi-annually in arrears on May 1 and November 1 of each year,
commencing November 1, 2005, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date"). Interest on the
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of original issuance; provided that
if there is no existing Default or Event of Default in the payment of interest,
and if this Note is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date, except in the case of the original
issuance of Notes, in which case interest shall accrue from the date of
authentication. The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes to the
Persons who are registered Holders of Notes at the close of business on the
April 15 or October 15 next preceding the Interest Payment Date, even if such
Notes are cancelled after such record date and on or before such Interest
Payment Date, except as provided in Section 307 of the Indenture with respect to
Defaulted Interest. Holders must surrender Notes to the Paying Agent to collect
payments of principal and premium, if any, together with accrued and unpaid
interest due at maturity. The Notes will be payable as to principal, premium, if
any, and interest at the office or agency of the Company maintained for such
purpose within the City and State of New York, or, at the option of the Company,
payment of interest may be made by check mailed to the Holders at their
addresses set forth in the Security Register of Holders, and provided that
payment by wire transfer of immediately available funds will be required with
respect to any amounts due on all Global Securities and all other Notes the
Holders of which shall have provided wire transfer instructions to the Company
or the Paying Agent. Such payment shall be in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts.
3. Paying Agent and Registrar. Initially, X.X. Xxxxxx Trust Company,
National Association, the Trustee under the Indenture, will act as Paying Agent
and Security Registrar. The Company may change any Paying Agent or Security
Registrar without notice to any Holder. The Company or any Guarantor may act in
any such capacity.
4. Indenture. This Note is one of a duly authorized issue of the series of
Securities of the Company designated as its 7 1/4% Senior Subordinated Notes due
2013 (the "Notes"), issued under a Subordinated Indenture, dated as of April 19,
2005 ("Original Indenture"), among the Company, the Guarantors and the Trustee,
as supplemented and amended by the First
A - 3
Supplemental Indenture (herein so called) thereto of even date therewith (the
Original Indenture, as so supplemented and amended, being called herein the
"Indenture"). Capitalized terms herein are used as defined in the Indenture
unless otherwise indicated. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. The Notes are unsecured senior
subordinated obligations of the Company limited to $220,000,000 aggregate
principal amount in the case of Notes issued on the Initial Issuance Date. The
Company may, subject to Sections 2.05 and 4.09 of the First Supplemental
Indenture, issue Additional Notes under the Indenture after the Initial Issuance
Date in either a limited or an unlimited aggregate principal amount. Any
Additional Notes so issued and the Initial Notes shall be treated as a single
class under the Indenture.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Notes prior to May 1, 2009.
Thereafter, the Company shall have the option to redeem the Notes, in whole or
in part, upon prior notice as set forth in Paragraph 8, at the Redemption Prices
(expressed as percentages of principal amount) set forth below, plus accrued and
unpaid interest, if any, to the applicable Redemption Date (subject to the right
of Holders of record on the relevant record date to receive interest due on an
Interest Payment Date that is on or prior to the Redemption Date), if redeemed
during the twelve-month period beginning on May 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2009.................................................................... 103.6250%
2010.................................................................... 101.8125%
2011 and thereafter..................................................... 100.0000%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph
5, at any time on or prior to May 1, 2008, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes (including
any Additional Notes) issued under the Indenture at a Redemption Price of
107.25% of the principal amount thereof, plus accrued and unpaid interest, if
any, thereon to the Redemption Date (subject to the right of Holders of record
on the relevant record date to receive interest due on an Interest Payment Date
that is on or prior to the Redemption Date), with the net cash proceeds of one
or more Equity Offerings by the Company, provided that (i) at least 65% of the
aggregate principal amount of Notes (including any Additional Notes) issued
under the Indenture remains outstanding immediately after the occurrence of each
such redemption and (ii) each such redemption occurs within 120 days of the date
of the closing of each such Equity Offering.
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Notes or to repurchase the Notes at the option of the Holders.
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7. Repurchase at Option of Holder.
(a) Within 30 days following the occurrence of a Change of Control, the
Company shall make an offer (a "Change of Control Offer") to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Notes at a purchase price equal to 101% of the aggregate principal amount of
Notes repurchased, plus accrued and unpaid interest, if any, to the date of
settlement (the "Change of Control Settlement Date"), subject to the right of
Holders of record on the relevant record date to receive interest due on an
Interest Payment Date that is on or prior to the Change of Control Settlement
Date. Within 30 days following a Change of Control, the Company shall mail a
notice of the Change of Control Offer to each Holder and the Trustee describing
the transaction that constitutes the Change of Control and setting forth the
procedures governing the Change of Control Offer as required by Section 4.15 of
the First Supplemental Indenture.
(b) On the 361st day after an Asset Sale, if the aggregate amount of
Excess Proceeds then exceeds $20.0 million, the Company shall commence an offer
to all Holders of Notes (an "Asset Sale Offer") pursuant to Section 3.04 of the
First Supplemental Indenture, and to all holders of any Pari Passu Indebtedness
then outstanding, to purchase the maximum principal amount of Notes and such
Pari Passu Indebtedness that may be purchased out of the Excess Proceeds, at an
offer price in cash in an amount equal to 100% of the principal amount of the
Notes plus accrued and unpaid interest, if any, thereon to the date of
settlement, subject to the right of Holders of record on the relevant record
date to receive interest due on an Interest Payment Date that is on or prior to
the Change of Control Settlement Date, in accordance with the procedures set
forth in the Indenture. If any Excess Proceeds remain after consummation of an
Asset Sale Offer, the Company may use such remaining Excess Proceeds for any
purpose not otherwise prohibited by the Indenture. If the aggregate principal
amount of Notes surrendered by Holders thereof and Pari Passu Indebtedness
surrendered by holders or lenders, collectively, exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and Pari Passu Indebtedness to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Trustee so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased) on the basis of the aggregate
principal amount of tendered Notes and Pari Passu Indebtedness. Holders of Notes
that are the subject of an offer to purchase will receive an Asset Sale Offer
from the Company prior to any related purchase date and may elect to have such
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days (except as otherwise provided in the Indenture if
the notice is issued in connection with a Covenant Defeasance, Legal Defeasance
or Discharge) before the Redemption Date to each Holder whose Notes are to be
redeemed at its registered address. Notes in denominations larger than $1,000
may be redeemed in part but only in whole multiples of $1,000, unless all of the
Notes held by a Holder are to be redeemed. On and after the Redemption Date
interest ceases to accrue on Notes or portions thereof called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Company or the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents, and may
require a Holder to pay any taxes due on transfer or exchange. The
A - 5
Company need not exchange or register the transfer of any Note or portion of a
Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Notes for a period of 15 days before the day of the mailing of a notice of
redemption of Notes selected for redemption.
10. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
pursuant to Article 5 of the First Supplemental Indenture, to make any change
that would provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture of any
such Holder, provided that any change to conform the Indenture to the Company's
prospectus relating to the offering of the notes shall not be deemed to
adversely affect the legal rights under the Indenture of any Holder, to secure
the Notes or the Subsidiary Guarantees pursuant to Section 4.12 of the First
Supplemental Indenture or otherwise, to provide for the issuance of Additional
Notes in accordance with the limitations set forth in the Indenture, to add any
additional Guarantor with respect to the Notes or to evidence the release of any
Guarantor from its Subsidiary Guarantee, in each case as provided in the
Indenture, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, to
evidence or provide for the acceptance of appointment under the Indenture of a
successor Trustee, to add to, change or eliminate any provisions of the
Indenture in respect of one or more other series of Securities or to establish
the forms or terms of Securities of any other series as permitted by the
Indenture.
12. Defaults and Remedies. Events of Default with respect to the Notes
include: (i) default for 30 days in the payment when due of interest on the
Notes; (ii) default in payment when due of the principal of or premium, if any,
on the Notes when due at Stated Maturity, upon optional redemption, upon
required repurchase, upon declaration or otherwise; (iii) failure by the Company
to comply with Section 4.07, 4.09, 4.10, 4.15 or 5.01 of the First Supplemental
Indenture; (iv) failure by the Company for 60 days after notice to comply with
any of its other agreements in the Indenture or the Notes; (v) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists or is created after the Initial Issuance
Date, if such default (a) is caused by a failure to pay principal of, or premium
or interest, if any, on such Indebtedness prior to the expiration of any grace
period provided in such Indebtedness (a "Payment Default") or (b) results in the
acceleration of such Indebtedness prior to its Stated Maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default
A - 6
or the maturity of which has been so accelerated, aggregates in excess of $15.0
million; (vi) failure by the Company or any of its Subsidiaries to pay final
judgments aggregating in excess of $15.0 million, which judgments are not paid,
discharged or stayed (including a stay pending appeal) for a period of 60 days
after the date of such final judgment (or, if later, the date when payment is
due pursuant to such judgment); (vii) except as permitted by the Indenture, any
Subsidiary Guarantee is held in any judicial proceeding to be unenforceable or
invalid or ceases for any reason to be in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms
its obligations under its Subsidiary Guarantee; and (viii) certain events of
bankruptcy, insolvency or reorganization with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary as specified in Section 501(8) or 501(9) of
the Original Indenture. If any Event of Default occurs and is continuing, the
Trustee, by notice to the Company, or the Holders of at least 25% in principal
amount of the then outstanding Notes, by notice to the Company and the Trustee,
may declare all the Notes to be due and payable immediately. Notwithstanding the
preceding, in the case of an Event of Default arising from certain events of
bankruptcy, insolvency or reorganization with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary described in Section 501(8) or 501(9) of the
Original Indenture, all outstanding Notes will become due and payable without
further action or notice. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power conferred on it. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default with respect to the Notes (except a Default or Event of Default relating
to the payment of principal, premium, if any, or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in principal
amount of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any past Default or Event of Default with
respect to the Notes and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of the principal of or
premium, if any, or interest on the Notes. The Company is required to deliver to
the Trustee annually a statement regarding compliance with the Indenture, and,
so long as any Notes are outstanding, the Company is required upon becoming
aware of any Default or Event of Default with respect to the Notes, to deliver
to the Trustee a statement specifying such Default or Event of Default.
13. Defeasance and Discharge. The Notes are subject to defeasance and
discharge upon the terms and conditions specified in the Indenture.
14. Subordination. The indebtedness evidenced by this Note is, to the
extent provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Debt of the Company, and this Note is
issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Note, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and (c) appoints the Trustee his attorney-in-fact for any and all
such purposes.
15. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, member, partner or stockholder or other owner
of Capital Stock of the Company or any Guarantor, as such, shall have any
liability for any obligations of the Company
A - 7
or any Guarantor under the Notes, the Subsidiary Guarantees or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
16. Authentication. This Note shall not be valid until authenticated by
the manual signature of an authorized signatory of the Trustee or an
authenticating agent.
17. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
and corresponding ISIN numbers in notices of redemption as a convenience to
Holders. No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.
19. Governing Law. THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
20. Successor Corporation. In the event a successor assumes all the
obligations of the Company under the Notes and the Indenture, pursuant to the
terms thereof, the Company will be released from all such obligations.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Xxxxxxx Petroleum Corporation
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Chief Financial Officer
A - 8
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
________________________________________________________________________________
Print or type assignee's name, address and zip code)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint __________________ agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.
Date:___________________________ Your Signature: ___________________________
Sign exactly as your name appears on the
other side of this Note.
A - 9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10 or 4.15 of the First Supplemental Indenture, check the box
below:
[ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the First Supplemental
Indenture, state the amount (in minimum denomination of $1,000 or integral
multiples thereof) you elected to have purchased: $____________
Date: ____________ Your _______________________________________________
Signature:
(Sign exactly as your name appears on the other
side of this Note)
Soc. Sec. or Tax Identification No.: ______________________
Signature Guarantee: ____________________________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A - 10
[TO BE ATTACHED TO GLOBAL SECURITY]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
Amount of decrease Amount of increase Principal Amount of
in Principal Amount in Principal Amount this Global Security Signature of
of this Global of this Global following such authorized officer
Date Security Security decrease or increase of Trustee
---------- ------------------- ------------------- -------------------- ------------------
A - 11
EXHIBIT B
--------------------------------------------------------------------------------
XXXXXXX PETROLEUM CORPORATION
And
the Guarantors named herein
----------------------------------------------
-------------
7 1/4% SENIOR SUBORDINATED NOTES DUE 2013
----------------------------------------------
------------------------
FORM OF SUPPLEMENTAL INDENTURE
AND AMENDMENT -- SUBSIDIARY GUARANTEE
DATED AS OF ____________ __, ____
--------------------------
X.X. XXXXXX TRUST COMPANY, NATIONAL ASSOCIATION,
Trustee
--------------------------
--------------------------------------------------------------------------------
B - 1
This SUPPLEMENTAL INDENTURE, dated as of ___________ __, ____ is among
Xxxxxxx Petroleum Corporation, a Delaware corporation (the "Company"), each of
the parties identified under the caption "Guarantors" on the signature page
hereto (the "Guarantors") and X.X. Xxxxxx Trust Company, National Association, a
national banking association, as Trustee.
RECITALS
WHEREAS, the Company, the initial Guarantors and the Trustee entered into
a Subordinated Indenture, dated as of April 19, 2005 (the "Original Indenture"),
as supplemented and amended by the First Supplemental Indenture (herein so
called) thereto of even date therewith (the Original Indenture as so
supplemented and amended being called herein the "Indenture"), pursuant to which
the Company has issued $_____________ in principal amount of 7 1/4% Senior
Subordinated Notes due 2013 (the "Notes"); and
WHEREAS, Section 901(g) of the Original Indenture provides that the
Company, the Guarantors and the Trustee may amend or supplement the Indenture in
order to comply with Section 4.13 or 10.03 of the First Supplemental Indenture,
without the consent of the Holders of the Notes; and
WHEREAS, all acts and things prescribed by the Indenture, by law and by
the Certificate of Incorporation and the Bylaws (or comparable constituent
documents) of the Company, of the Guarantors and of the Trustee necessary to
make this Supplemental Indenture a valid instrument legally binding on the
Company, the Guarantors and the Trustee, in accordance with its terms, have been
duly done and performed;
NOW, THEREFORE, to comply with the provisions of the Indenture and in
consideration of the above premises, the Company, the Guarantors and the Trustee
covenant and agree for the equal and proportionate benefit of the respective
Holders of the Notes as follows:
ARTICLE 1
Section 1.01. This Supplemental Indenture is supplemental to the Indenture
and does and shall be deemed to form a part of, and shall be construed in
connection with and as part of, the Indenture for any and all purposes.
Section 1.02. This Supplemental Indenture shall become effective
immediately upon its execution and delivery by each of the Company, the
Guarantors and the Trustee.
ARTICLE 2
From this date, in accordance with Section 4.13 or 10.03 of the First
Supplemental Indenture and by executing this Supplemental Indenture, the
Guarantors whose signatures appear below are subject to the provisions of the
Indenture to the extent provided for in Article 10 thereof.
B - 2
ARTICLE 3
Section 3.01. Except as specifically modified herein, the Indenture and
the Notes are in all respects ratified and confirmed (mutatis mutandis) and
shall remain in full force and effect in accordance with their terms with all
capitalized terms used herein without definition having the same respective
meanings ascribed to them as in the Indenture.
Section 3.02. Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed, by the Trustee by reason of this Supplemental Indenture. This
Supplemental Indenture is executed and accepted by the Trustee subject to all
the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee with respect hereto.
Section 3.03. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 3.04. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of such
executed copies together shall represent the same agreement.
[NEXT PAGE IS SIGNATURE PAGE]
B - 3
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
XXXXXXX PETROLEUM CORPORATION
By __________________________________
Name:
Title:
GUARANTORS
[___________________________]
By __________________________________
Name:
Title:
X.X. XXXXXX TRUST COMPANY,
NATIONAL ASSOCIATION, as
Trustee
By __________________________________
Name:
Title:
B - 4
