EXHIBIT 4.4
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STONE ENERGY CORPORATION
8 1/4% Senior Subordinated Notes due 2011
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INDENTURE
Dated as of December 10, 2001
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JPMorgan Chase Bank,
Trustee
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ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01 Definitions...........................................................................1
SECTION 1.02 Other Definitions....................................................................23
SECTION 1.03 Incorporation by Reference of Trust Indenture Act....................................24
SECTION 1.04 Rules of Construction................................................................24
SECTION 1.05 Acts of Holders......................................................................25
SECTION 1.06 Separability Clause..................................................................26
SECTION 1.07 Independence of Covenants............................................................26
ARTICLE 2
The Securities
SECTION 2.01 Amount of Securities; Issuable in Series.............................................26
SECTION 2.02 Form and Dating......................................................................27
SECTION 2.03 Execution and Authentication.........................................................27
SECTION 2.04 Registrar and Paying Agent...........................................................28
SECTION 2.05 Paying Agent To Hold Money in Trust..................................................28
SECTION 2.06 Securityholder Lists.................................................................29
SECTION 2.07 Replacement Securities...............................................................29
SECTION 2.08 Outstanding Securities...............................................................29
SECTION 2.09 Temporary Securities.................................................................29
SECTION 2.10 Cancelation..........................................................................29
SECTION 2.11 Defaulted Interest...................................................................30
SECTION 2.12 CUSIP Numbers........................................................................30
ARTICLE 3
Redemption
SECTION 3.01 Notices to Trustee....................................................................30
SECTION 3.02 Selection of Securities To Be Redeemed................................................30
SECTION 3.03 Notice of Redemption..................................................................31
SECTION 3.04 Effect of Notice of Redemption........................................................31
SECTION 3.05 Deposit of Redemption Price...........................................................31
SECTION 3.06 Securities Redeemed in Part...........................................................32
ARTICLE 4
Covenants
SECTION 4.01 Payment of Securities.................................................................32
SECTION 4.02 SEC Reports...........................................................................32
SECTION 4.03 Limitation on Indebtedness............................................................32
SECTION 4.04 Limitation on Restricted Payments.....................................................33
SECTION 4.05 Limitation on Restrictions on Distributions from Restricted Subsidiaries..............35
SECTION 4.06 Limitation on Asset Sales.............................................................36
SECTION 4.07 Limitation on Transactions with Affiliates............................................39
SECTION 4.08 [Intentionally Omitted]...............................................................40
SECTION 4.09 Change of Control.....................................................................40
SECTION 4.10 Limitation on Liens...................................................................41
SECTION 4.11 Compliance Certificate................................................................41
SECTION 4.12 Further Instruments and Acts..........................................................42
SECTION 4.13 Future Subsidiary Guarantors..........................................................42
SECTION 4.14 Incurrence of Layered Indebtedness....................................................42
SECTION 4.15 Restricted and Unrestricted Subsidiaries..............................................42
SECTION 4.16 Suspension of Certain Covenants.......................................................43
ARTICLE 5
Successor Company
SECTION 5.01 When Company May Merge or Transfer Assets.............................................43
SECTION 5.02 When a Subsidiary Guarantor May Merge or Transfer Assets..............................44
ARTICLE 6
Defaults and Remedies
SECTION 6.01 Events of Default.....................................................................45
SECTION 6.02 Acceleration..........................................................................46
SECTION 6.03 Other Remedies........................................................................47
SECTION 6.04 Waiver of Past Defaults...............................................................47
SECTION 6.05 Control by Majority...................................................................47
SECTION 6.06 Limitation on Suits...................................................................47
SECTION 6.07 Rights of Holders To Receive Payment..................................................48
SECTION 6.08 Collection Suit by Trustee............................................................48
SECTION 6.09 Trustee May File Proofs of Claim......................................................48
SECTION 6.10 Priorities............................................................................48
SECTION 6.11 Undertaking for Costs.................................................................49
SECTION 6.12 Waiver of Stay or Extension Laws......................................................49
ARTICLE 7
Trustee
SECTION 7.01 Duties of Trustee.....................................................................49
SECTION 7.02 Rights of Trustee.....................................................................50
SECTION 7.03 Individual Rights of Trustee..........................................................51
SECTION 7.04 Trustee's Disclaimer..................................................................51
SECTION 7.05 Notice of Defaults....................................................................51
SECTION 7.06 Reports by Trustee to Holders.........................................................51
SECTION 7.07 Compensation and Indemnity............................................................52
SECTION 7.08 Replacement of Trustee................................................................52
SECTION 7.09 Successor Trustee by Merger...........................................................53
SECTION 7.10 Eligibility; Disqualification.........................................................53
SECTION 7.11 Preferential Collection of Claims Against Company.....................................54
ARTICLE 8
Discharge of
Indenture; Defeasance
SECTION 8.01 Discharge of Liability on Securities; Defeasance......................................54
SECTION 8.02 Conditions to Defeasance..............................................................55
SECTION 8.03 Application of Trust Money............................................................56
SECTION 8.04 Repayment to Company..................................................................56
SECTION 8.05 Indemnity for Government Obligations..................................................56
SECTION 8.06 Reinstatement.........................................................................56
ARTICLE 9
Amendments
SECTION 9.01 Without Consent of Holders............................................................57
SECTION 9.02 With Consent of Holders...............................................................57
SECTION 9.03 Compliance with Trust
Indenture Act...................................................59
SECTION 9.04 Revocation and Effect of Consents and Waivers.........................................59
SECTION 9.05 Notation on or Exchange of Securities.................................................59
SECTION 9.06 Trustee To Sign Amendments............................................................59
SECTION 9.07 Payment for Consent...................................................................59
ARTICLE 10
Subordination
SECTION 10.01 Agreement To Subordinate..............................................................60
SECTION 10.02 Liquidation, Dissolution, Bankruptcy..................................................60
SECTION 10.03 Default on Senior Indebtedness........................................................60
SECTION 10.04 Acceleration of Payment of Securities.................................................61
SECTION 10.05 When Distribution Must Be Paid Over...................................................61
SECTION 10.06 Subrogation...........................................................................61
SECTION 10.07 Relative Rights.......................................................................61
SECTION 10.08 Subordination May Not Be Impaired by Company..........................................62
SECTION 10.09 Rights of Trustee and Paying Agent....................................................62
SECTION 10.10 Distribution or Notice to Representative..............................................62
SECTION 10.11 Article 10 Not To Prevent Events of Default or Limit Right To Accelerate..............62
SECTION 10.12 Trust Moneys Not Subordinated.........................................................62
SECTION 10.13 Trustee Entitled To Rely..............................................................63
SECTION 10.14 Trustee To Effectuate Subordination...................................................63
SECTION 10.15 Trustee Not Fiduciary for Holders of Senior Indebtedness..............................63
SECTION 10.16 Reliance by Holders of Senior Indebtedness on Subordination Provisions................63
ARTICLE 11
Subsidiary Guaranties
SECTION 11.01 Guaranties............................................................................64
SECTION 11.02 Contribution..........................................................................65
SECTION 11.03 Successors and Assigns................................................................66
SECTION 11.04 No Waiver.............................................................................66
SECTION 11.05 Modification..........................................................................66
SECTION 11.06 Execution of Supplemental
Indenture for Future Subsidiary Guarantors..................66
ARTICLE 12
Subordination of Subsidiary Guaranties
SECTION 12.01 Agreement To Subordinate..............................................................66
SECTION 12.02 Liquidation, Dissolution, Bankruptcy..................................................67
SECTION 12.03 Default on Senior Indebtedness of Subsidiary Guarantor................................67
SECTION 12.04 Demand for Payment....................................................................68
SECTION 12.05 When Distribution Must Be Paid Over...................................................68
SECTION 12.06 Subrogation...........................................................................68
SECTION 12.07 Relative Rights.......................................................................68
SECTION 12.08 Subordination May Not Be Impaired by Company..........................................68
SECTION 12.09 Rights of Trustee and Paying Agent....................................................68
SECTION 12.10 Distribution or Notice to Representative..............................................69
SECTION 12.11 Article 12 Not To Prevent Defaults Under a Subsidiary Guaranty or Limit Right
To Demand Payment.....................................................................69
SECTION 12.12 Trust Moneys Not Subordinated.........................................................69
SECTION 12.13 Trustee Entitled To Rely..............................................................69
SECTION 12.14 Trustee To Effectuate Subordination...................................................70
SECTION 12.15 Trustee Not Fiduciary for Holders of Senior Indebtedness of Subsidiary
Guarantor.............................................................................70
SECTION 12.16 Reliance by Holders of Senior Indebtedness on Subordination Provisions................70
ARTICLE 13
Miscellaneous
SECTION 13.01 Trust
Indenture Act Controls..........................................................70
SECTION 13.02 Notices...............................................................................70
SECTION 13.03 Communication by Holders with Other Holders...........................................71
SECTION 13.04 Certificate and Opinion as to Conditions Precedent....................................72
SECTION 13.05 Statements Required in Certificate or Opinion.........................................72
SECTION 13.06 When Securities Disregarded...........................................................72
SECTION 13.07 Rules by Trustee, Paying Agent and Registrar..........................................72
SECTION 13.08 Legal Holidays........................................................................72
SECTION 13.09 Governing Law.........................................................................73
SECTION 13.10 No Recourse Against Others............................................................73
SECTION 13.11 Successors............................................................................73
SECTION 13.12 Multiple Originals....................................................................73
SECTION 13.13 Table of Contents; Headings...........................................................73
APPENDIX A Provisions Relating to Initial Securities and Exchange Securities
EXHIBIT 1 to
APPENDIX A Form of Initial Security
EXHIBIT A Form of Exchange Security
EXHIBIT B Form of Supplemental
Indenture
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1) ..........................................................................7.10
(a)(2) .............................................................................7.10
(a)(3) .............................................................................N.A.
(a)(4) .............................................................................N.A.
(b) ..........................................................................7.08; 7.10
(c) ................................................................................N.A.
311(a) .............................................................................7.11
(b). ...............................................................................7.11
(c) ................................................................................N.A.
312(a) .............................................................................2.06
(b) ...............................................................................13.03
(c) ...............................................................................13.03
313(a) .............................................................................7.06
(b)(1) .............................................................................N.A.
(b)(2) .............................................................................7.06
(c) ...............................................................................13.02
(d) ................................................................................7.06
314(a) ................................................................4.02; 4.11; 13.02
(b) ................................................................................N.A.
(c)(1) ............................................................................13.04
(c)(2) ............................................................................13.04
(c)(3) .............................................................................N.A.
(d) ................................................................................N.A.
(e) ...............................................................................13.05
(f) ................................................................................4.11
315(a) .............................................................................7.01
(b) .........................................................................7.05; 13.02
(c) ................................................................................7.01
(d) ................................................................................7.01
(e) ................................................................................6.11
316(a) (last sentence) ............................................................13.06
(a)(1)(A) ..........................................................................6.05
(a)(1)(B) ..........................................................................6.04
(a)(2) .............................................................................N.A.
(b) ................................................................................6.07
317(a)(1) ..........................................................................6.08
(a)(2) .............................................................................6.09
(b) ................................................................................2.05
(i)
318(a) ............................................................................13.01
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purposes, be deemed to be
part of this
Indenture.
(ii)
INDENTURE dated as of December 10, 2001,
between
STONE ENERGY CORPORATION, a Delaware
corporation (the "Company"), and JPMorgan Chase Bank,
as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's 8
1/4% Senior Subordinated Notes due 2011, to be issued, from time to time, in one
or more series as in this Indenture provided (the "Initial Securities") and, if
and when issued pursuant to a registered or private exchange for the Initial
Securities, the Company's 8 1/4% Senior Subordinated Notes due 2011 (the
"Exchange Securities" and, together with the Initial Securities, the
"Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01 Definitions.
"Additional Assets" means (i) any Property (other than cash,
Permitted Short-Term Investments or securities) used in the Oil and Gas Business
or any business ancillary thereto, (ii) Investments in any other Person engaged
in the Oil and Gas Business or any business ancillary thereto (including the
acquisition from third parties of Capital Stock of such Person) as a result of
which such other Person becomes a Restricted Subsidiary in compliance with
Section 4.15, (iii) the acquisition from third parties of Capital Stock of a
Restricted Subsidiary or (iv) Permitted Business Investments.
"Adjusted Consolidated Net Tangible Assets" means (without
duplication), as of the date of determination, the remainder of:
(i) the sum of (a) discounted future net revenues from proved
oil and gas reserves of the Company and its Restricted Subsidiaries
calculated in accordance with Commission guidelines before any state,
federal or foreign income taxes, as estimated by the Company and
confirmed by a reputable firm of independent petroleum engineers in a
reserve report prepared as of the end of the Company's most recently
completed fiscal year for which audited financial statements are
available, as increased by, as of the date of determination, the
estimated discounted future net revenues from (1) estimated proved oil
and gas reserves acquired since such year-end, which reserves were not
reflected in such year-end reserve report, and (2) estimated oil and
gas reserves attributable to upward revisions of estimates of proved
oil and gas reserves since such year-end due to exploration,
development or exploitation activities, in each case calculated in
accordance with Commission
guidelines (utilizing the prices utilized in such year-end reserve
report), and decreased by, as of the date of determination, the
estimated discounted future net revenues from (3) estimated proved oil
and gas reserves produced or disposed of since such year-end and (4)
estimated oil and gas reserves attributable to downward revisions of
estimates of proved oil and gas reserves since such year-end due to
changes in geological conditions or other factors which would, in
accordance with standard industry practice, cause such revisions, in
each case calculated in accordance with Commission guidelines
(utilizing the prices utilized in such year-end reserve report);
provided that, in the case of each of the determinations made pursuant
to clauses (1) -------- through (4), such increases and decreases shall
be as estimated by the Company's petroleum engineers, (b) the
capitalized costs that are attributable to oil and gas properties of
the Company and its Restricted Subsidiaries to which no proved oil and
gas reserves are attributable, based on the Company's books and records
as of a date no earlier than the date of the Company's 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 (1) the net book value on a
date no earlier than the date of the Company's latest annual or
quarterly financial statements and (2) the Fair Market Value, as
estimated by the Company, of other tangible assets (including, without
duplication, Investments in unconsolidated Restricted Subsidiaries) of
the Company and its Restricted Subsidiaries, as of the date no earlier
than the date of the Company's latest audited financial statements,
minus
(ii) 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) to
the extent included in (i)(a) above, the discounted future net
revenues, calculated in accordance with Commission guidelines
(utilizing the prices utilized in the Company's year-end reserve
report), attributable to reserves which 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
(determined, if applicable, using the schedules specified with respect
thereto) and (d) the discounted future net revenues, calculated in
accordance with Commission guidelines, attributable to reserves subject
to Dollar-Denominated Production Payments which, based on the estimates
of production and price assumptions included in determining the
discounted future net revenues specified in (i)(a) above, would be
necessary to fully satisfy the payment obligations of the Company and
its Restricted Subsidiaries with respect to Dollar-Denominated
Production Payments (determined, if applicable, using the schedules
specified with respect thereto). If the Company changes its method of
accounting from the full cost method to the successful efforts method
or a similar method of accounting, "Adjusted Consolidated Net Tangible
Assets" shall continue to be calculated as if the Company were still
using the full cost method of accounting.
"Affiliate" of any specified Person means any other Person (i)
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person or (ii)
which beneficially owns or holds directly or indirectly 10% or more of any class
of the Voting Stock of such specified Person or of any Subsidiary of such
specified Person. For the purposes of this definition, "control," when used with
respect to any specified Person, means the power to direct the management and
policies of such Person directly or indirectly, whether through the ownership of
Voting Stock, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Asset Sale" means, with respect to any Person, any transfer,
conveyance, sale, lease or other disposition (collectively, "dispositions," and
including dispositions pursuant to any consolidation or merger) by such Person
in any single transaction or series of transactions of (i) shares of Capital
Stock or other ownership interests of another Person (including Capital Stock
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of Restricted Subsidiaries and Unrestricted Subsidiaries) or (ii) any other
Property of such Person; provided, however, that the term "Asset Sale" shall not
include: (a) the disposition of Permitted Short-Term Investments, inventory,
accounts receivable, surplus or obsolete equipment or other Property (excluding
the disposition of oil and gas in place and other interests in real property
unless made in connection with a Permitted Business Investment) in the ordinary
course of business; (b) the abandonment, assignment, lease, sublease or farmout
of 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 that is customary in the Oil and Gas
Business; (c) the disposition of Property received in settlement of debts owing
to such Person as a result of foreclosure, perfection or enforcement of any Lien
or debt, which debts were owing to such Person in the ordinary course of its
business; (d) any disposition that constitutes a Restricted Payment made in
compliance with Section 4.04; (e) when used with respect to the Company, a
Restricted Subsidiary or a Subsidiary Guarantor, any disposition of all or
substantially all of the Property of the Company such Restricted Subsidiary or
such Subsidiary Guarantor permitted pursuant to Article 5; (f) the disposition
of any Property by such Person to the Company or a Wholly Owned Subsidiary; (g)
the disposition of any asset with a Fair Market Value of less than $2,000,000;
or (h) any Production Payments and Reserve Sales, provided that any such
Production Payments and Reserve Sales, other than incentive compensation
programs on terms that are reasonably customary in the Oil and Gas Business for
geologists, geophysicists and other providers of technical services to the
Company or a Restricted Subsidiary, shall have been created, Incurred, issued,
assumed or Guaranteed in connection with the financing of, and within 60 days
after the acquisition of, the Property that is subject thereto.
"Average Life" means, with respect to any Indebtedness, at any
date of determination, the quotient obtained by dividing (i) the sum of the
products of (a) the number of years (and any portion thereof) from the date of
determination to the date or dates of each successive scheduled principal
payment (including any sinking fund or mandatory redemption payment
requirements) of such Indebtedness multiplied by (b) the amount of each such
principal payment by (ii) the sum of all such principal payments.
"Bank Credit Facilities" means, with respect to any Person,
one or more debt facilities or commercial paper facilities with banks or other
lenders (including pursuant to the Third Amended and Restated Credit Agreement,
dated as of July 31, 1997, among the Company, Bank of America, N.A., as agent,
and the lenders referred to therein) 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 such lenders
against such receivables) or trade letters of credit, together with any full or
partial extensions, revisions, restatements, refinancings or replacements
thereof by a lender or syndicate of lenders; provided, however, that any
Indebtedness that otherwise would come within this definition shall not
constitute Indebtedness under Bank Credit Facilities to the extent that the
Company shall have determined at the time of Incurrence that such Indebtedness
was Incurred pursuant to a clause of the definition of Permitted Indebtedness
other than clause (ii) of such definition.
"Basin Merger" means the transactions contemplated by the
Agreement and Plan of Merger, dated as of October 28, 2000, among the Company,
Partner Acquisition Corp. and Basin Exploration, Inc.
3
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means any obligation which is
required to be classified and accounted for as a capital lease obligation in
accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP, and the Stated Maturity thereof shall be the date of the
last payment date of rent or any other amount due in respect of such obligation.
"Capital Stock" in any Person means any and all shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person and any rights (other than debt securities
convertible into an equity interest), warrants or options to subscribe for or to
acquire an equity interest in such Person; provided, however, that "Capital
Stock" shall not include Redeemable Stock.
"Change of Control" means the occurrence of any of the
following events:
(i) any "person" or "group" (within the meaning of Sections
13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to
either of the foregoing, including any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act), other than one or more
Permitted Holders, becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all shares that any such
Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time) of more than 50 percent
of the total voting power of all classes of the Voting Stock of the
Company or currently exercisable warrants or options to acquire such
Voting Stock;
(ii) the sale, lease, conveyance or transfer of all or
substantially all the assets of the Company and the Restricted
Subsidiaries taken as a whole (other than to any Wholly Owned
Subsidiary) shall have occurred;
(iii) the shareholders of the Company shall have approved any
plan of liquidation or dissolution of the Company;
(iv) the Company consolidates with or merges into another
Person (other than one or more Permitted Holders) or any Person (other
than one or more Permitted Holders) consolidates with or merges into
the Company in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is reclassified into or
exchanged for cash, securities or other property, other than any such
transaction where (a) the outstanding Voting Stock of the Company is
reclassified into or exchanged for Voting Stock of the surviving
corporation that is Capital Stock and (b) either (x) the holders of the
Voting Stock of the Company immediately prior to such transaction own,
directly or indirectly, not less than a majority of the Voting Stock of
the surviving corporation immediately after such transaction in
substantially the same proportion as before the transaction or (y)
within 25 days after the closing of any such transaction both
4
Xxxxx'x and S&P shall have expressly affirmed credit ratings for the
Securities (after giving effect to such transaction) that are as high
or higher than the highest such ratings for the Securities given by
such services, respectively, at any time during the 90 days immediately
prior to the public announcement of such transaction and such expressly
affirmed ratings are at least "Ba3" from Xxxxx'x and "BB" from S&P; or
(v) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
(together with any new directors whose election or appointment by such
Board or whose nomination for election by the shareholders of the
Company was approved by a vote of a majority of the directors then
still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture
until a successor replaces it pursuant to the applicable provisions hereof and,
thereafter, means the successor and, for purposes of any provision contained
herein and required by the TIA, each other obligor on the indenture securities.
"Consolidated Interest Coverage Ratio" means, as of the date
of the transaction giving rise to the need to calculate the Consolidated
Interest Coverage Ratio (the "Transaction Date"), the ratio of (i) the aggregate
amount of EBITDA of the Company and its consolidated Restricted Subsidiaries for
the four full fiscal quarters immediately prior to the Transaction Date for
which financial statements are available to (ii) the aggregate Consolidated
Interest Expense of the Company and its Restricted Subsidiaries that is
anticipated to accrue during a period consisting of the fiscal quarter in which
the Transaction Date occurs and the three fiscal quarters immediately subsequent
thereto (based upon the pro forma amount and maturity of, and interest payments
in respect of, Indebtedness of the Company and its Restricted Subsidiaries
expected by the Company to be outstanding on the Transaction Date), assuming for
the purposes of this measurement the continuation of market interest rates
prevailing on the Transaction Date and base interest rates in respect of
floating interest rate obligations equal to the base interest rates on such
obligations in effect as of the Transaction Date; provided, that if the Company
or any of its Restricted Subsidiaries is a party to any Interest Rate Protection
Agreement which would have the effect of changing the interest rate on any
Indebtedness of the Company or any of its Restricted Subsidiaries for such four
quarter period (or a portion thereof), the resulting rate shall be used for such
four quarter period or portion thereof; provided further that any Consolidated
Interest Expense with respect to Indebtedness Incurred or retired by the Company
or any of its Restricted Subsidiaries during the fiscal quarter in which the
Transaction Date occurs shall be calculated as if such Indebtedness was so
Incurred or retired on the first day of the fiscal quarter in which the
Transaction Date occurs. In addition, if since the beginning of the four full
fiscal quarter period preceding the Transaction Date, (a) the Company or any of
its Restricted Subsidiaries shall have engaged in any Asset Sale, EBITDA for
such period shall be reduced by an amount equal to the EBITDA (if positive), or
increased by an amount equal to the EBITDA (if negative), directly attributable
to the assets which are the subject of such Asset Sale for such period
calculated on a pro forma basis as if such Asset Sale and any related retirement
of
5
Indebtedness had occurred on the first day of such period or (b) the Company
or any of its Restricted Subsidiaries shall have acquired any material assets,
EBITDA shall be calculated on a pro forma basis as if such asset acquisitions
had occurred on the first day of such four fiscal quarter period.
"Consolidated Interest Expense" means, with respect to any
Person for any period, without duplication, (i) the sum of (a) the aggregate
amount of cash and noncash interest expense (including capitalized interest) of
such Person and its Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP in respect of Indebtedness (including
(1) any amortization of debt discount, (2) net costs associated with Interest
Rate Protection Agreements (including any amortization of discounts), (3) the
interest portion of any deferred payment obligation, (4) all accrued interest
and (5) all commissions, discounts, commitment fees, origination fees and other
fees and charges owed with respect to the Bank Credit Facilities and other
Indebtedness) paid, accrued or scheduled to be paid or accrued during such
period; (b) Redeemable Stock dividends of such Person (and of its Restricted
Subsidiaries if paid to a Person other than such Person or its Restricted
Subsidiaries) and Preferred Stock dividends of such Person's Restricted
Subsidiaries if paid to a Person other than such Person or its other Restricted
Subsidiaries; (c) the portion of any rental obligation of such Person or its
Restricted Subsidiaries in respect of any Capital Lease Obligation allocable to
interest expense in accordance with GAAP; (d) the portion of any rental
obligation of such Person or its Restricted Subsidiaries in respect of any Sale
and Leaseback Transaction that is Indebtedness allocable to interest expense
(determined as if such obligation were treated as a Capital Lease Obligation);
and (e) to the extent any Indebtedness of any other Person (other than
Restricted Subsidiaries) is Guaranteed by such Person or any of its Restricted
Subsidiaries, the aggregate amount of interest paid, accrued or scheduled to be
paid or accrued by such other Person during such period attributable to any such
Indebtedness; less (ii) to the extent included in (i) above, amortization or
write-off of deferred financing costs of such Person and its Restricted
Subsidiaries during such period; in the case of both (i) and (ii) above, after
elimination of intercompany accounts among such Person and its Restricted
Subsidiaries and as determined in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period,
the aggregate net income (or net loss, as the case may be) of such Person and
its Restricted Subsidiaries for such period on a consolidated basis, determined
in accordance with GAAP; provided that there shall be excluded therefrom,
without duplication: (i) items classified as extraordinary gains or losses net
of taxes (less all fees and expenses relating thereto); (ii) any gain or loss
net of taxes (less all fees and expenses relating thereto) realized on the sale
or other disposition of Property, including the Capital Stock of any other
Person (but in no event shall this clause (ii) apply to any gains or losses on
the sale in the ordinary course of business of oil, gas or other hydrocarbons
produced or manufactured); (iii) the net income of any Restricted Subsidiary of
such specified Person to the extent the transfer to that Person of that income
is restricted by contract or otherwise, except for any cash dividends or cash
distributions actually paid by such Restricted Subsidiary to such Person during
such period; (iv) the net income (or loss) of any other Person in which such
specified Person or any of its Restricted Subsidiaries has an interest (which
interest does not cause the net income of such other Person to be consolidated
with the net income of such specified Person in accordance with GAAP or is an
interest in a consolidated Unrestricted Subsidiary), except to the extent of the
amount of cash dividends or other cash distributions
6
actually paid to such Person or its consolidated Restricted Subsidiaries by such
other Person during such period; (v) for the purposes of Section 4.04 only, the
net income of any Person acquired by such specified Person or any of its
Restricted Subsidiaries in a pooling-of-interests transaction for any period
prior to the date of such acquisition; (vi) any gain or loss, net of taxes,
realized on the termination of any employee pension benefit plan; (vii) any
adjustments of a deferred tax liability or asset pursuant to Statement of
Financial Accounting Standards No. 109 which result from changes in enacted tax
laws or rates; (viii) the cumulative effect of a change in accounting
principles; (ix) any write-downs of noncurrent assets, provided that any ceiling
limitation write-downs under Commission guidelines shall be treated as
capitalized costs, as if such write-downs had not occurred; (x) any noncash
compensation expense realized for grants of performance shares, stock options or
stock awards to officers, directors and employees of such specified Person or
any of its Restricted Subsidiaries; (xi) any non-cash gains or losses related to
Exchange Rate Contracts and Oil and Gas Hedging Contracts, net of taxes; and
(xii) any expenses relating to the Basin Merger, net of taxes.
"Consolidated Net Worth" of any Person means the stockholders'
equity of such Person and its Restricted Subsidiaries, as determined on a
consolidated basis in accordance with GAAP, less (to the extent included in
stockholders' equity) amounts attributable to Redeemable Stock of such Person or
its Restricted Subsidiaries.
"Default" means any event, act or condition the occurrence of
which is, or after notice or the passage of time or both would be, an Event of
Default.
"Designated Senior Indebtedness" means (i) the Bank Credit
Facilities and (ii) any other Senior Indebtedness of the Company which has, at
the time of determination, an aggregate principal amount outstanding of at least
$10,000,000 that is specifically designated in the instrument evidencing such
Senior Indebtedness and is designated in a notice delivered by the Company to
the holders or a Representative of the holders of such Senior Indebtedness and
the Trustee as "Designated Senior Indebtedness" of the Company.
"Dollar-Denominated Production Payments" means production
payment obligations recorded as liabilities in accordance with GAAP, together
with all undertakings and obligations in connection therewith.
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period, plus (i) the sum of, to
the extent reflected in the consolidated income statement of such Person and its
Restricted Subsidiaries for such period from which Consolidated Net Income is
determined and deducted in the determination of such Consolidated Net Income,
without duplication: (a) income tax expense (but excluding income tax expense
relating to sales or other dispositions of Property, including the Capital Stock
of any other Person, the gains from which are excluded in the determination of
such Consolidated Net Income), (b) Consolidated Interest Expense, (c)
depreciation and depletion expense, (d) amortization expense, (e) exploration
expense (if applicable) and (f) any other noncash charges including unrealized
foreign exchange (excluding, however, any such other noncash charge which
requires an accrual of or reserve for cash charges for any future period) less
(ii) the sum of, to the extent reflected in the consolidated income statement of
such Person and its Restricted Subsidiaries for such period from which
Consolidated Net Income is determined and added in
7
the determination of such Consolidated Net Income, without duplication (a)
income tax recovery (excluding, however, income tax recovery relating to sales
or other dispositions of Property, including the Capital Stock of any other
Person, the losses from which are excluded in the determination of such
Consolidated Net Income) and (b) unrealized foreign exchange gains.
"Equity Offering" means a bona fide underwritten sale to the
public of common stock of the Company pursuant to a registration statement
(other than a Form S-8 or any other form relating to securities issuable under
any employee benefit plan of the Company) that is declared effective by the
Commission following the Issue Date.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchanged Properties" means properties or assets used or
useful in the Oil and Gas Business received by the Company or a Restricted
Subsidiary in trade or as a portion of the total consideration for other such
properties or assets.
"Exchange Rate Contract" means, with respect to any Person,
any currency swap agreements, forward exchange rate agreements, foreign currency
futures or options, exchange rate collar agreements, exchange rate insurance and
other agreements or arrangements, or any combination thereof, entered into by
such Person in the ordinary course of its business for the purpose of limiting
or managing exchange rate risks to which such Person is subject.
"Fair Market Value" means, with respect to any assets to be
transferred pursuant to any Asset Sale or Sale and Leaseback Transaction or any
noncash consideration or property transferred or received by any Person, the
fair market value of such consideration or other property as determined by (i)
any officer of the Company if such fair market value is less than $25,000,000
and (ii) the Board of Directors as evidenced by a certified resolution delivered
to the Trustee if such fair market value is equal to or in excess of
$25,000,000.
"Fall Away Event" means the Securities shall have achieved
Investment Grade status and the Company delivers to the Trustee an Officers'
Certificate certifying that the foregoing condition has been satisfied.
"GAAP" means United States generally accepted accounting
principles as in effect on the date of this Indenture, unless stated otherwise.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including any Lien on the assets of
such Person securing obligations to pay Indebtedness of the primary obligor and
any obligation of such Person (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase or payment of) any security for the payment of
such Indebtedness, (ii) to purchase Property, securities or services for the
purpose of assuring the holder of such Indebtedness of the payment of such
Indebtedness or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness (and "Guaranteed",
"Guaranteeing" and "Guarantor" shall have meanings correlative to the
foregoing); provided, however, that a Guarantee by any Person shall
8
not include (a) endorsements by such Person for collection or deposit, in
either case, in the ordinary course of business or (b) a contractual commitment
by one Person to invest in another Person for so long as such Investment is
reasonably expected to constitute a Permitted Investment under clause (ii) of
the definition of Permitted Investments.
"Holder" means the Person in whose name a Security is
registered on the Securities Register.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume, Guarantee or become liable in respect of such Indebtedness
or other obligation or the recording, as required pursuant to GAAP or otherwise,
of any such Indebtedness or obligation on the balance sheet of such Person (and
"Incurrence", "Incurred", "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing); provided, however, that a change in GAAP that
results in an obligation of such Person that exists at such time, and is not
theretofore classified as Indebtedness, becoming Indebtedness shall not be
deemed an Incurrence of such Indebtedness. For purposes of this definition,
Indebtedness of the Company or a Restricted Subsidiary held by a Restricted
Subsidiary or Indebtedness of a Restricted Subsidiary held by another Restricted
Subsidiary shall be deemed to be Incurred by the Company or such first
Restricted Subsidiary in the event such other Restricted Subsidiary ceases to be
a Restricted Subsidiary or in the event such Indebtedness is transferred to a
Person other than the Company or a Restricted Subsidiary. For purposes of this
definition, any non-interest bearing or other discount Indebtedness shall be
deemed to have been Incurred (in an amount equal to its aggregate principal
amount at its Stated Maturity) only on the date of original issue thereof.
"Indebtedness" means at any time (without duplication), with
respect to any Person, whether recourse is to all or a portion of the assets of
such Person, and whether or not contingent, (i) any obligation of such Person
for borrowed money, (ii) any obligation of such Person evidenced by bonds,
debentures, notes, Guarantees or other similar instruments, including any such
obligations Incurred in connection with the acquisition of Property, assets or
businesses, (iii) any reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person, (iv) any obligation of such Person issued or assumed as
the deferred purchase price of Property or services (other than Trade Accounts
Payable), (v) any Capital Lease Obligation of such Person, (vi) the maximum
fixed redemption or repurchase price of Redeemable Stock of such Person at the
time of determination, (vii) any payment obligation of such Person under
Exchange Rate Contracts, Interest Rate Protection Agreements, Oil and Gas
Hedging Contracts or under any similar agreements or instruments, (viii) any
obligation to pay rent or other payment amounts of such Person with respect to
any Sale and Leaseback Transaction to which such Person is a party, (ix) with
respect to a Restricted Subsidiary, for purposes of the covenants described
under Section 4.03 and Section 4.13, the maximum fixed redemption or repurchase
price of Preferred Stock issued by such Restricted Subsidiary, and (x) any
obligation of the type referred to in clauses (i) through (ix) of this paragraph
of another Person and all dividends of another Person the payment of which, in
either case, such Person has Guaranteed or is responsible or liable, directly or
indirectly, as obligor, Guarantor or otherwise; provided, however, that
Indebtedness shall not include Production Payments and Reserve Sales. For
purposes of this definition, the maximum fixed repurchase price of any
Redeemable Stock or Preferred Stock that does not have
9
a fixed redemption or repurchase price shall be calculated in accordance with
the terms of such Redeemable Stock or Preferred Stock as if such Redeemable
Stock or Preferred Stock were repurchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture; provided,
however, that if such Redeemable Stock or Preferred Stock is not then permitted
to be repurchased, the repurchase price shall be the liquidation value of such
Redeemable Stock or Preferred Stock. The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability at such date in respect
of any contingent obligations described above.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Interest Rate Protection Agreement" means, with respect to
any Person, any interest rate swap agreement, forward rate agreement, interest
rate cap or collar agreement or other financial agreement or arrangement entered
into by such Person in the ordinary course of its business for the purpose of
limiting or managing interest rate risks to which such Person is subject.
"Investment" means, with respect to any Person (i) any amount
paid by such Person, directly or indirectly, to any other Person for Capital
Stock or other Property of, or as a capital contribution to, any other Person or
(ii) any direct or indirect loan or advance to any other Person (other than
accounts receivable of such Person arising in the ordinary course of business);
provided, however, that Investments shall not include (a) in the case of clause
(i) as used in the definition of "Restricted Payments" only, any such amount
paid through the issuance of Capital Stock of the Company and (b) in the case of
clause (i) or (ii), extensions of trade credit on commercially reasonable terms
in accordance with normal trade practices and any increase in the equity
ownership in any Person resulting from retained earnings of such Person.
"Investment Grade" means BBB- or higher by S&P (or its
equivalent rating under any successor rating categories of S&P), Baa3 or higher
by Xxxxx'x (or its equivalent rating under any successor rating categories of
Xxxxx'x) and the equivalent rating in respect of the rating categories of any
Rating Agencies substituted for S&P or Xxxxx'x.
"Issue Date" means the date on which the Original Securities
first were issued under this Indenture.
"Lien" means, with respect to any Property, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien (statutory or other), charge, easement, encumbrance, preference,
priority or other security or similar agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such Property (including any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing). For purposes of Section 4.10, a
Capital Lease Obligation shall be deemed to be secured by a Lien on the property
being leased.
"Liquid Securities" means securities (i) of an issuer that is
not an Affiliate of the Company, (ii) that are publicly traded on the
New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market and
(iii) as to which the Company is not subject to any restrictions on sale or
transfer (including any volume restrictions under Rule 144 under the
10
Securities Act or any other restrictions imposed by the Securities Act) or as to
which a registration statement under the Securities Act covering the resale
thereof is in effect for as long as the securities are held; provided that
securities meeting the requirements of clauses (i), (ii) and (iii) above shall
be treated as Liquid Securities from the date of receipt thereof until and only
until the earlier of (x) the date on which such securities are sold or exchanged
for cash or Permitted Short-Term Investments and (y) 180 days following the date
of receipt of such securities. If such securities are not sold or exchanged for
cash or Permitted Short-Term Investments within 180 days of receipt thereof, for
purposes of determining whether the transaction pursuant to which the Company or
a Restricted Subsidiary received the securities was in compliance with Section
4.06, such securities shall be deemed not to have been Liquid Securities at any
time.
"Make Whole Amount" means the greater of (1) 104.125% (which
percentage is the optional redemption price that would be payable on December
15, 2006, if the Securities were redeemed on such date) of principal amount and
(2) the sum of the present values of the remaining scheduled payments of
principal and interest (at the rate in effect on the date of calculation of the
redemption price) on the Securities (exclusive of interest accrued to the date
of redemption) discounted to the date of redemption on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the applicable
Treasury Rate plus 50 basis points.
"Xxxxx'x" means Xxxxx'x Investors Service, Inc. and its
successors.
"Net Available Cash" from an Asset Sale means cash proceeds
received therefrom (including (i) any cash proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, and (ii) the Fair Market Value of Liquid
Securities and Permitted Short-Term Investments, and excluding (a) any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to the Property that is the subject
of such Asset Sale and (b) except to the extent subsequently converted to cash,
Liquid Securities or Permitted Short-Term Investments within 240 days after such
Asset Sale, consideration constituting Exchanged Properties or consideration
other than as identified in the immediately preceding clauses (i) and (ii)), in
each case net of (a) all legal, title and recording expenses, commissions and
other fees and expenses incurred, and all federal, state, foreign and local
taxes required to be paid or accrued as a liability under GAAP as a consequence
of such Asset Sale, (b) all payments made on any Indebtedness (but specifically
excluding Indebtedness of the Company and its Restricted Subsidiaries assumed in
connection with or in anticipation of such Asset Sale) which is secured by any
assets subject to such Asset Sale, in accordance with the terms of any Lien upon
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Sale or by applicable law, be repaid out of the proceeds
from such Asset Sale, provided that such payments are made in a manner that
results in the permanent reduction in the balance of such Indebtedness and, if
applicable, a permanent reduction in any outstanding commitment for future
Incurrences of Indebtedness thereunder, (c) all distributions and other payments
required to be made to minority interest holders in Subsidiaries or joint
ventures as a result of such Asset Sale and (d) the deduction of appropriate
amounts to be provided by the seller as a reserve, in accordance with GAAP,
against any liabilities associated with the assets disposed of in such Asset
Sale and retained by the Company or any Restricted Subsidiary after such Asset
Sale; provided, however, that if any consideration for an Asset Sale (which
would otherwise constitute
11
Net Available Cash) is required to be held in escrow pending determination of
whether a purchase price adjustment shall be made, such consideration (or any
portion thereof) shall become Net Available Cash only at such time as it is
released to such Person or its Restricted Subsidiaries from escrow.
"Net Working Capital" means (i) all current assets of the
Company and its Restricted Subsidiaries, less (ii) all current liabilities of
the Company and its Restricted Subsidiaries, except current liabilities included
in Indebtedness, in each case as set forth in consolidated financial statements
of the Company prepared in accordance with GAAP.
"Non-recourse Purchase Money Indebtedness" means Indebtedness
(other than Capital Lease Obligations) of the Company or any Restricted
Subsidiary Incurred in connection with the acquisition by the Company or such
Restricted Subsidiary in the ordinary course of business of fixed assets used in
the Oil and Gas Business (including office buildings and other real property
used by the Company or such Restricted Subsidiary in conducting its operations)
with respect to which (i) the holders of such Indebtedness agree that they shall
look solely to the fixed assets so acquired which secure such Indebtedness, and
neither the Company nor any Restricted Subsidiary (a) is directly or indirectly
liable for such Indebtedness or (b) provides credit support, including any
undertaking, Guarantee, agreement or instrument that would constitute
Indebtedness (other than the grant of a Lien on such acquired fixed assets), and
(ii) no default or event of default with respect to such Indebtedness would
cause, or permit (after notice or passage of time or otherwise), any holder of
any other Indebtedness of the Company or a Restricted Subsidiary to declare a
default or event of default on such other Indebtedness or cause the payment,
repurchase, redemption, defeasance or other acquisition or retirement for value
thereof to be accelerated or payable prior to any scheduled principal payment,
scheduled sinking fund payment or maturity.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the Chief Accounting Officer, the
President, any Vice President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers at least one of whom shall be the principal executive officer,
principal accounting officer or principal financial officer of the Company.
"Oil and Gas Business" means the business of exploiting,
exploring for, developing, acquiring, operating, producing, processing,
gathering, marketing, storing, selling, hedging, treating, swapping, refining
and transporting hydrocarbons and other related energy businesses.
"Oil and Gas Hedging Contract" means, with respect to any
Person, any agreement or arrangement, or any combination thereof, relating to
oil and gas or other hydrocarbon prices, transportation or basis costs or
differentials or other similar financial factors, that is entered into by such
Person in the ordinary course of its business for the purpose of limiting or
managing risks associated with fluctuations in such prices, costs, differentials
or similar factors.
12
"Oil and Gas Liens" means (i) Liens on any specific property
or any interest therein, construction thereon or improvement thereto to secure
all or any part of the costs incurred for surveying, exploration, drilling,
extraction, development, operation, production, construction, alteration, repair
or improvement of, in, under or on such property and the plugging and
abandonment of xxxxx located thereon (it being understood that, in the case of
oil and gas producing properties, or any interest therein, costs incurred for
"development" shall include costs incurred for all facilities relating to such
properties or to projects, ventures or other arrangements of which such
properties form a part or which relate to such properties or interests); (ii)
Liens on an oil or gas producing property to secure obligations incurred or
guarantees of obligations incurred in connection with or necessarily incidental
to commitments for the purchase or sale of, or the transportation or
distribution of, the products derived from such property; (iii) Liens arising
under partnership agreements, oil and gas leases, overriding royalty agreements,
net profits agreements, production payment agreements, royalty trust agreements,
incentive compensation programs for geologists, geophysicists and other
providers of technical services to the Company or a Restricted Subsidiary,
master limited partnership agreements, farmout agreements, farmin agreements,
division orders, contracts for the sale, purchase, exchange, transportation,
gathering or processing of oil, gas or other hydrocarbons, unitizations and
pooling designations, declarations, orders and agreements, development
agreements, operating agreements, production sales contracts, area of mutual
interest agreements, gas balancing or deferred production agreements, injection,
repressuring and recycling agreements, salt water or other disposal agreements,
seismic or geophysical permits or agreements, and other agreements which are
customary in the Oil and Gas Business; provided, however, in all instances that
such Liens are limited to the assets that are the subject of the relevant
agreement, program, order or contract; (iv) Liens arising in connection with
Production Payments and Reserve Sales; and (v) Liens on pipelines or pipeline
facilities that arise by operation of law.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Pari Passu Indebtedness" means any Indebtedness of the
Company (or a Subsidiary Guarantor) that is pari passu in right of payment to
the Securities (or a Subsidiary Guaranty, as appropriate).
"Pari Passu Offer" means an offer by the Company or a
Subsidiary Guarantor to purchase all or a portion of Pari Passu Indebtedness to
the extent required by the indenture or other agreement or instrument pursuant
to which such Pari Passu Indebtedness was issued.
"Permitted Business Investments" means Investments and
expenditures made in the ordinary course of, and of a nature that is or shall
have become customary in, the Oil and Gas Business as a means of actively
engaging therein through agreements, transactions, interests or arrangements
which permit one to share risks or costs, comply with regulatory requirements
regarding local ownership or satisfy other objectives customarily achieved
through the conduct of Oil and Gas Business jointly with third parties,
including (i) ownership interests in oil and gas properties or gathering,
transportation, processing, storage or related systems and (ii) Investments and
expenditures in the form of or pursuant to operating agreements, processing
agreements, farmin agreements, farmout agreements, development agreements, area
of mutual
13
interest agreements, unitization agreements, pooling arrangements, joint bidding
agreements, service contracts, joint venture agreements, partnership agreements
(whether general or limited) and other similar agreements (including for limited
liability companies) with third parties, excluding, however, Investments in
corporations other than Restricted Subsidiaries.
"Permitted Hedging Agreements" means (i) Exchange Rate
Contracts and Oil and Gas Hedging Contracts and (ii) Interest Rate Protection
Agreements but only to the extent that the stated aggregate notional amount
thereunder does not exceed 100% of the aggregate principal amount of the
Indebtedness of the Company or a Restricted Subsidiary covered by such Interest
Rate Protection Agreements at the time such agreements were entered into.
"Permitted Holders" means Xxxxx X. Xxxxx, D. Xxxxx Xxxxx and
Xxx X. Xxxxxx, and their respective estates, spouses, ancestors, and lineal
descendants, the legal representatives of any of the foregoing and the trustees
of any bona fide trusts of which the foregoing are the sole beneficiaries or the
grantors, or any Person of which the foregoing "beneficially owns" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act) voting securities representing
at least 66-?% of the total voting power of all classes of Voting Stock of such
Person (exclusive of any matters as to which class voting rights exist).
"Permitted Indebtedness" means any and all of the following:
(i) Indebtedness arising under this Indenture with respect to the Original
Securities and any Subsidiary Guarantees relating thereto; (ii) Indebtedness
under the Bank Credit Facilities, provided that the aggregate principal amount
of all Indebtedness under the Bank Credit Facilities, together with all
Indebtedness Incurred pursuant to clause (x) of this paragraph in respect of
Indebtedness previously Incurred pursuant to this clause (ii), at any one time
outstanding does not exceed the greater of (a) $450,000,000, which amount shall
be permanently reduced by the amount of Net Available Cash from Asset Sales used
to permanently repay Indebtedness under the Bank Credit Facilities and not
subsequently reinvested in Additional Assets or used to permanently reduce other
Indebtedness to the extent permitted pursuant to Section 4.06, and (b) an amount
equal to the sum of (1) $350,000,000 and (2) 10% of Adjusted Consolidated Net
Tangible Assets determined as of the date of the Incurrence of such
Indebtedness; (iii) Indebtedness to the Company or any Restricted Subsidiary by
any of its Restricted Subsidiaries or Indebtedness of the Company to any of its
Restricted Subsidiaries (but only so long as such Indebtedness is held by the
Company or a Restricted Subsidiary); (iv) Indebtedness in respect of bid,
performance, reimbursement or surety obligations issued by or for the account of
the Company or any Restricted Subsidiary in the ordinary course of business,
including guarantees and letters of credit functioning as or supporting such
bid, performance, reimbursement or surety obligations (in each case other than
for an obligation for money borrowed); (v) Indebtedness under Permitted Hedging
Agreements; (vi) in-kind obligations relating to oil or gas balancing positions
arising in the ordinary course of business; (vii) Indebtedness outstanding on
the Issue Date not otherwise permitted in clauses (i) through (vi) above; (viii)
Non-recourse Purchase Money Indebtedness; (ix) Indebtedness not otherwise
permitted to be Incurred pursuant to this paragraph (excluding any Indebtedness
Incurred pursuant to clause (a) of Section 4.03), provided that the aggregate
principal amount of all Indebtedness Incurred pursuant to this clause (ix),
together with all Indebtedness Incurred pursuant to clause (x) of this paragraph
in respect of Indebtedness previously Incurred pursuant to this clause (ix), at
any one time outstanding does not exceed $50,000,000; (x) Indebtedness Incurred
in exchange for, or the proceeds of which are used to
14
refinance, (a) Indebtedness referred to in clauses (i), (vii) and (ix) of this
paragraph (including Indebtedness previously Incurred pursuant to this clause
(x)) and (b) Indebtedness Incurred pursuant to clause (a) of Section 4.03,
provided that, in the case of each of the foregoing clauses (a) and (b), such
Indebtedness is Permitted Refinancing Indebtedness; and (xi) Indebtedness
consisting of obligations in respect of purchase price adjustments, indemnities
or Guarantees of the same or similar matters in connection with the acquisition
or disposition of Property.
"Permitted Investments" means any and all of the following:
(i) Permitted Short-Term Investments; (ii) Investments in property, plant and
equipment used in the ordinary course of business and Permitted Business
Investments; (iii) Investments by any Restricted Subsidiary in the Company; (iv)
Investments by the Company or any Restricted Subsidiary in any Restricted
Subsidiary; (v) Investments by the Company or any Restricted Subsidiary in (a)
any Person that shall, upon the making of such Investment, become a Restricted
Subsidiary or (b) any Person if as a result of such Investment such Person is
merged or consolidated with or into, or transfers or conveys all or
substantially all its Property to, the Company or a Restricted Subsidiary; (vi)
Investments in the form of securities received from Asset Sales, provided that
such Asset Sales are made in compliance with Section 4.06; (vii) Investments in
negotiable instruments held for collection; lease, utility and other similar
deposits; and stock, obligations or other securities received in settlement of
debts (including under any bankruptcy or other similar proceeding) owing to the
Company or any of its Restricted Subsidiaries as a result of foreclosure,
perfection or enforcement of any Liens or Indebtedness, in each of the foregoing
cases in the ordinary course of business of the Company or such Restricted
Subsidiary; (viii) relocation allowances for, and advances and loans to,
officers, directors and employees of the Company or any of its Restricted
Subsidiaries; provided such items do not exceed in the aggregate $3,000,000 at
any one time outstanding; (ix) Investments intended to promote the Company's
strategic objectives in the Oil and Gas Business in an amount not to exceed 10%
of Adjusted Consolidated Net Tangible Assets (determined as of the date of the
making of any such Investment) at any one time outstanding (which Investments
shall be deemed to be no longer outstanding only upon the return of capital
thereof); (x) Investments made pursuant to Permitted Hedging Agreements of the
Company and its Restricted Subsidiaries; and (xi) Investments pursuant to any
agreement or obligation of the Company or any of its Restricted Subsidiaries as
in effect on the Issue Date (other than Investments described in clauses (i)
through (x) above).
"Permitted Liens" means any and all of the following: (i)
Liens existing as of the Issue Date; (ii) Liens securing the Securities, any
Subsidiary Guaranties and other obligations arising under this Indenture; (iii)
any Lien existing on any Property of a Person at the time such Person is merged
or consolidated with or into the Company or a Restricted Subsidiary or becomes a
Restricted Subsidiary (and not incurred in anticipation of or in connection with
such transaction), provided that such Liens are not extended to other Property
of the Company or the Restricted Subsidiaries; (iv) any Lien existing on any
Property at the time of the acquisition thereof (and not incurred in
anticipation of or in connection with such transaction), provided that such
Liens are not extended to other Property of the Company or the Restricted
Subsidiaries; (v) any Lien incurred in the ordinary course of business
incidental to the conduct of the business of the Company or the
15
Restricted Subsidiaries or the ownership of their Property (including (a)
easements, rights of way and similar encumbrances, (b) rights or title of
lessors under leases (other than Capital Lease Obligations), (c) rights of
collecting banks having rights of setoff, revocation, refund or chargeback with
respect to money or instruments of the Company or the Restricted Subsidiaries on
deposit with or in the possession of such banks, (d) Liens imposed by law,
including Liens under workers' compensation or similar legislation and
mechanics', carriers', warehousemen's, materialmen's, suppliers' and vendors'
Liens, (e) Liens incurred to secure performance of obligations with respect to
statutory or regulatory requirements, performance or return-of-money bonds,
surety bonds or other obligations of a like nature and incurred in a manner
consistent with industry practice and (f) Oil and Gas Liens), in each case which
are not incurred in connection with the borrowing of money, the obtaining of
advances or credit or the payment of the deferred purchase price of Property
(other than Trade Accounts Payable); (vi) Liens for taxes, assessments and
governmental charges not yet due or the validity of which are being contested in
good faith by appropriate proceedings, promptly instituted and diligently
conducted, and for which adequate reserves have been established to the extent
required by GAAP as in effect at such time; (vii) Liens incurred to secure
appeal bonds and judgment and attachment Liens, in each case in connection with
litigation or legal proceedings that are being contested in good faith by
appropriate proceedings so long as reserves have been established to the extent
required by GAAP as in effect at such time and so long as such Liens do not
encumber assets by an aggregate amount (together with the amount of any unstayed
judgments against the Company or any Restricted Subsidiary but excluding any
such Liens to the extent securing insured or indemnified judgments or orders) in
excess of $25,000,000; (viii) Liens securing Permitted Hedging Agreements of the
Company and its Restricted Subsidiaries so long as such Permitted Hedging
Agreements are permitted under Section 4.03; (ix) Liens securing Purchase Money
Indebtedness or Capital Lease Obligations, provided that such Liens attach only
to the Property acquired with the proceeds of such Purchase Money Indebtedness
or the Property that is the subject of such Capital Lease Obligations; (x) Liens
securing Non-recourse Purchase Money Indebtedness granted in connection with the
acquisition by the Company or any Restricted Subsidiary in the ordinary course
of business of fixed assets used in the Oil and Gas Business (including office
buildings and other real property used by the Company or such Restricted
Subsidiary in conducting its operations), provided that (a) such Liens attach
only to the fixed assets acquired with the proceeds of such Non-recourse
Purchase Money Indebtedness and (b) such Non-recourse Purchase Money
Indebtedness is not in excess of the purchase price of such fixed assets; (xi)
Liens resulting from the deposit of funds or evidences of Indebtedness in trust
for the purpose of decreasing or legally defeasing Indebtedness of the Company
or any of its Subsidiaries so long as such deposit of funds is permitted by
Section 4.04; (xii) Liens resulting from a pledge of Capital Stock of a Person
that is not a Restricted Subsidiary to secure obligations of such Person and any
refinancings thereof; (xiii) Liens to secure any permitted extension, renewal,
refinancing, refunding or exchange (or successive extensions, renewals,
refinancings, refundings or exchanges), in whole or in part, of or for any
Indebtedness secured by Liens referred to in clauses (i), (ii), (iii), (iv),
(ix) and (x) above; provided, however, that (a) such new Lien shall be limited
to all or part of the same Property (including future improvements thereon and
accessions thereto) subject to the original Lien and (b) the Indebtedness
secured by such Lien at such time is not increased to any amount greater than
the sum of (1) the outstanding principal amount or, if greater, the committed
amount of the Indebtedness secured by such original Lien immediately prior to
such extension, renewal, refinancing, refunding or exchange and (2) an amount
necessary to pay any fees and expenses, including premiums, related to such
refinancing, refunding, extension, renewal or replacement; (xiv) Liens in favor
of the Company or a Restricted Subsidiary; and (xv) Liens not otherwise
permitted by clauses (i) through (xiv) above incurred in the ordinary course of
business of the Company and its Restricted Subsidiaries
16
and encumbering Property having an aggregate Fair Market Value not in excess of
$10,000,000 at any one time. Notwithstanding anything in this paragraph to the
contrary, the term "Permitted Liens" shall not include Liens resulting from the
creation, incurrence, issuance, assumption or Guarantee of any Production
Payments and Reserve Sales other than (a) any such Liens existing as of the
Issue Date, (b) Production Payments and Reserve Sales in connection with the
acquisition of any Property after the Issue Date, provided that any such Lien
created in connection therewith is created, incurred, issued, assumed or
guaranteed in connection with the financing of, and within 60 days after the
acquisition of, such Property, (c) Production Payments and Reserve Sales, other
than those described in clauses (a) and (b) of this sentence, to the extent such
Production Payments and Reserve Sales constitute Asset Sales made pursuant to
and in compliance with Section 4.06 and (d) incentive compensation programs for
geologists, geophysicists and other providers of technical services to the
Company or a Restricted Subsidiary; provided, however, that, in the case of the
immediately foregoing clauses (a), (b), (c) and (d), any Lien created in
connection with any such Production Payments and Reserve Sales shall be limited
to the Property that is the subject of such Product Payments and Reserve Sales.
"Permitted Refinancing Indebtedness" means Indebtedness ("new
Indebtedness") Incurred in exchange for, or proceeds of which are used to
refinance, other Indebtedness ("old Indebtedness"); provided, however, that (i)
such new Indebtedness is in an aggregate principal amount not in excess of the
sum of (a) the aggregate principal amount then outstanding of the old
Indebtedness (or, if such old Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of determination), and
(b) an amount necessary to pay any fees and expenses, including premiums,
related to such exchange or refinancing, (ii) such new Indebtedness has a Stated
Maturity no earlier than the Stated Maturity of the old Indebtedness, (iii) such
new Indebtedness has an Average Life at the time such new Indebtedness is
Incurred that is equal to or greater than the Average Life of the old
Indebtedness at such time, (iv) such new Indebtedness is subordinated in right
of payment to the Securities (or, if applicable, the Subsidiary Guarantees) to
at least the same extent, if any, as the old Indebtedness and (v) if such old
Indebtedness is Non-recourse Purchase Money Indebtedness or Indebtedness that
refinanced Non-recourse Purchase Money Indebtedness, such new Indebtedness
satisfies clauses (i) and (ii) of the definition of "Non-recourse Purchase Money
Indebtedness."
"Permitted Short-Term Investments" means (i) Investments in
U.S. Government Obligations maturing within one year of the date of acquisition
thereof, (ii) Investments in demand accounts, time deposit accounts,
certificates of deposit, bankers' acceptances and money market deposits maturing
within one year of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States of America or any
State thereof or the District of Columbia that is a member of the Federal
Reserve System having capital, surplus and undivided profits aggregating in
excess of $500,000,000 and whose long-term Indebtedness is rated "A" (or higher)
according to Xxxxx'x, (iii) Investments in deposits available for withdrawal on
demand with any commercial bank that is organized under the laws of any country
in which the Company or any Restricted Subsidiary maintains an office or is
engaged in the Oil and Gas Business, provided that (a) all such deposits have
been made in such accounts in the ordinary course of business and (b) such
deposits do not at any one time exceed $20,000,000 in the aggregate, (iv)
repurchase and reverse repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (i) entered
17
into with a bank meeting the qualifications described in clause (ii), (v)
Investments in commercial paper or notes, maturing not more than one year after
the date of acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America or any State thereof or the District of Columbia with a short-term
rating at the time as of which any Investment therein is made of "P-1" (or
higher) according to Xxxxx'x or "A-1" (or higher) according to S&P or a
long-term rating at the time as of which any Investment is made of "A3" (or
higher) according to Xxxxx'x or "A-" (or higher) according to S&P, (vi)
Investments in any money market mutual fund having assets in excess of
$250,000,000 all of which consist of other obligations of the types described in
clauses (i), (ii), (iv) and (v) hereof and (vii) Investments in asset-backed
securities maturing within one year of the date of acquisition thereof with a
long-term rating at the time as of which any Investment therein is made of "A3"
(or higher) according to Xxxxx'x or "A-" (or higher) according to S&P.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, unlimited liability company, trust, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"Preferred Stock" of any Person means Capital Stock of such
Person of any class or classes (however designated) that ranks prior as to the
payment of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person; provided however, that
"Preferred Stock" shall not include Redeemable Stock.
"Principal" of any Indebtedness (including the Securities)
means the principal amount of such Indebtedness plus the premium, if any, on
such Indebtedness.
"Production Payments and Reserve Sales" means the grant or
transfer by the Company or a Restricted Subsidiary to any Person of a royalty,
overriding royalty, net profits interest, production payment (whether volumetric
or dollar denominated), partnership or other interest in oil and gas properties,
reserves or the right to receive all or a portion of the production or the
proceeds from the sale of production attributable to such properties where the
holder of such interest has recourse solely to such production or proceeds of
production, subject to the obligation of the grantor or transferor to operate
and maintain, or cause the subject interests to be operated and maintained, in a
reasonably prudent manner or other customary standard or subject to the
obligation of the grantor or transferor to indemnify for environmental, title or
other matters customary in the Oil and Gas Business, including any such grants
or transfers pursuant to incentive compensation programs on terms that are
reasonably customary in the Oil and Gas Business for geologists, geophysicists
and other providers of technical services to the Company or a Restricted
Subsidiary.
"Property" means, with respect to any Person, any interest of
such Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including Capital Stock and other securities issued
by any other Person (but excluding Capital Stock or other securities issued by
such first mentioned Person).
"Rating Agencies" means (i) S&P and Xxxxx'x or (ii) if S&P or
Xxxxx'x or both of them are not making ratings of the Securities publicly
available, a nationally recognized U.S.
18
rating agency or agencies, as the case may be, selected by the Company, which
will be substituted for S&P or Xxxxx'x or both, as the case may be.
"Redeemable Stock" of any Person means any equity security of
such Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or otherwise (including on the
happening of an event), is or could become required to be redeemed for cash or
other Property or is or could become redeemable for cash or other Property at
the option of the holder thereof, in whole or in part, on or prior to the first
anniversary of the Stated Maturity of the Securities; or is or could become
exchangeable at the option of the holder thereof for Indebtedness at any time in
whole or in part, on or prior to the first anniversary of the Stated Maturity of
the Securities; provided, however, that Redeemable Stock shall not include any
security by virtue of the fact that it may be exchanged or converted at the
option of the holder for Capital Stock of the Company having no preference as to
dividends or liquidation over any other Capital Stock of the Company.
"Representative" means the trustee, agent or representative
expressly authorized to act in such capacity, if any, for an issue of Senior
Indebtedness.
"Restricted Payment" means (i) a dividend or other
distribution declared or paid on the Capital Stock or Redeemable Stock of the
Company or to the Company's shareholders (other than dividends, distributions or
payments made solely in Capital Stock of the Company or in options, warrants or
other rights to purchase or acquire Capital Stock), or declared and paid to any
Person other than the Company or any of its Restricted Subsidiaries (and, if
such Restricted Subsidiary is not a Wholly Owned Subsidiary, to the other
shareholders of such Restricted Subsidiary on a pro rata basis) on the Capital
Stock or Redeemable Stock of any Restricted Subsidiary, (ii) a payment made by
the Company or any of its Restricted Subsidiaries (other than to the Company or
any Restricted Subsidiary) to purchase, redeem, acquire or retire any Capital
Stock or Redeemable Stock, or any options, warrants or other rights to acquire
Capital Stock or Redeemable Stock, of the Company or of a Restricted Subsidiary,
(iii) a payment made by the Company or any of its Restricted Subsidiaries to
redeem, repurchase, legally defease or otherwise acquire or retire for value
(including pursuant to mandatory repurchase covenants), prior to any scheduled
maturity, scheduled sinking fund or scheduled mandatory redemption, any
Indebtedness of the Company or a Restricted Subsidiary which is subordinate
(whether pursuant to its terms or by operation of law) in right of payment to
the Securities or the relevant Subsidiary Guaranty, as the case may be, provided
that this clause (iii) shall not include any such payment with respect to (a)
any such subordinated Indebtedness to the extent of Excess Proceeds remaining
after compliance with Section 4.06 and to the extent required by the indenture
or other agreement or instrument pursuant to which such subordinated
Indebtedness was issued or (b) the purchase, repurchase or other acquisition of
any such subordinated Indebtedness purchased in anticipation of satisfying a
scheduled maturity, scheduled sinking fund or scheduled mandatory redemption, in
each case due within one year of the date of acquisition, or (iv) an Investment
(other than a Permitted Investment) by the Company or a Restricted Subsidiary in
any Person.
"Restricted Subsidiary" means any Subsidiary of the Company
that has not been designated an Unrestricted Subsidiary pursuant to Section
4.15.
19
"S&P" means Standard & Poor's Ratings Service, a division of
The XxXxxx-Xxxx Companies, Inc. and its successors.
"Sale and Leaseback Transaction" means, with respect to any
Person, any direct or indirect arrangement (excluding, however, any such
arrangement between such Person and a Wholly Owned Subsidiary of such Person or
between one or more Wholly Owned Subsidiaries of such Person) pursuant to which
Property is sold or transferred by such Person or a Restricted Subsidiary of
such Person and is thereafter leased back from the purchaser or transferee
thereof by such Person or one of its Restricted Subsidiaries.
"SEC" means the Securities and Exchange Commission.
"Senior Indebtedness" when used with respect to the Company
means the obligations of the Company with respect to Indebtedness of the
Company, whether outstanding on the date hereof or thereafter created (including
Indebtedness under the Bank Credit Facilities), Incurred or assumed, and any
renewal, refunding, refinancing, replacement or extension thereof, unless, in
the case of any particular Indebtedness, the instrument creating or evidencing
the same or pursuant to which the same is outstanding expressly provides that
such Indebtedness shall not be senior in right of payment to the Securities;
provided, however, that Senior Indebtedness of the Company shall not include (i)
Indebtedness of the Company to a Subsidiary of the Company, (ii) amounts owed
for goods, materials or services purchased in the ordinary course of business,
(iii) Indebtedness Incurred in violation of this Indenture, (iv) amounts payable
or any other Indebtedness to employees of the Company or any Subsidiary of the
Company, (v) any liability for federal, state, local or other taxes owed or
owing by the Company, (vi) any Indebtedness of the Company that, when Incurred
and without regard to any election under Section 1111(b) of the United States
Bankruptcy Code, was without recourse to the Company, (vii) Pari Passu or
Subordinated Indebtedness of the Company, (viii) Indebtedness of the Company
that is represented by Redeemable Stock, (ix) Indebtedness evidenced by the
Securities and (x) in-kind obligations relating to net oil and gas balancing
positions. Senior Indebtedness of any Subsidiary Guarantor has a correlative
meaning, provided, however, that clause (i) above shall be deemed to refer to
Indebtedness of any Subsidiary Guarantor to the Company or any Subsidiary of the
Company.
"Significant Subsidiary" means, at any date of determination,
any Restricted Subsidiary that would be a "Significant Subsidiary" of the
Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the
Securities and Exchange Commission.
"Stated Maturity," when used with respect to any security or
any installment of principal thereof or interest thereon, means the date
specified in such security as the fixed date on which the principal of such
security or such installment of principal or interest is due and payable,
including pursuant to any mandatory redemption provision (but excluding any
provision providing for the repurchase of such security at the option of the
holder thereof upon the happening of any contingency unless such contingency has
occurred).
"Subordinated Indebtedness" means Indebtedness of the Company
(or a Subsidiary Guarantor) that is subordinated or junior in right of payment
to the Securities (or a Subsidiary Guaranty, as appropriate) pursuant to a
written agreement to that effect.
20
"Subsidiary" of a Person means (i) another Person which is a
corporation a majority of whose Voting Stock is at the time, directly or
indirectly, owned or controlled by (a) the first Person, (b) the first Person
and one or more of its Subsidiaries or (c) one or more of the first Person's
Subsidiaries or (ii) another Person which is not a corporation (x) at least 50%
of the ownership interest of which and (y) the power to elect or direct the
election of a majority of the directors or other governing body of which are
controlled by Persons referred to in clause (a), (b) or (c) above.
"Subsidiary Guarantors" means, unless released from their
Subsidiary Guarantees as permitted by this Indenture, any Restricted Subsidiary
that becomes a guarantor of the Securities in compliance with the provisions of
this Indenture and executes a supplemental indenture agreeing to be bound by the
terms of this Indenture.
"Subsidiary Guaranty" means an unconditional, unsecured senior
subordinated guaranty of the Securities given by any Restricted Subsidiary
pursuant to the terms of this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of this Indenture except as
required by Section 9.03 hereof; provided that in the event the Trust Indenture
Act of 1939 is amended after such date, "Trust Indenture Act" means, to the
extent required by any such amendment, the Trust Indenture Act of 1939, as so
amended.
"Trade Accounts Payable" means accounts payable or other
obligations of the Company or any Restricted Subsidiary to trade creditors
created or assumed by the Company or such Restricted Subsidiary in the ordinary
course of business in connection with the obtaining of goods or services.
"Treasury Rate" means the yield to maturity at the time of the
computation of United States Treasury securities with a constant maturity (as
compiled by and published in the most recent Federal Reserve Statistical Release
H.15 (519) which has become publicly available at least two Business Days prior
to the date fixed for redemption (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the period from the redemption date to December 15, 2006. However, if
the period from the redemption date to December 15, 2006 is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the redemption date to December 15, 2006
is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
21
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Uniform Commercial Code" means the
New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means (i) each Subsidiary of the
Company that the Company has designated pursuant to Section 4.15 as an
Unrestricted Subsidiary and (ii) any Subsidiary of an Unrestricted Subsidiary.
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States of America for the timely payment of
which its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America, the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of America
which, in either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act), as custodian, with respect to
any such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt; provided, however, that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depository receipt.
"Volumetric Production Payments" means production payment
obligations recorded as deferred revenue in accordance with GAAP, together with
all undertakings and obligations in connection therewith.
"Voting Stock" of any Person means Capital Stock of such
Person which ordinarily has voting power for the election of directors (or
persons performing similar functions) of such Person whether at all times or
only so long as no senior class of securities has such voting power by reason of
any contingency.
"Wholly Owned Subsidiary" means, at any time, a Restricted
Subsidiary of the Company all the Voting Stock of which (other than directors'
qualifying shares) is at such time owned, directly or indirectly, by the Company
and its other Wholly Owned Subsidiaries.
22
SECTION 1.02 Other Definitions.
Defined in
Term Section
-----------
"Bankruptcy Law"................................................................................. 6.01
"Change of Control Offer"........................................................................ 4.09
"Change of Control Payment"...................................................................... 4.09
"Change of Control Payment Date"................................................................. 4.09
"Claiming Guarantor"............................................................................. 11.02
"Contributing Party"............................................................................. 11.02
"covenant defeasance option"..................................................................... 8.01(b)
"Custodian"...................................................................................... 6.01
"Event of Default"............................................................................... 6.01
"Excess Proceeds"................................................................................ 4.06
"Global Security"................................................................................ Appendix A
"Initial Securities"............................................................................. Preamble
"legal defeasance option"........................................................................ 8.01(b)
"Legal Holiday".................................................................................. 13.08
"Obligations".................................................................................... 11.01
"Offer Amount"................................................................................... 4.06
"Offer Period"................................................................................... 4.06
"OID"............................................................................................ 2.01
"Original Securities"............................................................................ 2.01
"pay its Subsidiary Guaranty".................................................................... 12.03
"pay the Securities"............................................................................. 10.03
"Paying Agent"................................................................................... 2.04
"Payment Blockage Notice"........................................................................ 10.03
"Payment Blockage Period"........................................................................ 10.03
"Permitted Consideration"........................................................................ 4.06
"Prepayment Offer"............................................................................... 4.06
"Prepayment Offer Notice"........................................................................ 4.06
"Purchase Date".................................................................................. 4.06
"Registrar"...................................................................................... 2.04
"Successor Company".............................................................................. 5.01
23
SECTION 1.03 Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company, each
Subsidiary Guarantor and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04 Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and
words in the plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to secured Indebtedness merely by virtue
of its nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing
or other discount security at any date shall be the principal
amount thereof that would be shown on a balance sheet of the
issuer dated such date prepared in accordance with GAAP; and
(8) unless otherwise specified herein, the principal
amount of any Preferred Stock shall be the greater of (i) the
maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price
with respect to such Preferred Stock.
24
SECTION 1.05 Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section 105.
(b) The ownership of Securities shall be proved by the
Security Register.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other Act by the Holder of any Security shall bind every
future Holder of the same Security or the Holder of every Security issued upon
the transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, suffered or omitted to be done by the Trustee, any Paying Agent
or the Company, any Subsidiary Guarantor or any other obligor of the Securities
in reliance thereon, whether or not notation of such action is made upon such
Security.
(d) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(e) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of such Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding Trust
Indenture Act Section 316(c), any such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
more than 30 days prior to the first solicitation of Holders generally in
connection therewith and no later than the date such first solicitation is
completed.
If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for purposes of
determining whether Holders of the requisite proportion of Securities then
Outstanding have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for this
purpose the Securities then Outstanding shall be computed as of such record
date; provided that no such request, demand,
25
authorization, direction, notice, consent, waiver or other Act by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after
such record date.
(f) For purposes of this Indenture, any action by the Holders
which may be taken in writing may be taken by electronic means or as otherwise
reasonably acceptable to the Trustee.
SECTION 1.06 Separability Clause. In case any provision in
this Indenture or in the Securities or Subsidiary Guarantees, if any, shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.07 Independence of Covenants. Unless otherwise
provided herein, all covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenants, the fact that it would be permitted by an exception to,
or be otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.
ARTICLE 2
The Securities
SECTION 2.01 Amount of Securities; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited. All Securities shall be identical
in all respects other than issue price and issuance dates and as to
denomination. The Securities may be issued in one or more series; provided,
however, that any Securities issued with original issue discount ("OID") for
Federal income tax purposes shall not be issued as part of the same series as
any Securities that are issued with a different amount of OID or are not issued
with OID.
Subject to Section 2.03, the Trustee shall authenticate
Securities for original issue on the Issue Date in the aggregate principal
amount of $200,000,000 (the "Original Securities"). With respect to any
Securities issued after the Issue Date (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities pursuant to Section 2.07, 2.08, 2.09 or 3.06 or Appendix A),
there shall be established in or pursuant to a resolution of the Board of
Directors and, subject to Section 2.03, set forth or determined in the manner
provided in an Officer's Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of such Securities:
(1) whether such Securities shall be issued as part
of a new or existing series of Securities and the title of
such Securities (which shall distinguish the Securities of the
series from Securities of any other series);
(2) the aggregate principal amount of such Securities
which may be authenticated and delivered under this Indenture,
which amount shall be specified therein and may be unlimited;
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(3) the issue price and issuance date of such
Securities, including the date from which interest on such
Securities shall accrue;
(4) if applicable, that such Securities shall be
issuable in whole or in part in the form of one or more Global
Securities and, in such case, the respective depositories for
such Global Securities, the form of any legend or legends
which shall be borne by any such Global Security in addition
to or in lieu of that set forth in Exhibit 1 to Appendix A and
any circumstances in addition to or in lieu of those set forth
in Section 2.3 of Appendix A in which any such Global Security
may be exchanged in whole or in part for Securities
registered, and any transfer of such Global Security in whole
or in part may be registered, in the name or names of Persons
other than the depository for such Global Security or a
nominee thereof; and
(5) if applicable, that such Securities shall not be
issued in the form of Initial Securities subject to Appendix
A, but shall be issued in the form of Exchange Securities as
set forth in Exhibit A.
If any of the terms of any series are established by action
taken pursuant to a resolution of the Board of Directors, a copy of an
appropriate record of such action shall be certified by the Secretary or any
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate or the trust indenture supplementary
thereto setting forth the terms of the series. References in this Indenture to
Securities shall include any additional Securities issued after the Issue Date,
unless the context otherwise requires.
SECTION 2.02 Form and Dating. Provisions relating to the
Initial Securities of each series and the Exchange Securities are set forth in
Appendix A, which is hereby incorporated in and expressly made a part of this
Indenture. The Initial Securities of each series and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit 1 to Appendix A
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities of each series may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage, provided that any
such notation, legend or endorsement is in a form reasonably acceptable to the
Company. Each Security shall be dated the date of its authentication. The terms
of the Securities of each series set forth in Exhibit 1 to Appendix A and
Exhibit A are part of the terms of this Indenture.
SECTION 2.03 Execution and Authentication. Two Officers shall
sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the
27
Trustee for authentication, together with a written order of the Company signed
by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of the Company for the authentication and delivery of such
Securities, and the Trustee in accordance with such written order of the Company
shall authenticate and deliver such Securities.
A Security shall not be valid until an authorized officer of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.04 Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.05 Paying Agent To Hold Money in Trust. Prior to
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Wholly Owned Subsidiary acts as Paying Agent, it
shall segregate the money held by it as Paying Agent and hold it as a separate
trust fund. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed by the Paying
Agent. Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
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SECTION 2.06 Securityholder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION 2.07 Replacement Securities. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that such
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08 Outstanding Securities. Securities outstanding at
any time are all Securities 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. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09 Temporary Securities. Until definitive Securities
are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate definitive Securities
and deliver them in exchange for temporary Securities.
SECTION 2.10 Cancelation. The Company at any time may deliver
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment.
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The Trustee and no one else shall cancel and destroy (subject to the record
retention requirements of the Exchange Act) all Securities surrendered for
registration of transfer, exchange, payment or cancelation and shall, upon
written request, deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancelation.
SECTION 2.11 Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12 CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers 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 Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
ARTICLE 3
Redemption
SECTION 3.01 Notices to Trustee. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and that such redemption is being made pursuant to paragraph 5 of
the Securities.
The Company shall give each notice to the Trustee provided for
in this Section at least 45 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02 Selection of Securities To Be Redeemed. If less
than all the Securities are to be redeemed at any time, selection of Securities
for redemption may be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Securities are
listed, or, if the Securities are not so listed, on a pro rata basis, by lot or
by such other method that the Trustee shall deem fair and appropriate. The
Trustee shall make the selection from outstanding Securities not previously
called for redemption. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than $1,000. Securities
and portions of them the Trustee selects shall be in amounts of $1,000 or a
whole multiple of $1,000. Provisions of this Indenture that apply to
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Securities called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company promptly of the Securities or
portions of Securities to be redeemed.
SECTION 3.03 Notice of Redemption. At least 30 days but not
more than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption
price;
(5) if fewer than all the outstanding Securities are
to be redeemed, the identification and principal amounts of
the particular Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from
making such payment pursuant to the terms of this Indenture,
interest on Securities (or portion thereof) called for
redemption ceases to accrue on and after the redemption date;
and
(7) that no representation is made as to the
correctness or accuracy of the CUSIP number, if any, listed in
such notice or printed on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04 Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of redemption). Failure to give notice or any defect in the notice
to any Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.05 Deposit of Redemption Price. Prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest (subject to the right of Holders of record on the relevant record date
to receive interest due on the relevant interest payment date that is on or
prior to the
31
date of redemption) on all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which have been
delivered by the Company to the Trustee for cancelation.
SECTION 3.06 Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
SECTION 4.01 Payment of Securities. The Company shall promptly
pay the principal of and interest on the Securities on the dates and in the
manner provided in the Securities and in this Indenture. Principal and interest
shall be considered paid on the date due if on such date the Trustee or the
Paying Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02 SEC Reports. Notwithstanding that the Company may
not be required to remain subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company shall file with the SEC and provide the
Trustee and Holders of Securities with the annual reports and the information,
documents and other reports which are specified in Sections 13 and 15(d) of the
Exchange Act, and, with respect to the annual consolidated financial statements
only, a report thereon by the Company's independent auditors; provided, however,
that the Company shall not be so obligated to file such information, documents
and reports with the SEC if the SEC does not permit such filings. The Company
also shall comply with the other provisions of Section 314(a) of the Trust
Indenture Act.
SECTION 4.03 Limitation on Indebtedness. The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, Incur any Indebtedness unless, after giving pro forma effect to the
Incurrence of such Indebtedness and the receipt and application of the proceeds
thereof, no Default or Event of Default would occur as a consequence of, or be
continuing following, such Incurrence and application and either (a) after
giving pro forma effect to such Incurrence and application, the Consolidated
Interest Coverage Ratio would exceed 2.5 to 1.0 or (b) such Indebtedness is
Permitted Indebtedness.
In the event that an item of Indebtedness (including
Indebtedness Incurred by the Company to banks or other lenders) could be
Incurred pursuant to more than one of the provisions of Permitted Indebtedness,
the Company, in its sole discretion, will classify or reclassify such item of
Indebtedness and only be required to include the amount and type of such
32
Indebtedness in (and to have Incurred such Indebtedness pursuant to) one of the
clauses of Permitted Indebtedness; and an item of Indebtedness (including
Indebtedness Incurred by the Company to banks or other lenders) may for this
purpose be divided into more than one of the types of Permitted Indebtedness.
Accrual of interest, accretion or amortization of original issue discount and
the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, will not be deemed to be an incurrence of
Indebtedness for purposes of this Section 4.03; provided, in each such case,
that the amount thereof is included in Consolidated Interest Expense of the
Company as accrued.
SECTION 4.04 Limitation on Restricted Payments. (a) The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, make any Restricted Payment if, at the time of and after
giving effect to the proposed Restricted Payment, (i) any Default or Event of
Default would have occurred and be continuing, (ii) the Company could not Incur
at least $1.00 of additional Indebtedness pursuant to clause (a) of Section 4.03
or (iii) the aggregate amount expended or declared for all Restricted Payments
from the Issue Date would exceed the sum (without duplication) of the following:
(A) 50% of the aggregate Consolidated Net Income of the
Company accrued on a cumulative basis commencing on the last day of the
fiscal quarter immediately preceding the Issue Date, and ending on the
last day of the fiscal quarter ending on or immediately preceding the
date of such proposed Restricted Payment (or, if such aggregate
Consolidated Net Income shall be a loss, minus 100% of such loss), plus
(B) the aggregate net cash proceeds, or the Fair Market Value
of Property other than cash, received by the Company on or after the
Issue Date from the issuance or sale (other than to a Subsidiary of the
Company) of Capital Stock of the Company or any options, warrants or
rights to purchase Capital Stock of the Company, plus
(C) the aggregate net cash proceeds, or the Fair Market Value
of Property other than cash, received by the Company as capital
contributions to the Company (other than from a Subsidiary of the
Company) on or after the Issue Date, plus
(D) the aggregate net cash proceeds received by the Company
from the issuance or sale (other than to any Subsidiary of the Company)
on or after the Issue Date of convertible Indebtedness that has been
converted into or exchanged for Capital Stock of the Company, together
with the aggregate cash received by the Company at the time of such
conversion or exchange or received by the Company from any conversion
or exchange of convertible Senior Indebtedness or convertible Pari
Passu Indebtedness issued or sold (other than to any Subsidiary of the
Company) prior to the Issue Date, plus
(E) to the extent not otherwise included in the Company's
Consolidated Net Income, an amount equal to the net reduction in
Investments made by the Company and its Restricted Subsidiaries
subsequent to the Issue Date in any Person resulting from (1) payments
of interest on debt, dividends, repayments of loans or advances or
other transfers or distributions of Property, in each case to the
Company or any Restricted Subsidiary from any Person other than the
Company or a Restricted Subsidiary, and in an amount not to exceed the
book value of such Investments previously made in such Person
33
that were treated as Restricted Payments, or (2) the designation of any
Unrestricted Subsidiary as a Restricted Subsidiary, and in an amount
not to exceed the lesser of (x) the book value of all Investments
previously made in such Unrestricted Subsidiary that were treated as
Restricted Payments and (y) the Fair Market Value of such Unrestricted
Subsidiary, plus
(F) $25,000,000.
(b) The limitations set forth in paragraph (a) above shall not
prevent the Company or any Restricted Subsidiary from making the following
Restricted Payments so long as, at the time thereof, no Default or Event of
Default shall have occurred and be continuing (except in the case of clause (i)
below under which the payment of a dividend is permitted):
(i) the payment of any dividend on Capital Stock or Redeemable
Stock of the Company or any Restricted Subsidiary within 60 days after
the declaration thereof, if at such declaration date such dividend
could have been paid in compliance with paragraph (a) above;
(ii) the repurchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company or any of its
Subsidiaries held by any current or former officers, directors or
employees of the Company or any of its Subsidiaries pursuant to the
terms of agreements (including employment agreements) or plans approved
by the Board of Directors, including any such repurchase, redemption,
acquisition or retirement of shares of such Capital Stock that is
deemed to occur upon the exercise of stock options or similar rights if
such shares represent all or a portion of the exercise price or are
surrendered in connection with satisfying Federal income tax
obligations; provided, however, that the aggregate amount of such
repurchases, redemptions, acquisitions and retirements shall not exceed
the sum of (a) $1,000,000 in any twelve-month period and (b) the
aggregate net proceeds, if any, received by the Company during such
twelve-month period from any issuance of such Capital Stock pursuant to
such agreements or plans;
(iii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock or Redeemable Stock of the
Company or any Restricted Subsidiary, in exchange for, or out of the
aggregate net cash proceeds of, a substantially concurrent issuance and
sale (other than to a Subsidiary of the Company or an employee stock
ownership plan or trust established by the Company or any of its
Subsidiaries, for the benefit of their employees) of Capital Stock of
the Company;
(iv) the making of any principal payment on or the repurchase,
redemption, legal defeasance or other acquisition or retirement for
value, prior to any scheduled principal payment, scheduled sinking fund
payment or maturity, of any Subordinated Indebtedness (other than
Redeemable Stock) in exchange for, or out of the aggregate net cash
proceeds of, a substantially concurrent issuance and sale (other than
to a Subsidiary of the Company or an employee stock ownership plan or
trust established by the Company or any of its Subsidiaries, for the
benefit of their employees) of Capital Stock of the Company;
34
(v) the making of any principal payment on or the repurchase,
redemption, legal defeasance or other acquisition or retirement for
value of Subordinated Indebtedness in exchange for, or out of the
aggregate net cash proceeds of a substantially concurrent Incurrence
(other than a sale to a Subsidiary of the Company) of Subordinated
Indebtedness so long as such new Indebtedness is Permitted Refinancing
Indebtedness and (A) has an Average Life that is longer than the
Average Life of the Securities and (B) has a Stated Maturity for its
final scheduled principal payment that is more than one year after the
Stated Maturity of the final scheduled principal payment of the
Securities; and
(vi) loans made to officers, directors or employees of the
Company or any Restricted Subsidiary approved by the Board of Directors
(or a duly authorized officer), the net cash proceeds of which are used
solely (A) to purchase common stock of the Company in connection with a
restricted stock or employee stock purchase plan, or to exercise stock
options received pursuant to an employee or director stock option plan
or other incentive plan, in a principal amount not to exceed the
exercise price of such stock options or (B) to refinance loans,
together with accrued interest thereon, made pursuant to item (A) of
this clause (vi).
The actions described in clauses (i) and (ii) of this paragraph (b) shall be
included in the calculation of the amount of Restricted Payments. The actions
described in clauses (iii), (iv), (v) and (vi) of this paragraph (b) shall be
excluded in the calculation of the amount of Restricted Payments, provided that
the net cash proceeds from any issuance or sale of Capital Stock of the Company
pursuant to such clause (iii), (iv) or (vi) shall be excluded from any
calculations pursuant to clause (B) or (C) under the immediately preceding
paragraph (a).
(c) In computing Consolidated Net Income of the Company under
paragraph (a) above, (1) the Company shall use audited financial statements for
the portions of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based on the books and records of the Company for
the remaining portion of such period and (2) the Company shall be permitted to
rely in good faith on the financial statements and other financial data derived
from the books and records of the Company that are available on the date of
determination. If the Company makes a Restricted Payment which, at the time of
the making of such Restricted Payment, would in the good faith determination of
the Company be permitted under the requirements of this Indenture, such
Restricted Payment shall be deemed to have been made in compliance with this
Indenture notwithstanding any subsequent adjustments made in good faith to the
Company's financial statements affecting Consolidated Net Income of the Company
for any period.
SECTION 4.05 Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any consensual encumbrance or restriction on
the legal right of any Restricted Subsidiary to (i) pay dividends, in cash or
otherwise, or make any other distributions on or in respect of its Capital Stock
or Redeemable Stock, or pay any Indebtedness or other obligation owed, to the
Company or any other Restricted Subsidiary, (ii) make loans or advances to the
Company or any other Restricted Subsidiary or (iii) transfer any of its Property
to the Company or any other Restricted Subsidiary. Such limitation shall not
apply (a) with respect to clauses (i), (ii) and (iii), to
35
encumbrances and restrictions (1) in the Bank Credit Facilities and other
agreements and instruments, in each case as in effect on the Issue Date, (2)
relating to Indebtedness of a Restricted Subsidiary and existing at the time it
became a Restricted Subsidiary if such encumbrance or restriction was not
created in anticipation of or in connection with the transactions pursuant to
which such Restricted Subsidiary became a Restricted Subsidiary or (3) which
result from the renewal, refinancing, extension or amendment of an agreement
that is the subject of clause (a)(1) or (2) above or clause (b)(1) or (2) below,
provided that such encumbrance or restriction is not materially less favorable
to the Holders of Securities than those under or pursuant to the agreement so
renewed, refinanced, extended or amended, and (b) with respect to clause (iii)
only, to (1) any restriction on the sale, transfer or other disposition of
Property relating to Indebtedness that is permitted to be Incurred and secured
under Sections 4.03 and 4.10, (2) any encumbrance or restriction applicable to
Property at the time it is acquired by the Company or a Restricted Subsidiary,
so long as such encumbrance or restriction relates solely to the Property so
acquired and was not created in anticipation of or in connection with such
acquisition, (3) customary provisions restricting subletting or assignment of
leases and customary provisions in other agreements that restrict assignment of
such agreements or rights thereunder and (4) customary restrictions contained in
asset sale agreements limiting the transfer of such assets pending the closing
of such sale.
SECTION 4.06 Limitation on Asset Sales. (a) The Company shall
not, and shall not permit any Restricted Subsidiary to, consummate any Asset
Sale unless (i) the Company or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the Property subject to such Asset Sale and (ii) all of the
consideration paid to the Company or such Restricted Subsidiary in connection
with such Asset Sale is in the form of cash, cash equivalents, Liquid
Securities, Exchanged Properties or the assumption by the purchaser of
liabilities of the Company (other than liabilities of the Company that are by
their terms subordinated to the Securities) or liabilities of any Restricted
Subsidiary that made such Asset Sale (other than liabilities of a Subsidiary
Guarantor that are by their terms subordinated to such Subsidiary Guarantor's
Subsidiary Guaranty), in each case as a result of which the Company and its
remaining Restricted Subsidiaries are no longer liable for such liabilities
("Permitted Consideration"); provided, however, that the Company and its
Restricted Subsidiaries shall be permitted to receive Property other than
Permitted Consideration, so long as the aggregate Fair Market Value of all such
Property other than Permitted Consideration received from Asset Sales and held
by the Company or any Restricted Subsidiary at any one time shall not exceed
10.0% of Adjusted Consolidated Net Tangible Assets.
The Net Available Cash from Asset Sales by the Company or a
Restricted Subsidiary may be applied by the Company, such Restricted Subsidiary
or another Restricted Subsidiary, to the extent the Company or such Restricted
Subsidiary elects (or is required by the terms of any Senior Indebtedness of the
Company or a Subsidiary Guarantor), to (i) prepay, repay or purchase Senior
Indebtedness of the Company or a Subsidiary Guarantor or any Indebtedness of a
Restricted Subsidiary that is not a Subsidiary Guarantor (in each case excluding
Indebtedness owed to the Company or an Affiliate of the Company), (ii) reinvest
in Additional Assets (including by means of an Investment in Additional Assets
by a Restricted Subsidiary with Net Available Cash received by the Company or
another Restricted Subsidiary) or (iii) purchase Securities or purchase both
Securities and one or more series or issues of other
36
Pari Passu Indebtedness on a pro rata basis (excluding Securities and Pari Passu
Indebtedness owned by the Company or an Affiliate of the Company). Pending any
reinvestment pursuant to clause (ii) above, the Company may temporarily prepay,
repay or purchase Senior Indebtedness of the Company or a Subsidiary Guarantor.
(b) Any Net Available Cash from an Asset Sale not applied in
accordance with the preceding paragraph within 365 days from the date of such
Asset Sale shall constitute "Excess Proceeds." When the aggregate amount of
Excess Proceeds exceeds $20,000,000, the Company shall be required to make an
offer to purchase Securities having an aggregate principal amount equal to the
aggregate amount of Excess Proceeds (the "Prepayment Offer") at a purchase price
equal to 100% of the principal amount of such Securities plus accrued and unpaid
interest, if any, to the Purchase Date (as defined) in accordance with the
procedures (including prorating in the event of oversubscription) set forth
herein, but, if the terms of any Pari Passu Indebtedness require that a Pari
Passu Offer be made contemporaneously with the Prepayment Offer, then the Excess
Proceeds shall be prorated between the Prepayment Offer and such Pari Passu
Offer in accordance with the aggregate outstanding principal amounts of the
Securities and such Pari Passu Indebtedness, and the aggregate principal amount
of Securities for which the Prepayment Offer is made shall be reduced
accordingly. If the aggregate principal amount of Securities tendered by Holders
thereof exceeds the amount of available Excess Proceeds, then such Excess
Proceeds shall be allocated pro rata according to the principal amount of the
Securities tendered and the Trustee shall select the Securities to be purchased
in accordance herewith. To the extent that any portion of the amount of Excess
Proceeds remains after compliance with the second sentence of this paragraph and
provided that all Holders of Securities have been given the opportunity to
tender their Securities for purchase as described in the following paragraph in
accordance with this Indenture, the Company and its Restricted Subsidiaries may
use such remaining amount for purposes permitted by this Indenture and the
amount of Excess Proceeds shall be reset to zero.
(c) (1) Within 30 days after the 365th day following the date
of an Asset Sale, the Company shall, if it is obligated to make an offer to
purchase the Securities pursuant to the preceding paragraph, send a written
Prepayment Offer notice, by first-class mail, to the Trustee and the Holders of
the Securities (the "Prepayment Offer Notice"), accompanied by such information
regarding the Company and its Subsidiaries as the Company believes shall enable
such Holders of the Securities to make an informed decision with respect to the
Prepayment Offer (which at a minimum shall include (i) the most recently filed
Annual Report on Form 10-K (including audited consolidated financial statements)
of the Company, the most recent subsequently filed Quarterly Report on Form 10-Q
of the Company and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, other than Current Reports describing Asset
Sales otherwise described in the offering materials, or corresponding successor
reports (or, during any time that the Company is not subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, corresponding reports
prepared pursuant to Section 4.02), (ii) a description of material developments
in the Company's business subsequent to the date of the latest of such reports
and (iii) if material, appropriate pro forma financial information). The
Prepayment Offer Notice shall state, among other things, (i) that the Company is
offering to purchase Securities pursuant to the provisions of this Indenture,
(ii) that any Security (or any portion thereof) accepted for payment (and duly
paid on the Purchase Date) pursuant to the Prepayment Offer shall cease to
accrue interest on the Purchase Date, (iii) that
37
any Securities (or portions thereof) not properly tendered shall continue to
accrue interest, (iv) the purchase price and purchase date, which shall be,
subject to any contrary requirements of applicable law, no less than 30 days nor
more than 60 days after the date the Prepayment Offer Notice is mailed (the
"Purchase Date"), (v) the aggregate principal amount of Securities to be
purchased, (vi) a description of the procedure which Holders of Securities must
follow in order to tender their Securities and the procedures that Holders of
Securities must follow in order to withdraw an election to tender their
Securities for payment and (vii) all other instructions and materials necessary
to enable Holders to tender Securities pursuant to the Prepayment Offer.
(2) Not later than the date upon which written notice of a
Prepayment Offer is delivered to the Trustee as provided above, the Company
shall deliver to the Trustee an Officers' Certificate as to (i) the amount of
the Prepayment Offer (the "Offer Amount"), (ii) the allocation of the Net
Available Cash from the Asset Sales pursuant to which such Prepayment Offer is
being made and (iii) the compliance of such allocation with the provisions of
Section 4.06(a). On such date, the Company shall also irrevocably deposit with
the Trustee or with the Paying Agent (or, if the Company or a Wholly Owned
Subsidiary is the Paying Agent, shall segregate and hold in trust) in Permitted
Short-Term Investments, maturing on the last day prior to the Purchase Date or
on the Purchase Date if funds are immediately available by open of business, an
amount equal to the Offer Amount to be held for payment in accordance with the
provisions of this Section. Upon the expiration of the period for which the
Prepayment Offer remains open (the "Offer Period"), the Company shall deliver to
the Trustee for cancelation the Securities or portions thereof which have been
properly tendered to and are to be accepted by the Company. The Trustee or the
Paying Agent shall, on the Purchase Date, mail or deliver payment to each
tendering Holder in the amount of the purchase price. In the event that the
aggregate purchase price of the Securities delivered by the Company to the
Trustee is less than the Offer Amount, the Trustee or the Paying Agent shall
deliver the excess to the Company immediately after the expiration of the Offer
Period for application in accordance with this Section.
(3) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company or its agent at the address specified in the notice at least three
Business Days prior to the Purchase Date. Holders shall be entitled to withdraw
their election if the Trustee or the Company receives not later than one
Business Day prior to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Security
purchased. If at the expiration of the Offer Period the aggregate principal
amount of Securities surrendered by Holders exceeds the Offer Amount, the
Company shall select the Securities to be purchased on a pro rata basis (with
such adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000, or integral multiples thereof, shall be
purchased). Holders whose Securities are purchased only in part shall be issued
new Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of
38
this Section 4.06. A Security shall be deemed to have been accepted for purchase
at the time the Trustee or the Paying Agent mails or delivers payment therefor
to the surrendering Holder.
(d) The Company shall comply, to the extent applicable, with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws or regulations thereunder to the extent such laws and regulations are
applicable in connection with the purchase of Securities as described above. To
the extent that the provisions of any securities laws or regulations conflict
with the provisions relating to the Prepayment Offer, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described above by virtue thereof.
SECTION 4.07 Limitation on Transactions with Affiliates. (a)
The Company shall not, and shall not permit any of its Restricted Subsidiaries
to, directly or indirectly, conduct any business or enter into any transaction
or series of transactions (including the sale, transfer, disposition, purchase,
exchange or lease of Property, the making of any Investment, the giving of any
Guarantee or the rendering of any service) with or for the benefit of any
Affiliate of the Company (other than the Company or a Restricted Subsidiary),
unless (i) such transaction or series of transactions is on terms no less
favorable to the Company or such Restricted Subsidiary than those that could be
obtained in a comparable arm's-length transaction with a Person that is not an
Affiliate of the Company or such Restricted Subsidiary, and (ii) with respect to
a transaction or series of transactions involving aggregate payments by or to
the Company or such Restricted Subsidiary having a Fair Market Value equal to or
in excess of (a) $5,000,000 but less than $10,000,000, an Officer certifies that
such transaction or series of transactions complies with clause (i) of this
paragraph, as evidenced by an Officer's Certificate delivered to the Trustee or
(b) $10,000,000, the Board of Directors (including a majority of the
disinterested members of such Board of Directors) approves such transaction or
series of transactions and certifies that such transaction or series of
transactions complies with clause (i) of this paragraph, as evidenced by a
certified resolution delivered to the Trustee.
The limitations of the preceding paragraph do not apply to (i)
the payment of reasonable and customary regular fees to directors of the Company
or any of its Restricted Subsidiaries who are not employees of the Company or
any of its Restricted Subsidiaries, (ii) indemnities of officers and directors
of the Company or any Subsidiary consistent with such Person's charter, bylaws
and applicable statutory provisions, (iii) any issuance of securities, or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, stock options and stock ownership plans
approved by the Board of Directors, (iv) loans made (a) to officers, directors
or employees of the Company or any Restricted Subsidiary approved by the Board
of Directors (or by a duly authorized Officer), the proceeds of which are used
solely to purchase common stock of the Company in connection with a restricted
stock or employee stock purchase plan, or to exercise stock options received
pursuant to an employee or director stock option plan or other incentive plan,
in a principal amount not to exceed the exercise price of such stock options, or
(b) to refinance loans, together with accrued interest thereon, made pursuant to
this clause (iv), (v) advances and loans to officers, directors and employees of
the Company or any Subsidiary, provided such loans and advances (excluding loans
or advances made pursuant to the preceding clause (iv)) do not exceed $5,000,000
at any one time outstanding, (vi) any Restricted Payment permitted to be paid
pursuant to Section 4.04, (vii) any transaction or series of transactions
between the Company and one or more Restricted
39
Subsidiaries or between two or more Restricted Subsidiaries in the ordinary
course of business, provided that no more than 10% of the total voting power of
the Voting Stock of any such Restricted Subsidiary is owned by an Affiliate of
the Company (other than a Restricted Subsidiary) and (viii) any transaction or
series of transactions pursuant to any agreement or obligation of the Company or
any of its Restricted Subsidiaries in effect on the Issue Date.
SECTION 4.08 [Intentionally Omitted]
SECTION 4.09 Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder of Securities shall have the right to require the
Company to repurchase all or any part (equal to $1,000 in principal amount or an
integral multiple thereof) of such Holder's Securities pursuant to the offer
described below (the "Change of Control Offer") at a purchase price in cash
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of purchase, subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant interest
payment date (the "Change of Control Payment").
(b) Within 30 days following any Change of Control or, at the
Company's option, prior to such Change of Control but after the public
announcement thereof, the Company shall mail a notice to each Holder stating,
among other things: (i) that a Change of Control has occurred or is expected to
occur, as applicable, and a Change of Control Offer is being made pursuant to
this Indenture and that all Securities (or portions thereof) properly tendered
shall be accepted for payment; (ii) the purchase price and the purchase date,
which shall be, subject to any contrary requirements of applicable law, no fewer
than 30 days nor more than 60 days from the date the Company mails such notice
and which may not be prior to the Change of Control (the "Change of Control
Payment Date"); (iii) that any Security (or portion thereof) accepted for
payment (and duly paid on the Change of Control Payment Date) pursuant to the
Change of Control Offer shall cease to accrue interest on the Change of Control
Payment Date; (iv) that any Securities (or portions thereof) not properly
tendered shall continue to accrue interest; (v) a description of the transaction
or transactions constituting the Change of Control; (vi) the procedures that
Holders of Securities must follow in order to tender their Securities (or
portions thereof) for payment and the procedures that Holders of Securities must
follow in order to withdraw an election to tender Securities (or portions
thereof) for payment; and (vii) all other instructions and materials necessary
to enable Holders to tender Securities pursuant to the Change of Control Offer.
(c) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company or its agent at the address specified in the notice at least three
Business Days prior to the Change of Control Payment Date. Holders shall be
entitled to withdraw their election if the Trustee or the Company receives not
later than one Business Day prior to the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security which was delivered for purchase by
the Holder and a statement that such Holder is withdrawing his election to have
such Security purchased. Holders whose Securities are purchased only in part
shall be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered.
40
(d) On or prior to the Change of Control Payment Date, the
Company shall irrevocably deposit with the Trustee or with the Paying Agent (or,
if the Company or any of its Wholly Owned Subsidiaries is acting as the Paying
Agent, segregate and hold in trust) in cash an amount equal to the Change of
Control Payment payable to the Holders entitled thereto, to be held for payment
in accordance with the provisions of this Section.
(e) On the Change of Control Payment Date, the Company shall
deliver to the Trustee the Securities or portions thereof which have been
properly tendered to and are to be accepted by the Company for payment. The
Trustee or the Paying Agent shall, on the Change of Control Payment Date, mail
or deliver payment to each tendering Holder of the Change of Control Payment. In
the event that the aggregate Change of Control Payment is less than the amount
delivered by the Company to the Trustee or the Paying Agent, the Trustee or the
Paying Agent, as the case may be, shall deliver the excess to the Company
immediately after the Change of Control Payment Date.
(f) The Company shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Company and purchases all Securities validly tendered and not
withdrawn under such Change of Control Offer.
(g) The Company shall comply, to the extent applicable, with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws or regulations thereunder to the extent such laws and regulations are
applicable in connection with the purchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.10 Limitation on Liens. The Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, enter
into, create, Incur, assume or suffer to exist any Lien on or with respect to
any Property of the Company or such Restricted Subsidiary, whether owned on the
Issue Date or acquired after the Issue Date, or any interest therein or any
income or profits therefrom, unless the Securities or any Subsidiary Guaranty of
such Restricted Subsidiary, as applicable, are secured equally and ratably with
(or prior to) any and all other obligations secured by such Lien, except that
the Company and its Restricted Subsidiaries may enter into, create, Incur,
assume or suffer to exist Liens securing Senior Indebtedness and Permitted
Liens.
SECTION 4.11 Compliance Certificate. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the Company
an Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA Section 314(a)(4).
41
SECTION 4.12 Further Instruments and Acts. Upon request of the
Trustee, the Company shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.13 Future Subsidiary Guarantors. The Company shall
cause each Restricted Subsidiary that (i) Incurs Indebtedness or issues
Preferred Stock following the Issue Date or (ii) has Indebtedness or Preferred
Stock outstanding on the date on which such Restricted Subsidiary becomes a
Restricted Subsidiary, to execute and deliver to the Trustee a Subsidiary
Guaranty at the time such Restricted Subsidiary Incurs such Indebtedness or
becomes a Restricted Subsidiary and a supplemental indenture in the form of
Exhibit B pursuant to which such Subsidiary shall guaranty payment of the
Securities as provided in Section 11.06; provided, however, that such Restricted
Subsidiary shall not be required to deliver a Subsidiary Guaranty if the
aggregate amount of such Indebtedness or Preferred Stock, together with all
other Indebtedness and Preferred Stock then outstanding (a) of such Restricted
Subsidiary, is less than $10,000,000 and (b) among Restricted Subsidiaries that
are not Subsidiary Guarantors is less than $25,000,000.
SECTION 4.14 Incurrence of Layered Indebtedness. (i) The
Company shall not Incur any Indebtedness which is subordinated or junior in
right of payment to any Senior Indebtedness of the Company unless such
Indebtedness constitutes Indebtedness which is junior to, or pari passu with,
the Securities in right of payment and (ii) no Subsidiary Guarantor shall Incur
any Indebtedness that is subordinated or junior in right of payment to any
Senior Indebtedness of such Subsidiary Guarantor unless such Indebtedness
constitutes Indebtedness which is junior to, or pari passu with, such Subsidiary
Guarantor's Subsidiary Guaranty in right of payment.
SECTION 4.15 Restricted and Unrestricted Subsidiaries. Unless
defined or designated as an Unrestricted Subsidiary, any Person that becomes a
Subsidiary of the Company or any of its Restricted Subsidiaries shall be
classified as a Restricted Subsidiary subject to the provisions of the next
paragraph. The Company may designate a Subsidiary (including a newly formed or
newly acquired Subsidiary) of the Company or any of its Restricted Subsidiaries
as an Unrestricted Subsidiary if (i) such Subsidiary does not at such time own
any Capital Stock or Indebtedness of, or own or hold any Lien on any Property
of, the Company or any other Restricted Subsidiary, (ii) such Subsidiary does
not at such time have any Indebtedness or other obligations which, if in
default, would result (with the passage of time or notice or otherwise) in a
default on any Indebtedness of the Company or any Restricted Subsidiary and
(iii)(a) such designation is effective immediately upon such Subsidiary becoming
a Subsidiary of the Company or of a Restricted Subsidiary, (b) the Subsidiary to
be so designated has total assets of $1,000 or less or (c) if such Subsidiary
has assets greater than $1,000, then such redesignation as an Unrestricted
Subsidiary is deemed to constitute a Restricted Payment in an amount equal to
the Fair Market Value of the Company's direct and indirect ownership interest in
such Subsidiary, and such Restricted Payment would be permitted to be made at
the time of such designation under Section 4.04. Except as provided in the
immediately preceding sentence, no Restricted Subsidiary may be redesignated as
an Unrestricted Subsidiary. The designation of an Unrestricted Subsidiary or
removal of such designation shall be made by the Board of Directors pursuant to
a certified resolution delivered to the Trustee and shall be effective as of the
date specified in the applicable certified resolution, which shall not be prior
to the date such certified
42
resolution is delivered to the Trustee. Upon designation of a Restricted
Subsidiary as an Unrestricted Subsidiary in compliance with this Section, such
Restricted Subsidiary shall, by delivery of a supplemental indenture in form
satisfactory to the Trustee, be released from any Subsidiary Guaranty previously
made by such Subsidiary.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, take any action or enter into any transaction or
series of transactions that would result in a Person becoming a Restricted
Subsidiary (whether through an acquisition or otherwise) unless, after giving
effect to such action, transaction or series of transactions, on a pro forma
basis, (i) the Company could Incur at least $1.00 of additional Indebtedness
pursuant to clause (a) of Section 4.03 and (ii) no Default or Event of Default
would occur or be continuing.
SECTION 4.16 Suspension of Certain Covenants. In the event of
the occurrence of a Fall Away Event, (a) the covenants and provisions contained
hereunder under Section 4.03, Section 4.04, Section 4.05, Section 4.06, Section
4.07 and Section 4.13 shall each no longer be in effect for the remaining term
of the Notes, subject to the following paragraph, and (b) the Company will no
longer be subject to the financial test set forth in clause (iv) of Section
5.01(i).
If, at any time after the occurrence of a Fall Away Event, the
Company fails to maintain Investment Grade status, then the covenants which are
no longer in effect pursuant to the preceding paragraph shall thereafter be
reinstated and be applicable to the Company and its Restricted Subsidiaries
pursuant to the terms of the Indenture unless and until a subsequent Fall Away
Event occurs; provided, however, that no Default, Event of Default or breach of
any kind shall be deemed to exist under the Indenture based on, and none of the
Company or any of its Subsidiaries shall bear any liability for, any actions
taken or events occurring after the occurrence of a Fall Away Event and before
any reinstatement of such covenants as provided above, or any actions taken at
any time pursuant to any contractual obligation arising prior to such
reinstatement, regardless of whether such actions or events would have been
permitted if the applicable covenants remained in effect during such period.
ARTICLE 5
Successor Company
SECTION 5.01 When Company May Merge or Transfer Assets. The
Company shall not consolidate with or merge with or into any Person, or convey,
transfer or lease, in one transaction or a series of transactions, all or
substantially all the property of the Company and its Restricted Subsidiaries,
taken as a whole, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a Person organized or existing under the
laws of the United States of America, any State thereof or the District
of Columbia and the Successor Company (if not the Company) shall
expressly assume, by a supplemental indenture, executed and delivered
to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Securities and this Indenture;
(ii) in the case of a conveyance, transfer or lease of all or
substantially all the Property of the Company and its Restricted
Subsidiaries,
43
taken as a whole, such Property shall have been so conveyed,
transferred or leased as an entirety or virtually as an entirety to one
Person; (iii) immediately after giving effect to such transaction (and
treating, for purposes of this clause (iii) and clause (iv) below, any
Indebtedness which becomes or is anticipated to become an obligation of
the Successor Company or any Restricted Subsidiary as a result of such
transaction as having been Incurred by such Successor Company or such
Restricted Subsidiary at the time of such transaction), no Default or
Event of Default shall have occurred and be continuing; (iv) other than
with respect to the consolidation of the Company with or merger of the
Company with or into, or the conveyance, transfer or lease of all or
substantially all of the Property of the Company and its Restricted
Subsidiaries, taken as a whole, to a Wholly Owned Subsidiary,
immediately after giving effect to such transactions, the Successor
Company would be able to Incur an additional $1.00 of Indebtedness
pursuant to clause (a) of Section 4.03; and (v) the Company shall have
delivered to the Trustee an Officer's Certificate, stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture. The provisions of clauses (i), (ii),
(iii), (iv) and (v) above shall not apply to any transactions which
constitute an Asset Sale if the Company has complied with Section 4.06.
The Successor Company shall be the successor to the Company
and shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture, but the predecessor Company in the
case of a conveyance, transfer or lease shall not be released from the
obligation to pay the principal of and interest on the Securities.
SECTION 5.02 When a Subsidiary Guarantor May Merge or Transfer
Assets. The Company shall not permit any Subsidiary Guarantor to consolidate
with or merge with or into, or convey, transfer or lease, in one transaction or
series of transactions, all or substantially all of its Property to, any Person
(other than the Company or any other Subsidiary Guarantor) unless:
(a) the Successor Company (if not such Subsidiary) shall be a
person organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the
Successor Company (if not such Subsidiary) shall expressly assume, by a
supplemental indenture, in form satisfactory to the Trustee, all the
obligations of such Subsidiary under its Subsidiary Guaranty; (b) in
the case of a conveyance, transfer or lease of all or substantially all
the Property of such Subsidiary Guarantor, such Property shall have
been so conveyed, transferred or leased as an entirety or virtually as
an entirety to one Person; (c) immediately after giving effect to such
transaction no Default or Event of Default shall have occurred and be
continuing and (d) the Company shall have delivered to the Trustee an
Officers' Certificate, stating that such consolidation, merger or
transfer and such supplemental indenture (if any) comply with this
Indenture. The provisions of clauses (a), (b), (c) and (d) above shall
not apply to any transactions which constitute an Asset Sale if the
Company has complied with Section 4.06.
The Successor Company shall be the successor to the applicable
Subsidiary Guarantor and shall succeed to, and be substituted for, and may
exercise every right and power of such Subsidiary Guarantor under its Subsidiary
Guaranty, but the predecessor Subsidiary
44
Guarantor in the case of a conveyance, transfer or lease shall not be released
from the obligation to pay the principal of and interest on the Securities.
ARTICLE 6
Defaults and Remedies
SECTION 6.01 Events of Default. The following events shall be
"Events of Default":
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, whether or not such
payment shall be prohibited by Article 10, and such default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal of
any Security when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise, whether or not such payment shall be
prohibited by Article 10;
(3) the Company or any Subsidiary Guarantor fails to comply
with Article 5;
(4) default in the performance, or breach, of any covenant or
warranty of the Company or any Subsidiary Guarantor in this Indenture
(other than a covenant or warranty addressed in clauses (1), (2) or (3)
above) and continuance of such default or breach for a period of 60
days after the notice specified below;
(5) default by the Company or any Restricted Subsidiary under
any Indebtedness for borrowed money (other than Non-recourse Purchase
Money Indebtedness) of the Company or any Restricted Subsidiary which
results in acceleration of the maturity of such Indebtedness, or the
failure to pay such Indebtedness at maturity, in an amount greater than
$10,000,000 or its foreign currency equivalent at the time if such
Indebtedness is not discharged or such acceleration is not rescinded or
annulled within 10 days after the notice specified below;
(6) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors; or takes any comparable action under any foreign
laws relating to insolvency;
45
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property;
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary; or
(D) grants any similar relief under any foreign laws; and in
each such case the order or decree remains unstayed and in
effect for 60 days;
(8) one or more final judgments or orders by a court of
competent jurisdiction are entered against the Company or any
Restricted Subsidiary in an uninsured or unindemnified aggregate amount
outstanding at any time in excess of $10,000,000 and such judgments or
orders are not discharged, waived, stayed, satisfied or bonded for a
period of 60 consecutive days; or
(9) a Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of this Indenture and
such Subsidiary Guaranty) or a Subsidiary Guarantor denies or
disaffirms its obligations under its Subsidiary Guaranty.
The foregoing shall constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (4) or (5) is not an Event of Default
until the Trustee or the Holders of at least 25% in aggregate principal amount
of the outstanding Securities notify the Company (and in the case of such notice
by Holders, the Trustee) in writing of such Default and the Company does not
cure such Default within the time specified after receipt of such notice. Such
notice must specify the Default, demand that it be remedied and state that such
notice is a "Notice of Default."
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default and any event which with the giving of notice or the
lapse of time would become an Event of Default, its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 6.02 Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.01(6) or (7)) occurs and is
continuing, the Trustee by notice to
46
the Company, or the Holders of at least 25% in aggregate principal amount of the
Securities by notice to the Company and the Trustee, may declare the principal
of the Securities to be due and payable. Upon such a declaration, such principal
shall be due and payable immediately. If an Event of Default specified in
Section 6.01(6) or (7) occurs, the principal of the Securities shall
automatically and without any action by the Trustee or any Holder, become
immediately due and payable. The Holders of a majority in aggregate principal
amount of the outstanding Securities by notice to the Trustee and the Company
may rescind any declaration of acceleration if the rescission would not conflict
with any judgment or decree, and if all existing Events of Default have been
cured or waived except nonpayment of principal or interest that has become due
solely because of the acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.03 Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04 Waiver of Past Defaults. The Holders of a
majority in aggregate principal amount of the Securities by notice to the
Trustee may waive an existing Default and its consequences except (i) a Default
in the payment of the principal of or interest on a Security or (ii) a Default
in respect of a provision that under Section 9.02 cannot be amended without the
consent of each Securityholder affected. When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
impair any consequent right.
SECTION 6.05 Control by Majority. The Holders of a majority in
aggregate principal amount of the Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee with respect to the
Securities. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or, subject to Section 7.01, that the
Trustee determines is unduly prejudicial to the rights of other Securityholders
or would involve the Trustee in personal liability; provided, however, that the
Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction. Prior to taking any action hereunder, the
Trustee shall be entitled to reasonable indemnity against all losses and
expenses caused by taking or not taking such action.
SECTION 6.06 Limitation on Suits. A Securityholder may not
pursue any remedy with respect to this Indenture or the Securities unless:
47
(1) such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount
of the Securities then outstanding shall have made a written request,
and such Holder of or Holders shall have offered reasonable indemnity,
to the Trustee to pursue such proceeding as trustee; and
(3) the Trustee has failed to institute such proceeding and
has not received from the Holders of at least a majority in aggregate
principal amount of the Securities outstanding a direction inconsistent
with such request, within 60 days after such notice, request and offer.
The foregoing limitations on the pursuit of remedies by a
Securityholder shall not apply to a suit instituted by a Holder of Securities
for the enforcement of payment of the principal of or interest on such Security
on or after the applicable due date specified in such Security. A Securityholder
may not use this Indenture to prejudice the rights of another Securityholder or
to obtain a preference or priority over another Securityholder.
SECTION 6.07 Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in this Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08 Collection Suit by Trustee. If an Event of
Default specified in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.07.
SECTION 6.09 Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.
SECTION 6.10 Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section
7.07;
48
SECOND: to holders of Senior Indebtedness of the
Company to the extent required by Article 10;
THIRD: to Securityholders for amounts due and unpaid
on the Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest,
respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section.
At least 15 days before such record date, the Company shall mail to each
Securityholder and the Trustee a notice that states the record date, the payment
date and amount to be paid.
SECTION 6.11 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in aggregate principal amount of the Securities.
SECTION 6.12 Waiver of Stay or Extension Laws. The Company (to
the extent it may lawfully do so) shall not at any time insist upon, or plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and shall not 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 had been enacted.
ARTICLE 7
Trustee
SECTION 7.01 Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
49
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02 Rights of Trustee. (a) The Trustee may rely on
any document believed by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate any fact or matter stated
in the document.
50
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or
co-registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company or any Subsidiary Guarantor in this Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.05 Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it is known to a Trust
Officer or written notice of it is received by the Trustee. Except in the case
of a Default in payment of principal of or interest on any Security, the Trustee
may withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interests of
Securityholders.
The Trustee is not required to take notice or deemed to have
notice of any Event of Default with respect to the Securities, except an Event
of Default under Section 6.01(1) or 6.01(2) hereof, unless a Trust Officer shall
have received written notice of such Event of Default from the Company, any
Subsidiary Guarantor or any Securityholder or unless a Trust Officer shall
otherwise have knowledge thereof.
SECTION 7.06 Reports by Trustee to Holders. (a) As promptly as
practicable after each May 15 beginning with May 15, 2002, and in any event
prior to July 15 in each year, the Trustee shall mail to each Securityholder a
brief report dated as of May 15 each year that complies with TIA Section 313(a),
if and to the extent required by said subsection. The Trustee also shall comply
with TIA Section 313(b).
51
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
(b) Upon written request by the Trustee, the Company will
furnish or cause to be furnished to the Trustee within 30 days after the receipt
by the Company of any such request, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of a date not
more than 15 days prior to the time such list is furnished; provided, however,
that is and so long as the Trustee shall be the security registrar, no such list
need be furnished.
SECTION 7.07 Compensation and Indemnity. The Company shall pay
to the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the acceptance and administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee may have separate counsel and the Company shall
pay the fees and expenses of such counsel. The Company need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own wilful misconduct, negligence or bad faith.
The Company need not pay for any settlement made by the Trustee without the
Company's consent, such consent not to be unreasonably withheld.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(6) or (7), the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08 Replacement of Trustee. The Trustee may resign at
any time by so notifying the Company. The Holders of a majority in aggregate
principal amount of the Securities may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
52
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in aggregate principal amount of the Securities and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in aggregate principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder who has been a bona fide Holder of a Security for at least six
months may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09 Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any such successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of
53
condition. The Trustee shall comply with TIA Section 310(b), subject to the
penultimate paragraph thereof; provided, however, that there shall be excluded
from the operation of TIA Section 310(b)(1) any indenture or indentures under
which other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met.
SECTION 7.11 Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01 Discharge of Liability on Securities; Defeasance.
(a) When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07) for cancelation or
(ii) all outstanding Securities have become due and payable, whether at maturity
or as a result of the mailing of a notice of redemption pursuant to Article 3
and the Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Securities, including interest
thereon to maturity or such redemption date (other than Securities replaced
pursuant to Section 2.07), and if in either case the Company pays all other sums
payable hereunder by the Company, then this Indenture shall, subject to Sections
8.01(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under Sections
4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.09, 4.10, 4.13, 4.14 and 4.15, the
operation of Sections 6.01(4) (to the extent relating to such other Sections),
6.01(5), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections
6.01(6) and (7), with respect only to Significant Subsidiaries), its obligations
under Sections 5.01(iv) and 5.02 and the related operation of Section 6.01(3)
("covenant defeasance option"). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Sections 6.01(3)
and 6.01(4) (with respect to the provisions of Articles 4 and 5 referred to in
the immediately preceding paragraph) and Sections 6.01(5), 6.01(6), 6.01(7),
6.01(8) and 6.01(9) (but, in the case of Sections 6.01(6) and (7), with respect
only to Significant Subsidiaries). If the Company exercises its legal defeasance
option or its covenant defeasance option, each Subsidiary Guarantor, if any,
shall be released from all its obligations under its Subsidiary Guaranty.
54
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.05 and 8.06 and
Appendix A shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07 and 8.05 shall survive.
SECTION 8.02 Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal of
and interest on the Securities to maturity or redemption, as the case
may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the Securities to maturity or redemption, as the case
may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Section 6.01(6) or (7) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such 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 defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders 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
55
the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities as
contemplated by this Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03 Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
this Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities. Money
and securities so held in trust are not subject to Article 10.
SECTION 8.04 Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05 Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06 Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE 9
Amendments
SECTION 9.01 Without Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(4) to make any change in Article 10 or Article 12 that would
limit or terminate the benefits available to any holder of Senior
Indebtedness of the Company or any Subsidiary Guarantor (or
Representatives therefor) under Article 10 or Article 12, respectively;
(5) to add or to remove Subsidiary Guarantors when permitted
by the terms hereof, or to secure the Securities;
(6) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company;
(7) to comply with any requirements of the SEC in connection
with qualifying, or maintaining the qualification of, this Indenture
under the TIA; or
(8) to make any change that does not adversely affect the
rights of any Securityholder.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 or Article 12 of any holder of
Designated Senior Indebtedness then outstanding unless the holders of such
Designated Senior Indebtedness (or their Representative) consent in writing to
such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.02 With Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities. However, without the
consent of each Securityholder affected thereby an amendment or waiver may not:
57
(1) reduce the amount of Securities whose Holders must consent
to an amendment or waiver;
(2) reduce the rate of or change the time for payment of
interest on any Security;
(3) reduce the principal of or extend the Stated Maturity of
any Security;
(4) reduce the amount payable upon the redemption or
repurchase of any Security in accordance with Article 3 or Section 4.06
or 4.09, or change the time at which any Security may be redeemed in
accordance with Article 3;
(5) at any time after a Change of Control or an Asset Sale has
occurred, change the time at which the Change of Control Offer or
Prepayment Offer relating thereto must be made or at which the
Securities must be repurchased pursuant to such Change of Control Offer
or Prepayment Offer or make any other changes to Sections 4.06 or 4.09
or the definitions related thereto;
(6) make any Security payable in a currency other than that
stated in the Security;
(7) make any change in Article 10 or Article 12 that adversely
affects the rights of any Securityholder under Article 10 or Article
12;
(8) make any change in any Subsidiary Guaranty that would
adversely affect the Securityholders;
(9) impair the right of any Holder to institute suit for
enforcement of any payment on or with respect to such Holder's
Securities or any Subsidiary Guaranty;
(10) release any security that may have been granted to the
Trustee in respect of the Securities; or
(11) make any change in Section 6.04 or 6.07 or the second
sentence of this Section.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 or Article 12 of any holder of
Designated Senior Indebtedness then outstanding unless the holders of such
Designated Senior Indebtedness (or their Representative) consent in writing to
such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such
58
notice to all Securityholders, or any defect therein, shall not impair or affect
the validity of an amendment under this Section.
SECTION 9.03 Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.04 Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05 Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06 Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if such amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
SECTION 9.07 Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or
59
agree to amend in the time frame set forth in solicitation documents relating to
such consent, waiver or agreement.
ARTICLE 10
Subordination
SECTION 10.01 Agreement To Subordinate. The Company agrees,
and each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities is subordinated in right of payment, to the extent
and in the manner provided in this Article 10, to the payment when due of all
Senior Indebtedness of the Company and that the subordination is for the benefit
of and enforceable by the holders of such Senior Indebtedness. The Securities
shall in all respects rank pari passu with all existing and future Pari Passu
Indebtedness of the Company (including the Company's 8 3/4% Senior Subordinated
Notes due 2007) and senior to all future Subordinated Indebtedness of the
Company, and only Senior Indebtedness of the Company shall rank senior to the
Securities in accordance with the provisions set forth herein. All provisions of
this Article 10 shall be subject to Section 10.12.
SECTION 10.02 Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company to creditors upon a total
or partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:
(1) holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full of such Senior Indebtedness before
Securityholders shall be entitled to receive any payment of principal
of or interest on the Securities; and
(2) until such Senior Indebtedness is paid in full, any
distribution made by or on behalf of the Company to which
Securityholders would be entitled but for this Article 10 shall be made
to holders of such Senior Indebtedness as their interests may appear,
except that all Securityholders may receive and retain shares of stock
and any debt securities that are subordinated to all Senior
Indebtedness of the Company to at least the same extent as the
Securities.
SECTION 10.03 Default on Senior Indebtedness. The Company may
not pay the principal of, premium, if any, on or interest on the Securities or
make any deposit pursuant to Section 8.01 and may not repurchase, redeem or
otherwise retire any Securities (collectively, "pay the Securities") if (i) any
principal, premium, if any, interest or other amounts due in respect of any
Senior Indebtedness of the Company is not paid within any applicable grace
period (including at maturity) or (ii) any other default on Senior Indebtedness
of the Company occurs and the maturity of such Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, (x) the default
has been cured or waived and any such acceleration has been rescinded or (y)
such Senior Indebtedness has been paid in full; provided, however, that the
Company may pay the Securities without regard to the foregoing if the Company
and the Trustee receive written notice approving such payment from the
Representative of each issue of Designated Senior Indebtedness. During the
continuance of any default (other than a default described in clause (i) or (ii)
of the preceding sentence) with respect
60
to any Designated Senior Indebtedness pursuant to which the maturity thereof may
be accelerated immediately without further notice (except such notice as may be
required to effect such acceleration), the Company may not pay the Securities
for a period (a "Payment Blockage Period") commencing upon the receipt by the
Company and the Trustee of written notice of such default from the
Representative of the holders of such Designated Senior Indebtedness specifying
an election to effect a Payment Blockage Period (a "Payment Blockage Notice")
and ending 179 days after receipt of such notice by the Company and the Trustee
unless earlier terminated (i) by written notice to the Trustee and the Company
from the Representative who gave such Payment Blockage Notice, (ii) because such
Designated Senior Indebtedness has been repaid in full or (iii) because the
default giving rise to such Payment Blockage Notice is no longer continuing.
Notwithstanding the provisions described in the immediately preceding sentence,
unless the holders of such Designated Senior Indebtedness or the Representative
of such holders shall have accelerated the maturity of such Designated Senior
Indebtedness and not rescinded such acceleration, the Company may (unless
otherwise prohibited as described in the first sentence of this paragraph)
resume payments on the Securities after the end of such Payment Blockage Period.
No more than one Payment Blockage Notice may be given in any consecutive 360-day
period regardless of the number of defaults with respect to one or more issues
of Senior Indebtedness. No default with respect to Designated Senior
Indebtedness that existed or was continuing on the date of the commencement of
any Payment Blockage Period will be, or can be, made for the basis for the
commencement of a second Payment Blockage Period, whether or not within a period
of 365 consecutive days, unless such default has been cured or waived for a
period of not less than 90 consecutive days subsequent to the end of such
initial Payment Blockage Period.
SECTION 10.04 Acceleration of Payment of Securities. If
payment of the Securities is accelerated because of an Event of Default, the
Company or the Trustee shall promptly notify the holders of the Designated
Senior Indebtedness (or their Representatives) of the acceleration.
SECTION 10.05 When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article 10 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness of the Company and pay
it over to them as their interests may appear.
SECTION 10.06 Subrogation. After all Senior Indebtedness of
the Company is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness. A
distribution made under this Article 10 to holders of such Senior Indebtedness
which otherwise would have been made to Securityholders is not, as between the
Company and Securityholders, a payment by the Company on such Senior
Indebtedness.
SECTION 10.07 Relative Rights. This Article 10 defines the
relative rights of Securityholders and holders of Senior Indebtedness of the
Company. Nothing in this Indenture shall:
61
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default or an Event of Default, subject
to the rights of holders of Senior Indebtedness of the Company to
receive distributions otherwise payable to Securityholders.
SECTION 10.08 Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of the Company to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Indenture.
SECTION 10.09 Rights of Trustee and Paying Agent.
Notwithstanding Section 10.03, the Trustee or Paying Agent may continue to make
payments on the Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer receives notice satisfactory to it that payments may not be made under
this Article 10. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness may give the notice; provided,
however, that, if an issue of Senior Indebtedness of the Company has a
Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness of the Company with the same rights it would have if it were
not Trustee. The Registrar and co-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 10 with respect to any Senior Indebtedness of the Company which may
at any time be held by it, to the same extent as any other holder of such Senior
Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article 10 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
SECTION 10.10 Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness of the Company, the distribution may be made and the notice given
to their Representative (if any).
SECTION 10.11 Article 10 Not To Prevent Events of Default or
Limit Right To Accelerate. The failure to make a payment pursuant to the
Securities by reason of any provision in this Article 10 shall not be construed
as preventing the occurrence of a Default. Nothing in this Article 10 shall have
any effect on the right of the Securityholders or the Trustee to accelerate the
maturity of the Securities.
SECTION 10.12 Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Indebtedness or subject to the
restrictions set forth in this Article 10, and none of the
62
Securityholders shall be obligated to pay over any such amount to the Company or
any holder of Senior Indebtedness of the Company or any other creditor of the
Company.
SECTION 10.13 Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness of the Company for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of such Senior
Indebtedness and other Indebtedness 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 10. 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 Indebtedness of the Company to participate
in any payment or distribution pursuant to this Article 10, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Indebtedness 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 10, and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall
be applicable to all actions or omissions of actions by the Trustee pursuant to
this Article 10.
SECTION 10.14 Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness of the Company as provided in this Article 10 and appoints
the Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.15 Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Securityholders or the Company or any
other Person, money or assets to which any holders of Senior Indebtedness of the
Company shall be entitled by virtue of this Article 10 or otherwise.
SECTION 10.16 Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Securityholder by accepting a Security
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
Indebtedness of the Company, whether such Senior Indebtedness was created or
acquired before or after the issuance of the Securities, to acquire and continue
to hold, or to continue to hold, such Senior Indebtedness and such holder of
such Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Indebtedness.
63
ARTICLE 11
Subsidiary Guaranties
SECTION 11.01 Guaranties. Each Subsidiary Guarantor hereby
unconditionally guarantees, jointly and severally, to each Holder and to the
Trustee and its successors and assigns (a) the full and punctual payment of
principal of and interest on the Securities when due, whether at maturity, by
acceleration, by redemption or otherwise, and all other monetary obligations of
the Company under this Indenture and the Securities and (b) the full and
punctual performance within applicable grace periods of all other obligations of
the Company under this Indenture and the Securities (all the foregoing being
hereinafter collectively called the "Obligations"). Each Subsidiary Guarantor
further agrees that the Obligations may be extended or renewed, in whole or in
part, without notice or further assent from such Subsidiary Guarantor and that
such Subsidiary Guarantor will remain bound under this Article 11
notwithstanding any extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives notice
of any default under the Securities or the Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Company or any other Person under this Indenture, the
Securities or any other agreement or otherwise; (b) any extension or renewal of
any thereof; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Securities or any other agreement;
(d) the release of any security held by any Holder or the Trustee for the
Obligations or any of them; (e) the failure of any Holder or the Trustee to
exercise any right or remedy against any other guarantor of the Obligations; or
(f) any change in the ownership of such Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Obligations.
Each Subsidiary Guaranty is, to the extent and in the manner
set forth in Article 12, subordinated and subject in right of payment to the
prior payment in full of all Senior Indebtedness of the Subsidiary Guarantor
giving such Subsidiary Guaranty and each Subsidiary Guaranty is made subject to
such provisions of this Indenture.
Except as expressly set forth in Sections 4.15, 5.02 and
8.01(b), the obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Subsidiary Guarantor herein
shall not be discharged or impaired or otherwise affected by the failure of any
Holder or the Trustee to assert any claim or
64
demand or to enforce any remedy under this Indenture, the Securities or any
other agreement, by any waiver or modification of any thereof, by any default,
failure or delay, willful or otherwise, in the performance of the obligations,
or by any other act or thing or omission or delay to do any other act or thing
which may or might in any manner or to any extent vary the risk of such
Subsidiary Guarantor or would otherwise operate as a discharge of such
Subsidiary Guarantor as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein shall continue to be effective or be reinstated, as the case may
be, if at any time payment, or any part thereof, of principal of or interest on
any Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Obligation, each Subsidiary Guarantor hereby
promises to and will, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal
to the sum of (i) the unpaid amount of such Obligations, (ii) accrued and unpaid
interest on such Obligations (but only to the extent not prohibited by law) and
(iii) all other monetary Obligations of the Company to the Holders and the
Trustee.
Each Subsidiary Guarantor agrees that it shall not be entitled
to any right of subrogation in respect of any Obligations guaranteed hereby
until payment in full in cash of all Obligations and all obligations to which
the Obligations are subordinated as provided in Article 12. Each Subsidiary
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Obligations
guaranteed hereby may be accelerated as provided in Article 6 for the purposes
of such Subsidiary Guarantor's Subsidiary Guaranty herein, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6, such Obligations
(whether or not due and payable) shall forthwith become due and payable by such
Subsidiary Guarantor for the purposes of this Section.
Each Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
any Holder in enforcing any rights under this Section.
SECTION 11.02 Contribution. Each of the Company and any
Subsidiary Guarantor (a "Contributing Party") agrees (subject to Articles 10 and
12) that, in the event a payment shall be made by any other Subsidiary Guarantor
under any Subsidiary Guaranty (the "Claiming Guarantor"), the Contributing Party
shall indemnify the Claiming Guarantor in an amount equal to the amount of such
payment multiplied by a fraction, the numerator of which shall be the net worth
of the Contributing Party on the date hereof and the denominator of which shall
be the aggregate net worth of the Company and all the Subsidiary Guarantors on
the date
65
hereof (or, in the case of any Subsidiary Guarantor becoming a party hereto
pursuant to Section 9.01, the date of the amendment hereto executed and
delivered by such Subsidiary Guarantor).
SECTION 11.03 Successors and Assigns. This Article 11 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.04 No Waiver. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 11 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the Trustee and
the Holders herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Article 11
at law, in equity, by statute or otherwise.
SECTION 11.05 Modification. No modification, amendment or
waiver of any provision of this Article 11, nor the consent to any departure by
any Subsidiary Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice to or demand on any Subsidiary Guarantor in any case
shall entitle such Subsidiary Guarantor to any other or further notice or demand
in the same, similar or other circumstances.
SECTION 11.06 Execution of Supplemental Indenture for Future
Subsidiary Guarantors. Each Subsidiary which is required to become a Subsidiary
Guarantor pursuant to Section 4.13 shall promptly execute and deliver to the
Trustee a supplemental indenture in the form of Exhibit B hereto pursuant to
which such Subsidiary shall become a Subsidiary Guarantor under this Article 11
and shall guarantee the Obligations. Concurrently with the execution and
delivery of such supplemental indenture, the Company shall deliver to the
Trustee an Opinion of Counsel to the effect that such supplemental indenture has
been duly authorized, executed and delivered by such Subsidiary and that,
subject to the application of bankruptcy, insolvency, moratorium, fraudulent
conveyance or transfer and other similar laws relating to creditors' rights
generally and to the principles of equity, whether considered in a proceeding at
law or in equity, the Subsidiary Guaranty of such Subsidiary Guarantor is a
legal, valid and binding obligation of such Subsidiary Guarantor, enforceable
against such Subsidiary Guarantor in accordance with its terms.
ARTICLE 12
Subordination of Subsidiary Guaranties
SECTION 12.01 Agreement To Subordinate. Each Subsidiary
Guarantor agrees, and each Securityholder by accepting a Security agrees, that
the Obligations of such Subsidiary Guarantor are subordinated in right of
payment, to the extent and in the manner
66
provided in this Article 12, to the payment when due of all Senior Indebtedness
of such Subsidiary Guarantor and that the subordination is for the benefit of
and enforceable by the holders of such Senior Indebtedness. The Obligations of a
Subsidiary Guarantor shall in all respects rank pari passu with all existing and
future Pari Passu Indebtedness of such Subsidiary Guarantor and senior to all
existing and future Subordinated Indebtedness of such Subsidiary Guarantor, and
only Senior Indebtedness of such Subsidiary Guarantor (including such Subsidiary
Guarantor's Guarantee of Senior Indebtedness of the Company) shall rank senior
to the Obligations of such Subsidiary Guarantor in accordance with the
provisions set forth herein.
SECTION 12.02 Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of any Subsidiary Guarantor to creditors
upon a total or partial liquidation or a total or partial dissolution of such
Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Subsidiary Guarantor or its
property:
(1) holders of Senior Indebtedness of such Subsidiary
Guarantor shall be entitled to receive payment in full of such Senior
Indebtedness before Securityholders shall be entitled to receive any
payment pursuant to any Obligations of such Subsidiary Guarantor; and
(2) until the Senior Indebtedness of any Subsidiary Guarantor
is paid in full, any distribution made by or on behalf of such
Subsidiary Guarantor to which Securityholders would be entitled but for
this Article 12 shall be made to holders of such Senior Indebtedness as
their interests may appear, except that Securityholders may receive
shares of stock and any debt securities of such Subsidiary Guarantor
that are subordinated to Senior Indebtedness of such Subsidiary
Guarantor to at least the same extent as the Obligations of such
Subsidiary Guarantor are subordinated to Senior Indebtedness of such
Subsidiary Guarantor.
SECTION 12.03 Default on Senior Indebtedness of Subsidiary
Guarantor. No Subsidiary Guarantor may make any payment pursuant to any of its
Obligations or repurchase, redeem or otherwise retire or defease any Securities
or other Obligations (collectively, "pay its Subsidiary Guaranty") if (i) any
Senior Indebtedness of such Subsidiary Guarantor is not paid within any
applicable grace period (including at maturity) or (ii) any other default on
Senior Indebtedness of such Subsidiary Guarantor occurs and the maturity of such
Senior Indebtedness is accelerated in accordance with its terms unless, in
either case, (x) the default has been cured or waived and any such acceleration
has been rescinded or (y) such Senior Indebtedness has been paid in full;
provided, however, that any Subsidiary Guarantor may pay its Subsidiary Guaranty
without regard to the foregoing if such Subsidiary Guarantor and the Trustee
receive written notice approving such payment from the Representatives of each
issue of Senior Indebtedness of such Subsidiary Guarantor. No Subsidiary
Guarantor may pay its Subsidiary Guaranty during the continuance of any Payment
Blockage Period after receipt by the Company and the Trustee of a Payment
Blockage Notice under Section 10.03. Notwithstanding the provisions described in
the immediately preceding sentence, unless the holders of Designated Senior
Indebtedness giving such Payment Blockage Notice or the Representative of such
holders shall have accelerated the maturity of such Designated Senior
Indebtedness and not rescinded such acceleration, any Subsidiary Guarantor may
resume (unless otherwise prohibited as
67
described in the first sentence of this paragraph) payments pursuant to its
Subsidiary Guaranty after such Payment Blockage Period.
SECTION 12.04 Demand for Payment. If a demand for payment is
made on a Subsidiary Guarantor pursuant to Article 11, the Trustee shall
promptly notify the holders of the Designated Senior Indebtedness (or their
Representatives) of such demand.
SECTION 12.05 When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article 12 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of the relevant Senior Indebtedness and pay
it over to them or their Representatives as their interests may appear.
SECTION 12.06 Subrogation. After all Senior Indebtedness of a
Subsidiary Guarantor is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness. A
distribution made under this Article 12 to holders of such Senior Indebtedness
which otherwise would have been made to Securityholders is not, as between the
relevant Subsidiary Guarantor and Securityholders, a payment by such Subsidiary
Guarantor on such Senior Indebtedness.
SECTION 12.07 Relative Rights. This Article 12 defines the
relative rights of Securityholders and holders of Senior Indebtedness of a
Subsidiary Guarantor. Nothing in this Indenture shall:
(1) impair, as between a Subsidiary Guarantor and
Securityholders, the obligation of such Subsidiary Guarantor, which is
absolute and unconditional, to pay the Obligations to the extent set
forth in Article 11 or the relevant Subsidiary Guaranty; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a default by such Subsidiary Guarantor
under the Obligations, subject to the rights of holders of Senior
Indebtedness of such Subsidiary Guarantor to receive distributions
otherwise payable to Securityholders.
SECTION 12.08 Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of any Subsidiary Guarantor to
enforce the subordination of the Obligations of such Subsidiary Guarantor shall
be impaired by any act or failure to act by such Subsidiary Guarantor or by its
failure to comply with this Indenture.
SECTION 12.09 Rights of Trustee and Paying Agent.
Notwithstanding Section 12.03, the Trustee or Paying Agent may continue to make
payments on any Subsidiary Guaranty and shall not be charged with knowledge of
the existence of facts that would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of such payment, a
Trust Officer receives written notice satisfactory to it that payments may not
be made under this Article 12. The Company, the relevant Subsidiary Guarantor,
the Registrar or co-registrar, the Paying Agent, a Representative or a holder of
Senior Indebtedness of any Subsidiary Guarantor may give the notice; provided,
however, that, if an issue of Senior
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Indebtedness of any Subsidiary Guarantor has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not the
Trustee. The Registrar and co-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 12 with respect to any Senior Indebtedness of any Subsidiary
Guarantor which may at any time be held by it, to the same extent as any other
holder of Senior Indebtedness; and nothing in Article 7 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
7.07.
SECTION 12.10 Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness of any Subsidiary Guarantor, the distribution may be made and the
notice given to their Representative (if any).
SECTION 12.11 Article 12 Not To Prevent Defaults Under a
Subsidiary Guaranty or Limit Right To Demand Payment. The failure to make a
payment pursuant to a Subsidiary Guaranty by reason of any provision in this
Article 12 shall not be construed as preventing the occurrence of a default
under such Subsidiary Guaranty. Nothing in this Article 12 shall have any effect
on the right of the Securityholders or the Trustee to make a demand for payment
on any Subsidiary Guarantor pursuant to Article 11 or the relevant Subsidiary
Guaranty.
SECTION 12.12 Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Securities or any Subsidiary
Guaranty shall not be subordinated to the prior payment of any Senior
Indebtedness of the Company or any Subsidiary Guarantor or subject to the
restrictions set forth in this Article 12, and none of the Securityholders shall
be obligated to pay over any such amount to the Company or any Subsidiary
Guarantor or any holder of Senior Indebtedness of the Company or any Subsidiary
Guarantor or any other creditor of the Company or any Subsidiary Guarantor.
SECTION 12.13 Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness of any Subsidiary Guarantor for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
such Senior Indebtedness and other indebtedness of such Subsidiary Guarantor,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this 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 Indebtedness of any
Subsidiary Guarantor to participate in any payment or distribution pursuant to
this Article 12, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior
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Indebtedness of such Subsidiary 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 Article 12, and,
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment. The provisions of Sections 7.01 and 7.02 shall be applicable to
all actions or omissions of actions by the Trustee pursuant to this Article 12.
SECTION 12.14 Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness of any Subsidiary Guarantor as 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
Indebtedness of Subsidiary Guarantor. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of any Subsidiary Guarantor
and shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of such Senior Indebtedness shall be entitled by
virtue of this Article 12 or otherwise.
SECTION 12.16 Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Securityholder by accepting a Security
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
Indebtedness of any Subsidiary Guarantor, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Securities, to acquire
and continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of Senior Indebtedness shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.
ARTICLE 13
Miscellaneous
SECTION 13.01 Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02 Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail or sent by
facsimile (with a hard copy delivered in person or by mail promptly thereafter)
and addressed as follows:
70
if to the Company or any Subsidiary Guarantor:
Stone Energy Corporation
000 X. Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Telecopy No: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, III
if to the Trustee:
(1) for payment, registration, transfer, exchange and tender
of the Securities:
By Hand:
JPMorgan Chase Bank
0000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
By Mail:
JPMorgan Chase Bank
0000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
(2) for all other communications relating to the Securities:
JPMorgan Chase Bank
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
The Company or any Subsidiary Guarantor, on the one hand, or
the Trustee, on the other hand, by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. Notices shall be effective only upon receipt.
SECTION 13.03 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
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SECTION 13.04 Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, except to the extent
that the Company's request or application is expressly governed by another
provision herein, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06 When Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
SECTION 13.07 Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, the Paying Agent and any co-registrar may make
reasonable rules for their functions.
SECTION 13.08 Legal Holidays. A "Legal Holiday" is a Saturday,
a Sunday or a day on which banking institutions are not required to be open in
the State of Texas. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is
72
not a Legal Holiday, and no interest shall accrue for the intervening period. If
a regular record date is a Legal Holiday, the record date shall not be affected.
SECTION 13.09 Governing Law. THIS INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF
NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD
OTHERWISE REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
SECTION 13.10 No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company or any Subsidiary Guarantor
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 13.11 Successors. All agreements of the Company and
any Subsidiary Guarantors in this Indenture and the Securities shall bind their
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 13.12 Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 13.13 Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
STONE ENERGY CORPORATION,
by /s/ D. XXXXX XXXXX
---------------------------------------
Name: D. Xxxxx Xxxxx
Title: President and
Chief Executive Officer
JPMORGAN CHASE BANK, as Trustee,
by /s/ XXXXXXX X. XXXXXX
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
74
APPENDIX A
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO RULE 144A AND,
SUBJECT TO THE APPLICABLE PURCHASE AGREEMENT, TO INSTITUTIONAL ACCREDITED
INVESTORS.
PROVISIONS RELATING TO INITIAL SECURITIES
AND EXCHANGE SECURITIES
1. Definitions.
1.1 Definitions.
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Definitive Security" means a certificated Initial Security or
Exchange Security bearing, if required, the restricted securities legend set
forth in Section 2.3(d).
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Exchange Securities" means the 8 1/4% Senior Subordinated
Notes due 2011 to be issued pursuant to this Indenture in connection with a
Registered Exchange Offer or a Private Exchange pursuant to a Registration
Agreement.
"IAI" means an institutional "accredited investor" as
described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated; Credit Suisse First Boston Corporation; Banc of America
Securities LLC; Xxxxxxx Rice & Co., L.L.C.; and Xxxxxx Xxxx, a division of Xxxx
Xxxxx Wood, Walker, Inc.
"Initial Securities" means the 8 1/4% Senior Subordinated
Notes due 2011, to be issued from time to time, in one or more series as
provided for in this Indenture.
"Original Securities" means Initial Securities in the
aggregate principal amount of $200,000,000 issued on December 10, 2001.
"Private Exchange" means the offer by the Company, pursuant to
Section 2(f) of the Registration Rights Agreement dated December 10, 2001, or
pursuant to any similar provision of any other Registration Rights Agreement, to
issue and deliver to certain purchasers, in exchange for the Initial Securities
held by such purchasers as part of their initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means the 8 1/4% Senior
Subordinated Notes due 2011 to be issued pursuant to this Indenture in
connection with a Private Exchange pursuant to a Registration Agreement.
"Purchase Agreement" means the Purchase Agreement dated
December 5, 2001, between the Company and the Initial Purchasers relating to the
Original Securities, or any similar agreement relating to any future sale of
Initial Securities by the Company.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to a Registration Agreement, to certain Holders of Initial Securities,
to issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Rights Agreement" means the Registration Rights
Agreement dated December 10, 2001, between the Company and the Initial
Purchasers relating to the Original Securities, or any similar agreement
relating to any additional Initial Securities.
"Securities" means the Initial Securities and the Exchange
Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor person
thereto who shall initially be the Trustee.
"Shelf Registration Statement" means a registration statement
issued by the Company in connection with the offer and sale of Initial
Securities pursuant to a Registration Agreement.
"Transfer Restricted Securities" means Definitive Securities
and any other Securities that bear or are required to bear the legend set forth
in Section 2.3(d) hereto.
1.2 Other Definitions.
Defined in
Term Section:
---- -------
"Agent Members"............................................................ 2.1(b)
"Global Security".......................................................... 2.1(a)
"Rule 144A"................................................................ 2.1
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2. The Securities.
2.1 Form and Dating.
(a) Global Securities. Initial Securities shall be issued
initially in the form of one or more permanent global Securities in definitive,
fully registered form without interest coupons with the global securities legend
and restricted securities legend set forth in Exhibit 1 hereto (each, a "Global
Security"), which shall be deposited on behalf of the purchasers of the Initial
Securities represented thereby with the Securities Custodian, and registered in
the name of the Depository or a nominee of the Depository, duly executed by the
Company and authenticated by the Trustee as provided in this Indenture. The
aggregate principal amount of the Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depository or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b) and pursuant to an order of the Company, authenticate
and deliver initially one or more Global Securities that (a) shall be registered
in the name of the Depository for such Global Security or Global Securities or
the nominee of such Depository and (b) shall be delivered by the Trustee to such
Depository or pursuant to such Depository's instructions or held by the Trustee
as Securities Custodian.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as Securities
Custodian or under such Global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) Definitive Securities. Except as provided in Section 2.3
or 2.4, owners of beneficial interests in Global Securities will not be entitled
to receive physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
Original Securities for original issue in an aggregate principal amount of
$200,000,000, (2) additional Initial Securities, if and when issued, in an
unlimited principal amount and (3) Exchange Securities for issue only in a
Registered Exchange Offer or a Private Exchange pursuant to a Registration
Agreement, for a like principal amount of Initial Securities, upon a written
order of the Company signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of the Company. Such order shall
specify the amount of the Securities to be authenticated and the date on which
the original issue of Securities is to be authenticated and
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whether the Securities are to be Initial Securities or Exchange Securities.
Notwithstanding anything to the contrary in this Appendix or otherwise in this
Indenture, any additional issuance of Securities after the Issue Date shall be
in a principal amount of at least $25,000,000, whether such additional
Securities are of the same or a different series than the Original Securities.
2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive
Securities. When Definitive Securities are presented to the Registrar or a
co-registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized
denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Registrar or co-registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(ii) are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act, pursuant to
Section 2.3(b) or pursuant to clause (A), (B) or (C) below, and are
accompanied by the following additional information and documents, as
applicable:
(A) if such Definitive Securities are being delivered
to the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect; or
(B) if such Definitive Securities are being
transferred to the Company, a certification to that effect; or
(C) if such Definitive Securities are being
transferred pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act, (i) a
certification to that effect and (ii) if the Company so
requests, an opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the restrictions
set forth in the legend set forth in Section 2.3(d)(i).
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Security, duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar or
co-registrar, together with:
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(i) certification that such Definitive Security is being
transferred (A) to a QIB in accordance with Rule 144A or (B) to an IAI
that has furnished to the Trustee a signed letter; and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books and
records with respect to such Global Security to reflect an increase in
the aggregate principal amount of the Securities represented by the
Global Security, such instructions to contain information regarding the
Depositary account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Definitive Security so canceled. If no
Global Securities are then outstanding and the Global Security has not been
previously exchanged pursuant to Section 2.4, the Company shall issue and the
Trustee shall authenticate, upon written order of the Company in the form of an
Officers' Certificate, a new Global Security in the appropriate principal
amount.
(c) Transfer and Exchange of Global Securities. (i) The
transfer and exchange of Global Securities or beneficial interests therein shall
be effected through the Depository, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depository therefor. A transferor of a beneficial interest in a Global
Security shall deliver a written order given in accordance with the Depository's
procedures containing information regarding the participant account of the
Depository to be credited with a beneficial interest in the Global Security and
such account shall be credited in accordance with such instructions with a
beneficial interest in the Global Security and the account of the Person making
the transfer shall be debited by an amount equal to the beneficial interest in
the Global Security being transferred. In the case of a transfer of a beneficial
interest in a Global Security to an IAI, the transferee must furnish a signed
letter to the Trustee containing certain representations and agreements (the
form of which letter can be obtained from the Trustee or the Company).
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another
Global Security, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the Global Security
to which such interest is being transferred in an amount equal to the
principal amount of the interest to be so transferred, and the
Registrar shall reflect on its books and records the date and a
corresponding decrease in the principal amount of Global Security from
which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix A
(other than the provisions set forth in Section 2.4), a Global Security
may not be transferred as a whole except by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such
nominee to a successor Depository or a nominee of such successor
Depository.
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(iv) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 prior
to the consummation of a Registered Exchange Offer or the effectiveness
of a Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the reverse of
the Initial Securities intended to ensure that such transfers comply
with Rule 144A or such other applicable exemption from registration
under the Securities Act, as the case may be) and such other procedures
as may from time to time be adopted by the Company.
(d) Legend. (i) Except as permitted by the following
paragraphs (ii), (iii), (iv) and (vi), each Security certificate evidencing the
Global Securities and the Definitive Securities (and all Securities issued in
exchange therefor or in substitution thereof) shall bear a legend in
substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY ON ITS OWN
BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED PRIOR TO THE SECOND ANNIVERSARY OF THE LATER OF THE DATE OF ISSUANCE
HEREOF (OR A PREDECESSOR SECURITY HERETO) AND THE LAST DATE ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY HERETO), IN EITHER CASE OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE
BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR IN CONNECTION WITH
A-6
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, AND A CERTIFICATE (WHICH
MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE) IS DELIVERED BY THE TRANSFEREE
TO THE COMPANY AND THE TRUSTEE, (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT, OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER
HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF
THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING
THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION.
Each Definitive Security will also bear the following
additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
TRUSTEE, REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION INCLUDING, IN THE CASE OF CLAUSES (3) AND (4) ABOVE, AN
OPINION OF COUNSEL AS ANY OF THEM MAY REASONABLY REQUIRE TO CONFIRM
THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act:
(A) In the case of any Transfer Restricted Security
that is a Definitive Security, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security
for a Definitive Security that does not bear the legends set
forth above and rescind any restriction on the transfer of
such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security
that is represented by a Global Security, the Registrar shall
permit the Holder thereof to exchange such Transfer Restricted
Security for a Definitive Security that does not bear the
legends set forth above and rescind any restriction on the
transfer of such Transfer Restricted Security,
in either case, if the Holder certifies in writing to the Registrar that its
request for such exchange was made in reliance on Rule 144 (such certification
to be in the form set forth on the reverse of the Initial Security).
(iii) After a transfer of any Initial Securities during the
period of the effectiveness of a Shelf Registration Statement with
respect to such Initial Securities, all requirements pertaining to
legends on such Initial Security will cease to apply, the
A-7
requirements requiring that any such Initial Security be issued in
global form will cease to apply, and an Initial Security in
certificated or global form without legends will be available to the
transferee of the Holder of such Initial Securities upon exchange of
such transferring Holder's certificated Initial Security. Upon the
occurrence of any of the circumstances described in this paragraph, the
Company will deliver an Officers' Certificate to the Trustee
instructing the Trustee to issue Securities without legends.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which certain Holders of
such Initial Securities are offered Exchange Securities in exchange for
their Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities be issued in global form will cease
to apply, and certificated Initial Securities with the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders of such Initial Securities that do not exchange their Initial
Securities, and Exchange Securities in certificated or global form will
be available to Holders that exchange such Initial Securities in such
Registered Exchange Offer. Upon the occurrence of any of the
circumstances described in this paragraph, the Company will deliver an
Officers' Certificate to the Trustee instructing the Trustee to issue
Securities without legends.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities pursuant to which Holders of such Initial
Securities are offered Private Exchange Securities in exchange for
their Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued
in global form will continue to apply, and Private Exchange Securities
in global form will be available to Holders that exchange such Initial
Securities in such Private Exchange.
(e) Cancelation or Adjustment of Global Security. At such time
as all beneficial interests in a Global Security have either been exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled, such
Global Security shall be returned by the Depository to the Trustee for
cancelation or retained and canceled by the Trustee. At any time prior to such
cancelation, if any beneficial interest in a Global Security is exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled, the
principal amount of Securities represented by such Global Security shall be
reduced and an adjustment shall be made on the books and records of the Trustee
(if it is then the Securities Custodian for such Global Security) with respect
to such Global Security, by the Trustee or the Securities Custodian, to reflect
such reduction.
(f) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate certificated
Securities, Definitive Securities and Global Securities at the
Registrar's or co-registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Section 3.06, 4.06, 4.09 and
9.05).
A-8
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period
beginning 15 days before the mailing of a notice of redemption or an
offer to repurchase Securities or 15 days before an interest payment
date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a
participant in the Depository or any other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository) of
any notice (including any notice of redemption or repurchase) or the
payment of any amount, under or with respect to such Securities. All
notices and communications to be given to the Holders and all payments
to be made to Holders under the Securities shall be given or made only
to the registered Holders (which shall be the Depository or its nominee
in the case of a Global Security). The rights of beneficial owners in
any Global Security shall be exercised only through the Depository
subject to the applicable rules and procedures of the Depository. The
Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its members,
participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers
between or among Depository participants, members or beneficial owners
in any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
A-9
2.4 Certificated Securities.
(a) A Global Security deposited with the Depository or with
the Trustee as Securities Custodian pursuant to Section 2.1 shall be transferred
to the beneficial owners thereof in the form of certificated Securities in an
aggregate principal amount equal to the principal amount of such Global
Security, in exchange for such Global Security, only if such transfer complies
with Section 2.3 and (i) the Depository notifies the Company that it is
unwilling or unable to continue as a Depository for such Global Security or if
at any time the Depository ceases to be a "clearing agency" registered under the
Exchange Act, and a successor depositary is not appointed by the Company within
90 days of such notice, or (ii) an Event of Default has occurred and is
continuing or any event which after notice or lapse of time or both would be an
Event of Default has occurred or is continuing, or (iii) the Company, in its
sole discretion, notifies the Trustee in writing that it elects to cause the
issuance of certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depository to the Trustee, to be so transferred, in whole or from time to time
in part, without charge, and the Trustee shall authenticate and deliver, upon
such transfer of each portion of such Global Security, an equal aggregate
principal amount of certificated Securities of authorized denominations. Any
portion of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of $1,000 and any
integral multiple thereof and registered in such names as the Depository shall
direct. Any certificated Initial Security delivered in exchange for an interest
in the Global Security shall, except as otherwise provided by Section 2.3(d),
bear the restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.
A-10
EXHIBIT 1
to APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"),
NEW YORK,
NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS 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 INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER
HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY ON
ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED PRIOR TO THE SECOND ANNIVERSARY OF THE LATER OF THE DATE OF ISSUANCE
HEREOF (OR A PREDECESSOR SECURITY HERETO) AND THE LAST DATE ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY HERETO), IN EITHER CASE OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR
ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT
IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT OF FOR THE ACCOUNT OF ANOTHER
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO OR IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, AND A CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR THE
TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (4)
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (5)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND
AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND
NOT FOR DISTRIBUTION."
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE COMPANY,
TRUSTEE, REGISTRAR AND/OR TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION, INCLUDING, IN THE CASE OF CLAUSES (3) AND (4) ABOVE, AN OPINION OF
COUNSEL, AS ANY OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
E-2
[FORM OF FACE OF SECURITY]
No. $
------------
8 1/4% Senior Subordinated Note due 2011
CUSIP No.
-------
Stone Energy Corporation, a Delaware corporation, promises to
pay to , or registered assigns, the principal sum of Dollars, as
revised by the Schedule of Increases and Decreases in Global Security attached
hereto, on December 15, 2011.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
[SIGNATURE PAGE FOLLOWS]
E-3
Additional provisions of this Security are set forth on the
other side of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to
be duly executed.
STONE ENERGY CORPORATION,
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
JPMORGAN CHASE BANK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:
---------------------------------
Authorized Signatory
E-4
[FORM OF REVERSE SIDE OF SECURITY]
8 1/4% Senior Subordinated Note due 2011
1. Interest.
(a)
Stone Energy Corporation, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The Company
will pay interest semiannually in arrears on June 15 and December 15 of each
year. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from December 10, 2001.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne by
the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
(b) Special Interest. The holder of this Security is entitled
to the benefits of a Registration Rights Agreement, dated as of December 10,
2001, among the Company and the Initial Purchasers named therein (the
"Registration Rights Agreement"). Capitalized terms used in this paragraph (b)
but not defined herein have the meanings assigned to them in the Registration
Rights Agreement. In the event that (i) the Exchange Offer Registration
Statement has not been filed with the Commission on or prior to the 90th day
following the date of the original issuance of the Securities, (ii) neither the
Exchange Offer Registration Statement nor, if applicable, the Shelf Registration
Statement has been declared effective on or prior to the 180th day following the
date of the original issuance of the Securities, (iii) the Exchange Offer has
not been consummated on or prior to the 210th day following the date of the
original issuance of the Securities, or (iv) after the Shelf Registration
Statement, if applicable, has been declared effective, such Registration
Statement thereafter ceases to be effective or usable for more than 30
consecutive days in connection with resales of the Securities at any time that
the Company is obligated to maintain the effectiveness thereof pursuant to the
Registration Rights Agreement (each such event referred to in clauses (i)
through (iv) above being referred to herein as a "Registration Default"),
interest (the "Special Interest") shall accrue (in addition to stated interest
on the Securities) from and including the date on which the first such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured, at a rate per annum equal to 0.25% of the
principal amount of the Securities; provided, however, that such rate per annum
shall increase by 0.25% per annum from and including the 91st day after the
first such Registration Default (and each successive 91st day thereafter) unless
and until all Registration Defaults have been cured, upon which time the accrual
of Special Interest will cease and the interest rate will automatically and
immediately revert to the original interest rate; provided further, however,
that in no event shall the Special Interest accrue at a rate in excess of 1% per
annum. The Special Interest will be payable in cash semiannually in arrears each
June 15 and December 15
E-5
2. Method of Payment.
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the June 1 or December 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States of America that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium, if
any, and interest) will be made by wire transfer of immediately available funds
to the accounts specified by The Depository Trust Company. The Company will make
all payments in respect of a certificated Security (including principal,
premium, if any, and interest), by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on the Securities may also
be made, in the case of a Holder of at least $1,000,000 aggregate principal
amount of Securities, by wire transfer to a U.S. dollar account maintained by
the payee with a bank in the United States if such Holder elects payment by wire
transfer by giving written notice to the Trustee or the Paying Agent to such
effect designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
3. Paying Agent and Registrar.
Initially, JPMorgan Chase Bank (the "Trustee"), will act as
Paying Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as
of December 10, 2001 (the "Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement of
those terms.
The Securities are general unsecured obligations of the
Company and may be issued in an unlimited aggregate principal amount at any one
time outstanding. [This Security is one of the Original Securities referred to
in the Indenture issued in an initial aggregate principal amount of
$200,000,000. The Securities include the Original Securities, an unlimited
aggregate principal amount of additional Initial Securities that may be issued
under the Indenture and any Exchange Securities issued in exchange for Initial
Securities. The Original Securities, such additional Initial Securities and the
Exchange Securities are treated as a single class of securities under the
Indenture.]* [This Security is one of an unlimited aggregate principal amount of
additional Initial Securities that may be issued under the Indenture. The
Securities include such additional Securities, the Original Securities in an
aggregate principal amount of $200,000,000 previously issued under the Indenture
and any Exchange Securities issued in exchange for Initial
----------
* Insert appropriate bracketed language.
E-6
Securities. The additional Initial Securities, the Original Securities and the
Exchange Securities are treated as a single class of securities under the
Indenture.]* The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, make certain
Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
enter into or permit certain transactions with Affiliates, create or incur Liens
and make Asset Sales. The Indenture also imposes limitations on the ability of
the Company or any Subsidiary Guarantor to consolidate or merge with or into any
other Person or convey, transfer or lease all or substantially all of the
Property of the Company or any Subsidiary Guarantor. Certain of the covenants
under the Indenture will be suspended or terminated as provided in the Indenture
if the Securities have achieved Investment Grade status.
To guarantee the due and punctual payment of the principal and
interest, if any, on the Securities and all other amounts payable by the Company
under the Indenture and the Securities when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Subsidiary Guarantors, if any,
will unconditionally guarantee the Obligations on a senior subordinated basis
pursuant to the terms of the Indenture.
5. Optional Redemption.
The Securities are redeemable at any time before December 15,
2006, at the option of the Company, in whole but not in part, on not less than
30 nor more than 60 days' prior notice, at a cash redemption price equal to the
Make-Whole Amount, plus accrued and unpaid interest, if any, to the date of
redemption (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date). The
Make-Whole Amount shall be certified in writing by an Officer of the Company to
the Trustee prior to consummating any such redemption.
The Securities are redeemable at any time on or after December
15, 2006, at the option of the Company, in whole or in part (equal to $1,000 in
principal amount or an integral multiple thereof), on or not less than 30 nor
more than 60 days' prior notice, at the following redemption prices (expressed
as percentages of principal amount), plus accrued and unpaid interest, if any,
to the date of redemption (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on December 15 of the
years indicated below:
Redemption
Year Price
---- -----
2006............................................. 104.125%
2007............................................. 102.750%
2008............................................. 101.375%
2009 and thereafter.............................. 100.000%
----------
* Insert appropriate bracketed language.
E-7
Notwithstanding the foregoing, prior to December 15, 2004, the
Company may, at any time or from time to time, redeem up to 35% of the aggregate
principal amount of Securities issued under the Indenture at a redemption price
of 108.25% 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 the relevant interest payment
date) with the net proceeds of one or more Equity Offerings of the Company,
provided that at least 65% of the aggregate principal amount of the Securities
issued under the Indenture remains outstanding after the occurrence of such
redemption and provided, further, that such redemption shall occur not later
than 90 days after the date of the closing of any such Equity Offering. The
redemption shall be made in accordance with procedures set forth in the
Indenture.
6. Sinking Fund.
The Securities are not subject to any sinking fund.
7. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his or her registered address. Securities
in denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
8. Subordination.
The Securities are subordinated to Senior Indebtedness of the
Company. To the extent provided in the Indenture, Senior Indebtedness of the
Company must be paid before the Securities may be paid. In addition, any
Subsidiary Guaranty is subordinated to Senior Indebtedness of the relevant
Subsidiary Guarantor. The Company and each Subsidiary Guarantor, if any, agrees,
and each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give it
effect and appoints the Trustee as attorney-in-fact for such purpose.
9. Repurchase of Securities at the Option of Holders upon Change of Control.
Upon a Change of Control, any Holder of Securities will have
the right, subject to certain conditions specified in the Indenture, to cause
the Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
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10. Denominations; Transfer; Exchange.
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection of Securities to be redeemed or 15 days
before an interest payment date.
11. Persons Deemed Owners.
The registered Holder of this Security may be treated as the
owner of it for all purposes.
12. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance.
Subject to certain conditions, the Company at any time may
terminate some of or all of its obligations under the Securities and the
Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
14. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities and (ii)
any default or noncompliance with any provision may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder of Securities, the Company, any
Subsidiary Guarantors and the Trustee may amend the Indenture or the Securities
(i) to cure any ambiguity, omission, defect or inconsistency; (ii) to comply
with Article 5 of the Indenture; (iii) to provide for uncertificated Securities
in addition to or in place of certificated Securities; (iv) to make certain
changes in the subordination provisions; (v) to add Subsidiary Guaranties with
respect to the Securities and to remove such Subsidiary Guaranties as provided
by the terms thereof; (vi) to secure the Securities; (vii) to add additional
covenants or to surrender rights and powers conferred on the Company; (viii) to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the TIA; or (ix) to make any change
that does not adversely affect the rights of any Securityholder.
X-0
00. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the Securities, subject to
certain limitations, may declare all the Securities to be immediately due and
payable. Certain events of bankruptcy or insolvency are Events of Default and
shall result in the Securities being immediately due and payable upon the
occurrence of such Events of Default without any further act of the Trustee or
any Holder.
Holders of Securities may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power under the Indenture. The Holders of a majority in aggregate principal
amount of the Securities, by written notice to the Trustee and the Company, may
rescind any declaration of acceleration and its consequences if the rescission
would not conflict with any judgment or decree, and if all existing Events of
Default have been cured or waived except nonpayment of principal or interest
that has become due solely because of the acceleration.
16. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
17. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company or any Subsidiary Guarantor shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
18. Authentication.
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
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20. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICTS OF LAW THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION.
21. 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 Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY HOLDER OF SECURITIES UPON
WRITTEN REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH
HAS IN IT THE TEXT OF THIS SECURITY.
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security 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 Security
on the books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
---------------- -----------------------------------------
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed)
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
SEC Rule 17Ad-15.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the date that is two years
after the later of the date of original issuance of such Securities and the last
date, if any, on which such Securities were owned by the Company or any
Affiliate of the Company, the undersigned confirms that such Securities are
being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement
under the Securities Act of 1933; or
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(3) [ ] to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given
that such transfer is being made in reliance on Rule
144A, in each case pursuant to and in compliance with
Rule 144A under the Securities Act of 1933; or
(4) [ ] to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933) that has furnished to the
trustee a signed letter containing certain
representations and agreements (the form of which
letter can be obtained from the Trustee or the
Company); or
(5) [ ] pursuant to another available exemption from
registration provided by Rule 144 under the
Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (4) or (5) is
checked, the Trustee may require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933.
-----------------------------------
Your Signature
Signature Guarantee:
Date:
------------------------------------ -----------------------------------
Signature of Signature Guarantee
Signature must be guaranteed
by a participant in a
recognized signature guaranty
medallion program or other
signature guarantor acceptable
to the Trustee
----------------------------------------------------------------
E-13
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:
----------------- -------------------------------------
NOTICE: To be executed by
an executive officer
E-14
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is
$____________. The following increases or decreases in this Global Security have
been made:
Principal amount of
Amount of decrease in Amount of increase in this Global Security Signature of authorized
Date of Principal Amount of Principal Amount of this following such decrease signatory of Trustee or
Exchange this Global Security Global Security or increase Securities Custodian
-------- --------------------- ------------------------ ----------------------- -----------------------
E-15
OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS SECURITY PURCHASED BY THE
COMPANY PURSUANT TO SECTION 4.06 OR 4.09 OF THE INDENTURE, CHECK THE BOX:
[ ]
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS SECURITY
PURCHASED BY THE COMPANY PURSUANT TO SECTION 4.06 OR 4.09 OF THE INDENTURE,
STATE THE AMOUNT: $
DATE: YOUR SIGNATURE:
------------------ --------------------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON
THE OTHER SIDE OF THE SECURITY)
SIGNATURE GUARANTEE:
----------------------------------------------------------
SIGNATURE MUST BE GUARANTEED BY A PARTICIPANT IN A
RECOGNIZED SIGNATURE GUARANTY MEDALLION PROGRAM OR
OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE.
E-16
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY]
No. $
---------
8 1/4% Senior Subordinated Note due 2011
CUSIP No.
---------
Stone Energy Corporation, a Delaware corporation,
promises to pay to , or registered assigns,
the principal sum of Dollars on December 15, 2011
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
E-17
Additional provisions of this Security are set forth on the
other side of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to
be duly executed.
STONE ENERGY CORPORATION,
by
-------------------------------------
Name:
Title:
by
-------------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
JPMORGAN CHASE BANK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
--------------------------------
Authorized Signatory
----------
*/ If the Security is to be issued in global form, add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".
E-18
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
8 1/4% Senior Subordinated Note due 2011
1. Interest.
Stone Energy Corporation, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The Company
will pay interest semiannually in arrears on June 15 and December 15 of each
year. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from December 10, 2001.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne by
the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
2. Method of Payment.
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the June 1 or December 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States of America that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium, if
any, and interest) will be made by wire transfer of immediately available funds
to the accounts specified by The Depository Trust Company. The Company will make
all payments in respect of a certificated Security (including principal,
premium, if any, and interest), by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on the Securities may also
be made, in the case of a Holder of at least $1,000,000 aggregate principal
amount of Securities, by wire transfer to a U.S. dollar account maintained by
the payee with a bank in the United States if such Holder elects payment by wire
transfer by giving written notice to the Trustee or the Paying Agent to such
effect designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
3. Paying Agent and Registrar.
Initially, JPMorgan Chase Bank (the "Trustee"), will act as
Paying Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as
of December 10, 2001 (the "Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the
E-19
Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on
the date of the Indenture (the "TIA"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the TIA for a statement of those terms.
The Securities are general unsecured obligations of the
Company that may be issued in an unlimited aggregate principal amount at any one
time outstanding. This Security is one of the Exchange Securities referred to in
the Indenture issued in exchange for Initial Securities. The Securities include
the Exchange Securities, the Original Securities in the aggregate principal
amount of $200,000,000 and an unlimited aggregate principal amount of additional
Initial or Exchange Securities, as the case may be. The Exchange Securities, the
Original Securities and such additional Initial or Exchange Securities are
treated as a single class of securities under the Indenture. The Indenture
imposes certain limitations on the ability of the Company and its Restricted
Subsidiaries to, among other things, make certain Investments and other
Restricted Payments, pay dividends and other distributions, incur Indebtedness,
enter into consensual restrictions upon the payment of certain dividends and
distributions by such Restricted Subsidiaries, enter into or permit certain
transactions with Affiliates, create or incur Liens and make Asset Sales. The
Indenture also imposes limitations on the ability of the Company or any
Subsidiary Guarantor to consolidate or merge with or into any other Person or
convey, transfer or lease all or substantially all of the Property of the
Company or any Subsidiary Guarantor. Certain of the covenants under the
Indenture will be suspended or terminated as provided in the Indenture if the
Securities have achieved Investment Grade status.
To guarantee the due and punctual payment of the principal and
interest, if any, on the Securities and all other amounts payable by the Company
under the Indenture and the Securities when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Subsidiary Guarantors, if any,
will unconditionally guarantee the Obligations on a senior subordinated basis
pursuant to the terms of the Indenture.
5. Optional Redemption.
The Securities are redeemable at any time before December 15,
2006, at the option of the Company, in whole but not in part, on not less than
30 nor more than 60 days' prior notice, at a cash redemption price equal to the
Make-Whole Amount, plus accrued and unpaid interest, if any, to the date of
redemption (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date). The
Make-Whole Amount shall be certified in writing by an Officer of the Company to
the Trustee prior to consummating any such redemption.
The Securities are redeemable at any time on or after December
15, 2006, at the option of the Company, in whole or in part (equal to $1,000 in
principal amount or an integral multiple thereof), on or not less than 30 nor
more than 60 days' prior notice, at the following redemption prices (expressed
as percentages of principal amount), plus accrued and unpaid interest, if any,
to the date of redemption (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on December 15 of the
years indicated below:
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Redemption
Year Price
---- -----
2006................................................................. 104.125%
2007................................................................. 102.750%
2008................................................................. 101.375%
2009 and thereafter.................................................. 100.000%
Notwithstanding the foregoing, prior to December 15, 2004, the
Company may, at any time or from time to time, redeem up to 35% of the aggregate
principal amount of Securities issued under the Indenture at a redemption price
of 108.25% 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 the relevant interest payment
date) with the net proceeds of one or more Equity Offerings of the Company,
provided that at least 65% of the aggregate principal amount of the Securities
issued under the Indenture remains outstanding after the occurrence of such
redemption and provided, further, that such redemption shall occur not later
than 90 days after the date of the closing of any such Equity Offering. The
redemption shall be made in accordance with procedures set forth the Indenture.
6. Sinking Fund.
The Securities are not subject to any sinking fund.
7. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his or her registered address. Securities
in denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
8. Subordination.
The Securities are subordinated to Senior Indebtedness of the
Company. To the extent provided in the Indenture, Senior Indebtedness of the
Company must be paid before the Securities may be paid. In addition, any
Subsidiary Guaranty is subordinated to Senior Indebtedness of the relevant
Subsidiary Guarantor. The Company and each Subsidiary Guarantor, if any, agrees,
and each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give it
effect and appoints the Trustee as attorney-in-fact for such purpose.
X-00
0. Xxxxxxxxxx of Securities at the Option of Holders upon Change of Control.
Upon a Change of Control, any Holder of Securities will have
the right, subject to certain conditions specified in the Indenture, to cause
the Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
10. Denominations; Transfer; Exchange.
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection of Securities to be redeemed or 15 days
before an interest payment date.
11. Persons Deemed Owners.
The registered Holder of this Security may be treated as the
owner of it for all purposes.
12. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance.
Subject to certain conditions, the Company at any time may
terminate some of or all of its obligations under the Securities and the
Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
14. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities and (ii)
any default or noncompliance with any provision may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder of Securities, the Company, any
Subsidiary Guarantors and the Trustee may amend the Indenture or the Securities
(i) to cure any ambiguity, omission, defect or inconsistency; (ii) to
E-22
comply with Article 5 of the Indenture; (iii) to provide for uncertificated
Securities in addition to or in place of certificated Securities; (iv) to make
certain changes in the subordination provisions; (v) to add Subsidiary
Guaranties with respect to the Securities and to remove such Subsidiary
Guaranties as provided by the terms thereof; (vi) to secure the Securities;
(vii) to add additional covenants or to surrender rights and powers conferred on
the Company; (viii) to comply with the requirements of the Commission in order
to effect or maintain the qualification of the Indenture under the TIA; or (ix)
to make any change that does not adversely affect the rights of any
Securityholder.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the Securities, subject to
certain limitations, may declare all the Securities to be immediately due and
payable. Certain events of bankruptcy or insolvency are Events of Default and
shall result in the Securities being immediately due and payable upon the
occurrence of such Events of Default without any further act of the Trustee or
any Holder.
Holders of Securities may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power under the Indenture. The Holders of a majority in aggregate principal
amount of the Securities, by written notice to the Trustee and the Company, may
rescind any declaration of acceleration and its consequences if the rescission
would not conflict with any judgment or decree, and if all existing Events of
Default have been cured or waived except nonpayment of principal or interest
that has become due solely because of the acceleration.
16. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
17. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company or any Subsidiary Guarantor shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
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18. Authentication.
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
20. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICTS OF LAW THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION.
21. 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 Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY HOLDER OF SECURITIES UPON
WRITTEN REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH
HAS IN IT THE TEXT OF THIS SECURITY.
E-24
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security 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
Security 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 Security. Signature
must be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.
E-25
OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS SECURITY PURCHASED BY THE
COMPANY PURSUANT TO SECTION 4.06 OR 4.09 OF THE INDENTURE, CHECK THE BOX:
[ ]
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS SECURITY
PURCHASED BY THE COMPANY PURSUANT TO SECTION 4.06 OR 4.09 OF THE INDENTURE,
STATE THE AMOUNT:
$
DATE: YOUR SIGNATURE:
------------------- --------------------------------------
(SIGN EXACTLY AS YOUR NAME APPEARS ON
THE OTHER SIDE OF THE SECURITY)
SIGNATURE GUARANTEE:
----------------------------------------------------------
SIGNATURE MUST BE GUARANTEED BY A PARTICIPANT IN A
RECOGNIZED SIGNATURE GUARANTY MEDALLION PROGRAM OR OTHER
SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE.
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EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental
Indenture") dated as of , among [SUBSIDIARY
GUARANTOR] (the "New Subsidiary Guarantor"), a subsidiary of
Stone Energy Corporation (or its successor), a Delaware
corporation (the "Company"), STONE ENERGY CORPORATION, on
behalf of itself and the Subsidiary Guarantors (the "Existing
Subsidiary Guarantors") under the Indenture referred to below,
and JPMorgan Chase Bank, a
New York banking association, as
trustee under the indenture referred to below (the "Trustee").
WITNESSETH:
WHEREAS the Company has heretofore executed and delivered to
the Trustee an Indenture (the "Indenture") dated as of December 10, 2001,
providing for the issuance of an unlimited aggregate principal amount of 8 1/4%
Senior Subordinated Notes due 2011 (the "Securities");
WHEREAS Section 4.13 of the Indenture provides that under
certain circumstances the Company is required to cause the New Subsidiary
Guarantor to execute and deliver to the Trustee a supplemental indenture
pursuant to which the New Subsidiary Guarantor shall unconditionally guarantee
all the Company's obligations under the Securities pursuant to a Subsidiary
Guaranty on the terms and conditions set forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the
Trustee, the Company and the Existing Subsidiary Guarantors are authorized to
execute and deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the New Subsidiary Guarantor, the Company, the Existing Subsidiary Guarantors
and the Trustee mutually covenant and agree for the equal and ratable benefit of
the holders of the Securities as follows:
1. Agreement to Guarantee. The New Subsidiary Guarantor hereby
agrees, jointly and severally with all other Subsidiary Guarantors, to
unconditionally guarantee the Company's obligations under the Securities on the
term and subject to the conditions set forth in Article 11 of the Indenture and
to be bound by all other applicable provisions of the Indenture.
2. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental
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Indenture shall form a part of the Indenture for all purposes, and every holder
of Securities heretofore or hereafter authenticated and delivered shall be bound
hereby.
3. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD
OTHERWISE REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
4. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
5. Counterparts. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
6. Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.
[NEW SUBSIDIARY GUARANTOR],
by
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Name:
Title:
STONE ENERGY CORPORATION, on
behalf of itself and the
Existing Subsidiary Guarantors,
by
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Name:
Title:
JPMORGAN CHASE BANK, as Trustee,
by
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Name:
Title:
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