COMSTOCK RESOURCES, INC.,
SUBSIDIARY GUARANTORS
NAMED HEREIN
and
U.S. TRUST COMPANY OF TEXAS, N.A.
Trustee
INDENTURE
Dated as of April 29, 1999
$150,000,000
11 1/4% Senior Notes due 2007
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THIS INDENTURE, dated as of April 29, 1999, is between COMSTOCK RESOURCES,
INC., a Nevada corporation (hereinafter called the "Company"), the SUBSIDIARY
GUARANTORS (as defined hereinafter) and U.S. TRUST COMPANY OF TEXAS, N.A., as
Trustee (hereinafter called 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 11 1/4% Senior Notes
due 2007, 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 11
1/4% Senior Notes due 2007 (the "Exchange Securities" and, together with the
Initial Securities, the "Securities"):
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions.
"Acquired Indebtedness" means Indebtedness of a Person (a) existing at the
time such Person becomes a Restricted Subsidiary or (b) assumed in connection
with acquisitions of Properties from such Person (other than any Indebtedness
incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary or such acquisition). Acquired Indebtedness shall be
deemed to be incurred on the date the acquired Person becomes a Restricted
Subsidiary or the date of the related acquisition of Properties from such
Person.
"Act," when used with respect to any Holder, has the meaning specified in
Section 13.3.
"Additional Assets" means (i) any Property (other than cash, Cash
Equivalents 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, (iii) the acquisition from third parties
of Capital Stock of a Restricted Subsidiary or (iv) Investments pursuant to
clause (v) of the definition of "Permitted 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 nationally recognized 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
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by the Company's petroleum engineers, unless there is a Material Change as a
result of such acquisitions, dispositions or revisions, in which event the
discounted future net revenues utilized for purposes of this clause (i)(A) shall
be confirmed in writing by a nationally recognized firm of independent 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 appraised
value, as estimated by independent appraisers, 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).
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the
amount by which the fair value of the Properties of such Subsidiary Guarantor
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date), but excluding liabilities under
its Subsidiary Guarantee, of such Subsidiary Guarantor at such date.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control," when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of this definition, beneficial ownership of 10% or more of the voting
common equity (on a fully diluted basis) or options or warrants to purchase such
equity (but only if exercisable at the date of determination or within 60 days
thereof) of a Person shall be deemed to constitute control of such Person.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other
disposition to any Person other than the Company or any of its Restricted
Subsidiaries (including, without limitation, by way of merger or consolidation)
(collectively, for purposes of this definition, a "transfer"), directly or
indirectly, in one or a series of related transactions, of (a) any Capital Stock
of any Restricted Subsidiary held by the Company or any Restricted Subsidiary,
(b) all or substantially all of the Properties of any division or line of
business of the Company or any of its Restricted Subsidiaries or (c) any other
Properties of the Company or any of its Restricted Subsidiaries other than (i) a
transfer of cash, Cash Equivalents, hydrocarbons or other mineral products in
the ordinary course of business or (ii) any lease, abandonment, disposition,
relinquishment or farm-out of any oil and gas Property in the ordinary course of
business. For the purposes of this definition, the term "Asset Sale" also shall
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not include (i) any transfer of Properties (including Capital Stock) which is
governed by, and made in accordance with, the provisions of Article VII hereof;
(ii) any transfer of Properties to an Unrestricted Subsidiary, if permitted
under Section 9.9 hereof; or (iii) any transfer of Properties (including Capital
Stock) having a Fair Market Value of less than $2,500,000.
"Attributable Indebtedness" means, with respect to any particular lease
under which any Person is at the time liable and at any date as of which the
amount thereof is to be determined, the present value of the total net amount of
rent required to be paid by such Person under the lease during the primary term
thereof, without giving effect to any renewals at the option of the lessee,
discounted from the respective due dates thereof to such date at the rate of
interest per annum implicit in the terms of the lease. As used in the preceding
sentence, the net amount of rent under any lease for any such period shall mean
the sum of rental and other payments required to be paid with respect to such
period by the lessee thereunder excluding any amounts required to be paid by
such lessee on account of maintenance and repairs, insurance, taxes,
assessments, water rates or similar charges. In the case of any lease which is
terminable by the lessee upon payment of a penalty, such net amount of rent
shall also include the amount of such penalty, but no rent shall be considered
as required to be paid under such lease subsequent to the first date upon which
it may be so terminated.
"Average Life" means, with respect to any Indebtedness, as at any date of
determination, the quotient obtained by dividing (a) the sum of the products of
(i) 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,
without limitation, any sinking fund or mandatory redemption payment
requirements) of such Indebtedness multiplied by (ii) the amount of each such
principal payment by (b) the sum of all such principal payments.
"Bank Credit Facility" means that certain Credit Agreement dated as of
April 29, 1999 among Comstock Resources, Inc., Comstock Oil & Gas, Inc.,
Comstock Oil & Gas - Louisiana, Inc., Comstock Offshore, LLC, as Borrowers, the
lenders party thereto from time to time, The First National Bank of Chicago, as
Administrative Agent, Toronto Dominion (Texas), Inc., as Syndication Agent and
Paribas, as Documentation Agent, together with all related documents executed or
delivered pursuant thereto at any time (including, without limitation, all
mortgages, deeds of trust, guarantees, security agreements and all other
collateral and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder provided that such
increase in borrowings is within the definition of "Permitted Indebtedness" or
is otherwise permitted under Section 9.11) or adding Subsidiaries as additional
borrowers or guarantors thereunder and all or any portion of the Indebtedness
and other Obligations under such agreement or agreements or any successor or
replacement agreement or agreements, and whether by the same or any other agent,
lender or group of lenders.
"Board of Directors" means, with respect to the Company, either the board
of directors of the Company or any duly authorized committee of such board of
directors, and, with respect to any Subsidiary, either the board of directors of
such Subsidiary or any duly authorized committee of that board or, in the case
of a Subsidiary not having a board of directors, the manager or other person
performing a function comparable to a board of directors of a corporation.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by its Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee, and with respect to a Subsidiary, a
copy of a resolution certified by the Secretary or an Assistant Secretary of
such Subsidiary to have been duly adopted by its Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
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"Borrowing Base" means, as of any date, the aggregate amount of borrowing
availability as of such date under the Bank Credit Facility that determines
availability on the basis of a borrowing base or other asset-based calculation.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the cities of New York, New
York or Dallas, Texas are authorized or obligated by law or executive order to
close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights or other equivalents in the equity interests
(however designated) in such Person, and any rights (other than debt securities
convertible into an equity interest), warrants or options exercisable for,
exchangeable for or convertible into such an equity interest in such Person.
"Capitalized Lease Obligation" means any obligation to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) any
Property that is required to be classified and accounted for as a capital lease
obligation under GAAP, and, for the purpose of this Indenture, the amount of
such obligation at any date shall be the capitalized amount thereof at such
date, determined in accordance with GAAP.
"Cash Equivalents" means (i) any evidence of Indebtedness with a maturity
of 180 days or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in support
thereof); (ii) demand and time deposits and certificates of deposit or
acceptances with a maturity of 180 days or less of any financial institution
that is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $500,000,000; (iii) commercial
paper with a maturity of 180 days or less issued by a corporation that is not an
Affiliate of the Company and is organized under the laws of any state of the
United States or the District of Columbia and rated at least A-l by S&P or at
least P-l by Moody's; (iv) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (i) above
entered into with any commercial bank meeting the specifications of clause (ii)
above; (v) overnight bank deposits and bankers' acceptances at any commercial
bank meeting the qualifications specified in clause (ii) above; (vi) deposits
available for withdrawal on demand with any commercial bank not meeting the
qualifications specified in clause (ii) above but which is a lending bank under
the Bank Credit Facility, provided all such deposits do not exceed $5,000,000 in
the aggregate at any one time; (vii) demand and time deposits and certificates
of deposit with any commercial bank organized in the United States not meeting
the qualifications specified in clause (ii) above, provided that such deposits
and certificates support bond, letter of credit and other similar types of
obligations incurred in the ordinary course of business; and (viii) investments
in money market or other mutual funds substantially all of whose assets comprise
securities of the types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of any event or series of events
by which (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50%
of the total Voting Stock of the Company; (b) the Company consolidates with or
merges into another Person or any Person consolidates with, or merges into, the
Company, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Company is changed into or exchanged for cash, securities or
other Property, other than any such transaction where (i) the outstanding Voting
Stock of the Company is changed into or exchanged for Voting Stock of the
surviving or resulting Person that is Qualified Capital Stock and (ii) 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 or resulting Person immediately after such transaction; (c) the
Company, either individually or in conjunction with one or more Restricted
Subsidiaries, sells, assigns, conveys, transfers, leases or otherwise disposes
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of, or the Restricted Subsidiaries sell, assign, convey, transfer, lease or
otherwise dispose of, all or substantially all of the Properties of the Company
and the Restricted Subsidiaries, taken as a whole (either in one transaction or
a series of related transactions), including Capital Stock of the Restricted
Subsidiaries, to any Person (other than the Company or a Wholly Owned Restricted
Subsidiary); (d) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of the Company was approved by
a vote of a two-thirds 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 of the Company then in office; or (e) the
liquidation or dissolution of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations thereunder issued by the
Internal Revenue Service.
"Commission" or "SEC" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Stock" of any Person means Capital Stock of such Person that does
not rank 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.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its President, any Vice
President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.
"Consolidated Exploration Expenses" means, for any period, exploration
expenses of the Company and its Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the ratio
on a pro forma basis of (a) the sum of Consolidated Net Income, Consolidated
Interest Expense, Consolidated Income Tax Expense and Consolidated Non-cash
Charges each to the extent deducted in computing Consolidated Net Income, in
each case, for such period, of the Company and its Restricted Subsidiaries on a
consolidated basis, all determined in accordance with GAAP, decreased (to the
extent included in determining Consolidated Net Income) by the sum of (x) the
amount of deferred revenues that are amortized during such period and are
attributable to reserves that are subject to Volumetric Production Payments and
(y) amounts recorded in accordance with GAAP as repayments of principal and
interest pursuant to Dollar-Denominated Production Payments, to (b) the sum of
such Consolidated Interest Expense for such period; provided, however, that (i)
the Consolidated Fixed Charge Coverage Ratio shall be calculated on a pro forma
basis on the assumptions that (A) the Indebtedness to be incurred (and all other
Indebtedness incurred after the first day of such period of four full fiscal
quarters referred to in Section 9.11(a) hereof through and including the date of
determination), and (if applicable) the application of the net proceeds
therefrom (and from any other such Indebtedness), including to refinance other
Indebtedness, had been incurred on the first day of such four-quarter period
and, in the case of Acquired Indebtedness, on the assumption that the related
transaction (whether by means of purchase, merger or otherwise) also had
occurred on such date with the appropriate adjustments with respect to such
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acquisition being included in such pro forma calculation and (B) any acquisition
or disposition by the Company or any Restricted Subsidiary of any Properties
outside the ordinary course of business, or any repayment of any principal
amount of any Indebtedness of the Company or any Restricted Subsidiary prior to
the Stated Maturity thereof, in either case since the first day of such period
of four full fiscal quarters through and including the date of determination,
had been consummated on such first day of such four-quarter period, (ii) in
making such computation, the Consolidated Interest Expense attributable to
interest on any Indebtedness required to be computed on a pro forma basis in
accordance with Section 9.11(a) hereof and (A) bearing a floating interest rate
shall be computed as if the rate in effect on the date of computation had been
the applicable rate for the entire period and (B) which was not outstanding
during the period for which the computation is being made but which bears, at
the option of the Company, a fixed or floating rate of interest, shall be
computed by applying, at the option of the Company, either the fixed or floating
rate, (iii) in making such computation, the Consolidated Interest Expense
attributable to interest on any Indebtedness under a revolving credit facility
required to be computed on a pro forma basis in accordance with Section 9.11(a)
hereof shall be computed based upon the average daily balance of such
Indebtedness during the applicable period, provided that such average daily
balance shall be reduced by the amount of any repayment of Indebtedness under a
revolving credit facility during the applicable period, which repayment
permanently reduced the commitments or amounts available to be reborrowed under
such facility, (iv) notwithstanding clauses (ii) and (iii) of this proviso,
interest on Indebtedness determined on a fluctuating basis, to the extent such
interest is covered by agreements relating to Interest Rate Protection
Obligations, shall be deemed to have accrued at the rate per annum resulting
after giving effect to the operation of such agreements, (v) in making such
calculation, Consolidated Interest Expense shall exclude interest attributable
to Dollar-Denominated Production Payments, and (vi) if after the first day of
the period referred to in clause (a) of this definition the Company has
permanently retired any Indebtedness out of the Net Cash Proceeds of the
issuance and sale of shares of Qualified Capital Stock of the Company within 30
days of such issuance and sale, Consolidated Interest Expense shall be
calculated on a pro forma basis as if such Indebtedness had been retired on the
first day of such period.
"Consolidated Income Tax Expense" means, for any period, the provision for
federal, state, local and foreign income taxes (including state franchise taxes
accounted for as income taxes in accordance with GAAP) of the Company and its
Restricted Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense" means, for any period, without duplication,
the sum of (i) the interest expense of the Company and its Restricted
Subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP, including, without limitation, (a) any amortization of debt discount,
(b) the net cost under Interest Rate Protection Obligations (including any
amortization of discounts), (c) the interest portion of any deferred payment
obligation constituting Indebtedness, (d) all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing and (e) all accrued interest, in each case to the extent attributable
to such period, (ii) to the extent any Indebtedness of any Person (other than
the Company or a Restricted Subsidiary) is guaranteed by the Company or any
Restricted Subsidiary, the aggregate amount of interest paid (to the extent not
accrued in a prior period) or accrued by such other Person during such period
attributable to any such Indebtedness, in each case to the extent attributable
to that period, (iii) the aggregate amount of the interest component of
Capitalized Lease Obligations paid (to the extent not accrued in a prior
period), accrued or scheduled to be paid or accrued by the Company and its
Restricted Subsidiaries during such period as determined on a consolidated basis
in accordance with GAAP and (iv) the aggregate amount of dividends paid (to the
extent such dividends are not accrued in a prior period and excluding dividends
paid in Qualified Capital Stock) or accrued on Disqualified Capital Stock of the
Company and its Restricted Subsidiaries, to the extent such Disqualified Capital
Stock is owned by Persons other than the Company or its Restricted Subsidiaries,
less, to the extent included in any of clauses (i) through (iv), amortization of
capitalized debt issuance costs of the Company and its Restricted Subsidiaries
during such period.
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"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of the Company and its Restricted Subsidiaries for such period
as determined in accordance with GAAP, adjusted by excluding (a) net after-tax
extraordinary gains or losses (less all fees and expenses relating thereto), (b)
net after-tax gains or losses (less all fees and expenses relating thereto)
attributable to Asset Sales, (c) the net income (or net loss) of any Person
(other than the Company or any of its Restricted Subsidiaries), in which the
Company or any of its Restricted Subsidiaries has an ownership interest, except
to the extent of the amount of dividends or other distributions actually paid to
the Company or any of its Restricted Subsidiaries in cash by such other Person
during such period (regardless of whether such cash dividends or distributions
is attributable to net income (or net loss) of such Person during such period or
during any prior period), (d) net income (or net loss) of any Person combined
with the Company or any of its Restricted Subsidiaries on a "pooling of
interests" basis attributable to any period prior to the date of combination,
(e) the net income of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary is not at the date of determination permitted, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders, (f) dividends paid
on Qualifying TECONS, (g) dividends paid in Qualified Capital Stock, (h) income
resulting from transfers of assets received by the Company or any Restricted
Subsidiary from an Unrestricted Subsidiary, (i) Consolidated Exploration
Expenses and any write-downs or impairments of non-current assets and (j) the
cumulative effect of a change in accounting principles.
"Consolidated Net Worth" means, at any date, the consolidated stockholders'
equity of the Company and its Restricted Subsidiaries less the amount of such
stockholders' equity attributable to Disqualified Capital Stock or treasury
stock of the Company and its Restricted Subsidiaries, as determined in
accordance with GAAP.
"Consolidated Non-cash Charges" means, for any period, the aggregate
depreciation, depletion, amortization and exploration expense and other non-cash
expenses of the Company and its Restricted Subsidiaries reducing Consolidated
Net Income for such period, determined on a consolidated basis in accordance
with GAAP (excluding any such non-cash charge for which an accrual of or reserve
for cash charges for any future period is required).
"Corporate Trust Office" means the office of the Trustee at which at any
particular time the trust created by this Indenture is administered, which
office at the date of execution of this Indenture is located at 2001 Ross
Avenue, 27th Floor, Dallas, Texas 75201.
"Default" means any event, act or condition that is, or after notice or
passage of time or both would become, an Event of Default.
"Disinterested Director" means, with respect to any transaction or series
of transactions in respect of which the Board of Directors of the Company is
required to deliver a Board Resolution hereunder, a member of the Board of
Directors of the Company who does not have any material direct or indirect
financial interest (other than an interest arising solely from the beneficial
ownership of Capital Stock of the Company) in or with respect to such
transaction or series of transactions.
"Disqualified Capital Stock" means any Capital Stock that, either by its
terms, by the terms of any security into which it is convertible or exchangeable
or by contract or otherwise, is, or upon the happening of an event or passage of
time would be, required to be redeemed or repurchased prior to the final Stated
Maturity of the Securities or is redeemable at the option of the holder thereof
at any time prior to such final Stated Maturity, or is convertible into or
exchangeable for debt securities at any time prior to such final Stated
Maturity. For purposes of Section 9.11(a) hereof, Disqualified Capital Stock
shall be valued at the greater of its voluntary or involuntary maximum fixed
redemption or repurchase price plus accrued and unpaid dividends. For such
purposes, the "maximum fixed redemption or repurchase price" of any Disqualified
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Capital Stock which does not have a fixed redemption or repurchase price shall
be calculated in accordance with the terms of such Disqualified Capital Stock as
if such Disqualified Capital Stock were redeemed or repurchased on the date of
determination, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value shall be
determined in good faith by the board of directors of the issuer of such
Disqualified Capital Stock; provided, however, that if such Disqualified Capital
Stock is not at the date of determination permitted or required to be redeemed
or repurchased, the "maximum fixed redemption or repurchase price" shall be the
book value of such Disqualified Capital Stock.
"Dollar-Denominated Production Payments" means production payment
obligations of the Company or any Restricted Subsidiary recorded as liabilities
in accordance with GAAP, together with all undertakings and obligations in
connection therewith.
"Event of Default" has the meaning specified in Section 4.1 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor act thereto.
"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.
"Fair Market Value" means the fair market value of a Property (including
shares of Capital Stock) as determined in good faith by the Board of Directors
of the Company and evidenced by a Board Resolution, which determination shall be
conclusive for purposes of this Indenture; provided, however, that unless
otherwise specified herein, the Board of Directors shall be under no obligation
to obtain any valuation or assessment from any investment banker, appraiser or
other third party.
"Federal Bankruptcy Code" means the United States Bankruptcy Code of Title
11 of the United States Code, as amended from time to time.
"Finance Person" means a Subsidiary of the Company, the Common Stock of
which is owned by the Company, that does not engage in any activity other than
(i) the holding of Subordinated Indebtedness with respect to which payments of
interest on such Subordinated Indebtedness can, at the election of the issuer
thereof, be deferred for one or more payment periods, (ii) the issuance of
Qualifying TECONS and Common Stock and/or debt securities and (iii) any activity
necessary, incidental or related to the foregoing.
"Foreign Subsidiary" means a Restricted Subsidiary that is formed in a
jurisdiction other than the United States or a State thereof or the District of
Columbia, that engages in the Oil and Gas Business exclusively outside the
United States of America and that is treated as a corporation or an association
taxable as a corporation for U.S. federal income tax purposes.
"GAAP" means generally accepted accounting principles, consistently
applied, that are set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant
segment of the accounting profession of the United States of America, which are
applicable as of the date of this Indenture.
The term "guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments or documents for collection
in the ordinary course of business), direct or indirect, in any manner, of any
part or all of such obligation and (ii) an agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to assure in any way
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the payment or performance (or payment of damages in the event of
non-performance) of all or any part of such obligation, including, without
limiting the foregoing, the payment of amounts drawn down under letters of
credit. When used as a verb, "guarantee" has a corresponding meaning.
"Holder" means a Person in whose name a Security is registered in a
Security Register.
"Indebtedness" means, with respect to any Person, without duplication, (a)
all liabilities of such Person, contingent or otherwise, for borrowed money or
for the deferred purchase price of Property or services (excluding any trade
accounts payable and other accrued current liabilities incurred and reserves
established in the ordinary course of business) and all liabilities of such
Person incurred in connection with any agreement to purchase, redeem, exchange,
convert or otherwise acquire for value any Capital Stock of such Person, or any
warrants, rights or options to acquire such Capital Stock outstanding on the
date of this Indenture or thereafter, if, and to the extent, any of the
foregoing would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, (b) all obligations of such Person evidenced
by bonds, notes, debentures or other similar instruments, if, and to the extent,
any of the foregoing would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, (c) all obligations of such Person with
respect to letters of credit, (d) all indebtedness of such Person created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person (even if the rights and remedies of
the seller or lender under such agreement in the event of default are limited to
repossession or sale of such Property), but excluding trade accounts payable and
reserves established arising in the ordinary course of business, (e) all
Capitalized Lease Obligations of such Person, (f) the Attributable Indebtedness
(in excess of any related Capitalized Lease Obligations) related to any
Sale/Leaseback Transaction of such Person, (g) all Indebtedness referred to in
the preceding clauses of other Persons and all dividends of other Persons, the
payment of which is secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon
Property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness (the amount of such obligation being deemed to be
the lesser of the value of such Property or the amount of the obligation so
secured), (h) all guarantees by such Person of Indebtedness referred to in this
definition (including, with respect to any Production Payment, any warranties or
guaranties of production or payment by such Person with respect to such
Production Payment but excluding other contractual obligations of such Person
with respect to such Production Payment), and (i) all obligations of such Person
under or in respect of currency exchange contracts, oil and natural gas price
hedging arrangements and Interest Rate Protection Obligations; provided,
however, that Indebtedness shall not include Qualifying TECONS and Indebtedness
(including guarantees thereof) relating to Qualifying TECONS and held by a
Finance Person. Subject to clause (h) of the first sentence of this definition,
neither Dollar-Denominated Production Payments nor Volumetric Production
Payments shall be deemed to be Indebtedness. In addition, Disqualified Capital
Stock shall not be deemed to be Indebtedness.
"Indenture" means this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Insolvency or Liquidation Proceeding" means, with respect to any Person,
(a) an insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or similar case or proceeding in connection
therewith, relative to such Person or its creditors, as such, or its assets or
(b) any liquidation, dissolution or other winding-up proceeding of such Person,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy or (c) any assignment for the benefit of creditors or any other
marshaling of assets and liabilities of such Person.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
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"Interest Rate Protection Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements or arrangements designed to protect
against or manage such Person's and any of its Subsidiaries' exposure to
fluctuations in interest rates.
"Investment" means, with respect to any Person, any direct or indirect
advance, loan, guarantee of Indebtedness or other extension of credit or capital
contribution to (by means of any transfer of cash or other Property to others or
any payment for Property or services for the account or use of others), or any
purchase or acquisition by such Person of any Capital Stock, bonds, notes,
debentures or other securities (including derivatives) or evidences of
Indebtedness issued by, any other Person. In addition, the Fair Market Value of
the net assets of any Restricted Subsidiary at the time that such Restricted
Subsidiary is designated an Unrestricted Subsidiary shall be deemed to be an
"Investment" made by the Company in such Unrestricted Subsidiary at such time.
"Investments" shall exclude (a) extensions of trade credit or other advances to
customers on commercially reasonable terms in accordance with normal trade
practices or otherwise in the ordinary course of business, (b) Interest Rate
Protection Obligations entered into in the ordinary course of business or as
required by any Permitted Indebtedness or any Indebtedness incurred in
compliance with Section 9.11 hereof, but only to the extent that the stated
aggregate notional amounts of such Interest Rate Protection Obligations do not
exceed 105% of the aggregate principal amount of such Indebtedness to which such
Interest Rate Protection Obligations relate and (c) endorsements of negotiable
instruments and documents in the ordinary course of business.
"Issue Date" means the date on which the Original Securities were first
issued under this Indenture.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim or similar type
of encumbrance (including, without limitation, any agreement to give or grant
any lease, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing) upon or with
respect to any Property of any kind. A Person shall be deemed to own subject to
a Lien any Property which such Person has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement.
"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 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 (a) the date on which such securities are sold or exchanged for cash
or Cash Equivalents and (y) 150 days following the date of receipt of such
securities. If such securities are not sold or exchanged for cash or Cash
Equivalents within 120 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 9.16 hereof, such
securities shall be deemed not to have been Liquid Securities at any time.
"Material Change" means an increase or decrease (except to the extent
resulting from changes in prices) of more than 30% during a fiscal quarter in
the estimated discounted future net revenues from proved oil and gas reserves of
the Company and its Restricted Subsidiaries, calculated in accordance with
clause (i)(A) of the definition of Adjusted Consolidated Net Tangible Assets;
provided, however, that the following shall be excluded from the calculation of
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Material Change: (i) any acquisitions during the quarter of oil and gas reserves
with respect to which the Company's estimate of the discounted future net
revenues from proved oil and gas reserves has been confirmed by independent
petroleum engineers and (ii) any dispositions of Properties during such quarter
that were disposed of in compliance with Section 9.16.
"Maturity" means, with respect to any Security, the date on which any
principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity with respect to such principal or by
declaration of acceleration, call for redemption or purchase or otherwise.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Available Cash" from an Asset Sale or Sale/Leaseback Transaction 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 Cash Equivalents, 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 or Sale/Leaseback Transaction and (b) except to the extent
subsequently converted to cash, Cash Equivalents or Liquid Securities within 240
days after such Asset Sale or Sale/Leaseback Transaction, 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 or
Sale/Leaseback Transaction, (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 or
Sale/Leaseback Transaction) which is secured by any assets subject to such Asset
Sale or Sale/Leaseback Transaction, 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 Sale/Leaseback Transaction or by applicable law,
be repaid out of the proceeds from such Asset Sale or Sale/Leaseback
Transaction, 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 or Sale/Leaseback Transaction 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 or Sale/Leaseback Transaction and retained by the Company or any
Restricted Subsidiary after such Asset Sale or Sale/Leaseback Transaction;
provided, however, that if any consideration for an Asset Sale or Sale/Leaseback
Transaction (which would otherwise constitute 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 Cash Proceeds," with respect to any issuance or sale of Qualified
Capital Stock or other securities, means the cash proceeds of such issuance or
sale net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultant and other fees
and expenses actually incurred in connection with such issuance or sale and net
of taxes paid or payable as a result thereof.
"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.
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"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of the Company or any Restricted Subsidiary incurred in connection
with the acquisition by the Company or such Restricted Subsidiary of any
Property and as to which (a) the holders of such Indebtedness agree that they
will look solely to the Property so acquired and securing such Indebtedness for
payment on or in respect of such Indebtedness, and neither the Company nor any
Subsidiary (other than an Unrestricted Subsidiary) (i) provides credit support,
including any undertaking, agreement or instrument which would constitute
Indebtedness or (ii) is directly or indirectly liable for such Indebtedness, and
(b) no default with respect to such Indebtedness would permit (after notice or
passage of time or both), according to the terms thereof, any holder of any
Indebtedness of the Company or a Restricted Subsidiary to declare a default on
such Indebtedness or cause the payment thereof to be accelerated or payable
prior to its Stated Maturity.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, payments with respect to any letters of
credit, reimbursements, damages and other liabilities payable under the
documentation governing any Indebtedness.
"Officers" means, with respect to any Person, the Chief Executive Officer,
the President, any Vice President, the Chief Financial Officer and the Treasurer
of such Person.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, and delivered
to the Trustee.
"Oil and Gas Business" means (i) the acquisition, exploration, development,
operation and disposition of interests in oil, gas and other hydrocarbon
Properties, (ii) the gathering, marketing, treating, processing, storage,
refining, selling and transporting of any production from such interests or
Properties, (iii) any business relating to or arising from exploration for or
development, production, treatment, processing, storage, refining,
transportation or marketing of oil, gas and other minerals and products produced
in association therewith and (iv) any activity necessary, appropriate or
incidental to the activities described in the foregoing clauses (i) through
(iii) of this definition.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company (or any Subsidiary Guarantor), including an employee of the
Company (or any Subsidiary Guarantor), and who shall be reasonably acceptable to
the Trustee.
"Outstanding," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities, provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Securities, except to the extent provided in Sections 11.2 and
11.3 hereof, with respect to which the Company has effected legal
defeasance or covenant defeasance as provided in Article XI hereof; and
E-156
(iv) Securities which have been paid pursuant to Section 2.7 hereof or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such securities are held by a bona
fide purchaser in whose hands the Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Securities owned
by the Company, any Subsidiary Guarantor or any other obligor upon the
Securities or any Affiliate of the Company, any Subsidiary Guarantor or such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in making such
calculation or in relying upon any such request, demand, authorization,
direction, consent, notice or waiver, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company, any Subsidiary Guarantor or
any other obligor upon the Securities or any Affiliate of the Company, any
Subsidiary Guarantor or such other obligor.
"Permitted Indebtedness" means any of the following:
(i) Indebtedness under the Bank Credit Facility in an
aggregate principal amount at any one time outstanding not to exceed
the Borrowing Base, plus all interest and fees and other Obligations
under such facility and any guarantee of any such Indebtedness;
(ii) Indebtedness under the Original Securities;
(iii) Indebtedness outstanding or in effect on the date of this
Indenture (and not repaid or defeased with the proceeds of the
offering of the Securities);
(iv) obligations pursuant to Interest Rate Protection
Obligations, but only to the extent such obligations do not exceed
105% of the aggregate principal amount of the Indebtedness covered by
such Interest Rate Protection Obligations; obligations under currency
exchange contracts entered into in the ordinary course of business;
hedging arrangements entered into in the ordinary course of business
for the purpose of protecting production, purchases and resales
against fluctuations in oil or natural gas prices; and any guarantee
of any of the foregoing;
(v) the Subsidiary Guarantees of the Securities (and any
assumption of the obligations guarantees thereby);
(vi) Indebtedness of the Company owing to and held by a Wholly
Owned Restricted Subsidiary, and Indebtedness of any Restricted
Subsidiary owing to and held by the Company or a Wholly Owned
Restricted Subsidiary;
(vii) Permitted Refinancing Indebtedness and any guarantee
thereof;
(viii) Non-Recourse Indebtedness;
(ix) in-kind obligations relating to net gas balancing positions
arising in the ordinary course of business;
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(x) Indebtedness in respect of bid, performance or surety bonds
issued for the account of the Company or any Restricted Subsidiary in
the ordinary course of business, including guaranties and letters of
credit supporting such bid, performance or surety obligations (in each
case other than for an obligation for money borrowed); and
(xi) any additional Indebtedness in an aggregate principal
amount not in excess of $25,000,000 at any one time outstanding and any
guarantee thereof.
"Permitted Investments" means any of the following: (i) Investments in Cash
Equivalents; (ii) Investments in property, plant and equipment used in the
ordinary course of business; (iii) Investments in the Company or any of its
Restricted Subsidiaries; (iv) Investments by the Company or any of its
Restricted Subsidiaries in another Person, if as a result of such Investment (A)
such other Person becomes a Restricted Subsidiary or (B) such other Person is
merged or consolidated with or into, or transfers or conveys all or
substantially all of its Properties to, the Company or a Restricted Subsidiary;
(v) entry into operating agreements, joint ventures, partnership agreements,
working interests, royalty interests, mineral leases, processing agreements,
farm-out agreements, contracts for the sale, transportation or exchange of oil
and natural gas, unitization agreements, pooling arrangements, area of mutual
interest agreements or other similar or customary agreements, transactions,
Properties, interests or arrangements, and Investments and expenditures in
connection therewith or pursuant thereto, in each case made or entered into in
the ordinary course of the Oil and Gas Business, excluding, however, Investments
in corporations; (vi) entry into any hedging arrangements in the ordinary course
of business for the purpose of protecting the Company's or any Restricted
Subsidiary's production, purchases and resales against fluctuations in oil or
natural gas prices; (vii) entry into any currency exchange contract in the
ordinary course of business; or (viii) Investments in stock, obligations or
securities received in settlement of debts owing to the Company or any
Restricted Subsidiary as a result of bankruptcy or insolvency proceedings or
upon the foreclosure, perfection or enforcement of any Lien in favor of the
Company or a Restricted Subsidiary, in each case as to debt owing to the Company
or a Restricted Subsidiary that arose in the ordinary course of business of the
Company or any such Restricted Subsidiary.
"Permitted Liens" means the following types of Liens:
(a) Liens existing as of the date of this Indenture;
(b) Liens securing the Securities or the Subsidiary Guarantees;
(c) Liens in favor of the Company or any Restricted Subsidiary;
(d) Liens securing Indebtedness of the Company under the Bank Credit
Facility that constitutes Permitted Indebtedness pursuant to clause (i) of
the definition of "Permitted Indebtedness";
(e) Liens for taxes, assessments and governmental charges or claims
either
(f) (i) not delinquent or (ii) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required pursuant
to GAAP;
(g) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not delinquent or
being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made in
respect thereof;
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(h) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security, or to secure the payment or performance of
tenders, statutory or regulatory obligations, surety and appeal bonds,
bids, government contracts and leases, performance and return of money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money but including lessee or operator obligations
under statutes, governmental regulations or instruments related to the
ownership, exploration and production of oil, gas and minerals on state,
federal or foreign lands or waters);
(i) judgment and attachment Liens not giving rise to an Event of
Default so long as any appropriate legal proceedings which may have been
duly initiated for the review of such judgment shall not have been finally
terminated or the period within which such proceeding may be initiated
shall not have expired;
(j) easements, rights-of-way, restrictions and other similar charges
or encumbrances not interfering in any material respect with the ordinary
conduct of the business of the Company or any of its Restricted
Subsidiaries;
(k) any interest or title of a lessor under any Capitalized Lease
Obligation or operating lease;
(l) purchase money Liens; provided, however, that (i) the related
purchase money Indebtedness shall not be secured by any Property of the
Company or any Restricted Subsidiary other than the Property so acquired
(including, without limitation, those acquired indirectly through the
acquisition of stock or other ownership interests) and the proceeds thereof
and (ii) the Lien securing such Indebtedness shall be created within 90
days of such acquisition;
(m) Liens securing obligations under hedging agreements that the
Company or any Restricted Subsidiary enters into in the ordinary course of
business for the purpose of protecting its production, purchases and
resales against fluctuations in oil or natural gas prices;
(n) Liens upon specific items of inventory or other goods of any
Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate
the purchase, shipment or storage of such inventory or other goods;
(o) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other Property
relating to such letters of credit and products and proceeds thereof;
(p) Liens encumbering Property under construction arising from
progress or partial payments by a customer of the Company or its Restricted
Subsidiaries relating to such Property;
(q) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty requirements of the Company
or any of its Restricted Subsidiaries, including rights of offset and
set-off;
(r) Liens securing Interest Rate Protection Obligations which Interest
Rate Protection Obligations relate to Indebtedness that is secured by Liens
otherwise permitted under this Indenture;
(s) Liens on, or related to, Properties to secure all or part of the
costs incurred in the ordinary course of business for the exploration,
drilling, development or operation thereof;
(t) Liens on pipeline or pipeline facilities which arise by operation
of law;
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(u) Liens arising under operating agreements, joint venture
agreements, partnership agreements, oil and gas leases, farm-out
agreements, division orders, contracts for the sale, transportation or
exchange of oil and natural gas, unitization and pooling declarations and
agreements, area of mutual interest agreements and other agreements which
are customary in the Oil and Gas Business;
(v) Liens reserved in oil and gas mineral leases for bonus or rental
payments or for compliance with the terms of such leases;
(w) Liens constituting survey exceptions, encumbrances, easements or
reservations of, or rights to others for, rights-of-way, zoning or other
restrictions as to the use of real properties, and minor defects of title
which, in the case of any of the foregoing, were not incurred or created to
secure the payment of borrowed money or the deferred purchase price of
Property or services, and in the aggregate do not materially adversely
affect the value of the Properties of the Company and the Restricted
Subsidiaries, taken as a whole, or materially impair the use of such
Properties for the purposes of which such Properties are held by the
Company or any Restricted Subsidiaries;
(x) Liens securing Non-Recourse Indebtedness; provided, however, that
the related Non-Recourse Indebtedness shall not be secured by any Property
of the Company or any Restricted Subsidiary other than the Property
acquired (including, without limitation, those acquired indirectly through
the acquisition of stock or other ownership interests) by the Company or
any Restricted Subsidiary with the proceeds of such Non-Recourse
Indebtedness;
(y) Liens on property existing at the time of acquisition thereof by
the Company or any Subsidiary of the Company and Liens on Property of a
Subsidiary existing at the time it became a Subsidiary, provided that such
Liens were in existence prior to the contemplation of the acquisition and
do not extend to any Property other than the Acquired Property; and
(z) Liens resulting from the deposit of funds or evidences of
Indebtedness in trust for the purpose of defeasing Indebtedness of the
Company or any of its Restricted Subsidiaries.
Notwithstanding anything in clauses (a) through (y) of this definition, the term
"Permitted Liens" shall not include any Liens resulting from the creation,
incurrence, issuance, assumption or guarantee of any Production Payments other
than Production Payments that are created, incurred, issued, assumed or
guaranteed in connection with the financing of, and within 30 days after, the
acquisition of the Properties that are subject thereto.
"Permitted Refinancing Indebtedness" means Indebtedness of the Company or a
Restricted Subsidiary, the net proceeds of which are used to renew, extend,
refinance, refund or repurchase (including, without limitation, pursuant to a
Change of Control Offer or Prepayment Offer) outstanding Indebtedness of the
Company or any Restricted Subsidiary, provided that (a) if the Indebtedness
(including the Securities) being renewed, extended, refinanced, refunded or
repurchased is pari passu with or subordinated in right of payment to either the
Securities or the Subsidiary Guarantees, then such Indebtedness is pari passu
with or subordinated in right of payment to the Securities or the Subsidiary
Guarantees, as the case may be, at least to the same extent as the Indebtedness
being renewed, extended, refinanced, refunded or repurchased, (b) such
Indebtedness has a Stated Maturity for its final scheduled principal payment
that is no earlier than the Stated Maturity for the final scheduled principal
payment of the Indebtedness being renewed, extended, refinanced, refunded or
repurchased and (c) such Indebtedness has an Average Life at the time such
Indebtedness is incurred that is equal to or greater than the Average Life of
the Indebtedness being renewed, extended, refinanced, refunded or repurchased;
provided, further, that such Indebtedness is in an aggregate principal amount
(or, if such Indebtedness is issued at a price less than the principal amount
thereof, the aggregate amount of gross proceeds therefrom is) not in excess of
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the aggregate principal amount then outstanding of the Indebtedness being
renewed, extended, refinanced, refunded or repurchased (or if the Indebtedness
being renewed, extended, refinanced, refunded or repurchased was issued at a
price less than the principal amount thereof, then not in excess of the amount
of liability in respect thereof determined in accordance with GAAP) plus the
amount of any premium required to be paid in connection with such renewal,
extension, refinancing, refunding or repurchase pursuant to the terms of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased or the
amount of any premium reasonably determined by the Company as necessary to
accomplish such renewal, extension, refinancing, refunding or repurchase, plus
the amount of reasonable fees and expenses incurred by the Company or such
Restricted Subsidiary in connection therewith.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's preferred or preference stock, whether now outstanding or issued after
the date of this Indenture, including, without limitation, all classes and
series of preferred or preference stock of such Person.
"Production Payments" means, collectively, Dollar-Denominated Production
Payments and Volumetric Production Payments.
"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, without limitation, Capital Stock in any other Person.
"Public Equity Offering" means an offer and sale of Common Stock of the
Company for cash pursuant to a registration statement that has been declared
effective by the Commission pursuant to the Securities Act (other than a
registration statement on Form S-8 or otherwise relating to equity securities
issuable under any employee benefit plan of the Company).
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Disqualified Capital Stock and, with respect to the
Company, Qualified Capital Stock includes, without limitation, any Qualifying
TECONS.
"Qualifying TECONS" means preferred trust securities or similar securities
issued by a Finance Person after the date of this Indenture.
"Redemption Date," when used with respect to any Security to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the April 15 or October 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Responsible Officer," when used with respect to the Trustee, means any
officer in the Corporate Trust Office, and also means, with respect to a
particular corporate trust matter, any other officer of the Trustee to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
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"Restricted Investment" means (without duplication) (i) the designation of
a Subsidiary as an Unrestricted Subsidiary in the manner described in the
definition of "Unrestricted Subsidiary" and (ii) any Investment other than a
Permitted Investment.
"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on or after the date of this Indenture, unless such Subsidiary of the
Company is an Unrestricted Subsidiary or is designated as an Unrestricted
Subsidiary pursuant to the terms of this Indenture.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and its successors.
"Sale/Leaseback Transaction" means with respect to the Company or any of
its Restricted Subsidiaries, any arrangement with any Person providing for the
leasing by the Company or any of its Restricted Subsidiaries of any principal
property, acquired or placed into service more than 180 days prior to such
arrangement, whereby such property has been or is to be sold or transferred by
the Company or any of its Restricted Subsidiaries to such Person.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and any successor act thereto.
"Senior Indebtedness" means any Indebtedness of the Company (whether
outstanding on the date hereof or hereinafter incurred), unless such
Indebtedness is Subordinated Indebtedness.
"Series A Preferred Stock" means the Company's Series A 1999 Convertible
Preferred Stock, par value $10.00 per share.
"Series B Preferred Stock" means the Company's Series B 1999
Non-Convertible Preferred Stock, par value $10.00 per share.
"Stated Maturity" means, when used with respect to any Indebtedness or any
installment of interest thereon, means the date specified in the instrument
evidencing or governing such Indebtedness as the fixed date an which the
principal of such Indebtedness or such installment of interest is due and
payable.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Subsidiary Guarantor which is expressly subordinated in right of payment to the
Securities or the Subsidiary Guarantees, as the case may be. "Subsidiary" means,
with respect to any Person, (i) a corporation a majority of whose Voting Stock
is at the time, directly or indirectly, owned by such Person, by one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries
thereof or (ii) any other Person (other than a corporation), including, without
limitation, a joint venture, in which such Person, one or more Subsidiaries
thereof or such Person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof, have at least majority
ownership interest entitled to vote in the election of directors, managers or
trustees thereof (or other Persons performing similar functions).
"Subsidiary Guarantee" has the meaning specified in Section 12.1 hereof.
"Subsidiary Guarantor" means (i) Comstock Oil & Gas, Inc., a Nevada
corporation, (ii) Comstock Oil & Gas - Louisiana, Inc., a Nevada corporation,
(iii) Comstock Offshore, LLC, a Nevada limited liability company, (iv) each of
the Company's other Restricted Subsidiaries, if any, executing a supplemental
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indenture in compliance with the provisions of Section 9.12(a) hereof and (v)
any Person that becomes a successor guarantor of the Securities in compliance
with the provisions of Section 12.2 hereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and in force at the date as of which this Indenture was executed, except
as provided in Section 8.5 hereof.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination will be designated an Unrestricted Subsidiary by the
Board of Directors of the Company as provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors of the Company may designate
any Subsidiary of the Company as an Unrestricted Subsidiary so long as (a)
neither the Company nor any Restricted Subsidiary is directly or indirectly
liable pursuant to the terms of any Indebtedness of such Subsidiary; (b) no
default with respect to any Indebtedness of such Subsidiary would permit (upon
notice, lapse of time or otherwise) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its Stated Maturity; (c) such designation as an Unrestricted Subsidiary would be
permitted under Section 9.9 hereof; and (d) such designation shall not result in
the creation or imposition of any Lien on any of the Properties of the Company
or any Restricted Subsidiary (other than any Permitted Lien or any Lien the
creation or imposition of which shall have been in compliance with Section 9.14
hereof); provided, however, that with respect to clause (a), the Company or a
Restricted Subsidiary may be liable for Indebtedness of an Unrestricted
Subsidiary if (1) such liability constituted a Permitted Investment or a
Restricted Payment permitted by Section 9.9 hereof, in each case at the time of
incurrence, or (2) the liability would be a Permitted Investment at the time of
designation of such Subsidiary as an Unrestricted Subsidiary. Any such
designation by the Board of Directors of the Company shall be evidenced to the
Trustee by filing a Board Resolution with the Trustee giving effect to such
designation. The Board of Directors of the Company may designate any
Unrestricted Subsidiary as a Restricted Subsidiary if, immediately after giving
effect to such designation, on a pro forma basis (i) no Default or Event of
Default shall have occurred and be continuing, (ii) the Company could incur
$1.00 of additional Indebtedness (not including the incurrence of Permitted
Indebtedness) under Section 9.11(a) hereof and (iii) if any of the Properties of
the Company or any of its Restricted Subsidiaries would upon such designation
become subject to any Lien (other than a Permitted Lien), the creation or
imposition of such Lien shall have been in compliance with Section 9.14 hereof.
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
"Volumetric Production Payments" means production payment obligations of
the Company or a Restricted Subsidiary recorded as deferred revenue in
accordance with GAAP, together with all undertakings and obligations in
connection therewith.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary of the
Company to the extent (i) all of the Capital Stock or other ownership interests
in such Restricted Subsidiary, other than any directors' qualifying shares
mandated by applicable law, is owned directly or indirectly by the Company or
(ii) such Restricted Subsidiary does substantially all of its business in one or
more foreign jurisdictions and is required by the applicable laws and
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regulations of any such foreign jurisdiction to be partially owned by the
government of such foreign jurisdiction or individual or corporate citizens of
such foreign jurisdiction in order for such Restricted Subsidiary to transact
business in such foreign jurisdiction, provided that the Company, directly or
indirectly, owns the remaining Capital Stock or ownership interest in such
Restricted Subsidiary and, by contract or otherwise, controls the management and
business of such Restricted Subsidiary and derives the economic benefits of
ownership of such Restricted Subsidiary to substantially the same extent as if
such Restricted Subsidiary were a wholly owned subsidiary.
Section 1.2 Other Definitions.
Defined
Term in Section
"Change of Control Notice"...............................9.15(c)
"Change of Control Offer"................................9.15(a)
"Change of Control Purchase Date"........................9.15(c)
"Change of Control Purchase Price".......................9.15(a)
"Excess Proceeds"........................................9.16(b)
"Funding Guarantor".........................................12.5
"Global Security".....................................Appendix A
"Offer Amount"...........................................9.16(c)
"Offer Period"...........................................9.16(c)
"OID"........................................................2.1
"Original Securities"........................................2.1
"Paying Agent"...............................................2.4
"Payment Restriction".......................................9.18
"Permitted Consideration.................................9.16(a)
"Prepayment Offer".......................................9.16(b)
"Prepayment Offer Notice.................................9.16(c)
"Purchase Date"..........................................9.16(c)
"Registrar"..................................................2.4
"Representative"............................................13.2
"Restricted Payment"......................................9.9(a)
"Security Register"..........................................2.4
"Surviving Entity"........................................7.1(a)
"U.S. Government Obligations"............................11.4(a)
Section 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities,
"indenture security holder" means a Holder,
"indenture to be qualified" means this Indenture,
"indenture trustee" or "institutional trustee" means the Trustee, and
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
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All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.
Section 1.4 Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP and all accounting calculations will be
determined in accordance with GAAP;
(c) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision;
(d) the masculine gender includes the feminine and the neuter;
(e) a "day" means a calendar day;
(f) the term "merger" includes a statutory share exchange and the term
"merged" has a correlative meaning;
(g) provisions apply to successive events and transactions; and
(h) references to agreements and other instruments include subsequent
amendments and waivers but only to the extent not prohibited by this Indenture.
ARTICLE II.
THE SECURITIES
Section 2.1 Amount of Securities; Issuable in Series.
The aggregate principal amount of Securities Outstanding at any one time
may not exceed $225,000,000 except as provided in Section 2.7 hereof. All
Securities shall be identical in all respects other than issue price and
issuance dates. 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 2.3, the Trustee shall authenticate Securities for
original issue on the Issue Date in the aggregate principal amount of
$150,000,000 (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 2.7, 2.8, 2.9, 9.15, 9.16 or 10.6 or Appendix A), there
shall be established in or pursuant to a resolution of the Board of Directors
and, subject to Section 2.3, 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:
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(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 shall be in an aggregate
principal amount not to exceed $75,000,000 (except for Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Securities of the same series pursuant to Section 2.7, 2.8, 2.9, 9.15,
9.16 or 10.6 or Appendix A and except for Securities which, pursuant to Section
2.3, are deemed never to have been authenticated and delivered hereunder);
(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.
Notwithstanding anything to the contrary in this Section or otherwise in
this Indenture, any additional issuance of Securities after the Issue Date,
whether such Securities are of the same or a different series than the Original
Securities, shall be in a principal amount greater than or equal to $25,000,000.
Section 2.2 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.
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Section 2.3 Execution and Authentication.
Two Officers of the Company shall sign the Securities for the Company by
manual or facsimile signature. The Company's seal may 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 Trustee for authentication, together with a written order of the
Company signed by two Officers 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 signatory 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 2.4 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 (the "Security 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 5.6. The
Company 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 2.5 Paying Agent To Hold Money in Trust.
Not later than 10:00 a.m., Eastern standard time, on 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
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
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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.
Section 2.6 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 2.7 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 2.8 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 2.7, 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 2.9 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.
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Section 2.10 Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. 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 cancellation and shall, upon
written request, deliver a certificate of such destruction to the Company. The
Company may not issue new Securities to replace Securities it has redeemed, paid
or delivered to the Trustee for cancellation.
Section 2.11 Defaulted Interest.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the persons who are
Securityholders on a subsequent special record date, in each case at the rate
provided in the Securities and in Section 9.1 hereof. 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 III.
SATISFACTION AND DISCHARGE
Section 3.1 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of
Securities, as expressly provided for in this Indenture) as to all Outstanding
Securities, and the Trustee, at the expense of the Company, shall, upon payment
of all amounts due the Trustee under Section 5.6 hereof, execute proper
instruments acknowledging satisfaction and discharge of this Indenture when
(a) either
(1) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been replaced as provided in Section 2.7 hereof
and (ii) Securities for whose payment money or United States governmental
obligations of the type described in clause (i) of the definition of Cash
Equivalents have theretofore been deposited in trust with the Trustee or
any Paying Agent or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as provided
in Section 9.3 hereof) have been delivered to the Trustee for cancellation,
or
(2) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
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(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of clause (2)(i), (2)(ii) or (2)(iii) above,
has irrevocably deposited or caused to be deposited with the Trustee funds
in an amount sufficient to pay and discharge the entire indebtedness on
such Securities not theretofore delivered to the Trustee for cancellation,
for principal (and premium, if any) and interest to the date of such
deposit (in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be, together with
instructions from the Company irrevocably directing the Trustee to apply
such funds to the payment thereof at maturity or redemption, as the case
may be;
(b) the Company has paid or caused to be paid all other sums then due
and payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, which, taken together, state that all conditions
precedent herein relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 5.6 hereof and, if money
shall have been deposited with the Trustee pursuant to this Section, the
obligations of the Trustee under Section 3.2 hereof and the last paragraph of
Section 9.3 hereof shall survive.
Section 3.2 Application of Trust Money.
Subject to the provisions of the last paragraph of Section 9.3 hereof, all
money deposited with the Trustee pursuant to Section 3.1 hereof shall be held in
trust and applied by it, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE IV.
DEFAULTS AND REMEDIES
Section 4.1 Events of Default.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be 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):
(a) default in the payment of the principal of or premium, if any, on any
of the Securities when the same becomes due and payable, whether such payment is
due at Stated Maturity, upon redemption, upon repurchase pursuant to a Change of
Control Offer or a Prepayment Offer, upon acceleration or otherwise; or
(b) default in the payment of any installment of interest on any of the
Securities, when it becomes due and payable, and the continuance of such default
for a period of 30 days; or
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(c) default in the performance or breach of the provisions of Article VII
hereof, the failure to make or consummate a Change of Control Offer in
accordance with the provisions of Section 9.15 or the failure to make or
consummate a Prepayment Offer in accordance with the provisions of Section 9.16;
or
(d) the Company or any Subsidiary Guarantor shall fail to perform or
observe any other term, covenant or agreement contained in the Securities, any
Subsidiary Guarantee or this Indenture (other than a default specified in
subparagraph (a), (b) or (c) above) for a period of 60 days after written notice
of such failure stating that it is a "notice of default" hereunder and requiring
the Company or such Subsidiary Guarantor, as the case may be, to remedy the same
shall have been given (x) to the Company by the Trustee or (y) to the Company
and the Trustee by the Holders of at least 25% in aggregate principal amount of
the Securities then Outstanding; or
(e) the occurrence and continuation beyond any applicable grace period of
any default in the payment of the principal of (or premium, if any, on) or
interest on any Indebtedness of the Company (other than the Securities) or any
Subsidiary Guarantor or any other Restricted Subsidiary for money borrowed when
due, or any other default resulting in acceleration of any Indebtedness of the
Company or any Subsidiary Guarantor or any other Restricted Subsidiary for money
borrowed, provided that the aggregate principal amount of such Indebtedness
shall exceed $10,000,000; or
(f) any Subsidiary Guarantee shall for any reason cease to be, or be
asserted by the Company or any Subsidiary Guarantor, as applicable, not to be,
in full force and effect (except pursuant to the release of any such Subsidiary
Guarantee in accordance with this Indenture); or
(g) final judgments or orders rendered against the Company or any
Subsidiary Guarantor or any other Restricted Subsidiary that are unsatisfied and
that require the payment in money, either individually or in an aggregate
amount, that is more than $10,000,000 over the coverage under applicable
insurance policies and either (A) commencement by any creditor of an enforcement
proceeding upon such judgment (other than a judgment that is stayed by reason of
pending appeal or otherwise) or (B) the occurrence of a 60-day period during
which a stay of such judgment or order, by reason of pending appeal or
otherwise, was not in effect; or
(h) the entry of a decree or order by a court having jurisdiction in the
premises (A) for relief in respect of the Company or any Subsidiary Guarantor or
any other Restricted Subsidiary in an involuntary case or proceeding under the
Federal Bankruptcy Code or any other applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) adjudging the Company or
any Subsidiary Guarantor or any other Restricted Subsidiary bankrupt or
insolvent, or approving a petition seeking reorganization, arrangement,
adjustment or composition of the Company or any Subsidiary Guarantor or any
other Restricted Subsidiary under the Federal Bankruptcy Code or any applicable
federal or state law, or appointing under any such law a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or any Subsidiary Guarantor or any other Restricted Subsidiary or of a
substantial part of its consolidated assets, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of
60 consecutive days; or
(i) the commencement by the Company or any Subsidiary Guarantor or any
other Restricted Subsidiary of a voluntary case or proceeding under the Federal
Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or any other case or proceeding to be
adjudicated bankrupt or insolvent, or the consent by the Company or any
Subsidiary Guarantor or any other Restricted Subsidiary to the entry of a decree
or order for relief in respect thereof in an involuntary case or proceeding
under the Federal Bankruptcy Code or any other applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or
the filing by the Company or any Subsidiary Guarantor or any other Restricted
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Subsidiary of a petition or consent seeking reorganization or relief under any
applicable federal or state law, or the consent by it under any such law to the
filing of any such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or other
similar official) of the Company or any Subsidiary Guarantor or any other
Restricted Subsidiary or of any substantial part of its consolidated assets, or
the making by it of an assignment for the benefit of creditors under any such
law, or the admission by it in writing of its inability to pay its debts
generally as they become due or taking of corporate action by the Company or any
Subsidiary Guarantor or any other Restricted Subsidiary in furtherance of any
such action.
Section 4.2 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in Section
4.1(h) or (i) hereof) occurs and is continuing, the Trustee or the Holders of
not less than 25% in aggregate principal amount of the Securities then
Outstanding, by written notice to the Company (and to the Trustee if such notice
is given by the Holders), may, and the Trustee upon the request of the Holders
of not less than 25% in aggregate principal amount of the Outstanding Securities
shall, by a notice in writing to the Company, declare all unpaid principal of,
premium, if any, and accrued and unpaid interest on all the Securities to be due
and payable immediately, upon which declaration all amounts payable in respect
of the Securities shall be immediately due and payable. If an Event of Default
specified in Section 4.1(h) or (i) hereof occurs and is continuing, the amounts
described above shall become and be immediately due and payable without any
declaration, notice or other act on the part of the Trustee or any Holder.
Promptly after the occurrence of a declaration of acceleration, the Company
shall notify each holder of Senior Indebtedness thereof, but failure to give any
such notice shall not affect such declaration or its consequences.
At any time after a declaration of acceleration has been made and before a
judgment or decree for payment of the money due has been obtained by the Trustee
as hereinafter in this Article provided, the Holders of a majority in aggregate
principal amount of the Securities Outstanding, by written notice to the
Company, the Subsidiary Guarantors and the Trustee, may rescind and annul such
declaration and its consequences if
(a) the Company or any Subsidiary Guarantor has paid or deposited with the
Trustee a sum sufficient to pay,
(1) all overdue interest on all Outstanding Securities,
(2) all unpaid principal of (and premium, if any, on) any Outstanding
Securities which have become due otherwise than by such declaration of
acceleration, including any Securities required to have been purchased on a
Change of Control Date or a Purchase Date pursuant to a Change of Control
Offer or a Prepayment Offer, as applicable, and interest on such unpaid
principal at the rate borne by the Securities,
(3) to the extent that payment of such interest is lawful, interest on
overdue interest and overdue principal at the rate borne by the Securities
(without duplication of any amount paid or deposited pursuant to clauses
(1) and (2) above), and
(4) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
(b) the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction as certified to the Trustee by the Company; and
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(c) all Events of Default, other than the non-payment of amounts of
principal of (or premium, if any, on) or interest on Securities which have
become due solely by such declaration of acceleration, have been cured or waived
as provided in Section 4.13 hereof.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Notwithstanding the foregoing, if an Event of Default specified in Section
4.1(e) hereof shall have occurred and be continuing, such Event of Default and
any consequential acceleration shall be automatically rescinded if the
Indebtedness that is the subject of such Event of Default has been repaid, or if
the default relating to such Indebtedness is waived or cured and if such
Indebtedness has been accelerated, then the holders thereof have rescinded their
declaration of acceleration in respect of such Indebtedness (provided, in each
case, that such repayment, waiver, cure or rescission is effected within a
period of 10 days from the continuation of such default beyond the applicable
grace period or the occurrence of such acceleration), and written notice of such
repayment, or cure or waiver and rescission, as the case may be, shall have been
given to the Trustee by the Company and countersigned by the holders of such
Indebtedness or a trustee, fiduciary or agent for such holders or other evidence
satisfactory to the Trustee of such events is provided to the Trustee, within 30
days after any such acceleration in respect of the Securities, and so long as
such rescission of any such acceleration of the Securities does not conflict
with any judgment or decree as certified to the Trustee by the Company.
Section 4.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(a) default is made in the payment of any installment of interest on any
Security when such interest becomes due and payable and such default continues
for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium, if any,
on) any Security at the Maturity thereof or with respect to any Security
required to have been purchased by the Company on the Change of Control Purchase
Date or the Purchase Date pursuant to a Change of Control Offer or Prepayment
Offer, as applicable, then the Company will, upon demand of the Trustee, pay to
the Trustee for the benefit of the Holders of such Securities, the whole amount
then due and payable on such Securities for principal (and premium, if any) and
interest, and interest on any overdue principal (and premium, if any) and, to
the extent that payment of such interest shall be legally enforceable, upon any
overdue installment of interest, at the rate borne by the Securities, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
money adjudged or decreed to be payable in the manner provided by law out of the
Property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
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Section 4.4 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, any Subsidiary Guarantor or any
other obligor upon the Securities, their creditors or the Property of the
Company, any Subsidiary Guarantor or of such other obligor, the Trustee
(irrespective of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company, the Subsidiary
Guarantors or such other obligor for the payment of overdue principal, premium,
if any, or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities and
to file such other papers or documents and take any other actions including
participation as a full member of any creditor or other committee as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any money or other Property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 5.6 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the Subsidiary Guarantees or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 4.5 Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities or
the Subsidiary Guarantees may be prosecuted and enforced by the Trustee without
the possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name and as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities in
respect of which such judgment has been recovered.
Section 4.6 Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in the case of the distribution of such money on account of principal (or
premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: to the payment of all amounts due the Trustee under Section 5.6
hereof;
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SECOND: to the payment of the amounts then due and unpaid for
principal of (and premium, if any, on) and interest on the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and premium, if
any) and interest, respectively; and
THIRD: the balance, if any, to the Company, or to whomsoever may be
lawfully entitled to receive the same, or as a court of competent
jurisdiction may direct.
Section 4.7 Limitation on Suits.
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(b) the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority or more in
aggregate principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
Section 4.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment, as provided herein (including, if applicable, Article XI hereof) and in
such Security of the principal of (and premium if any, on) and (subject to
Section 2.11 hereof) interest on, such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
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Section 4.9 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Subsidiary Guarantors, the Trustee and the
Holders shall be restored severally and respectively to their former positions
hereunder and thereunder and all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.
Section 4.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
2.7 hereof, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 4.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
Section 4.12 Control by Holders.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, provided that
(a) such direction shall not be in conflict with any rule of law or with
this Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(c) the Trustee need not take any action which might involve it in personal
liability or expense for which the Trustee has not received a satisfactory
indemnity therefor or be unduly prejudicial to the Holders not joining therein.
Section 4.13 Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities may on behalf of the Holders of all the Securities
waive any existing Default or Event of Default hereunder and its consequences,
except a Default or Event of Default
(a) in respect of the payment of the principal of (or premium, if any, on)
or interest on any Security, or
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(b) in respect of a covenant or provision hereof which under Article VIII
hereof cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected thereby.
Upon any such waiver, such Default or Event of Default shall cease to exist
for every purpose under this Indenture, but no such waiver shall extend to any
subsequent or other fault or Event of Default or impair any right consequent
thereon.
Section 4.14 Waiver of Stay, Extension or Usury Laws.
Each of the Company and the Subsidiary Guarantors covenants (to the extent
that each may lawfully do so) that it will not at any time insist upon, plead or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension, or usury law or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company or any
Subsidiary Guarantor from paying all or any portion of the principal of
(premium, if any, on) or interest on the Securities as contemplated herein, or
which may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) each of the Company and the Subsidiary
Guarantors hereby expressly waives all benefit or advantage of any such law, and
covenant that they will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE V.
THE TRUSTEE
Section 5.1 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 his own affairs.
(b) Except during the continuance of an Event of Default:
(i) 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
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, and shall be fully protected in so relying, 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; provided, however, that,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture, but the Trustee has
no obligation to determine the accuracy or completeness (other than as to
conformity with the requirements of this Indenture) of the statements made
therein.
(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:
(i) this paragraph shall not limit the effect of Section 5.1(b);
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(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) 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 4.12.
Section 5.2 Certain Rights of Trustee.
Subject to the provisions of Section 5.1 hereof:
(a) the Trustee may conclusively rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper (whether in its original or
facsimile form), or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may reasonably see fit;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it in good faith to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture;
and
(i) the Trustee shall not be deemed to have notice or knowledge of any
matter unless a Responsible Officer has actual knowledge thereof or unless
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written notice thereof is received by the Trustee at its Corporate Trust Office
and such notice references the Securities generally, the Company or this
Indenture.
The Trustee shall not be required to advance, expend or risk its own funds
or otherwise incur any 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 for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Section 5.3 Trustee Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company or the Subsidiary Guarantors, as the case may be, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture, the
Subsidiary Guarantees or the Securities. The Trustee shall not be accountable
for the use or application by the Company of any Securities or the proceeds
thereof.
Section 5.4 May Hold Securities.
The Trustee, any Paying Agent, any Registrar or any other agent of the
Company, the Subsidiary Guarantors or of the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
TIA Sections 310(b) and 311 in the case of the Trustee, may otherwise deal with
the Company and the Subsidiary Guarantors with the same rights it would have if
it were not the Trustee, Paying Agent, Registrar or such other agent.
Section 5.5 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company or any Subsidiary Guarantor.
Section 5.6 Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee may agree in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to the Trustee's wilful misconduct, negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability, claim damage or expense incurred without wilful misconduct or
negligence on its part, (i) arising out of or in connection with the acceptance
or administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder or (ii) in connection with
enforcing this indemnification provision.
The obligations of the Company under this Section 5.6 to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
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advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture or any other termination under any Insolvency or
Liquidation Proceeding. As security for the performance of such obligations of
the Company, the Trustee shall have a claim and lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for payment of principal of (and premium, if any, on) or
interest on particular Securities. Such lien shall survive the satisfaction and
discharge of this Indenture or any other termination under any Insolvency or
Liquidation Proceeding.
When the Trustee incurs expenses or renders services after the occurrence
of an Event of Default specified in paragraph (h) or (i) of Section 4.1 of this
Indenture, such expenses and the compensation for such services are intended to
constitute expenses of administration under any Insolvency or Liquidation
Proceeding.
Section 5.7 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible to
act as Trustee under TIA Section 310(a)(1) and shall have a combined capital and
surplus of at least $50,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of federal,
state, territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 5.7, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 5.8 Conflicting Interests.
The Trustee shall comply with the provisions of Section 310(b) of the Trust
Indenture Act; 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 5.9 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 5.10 hereof.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 5.10 hereof shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of not
less than a majority in aggregate principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
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(2) the Trustee shall cease to be eligible under Section 5.7 hereof
and shall fail to resign after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Security for at least
six months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in aggregate principal amount of the Outstanding Securities delivered
to the Company and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment, become the successor
Trustee and supersede the successor Trustee appointed by the Company. If no
successor Trustee shall have been so appointed by the Company or the Holders and
accepted appointment in the manner hereinafter provided, the retiring Trustee or
any Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee. The
evidence of such successorship may, but need not be, evidenced by a supplemental
indenture.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to the Holders of
Securities in the manner provided for in Section 13.5 hereof. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
(g) Notwithstanding the replacement of the Trustee pursuant to this Section
5.9, the Company's obligations under Section 5.6 shall continue for the benefit
of the retiring Trustee.
Section 5.10 Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of all amounts due it under
Section 5.6 hereof, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all money and
other Property held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
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Section 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation or banking association into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation or banking
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or banking association succeeding
to all or substantially all of the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided such corporation or
banking association shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities;
and in case at that time any of the Securities shall not have been
authenticated, any successor Trustee may authenticate such Securities either in
the name of any predecessor hereunder or in the name of the successor 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; provided, however,
that the right to adopt the certificate of authentication of any predecessor
Trustee or to authenticate Securities in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
Section 5.12 Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor under the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
Section 5.13 Notice of Defaults.
Within 90 days after the occurrence of any Default hereunder, the Trustee
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice of such Default hereunder known to the Trustee, unless such Default shall
have been cured or waived; provided, however, that, except in the case of a
Default in the payment of the principal of (or premium, if any, on) or interest
on any Security, the Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interest of the
Holders. The Trustee shall not be deemed to have notice of any Default, other
than a Default under 4.1(a) or (b), unless the Trustee shall have been advised
in writing that a Default has occurred. No duty imposed upon the Trustee in this
Indenture shall be applicable with respect to any Default of which the Trustee
is not deemed to have notice.
ARTICLE VI.
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 6.1 Holders' Lists; Holder Communications; Disclosures Respecting
Holders.
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
the Holders. Neither the Company, any Subsidiary Guarantor nor the Trustee shall
be under any responsibility with regard to the accuracy of such list. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee
semi-annually before each Regular Record Date, and at such other times as the
Trustee may reasonably request in writing, a list, in such form as the Trustee
may reasonably request, as of such date of the names and addresses of the
Holders then known to the Company. The Company and the Trustee shall also
satisfy any other requirements imposed upon each of them by TIA Section 312(a).
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Holders may communicate pursuant to Section 312(b) of the TIA with other
Holders with respect to their rights under this Indenture or the Securities.
Every Holder of Securities, by receiving and holding the same, agrees with the
Company, the Subsidiary Guarantors, the Registrar and the Trustee that none of
the Company, the Subsidiary Guarantors, the Registrar or the Trustee, or any
agent of any of them, shall be held accountable by reason of the disclosure of
any information as to the names and addresses of the Holders in accordance with
TIA Section 312, regardless of the source from which such information was
derived, that each of such Persons shall have the protection of TIA Section
312(c) and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
Section 6.2 Reports By Trustee.
Within 60 days after May 15 of each year commencing with May 15, 2000, the
Trustee shall transmit by mail to the Holders, as their names and addresses
appear in the Security Register, a brief report dated as of such May 15 in
accordance with and to the extent required under TIA Section 313(a). The Trustee
shall also comply with TIA Sections 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the Securities
become listed on any stock exchange or automatic quotation system.
A copy of each Trustee's report, at the time of its mailing to Holders of
Securities, shall be mailed to the Company and filed with the Commission and
each stock exchange, if any, on which the Securities are listed.
Section 6.3 Reports by Company.
The Company shall:
(a) file with the Trustee, within 30 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company
is not required to file information, documents or reports pursuant to either of
said Sections, then the Company shall file with the Trustee such information,
documents or reports as required pursuant to Section 9.8 hereof;
(b) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and
(c) transmit by mail to all Holders, in the manner and to the extent
provided in TIA Section 313(c), such summaries of any information, documents and
reports (without exhibits except to the extent required by TIA Section 313(c))
required to be filed by the Company pursuant to paragraph (a) or (b) of this
Section as may be required by rules and regulations prescribed from time to time
by the Commission.
ARTICLE VII.
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 7.1 Company May Consolidate, etc., Only on Certain Terms.
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The Company shall not, in any single transaction or a series of related
transactions, merge or consolidate with or into any other Person, or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
the Properties of the Company and its Restricted Subsidiaries on a consolidated
basis to any Person or group of Affiliated Persons, and the Company shall not
permit any of its Restricted Subsidiaries to enter into any such transaction or
series of related transactions if such transaction or series of transactions, in
the aggregate, would result in a sale, assignment, conveyance, transfer, lease
or other disposition of all or substantially all of the Properties of the
Company and its Restricted Subsidiaries on a consolidated basis to any other
Person or group of Affiliated Persons, unless at the time and after giving
affect thereto:
(a) either (i) if the transaction is a merger or consolidation, the Company
shall be the surviving Person of such merger or consolidation, or (ii) the
Person (if other than the Company) formed by such consolidation or into which
the Company is merged or to which the Properties of the Company or its
Restricted Subsidiaries, as the case may be, are sold, assigned, conveyed,
transferred, leased or otherwise disposed of (any such surviving Person or
transferee Person being called the "Surviving Entity") shall be a corporation
organized and existing under the laws of the United States of America, any state
thereof or the District of Columbia and shall, in either case, expressly assume
by a supplemental indenture to this 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, and, in each case, this Indenture shall
remain in full force and effect;
(b) immediately before and immediately after giving effect to such
transaction or series of related transactions on a pro forma basis (and treating
any Indebtedness not previously an obligation of the Company or any of its
Restricted Subsidiaries which becomes the obligation of the Company or any of
its Restricted Subsidiaries in connection with or as a result of such
transaction or transactions as having been incurred at the time of such
transaction or transactions), no Default or Event of Default shall have occurred
and be continuing;
(c) except in the case of the consolidation or merger of any Restricted
Subsidiary with or into the Company, immediately after giving effect to such
transaction or transactions on a pro forma basis, the Consolidated Net Worth of
the Company (or the Surviving Entity if the Company is not the continuing
obligor under this Indenture) is at least equal to the Consolidated Net Worth of
the Company immediately before such transaction or transactions;
(d) except in the case of the consolidation or merger of the Company with
or into a Restricted Subsidiary or any Restricted Subsidiary with or into the
Company or another Restricted Subsidiary, immediately before and immediately
after giving effect to such transaction or transactions on a pro forma basis
(assuming that the transaction or transactions occurred on the first day of the
period of four full fiscal quarters ending immediately prior to the consummation
of such transaction or transactions, with the appropriate adjustments with
respect to the transaction or transactions being included in such pro forma
calculation), the Company (or the Surviving Entity if the Company is not the
continuing obligor under this Indenture) could incur $1.00 of additional
Indebtedness (excluding Permitted Indebtedness) under Section 9.11(a) hereof;
(e) if the Company is not the continuing obligor under this Indenture, then
each Subsidiary Guarantor, unless it is the Surviving Entity, shall have by
supplemental indenture confirmed that its Subsidiary Guarantee of the Securities
shall apply to the Surviving Entity's obligations under this Indenture and the
Securities:
(f) if any of the Properties of the Company or any of its Restricted
Subsidiaries would upon such transaction or series of related transactions
become subject to any Lien (other than a Permitted Lien), the creation or
imposition of such Lien shall have been in compliance with Section 9.14 hereof;
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(g) the Company (or the Surviving Entity if the Company is not the
continuing obligor under this Indenture) shall have delivered to the Trustee, in
form and substance reasonably satisfactory to the Trustee, (i) an Officers'
Certificate stating that such consolidation, merger, conveyance, transfer, lease
or other disposition and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, comply with this Indenture
and (ii) an Opinion of Counsel stating that the requirements of Section 7.1(a)
have been satisfied.
Section 7.2 Successor Substituted.
Upon any consolidation of the Company with or merger of the Company into
any other corporation or any sale, assignment, lease, conveyance, transfer or
other disposition of all or substantially all of the Properties of the Company
and its Restricted Subsidiaries on a consolidated basis in accordance with
Section 7.1 hereof, the Surviving Entity shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such Surviving Entity had been named as the Company
herein, and in the event of any such sale, assignment, lease, conveyance,
transfer or other disposition, the Company (which term shall for this purpose
mean the Person named as the "Company" in the first paragraph of this Indenture
or any successor Person which shall theretofore become such in the manner
described in Section 7.1 hereof), except in the case of a lease, shall be
discharged of all obligations and covenants under this Indenture and the
Securities, and the Company may be dissolved and liquidated and such dissolution
and liquidation shall not cause a Change of Control under clause (e) of the
definition thereof to occur unless the sale, assignment, lease, conveyance,
transfer or other disposition of all or substantially all of the Properties of
the Company and its Restricted Subsidiaries on a consolidated basis to any
Person otherwise results in a Change of Control.
ARTICLE VIII.
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, each of the Subsidiary Guarantors, when authorized by a Board
Resolution, and the Trustee upon Company Request, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company contained
herein and in the Securities; or
(b) to add to the covenants of the Company for the benefit of the Holders
or to surrender any right or power herein conferred upon the Company; or
(c) to comply with any requirement of the SEC in connection with qualifying
this Indenture under the TIA or maintaining such qualification thereafter; or
(d) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee pursuant to the requirements of Sections 5.9 and 5.10
hereof; or
(e) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Indenture, provided that such action shall not adversely affect the
interests of the Holders in any material respect; or
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(f) to secure the Securities or the Subsidiary Guarantees pursuant to the
requirements of Section 9.14 hereof or otherwise; or
(g) to add any Restricted Subsidiary as an additional Subsidiary Guarantor
as provided in Section 9.12(a) hereof or to evidence the succession of another
Person to any Subsidiary Guarantor pursuant to Section 12.2(b) hereof and the
assumption by any such successor of the covenants and agreements of such
Subsidiary Guarantor contained herein, in the Securities and in the Subsidiary
Guarantee of such Subsidiary Guarantor; or
(h) to release a Subsidiary Guarantor from its Subsidiary Guarantee
pursuant to Section 12.3 hereof; or
(i) to provide for uncertificated Securities in addition to or in place of
certificated Securities.
Section 8.2 Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, each of the Subsidiary Guarantors, when authorized by a Board
Resolution, and the Trustee upon Company Request may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any installment of
interest on, any Security, or reduce the principal amount thereof or the rate of
interest thereon or any premium thereon, or change the coin or currency in which
principal of any Security or any premium or the interest on any Security is
payable, or impair the right to institute suit for the enforcement of any such
payment after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date); or
(b) reduce the percentage of aggregate principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder or the consequences of a default provided for in this Indenture; or
(c) modify any of the provisions of this Section or Sections 4.13 and 9.20
hereof, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Security affected thereby; or
(d) amend, change or modify the obligation of the Company to make and
consummate a Change of Control Offer in the event of a Change of Control, or to
make and consummate a Prepayment Offer with respect to any Asset Sale, or modify
any of the provisions or definitions with respect thereto.
It shall not be necessary for any Act of the Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 8.3 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
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the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 8.4 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 8.5 Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 8.6 Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company, and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
Section 8.7 Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 8.2 hereof, the
Company shall give notice thereof to the Holders of each Outstanding Security
affected, in the manner provided for in Section 13.5 hereof, setting forth in
general terms the substance of such supplemental indenture.
ARTICLE IX.
COVENANTS
Section 9.1 Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the Holders that it
will duly and punctually pay the principal of (and premium, if any, on) and
interest on the Securities in accordance with the terms of the Securities and
this Indenture.
Section 9.2 Maintenance of Office or Agency.
The Company shall maintain an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities, the Subsidiary Guarantees and this
Indenture may be served. The New York office of the Trustee shall be such office
or agency of the Company, unless the Company shall designate and maintain some
other office or agency for one or more of such purposes. The Company will give
prompt written notice to the Trustee of any change in the location of any such
office or agency. If at any time the Company shall fail to maintain any such
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required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the aforementioned office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind any such designation. Further,
if at any time there shall be no such office or agency in The City of New York
where the Securities may be presented or surrendered for payment, the Company
shall forthwith designate and maintain such an office or agency in The City of
New York, in order that the Securities shall at all times be payable in The City
of New York. The Company will give prompt written notice to the Trustee of any
such designation or rescission and any change in the location of any such other
office or agency.
Section 9.3 Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it shall, on
or before 10:00 a.m., Eastern time, on each due date of the principal of (and
premium, if any, on) or interest on any of the Securities, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due until such sum
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it will on or before 10:00 a.m., Eastern time, on each due date of
the principal of (and premium, if any, on), or interest on, any Securities,
deposit with a Paying Agent immediately available funds in a sum sufficient to
pay the principal (and premium, if any) or interest so becoming due, such funds
to be held in trust for the benefit of the Persons entitled to such principal,
premium or interest, and (unless such Paying Agent is the Trustee) the Company
shall promptly notify the Trustee of such action or any failure so to act.
The Company shall cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of (and
premium, if any, on) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal (and
premium, if any) or interest; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums. The Trustee and each Paying Agent shall promptly pay to the Company, upon
Company Request, any money held by them (other than pursuant to Article XI) at
any time in excess of amounts required to pay principal, premium, if any, or
interest on the Securities.
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Subject to applicable escheat and abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any, on) or interest
on any Security and remaining unclaimed for two years after such principal (and
premium, if any) or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease.
Section 9.4 Corporate Existence.
Except as expressly permitted by Article VII hereof, Section 9.16 hereof or
other provisions of this Indenture, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and each
Restricted Subsidiary; provided, however, that the Company shall not be required
to preserve any such existence of its Restricted Subsidiaries, rights or
franchises, if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries, taken as a whole, and that the loss
thereof is not disadvantageous in any material respect to the Holders.
Section 9.5 Payment of Taxes; Maintenance of Properties; Insurance.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or Property of the Company or any
Restricted Subsidiary and (b) all lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a Lien upon the Property of the
Company or any Restricted Subsidiary; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which
appropriate provision has been made in accordance with GAAP.
The Company shall cause all material Properties owned by the Company or any
Restricted Subsidiary and used or held for use in the conduct of its business or
the business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order (ordinary wear and tear excepted), all as in
the judgment of the Company or such Restricted Subsidiary may be necessary so
that its business may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company or any
Restricted Subsidiary from discontinuing the maintenance of any of such
Properties if such discontinuance is, in the judgment of the Company or such
Restricted Subsidiary, as the case may be, desirable in the conduct of the
business of the Company or such Restricted Subsidiary and not disadvantageous in
any material respect to the Holders. Notwithstanding the foregoing, nothing
contained in this Section 9.5 shall limit or impair in any way the right of the
Company and its Restricted Subsidiaries to sell, divest and otherwise to engage
in transactions that are otherwise permitted by this Indenture.
The Company shall at all times keep all of its, and cause its Restricted
Subsidiaries to keep their, Properties which are of an insurable nature insured
with insurers, believed by the Company to be responsible, against loss or damage
to the extent that property of similar character and in a similar location is
usually so insured by corporations similarly situated and owning like
Properties.
The Company or any Restricted Subsidiary may adopt such other plan or
method of protection, in lieu of or supplemental to insurance with insurers,
whether by the establishment of an insurance fund or reserve to be held and
applied to make good losses from casualties, or otherwise, conforming to the
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systems of self-insurance maintained by corporations similarly situated and in a
similar location and owning like Properties, as may be determined by the Board
of Directors of the Company or such Restricted Subsidiary.
Section 9.6 Limitation on Conduct of Business.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in the conduct of any business other than the Oil and
Gas Business.
Section 9.7 Statement by Officers as to Default.
(a) The Company shall deliver to the Trustee, within 100 days after the end
of each fiscal year of the Company and within 45 days of the end of each of the
first, second and third quarters of each fiscal year of the Company, an
Officers' Certificate stating that a review of the activities of the Company and
its Restricted Subsidiaries during the preceding fiscal quarter or fiscal year,
as applicable, has been made under the supervision of the signing Officers with
a view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of such Officer's
knowledge the Company has kept, observed, performed and fulfilled each and every
condition and covenant contained in this Indenture and no Default or Event of
Default has occurred and is continuing (or, if a Default or Event of Default
shall have occurred to either such Officer's knowledge, describing all such
Defaults or Events of Default of which such Officer may have knowledge and what
action the Company is taking or proposes to take with respect thereto). Such
Officers' Certificate shall comply with TIA Section 314(a)(4). For purposes of
this Section 9.7(a), such compliance shall be determined without regard to any
period of grace or requirement of notice under this Indenture.
(b) The Company shall, so long as any of the Securities is outstanding,
deliver to the Trustee, upon any of its Officers becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company proposes to take with respect thereto,
within 10 days of its occurrence.
Section 9.8 Provision of Financial Information.
The Company (and the Subsidiary Guarantors, if applicable) shall file on a
timely basis with the SEC, to the extent such filings are accepted by the
Commission and whether or not the Company has a class of securities registered
under the Exchange Act, the annual reports, quarterly reports and other
documents that the Company would be required to file if it were subject to
Section 13 or 15 of the Exchange Act. The Company (and the Subsidiary
Guarantors, if applicable) shall also file with the Trustee (with exhibits), and
provide to each Holder of Securities (without exhibits), without cost to such
Holder, copies of such reports and documents within 15 days after the date on
which the Company (and the Subsidiary Guarantors, if applicable) file such
reports and documents with the Commission or the date on which the Company (and
the Subsidiary Guarantors, if applicable) would be required to file such reports
and documents if the Company were so required and, if filing such reports and
documents with the Commission is not accepted by the Commission or is prohibited
under the Exchange Act, the Company shall supply at its cost copies of such
reports and documents (including any exhibits thereto) to any Holder of
Securities promptly upon written request given in accordance with Section 13.4
hereof. The Company is obligated to make available, upon request, to any Holder
of Securities the information required by Rule 144A(d)(4) under the Securities
Act, during any period in which the Company is not subject to Section 13 or
15(d) of the Exchange Act.
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Section 9.9 Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, take the following actions:
(i) declare or pay any dividend on, or make any distribution to
holders of, any shares of Capital Stock of the Company (other than
dividends or distributions payable solely in shares of Qualified Capital
Stock of the Company or in options, warrants or other rights to purchase
Qualified Capital Stock of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any Affiliate thereof (other than any
Wholly Owned Restricted Subsidiary of the Company) or any options, warrants
or other rights to acquire such Capital Stock (other than the purchase,
redemption, acquisition or retirement of any Disqualified Capital Stock of
the Company solely in shares of Qualified Capital Stock of the Company);
(iii) make any principal payment on or repurchase, redeem, defease or
otherwise acquire or retire for value, prior to any scheduled principal
payment, scheduled sinking fund payment or maturity, any Subordinated
Indebtedness, except in any case out of the proceeds of Permitted
Refinancing Indebtedness, or
(iv) make any Restricted Investment;
(such payments or other actions described in clauses (i) through (iv) being
collectively referred to as "Restricted Payments"), unless at the time of and
after giving effect to the proposed Restricted Payment (the amount of any such
Restricted Payment, if other than cash, shall be the amount determined by the
Board of Directors of the Company, whose determination shall be conclusive and
evidenced by a Board Resolution), (A) no Default or Event of Default shall have
occurred and be continuing, (B) the Company could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in accordance with Section
9.11(a) hereof and (C) the aggregate amount of all Restricted Payments declared
or made after the date of this Indenture shall not exceed the sum (without
duplication) of the following:
(1) 50% of the Consolidated Net Income of the Company accrued
on a cumulative basis during the period beginning on April 1, 1999 and
ending on the last day of the Company's last fiscal quarter ending
prior to the date of such proposed Restricted Payment (or, if such
Consolidated Net Income shall be a loss, minus 100% of such loss), plus
(2) the aggregate Net Cash Proceeds, or the Fair Market Value
of Property other than cash, received after the date of this Indenture
by the Company from the issuance or sale (other than to any of its
Restricted Subsidiaries) of shares of Qualified Capital Stock of the
Company or any options, warrants or rights to purchase such shares of
Qualified Capital Stock of the Company, plus
(3) the aggregate Net Cash Proceeds, or the Fair Market Value
of Property other than cash, received after the date of this Indenture
by the Company (other than from any of its Restricted Subsidiaries)
upon the exercise of any options, warrants or rights to purchase shares
of Qualified Capital Stock of the Company, plus
(4) the aggregate Net Cash Proceeds received after the date of
this Indenture by the Company from the issuance or sale (other than to
any of its Restricted Subsidiaries) of Indebtedness or shares of
Disqualified Capital Stock that have been converted into or exchanged
for Qualified Capital Stock of the Company, together with the aggregate
cash received by the Company at the time of such conversion or
exchange, plus
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(5) to the extent not otherwise included in Consolidated Net
Income, the net reduction in Investments in Unrestricted Subsidiaries
resulting from dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Company or a Restricted
Subsidiary after the date of this Indenture from any Unrestricted
Subsidiary or from the redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary (valued in each case as provided in the
definition of "Investment"), not to exceed in the case of any
Unrestricted Subsidiary the total amount of Investments (other than
Permitted Investments) in such Unrestricted Subsidiary made by the
Company and its Restricted Subsidiaries in such Unrestricted Subsidiary
after the date of this Indenture.
(b) Notwithstanding paragraph (a) above, the Company and its Restricted
Subsidiaries may take the following actions so long as (in the case of clauses
(ii), (iii) and (iv) below) no Default or Event of Default shall have occurred
and be continuing:
(i) the payment of any dividend on any Capital Stock of the
Company within 60 days after the date of declaration thereof, if at
such declaration date such declaration complied with the provisions of
paragraph (a) above (and such payment shall be deemed to have been paid
on such date of declaration for purposes of any calculation required by
the provisions of paragraph (a) above);
(ii) the payment of dividends through June 30, 2004 on any
shares of the Company's Series A Preferred Stock or Series B Preferred
Stock outstanding on the date of the Indenture (and including shares of
Series A Preferred Stock into which shares of Series B Preferred Stock
outstanding on the date of this Indenture are converted in accordance
with their terms) in an aggregate annual amount not in excess of 9.0%
of the par value of such shares that are outstanding, provided that (A)
such dividends are paid within 60 days of the date of declaration
thereof and (B) on the date of declaration and having given pro forma
effect to the making of such payment the Consolidated Fixed Charge
Coverage Ratio for the four full fiscal quarters immediately preceding
such event, taken as one period, would have been equal to or greater
than 2.25 to 1.0;
(iii) the repurchase, redemption or other acquisition or
retirement of any shares of any class of Capital Stock of the Company
or any Restricted Subsidiary, in exchange for, or out of the aggregate
Net Cash Proceeds of, a substantially concurrent issue and sale (other
than to a Restricted Subsidiary) of shares of Qualified Capital Stock
of the Company;
(iv) the repurchase, redemption, repayment, defeasance or
other acquisition or retirement for value of any Subordinated
Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds
from, a substantially concurrent issue and sale (other than to a
Restricted Subsidiary) of shares of Qualified Capital Stock of the
Company;
(v) the purchase, redemption, repayment, defeasance or other
acquisition or retirement for value of Subordinated Indebtedness (other
than Disqualified Capital Stock) in exchange for, or out of the
aggregate net cash proceeds of, a substantially concurrent incurrence
(other than to a Restricted Subsidiary) of Subordinated Indebtedness of
the Company so long as (A) the principal amount of such new
Indebtedness does not exceed the principal amount (or, if such
Subordinated Indebtedness being refinanced 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) of the Subordinated Indebtedness being so purchased,
redeemed, repaid, defeased, acquired or retired, plus the amount of any
premium required to be paid in connection with such refinancing
pursuant to the terms of the Indebtedness refinanced or the amount of
any premium reasonably determined by the Company as necessary to
accomplish such refinancing, plus the amount of expenses of the Company
incurred in connection with such refinancing, (B) such new Indebtedness
is subordinated to the Securities at least to the same extent as such
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Subordinated Indebtedness so purchased, redeemed, repaid, defeased,
acquired or retired, and (C) such new Indebtedness has an Average Life
to Stated Maturity that is longer than the Average Life to Stated
Maturity of the Securities and such new Indebtedness has a Stated
Maturity for its final scheduled principal payment that is at least 91
days later than the Stated Maturity for 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
of the Company in an aggregate amount not to exceed $1,000,000
outstanding at any one time, the 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 (v).
The actions described in clauses (i), (ii), (iii), (iv) and (vi) of
this paragraph (b) shall be Restricted Payments that shall be permitted to be
made in accordance with this paragraph (b) but shall reduce the amount that
would otherwise be available for Restricted Payments under clause (3) of
paragraph (a) (provided that any dividend paid pursuant to clause (i) of this
paragraph (b) shall reduce the amount that would otherwise be available under
clause (3) of paragraph (a) when declared, but not also when subsequently paid
pursuant to such clause (i)), and the actions described in clause (iv) of this
paragraph (b) shall be permitted to be taken in accordance with this paragraph
and shall not reduce the amount that would otherwise be available for Restricted
Payments under clause (3) of paragraph (a).
(c) In computing Consolidated Net Income 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 9.10 Limitation on Guarantees by Subsidiary Guarantors.
The Company shall not permit any Subsidiary Guarantor to guarantee the
payment of any Subordinated Indebtedness of the Company unless such guarantee
shall be subordinated to such Subsidiary Guarantor's Subsidiary Guarantee at
least to the same extent as such Subordinated Indebtedness is subordinated to
the Securities; provided, however, that this Section 9.10 shall not be
applicable to any guarantee of any Subsidiary Guarantor that (i) existed at the
time such Person became a Subsidiary of the Company and (ii) was not incurred in
connection with, or in contemplation of, such Person's becoming a Subsidiary of
the Company.
Section 9.11 Limitation on Indebtedness and Disqualified Capital Stock.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume, guarantee or in any manner become
directly or indirectly liable for the payment of (collectively, "incur") any
Indebtedness (including any Acquired Indebtedness), except for Permitted
Indebtedness, and the Company shall not, and shall not permit any of its
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Restricted Subsidiaries to, issue any Disqualified Capital Stock (except for the
issuance by the Company of (A) 1,948,001 shares of Series A Preferred Stock and
1,051,999 shares of Series B Preferred Stock on the date of this Indenture (and
including the shares of Series A Preferred Stock issued upon the conversion of
such shares of Series B Preferred Stock into shares of Series A Preferred Stock
in accordance with their terms) and (B) Disqualified Capital Stock (1) which is
redeemable at the Company's option in cash or Qualified Capital Stock and (2)
the dividends on which are payable at the Company's option in cash or Qualified
Capital Stock); provided however, that the Company and its Restricted
Subsidiaries that are Subsidiary Guarantors may incur Indebtedness or issue
shares of Disqualified Capital Stock if (i) at the time of such event and after
giving effect thereto on a pro forma basis the Consolidated Fixed Charge
Coverage Ratio for the four full quarters immediately preceding such event,
taken as one period, would have been equal to or greater than 2.5 to 1.0 and
(ii) no Default or Event of Default shall have occurred and be continuing at the
time such additional Indebtedness is incurred or such Disqualified Capital Stock
is issued or would occur as a consequence of the incurrence of the additional
Indebtedness or the issuance of the Disqualified Capital Stock. For purposes of
determining compliance with this Section 9.11(a), in the event that an item of
Indebtedness meets the criteria of one or more of the categories of Permitted
Indebtedness described in clauses (i) through (xi) of such definition or is
entitled to be incurred (whether incurred under the Bank Credit Facility or
otherwise) pursuant to the proviso of the foregoing sentence, the Company may,
in its sole discretion, classify such item of Indebtedness in any manner that
complies with this covenant and such item of Indebtedness will be treated as
having been incurred pursuant too only one of such clauses of the definition of
Permitted Indebtedness or the proviso of the foregoing sentence and an item of
Indebtedness may be divided and classified in more than one of the types of
Indebtedness permitted hereunder.
(b) The amount of any guarantee by the Company or any Restricted Subsidiary
of any Indebtedness of the Company or one or more Restricted Subsidiaries shall
not be deemed to be outstanding or incurred for purposes of this Section 9.11
hereof in addition to the amount of Indebtedness which it guarantees.
(c) For purposes of this Section 9.11, Indebtedness of any Person that
becomes a Restricted Subsidiary by merger, consolidation or other acquisition
shall be deemed to have been incurred by the Company and the Restricted
Subsidiary at the time such Person becomes a Restricted Subsidiary.
Section 9.12 Additional Subsidiary Guarantors.
(a) The Company shall cause each Restricted Subsidiary that becomes, or
comes into existence as, a Restricted Subsidiary after the date of this
Indenture and has assets, businesses, divisions, real property or equipment with
a Fair Market Value in excess of $5,000,000 to execute and deliver a
supplemental indenture to this Indenture agreeing to be bound by its terms
applicable to a Subsidiary Guarantor and providing for a Subsidiary Guarantee of
the Securities by such Restricted Subsidiary.
(b) Notwithstanding the foregoing and the other provisions of this
Indenture, any Subsidiary Guarantee incurred by a Restricted Subsidiary pursuant
to this Section 9.12 shall provide by its terms that it shall be automatically
and unconditionally released and discharged upon the terms and conditions set
forth in Section 12.3 hereof.
Section 9.13 Limitation on Issuances and Sales of Capital Stock by
Restricted Subsidiaries.
The Company (a) shall not permit any Restricted Subsidiary to issue or sell
any Capital Stock to any Person other than to the Company or one of its Wholly
Owned Restricted Subsidiaries or (b) permit any Person other than the Company or
one of its Wholly Owned Restricted Subsidiaries to own any Capital Stock of any
other Restricted Subsidiary except, in each case, for (i) directors' qualifying
shares, (ii) the Capital Stock of a Restricted Subsidiary owned by a Person at
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the time such Restricted Subsidiary became a Restricted Subsidiary or acquired
by such Person in connection with the formation of the Restricted Subsidiary, or
transfers thereof or (iii) a sale of all of the Capital Stock of a Restricted
Subsidiary owned by the Company or its Subsidiaries effected in accordance with
Section 9.16 hereof, (d) Qualifying TECONS or (e) any sale or issuance of
Capital Stock of a Foreign Subsidiary that is required to be issued to or owned
by the government of a foreign jurisdiction or individual or corporate citizens
of such foreign jurisdiction in order for such Foreign Subsidiary to transact
business in such foreign jurisdiction, provided, that any such sale or issuance
shall be deemed to be an Asset Sale to the extent the percentage of the total
outstanding Voting Stock of such Foreign Subsidiary owned directly and
indirectly by the Company is reduced as a result of such sale or issuance and
any such sale or issuance must be made in compliance with the provisions of
Section 9.16 hereof.
Section 9.14 Limitation on Liens.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume, affirm or suffer to exist or
become effective any Lien of any kind, except for Permitted Liens, upon any of
their respective Properties, whether now owned or acquired after the date of
this Indenture, or any income or profits therefrom, or assign or convey any
right to receive income thereon, unless (a) in the case of any Lien securing
Subordinated Indebtedness, the Securities are secured by a lien on such Property
or proceeds that is senior in priority to such Lien and (b) in the case of any
other Lien, the Securities are directly secured equally and ratably with the
obligation or liability secured by such Lien.
Section 9.15 Purchase of Securities Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase (a "Change of Control Offer") all of the
then Outstanding Securities, in whole or in part, from the Holders of such
Securities in integral multiples of $1,000, at a purchase price (the "Change of
Control Purchase Price") equal to 101% of the aggregate principal amount of such
Securities, plus accrued and unpaid interest, if any, to the Change of Control
Purchase Date (as defined below), in accordance with the procedures set forth in
paragraphs (b), (c) and (d) of this Section. The Company shall, subject to the
provisions described below, be required to purchase all Securities properly
tendered into the Change of Control Offer and not withdrawn. The Company will
not be required to make a Change of Control Offer upon a Change of Control if
another Person makes the Change of Control Offer at the same purchase price, at
the same times and otherwise in substantial compliance with the requirements
applicable to a Change of Control Offer to be made by the Company and purchases
all Securities validly tendered and not withdrawn under such Change of Control
Offer.
(b) The Change of Control Offer is required to remain open for at least 20
Business Days and until the close of business on the fifth Business Day prior to
the Change of Control Purchase Date (as defined below).
(c) Not later than the 30th day following any Change of Control, the
Company shall give to the Trustee in the manner provided in Section 13.4 and
each Holder of the Securities in the manner provided in Section 13.5, a notice
(the "Change of Control Notice") governing the terms of the Change of Control
Offer and stating:
(1) that a Change in Control has occurred and that such Holder has the
right to require the Company to repurchase such Holder's Securities, or
portion thereof, at the Change of Control Purchase Price;
(2) any information regarding such Change of Control required to be
furnished pursuant to Rule 13e-1 under the Exchange Act and any other
securities laws and regulations thereunder;
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(3) a purchase date (the "Change of Control Purchase Date") which
shall be on a Business Day and no earlier than 30 days nor later than 60
days from the date the Change of Control occurred;
(4) that any Security, or portion thereof, not tendered or accepted
for payment will continue to accrue interest:
(5) that unless the Company defaults in depositing money with the
Paying Agent in accordance with the last paragraph of clause (d) of this
Section 9.15, or payment is otherwise prevented, any Security, or portion
thereof, accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Purchase Date; and
(6) the instructions a Holder must follow in order to have his
Securities repurchased in accordance with paragraph (d) of this Section.
If any of the Securities subject to the Change of Control Offer is in the form
of a Global Security, then the Company shall modify the Change of Control Notice
to the extent necessary to accord with the procedures of the depository
applicable thereto.
(d) Holders electing to have Securities purchased will be required to
surrender such Securities to the Paying Agent at the address specified in the
Change of Control Notice at least five Business Days prior to the Change of
Control Purchase Date. Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than three Business Days prior to the
Change of Control Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder and principal amount of the
Securities delivered for purchase by the Holder as to which his election is to
be withdrawn and a statement that such Holder is withdrawing his election to
have such Securities purchased. Holders whose Securities are purchased only in
part will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered.
On the Change of Control Purchase Date, the Company shall (i) accept for
payment Securities or portions thereof validly tendered pursuant to a Change of
Control Offer, (ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Securities or portions thereof so tendered, and (iii)
deliver or cause to be delivered to the Trustee the Securities so accepted. The
Paying Agent shall promptly mail or deliver to Holders of the Securities so
tendered payment in an amount equal to the purchase price for the Securities,
and the Company shall execute and the Trustee shall authenticate and mail or
make available for delivery to such Holders a new Security equal in principal
amount to any unpurchased portion of the Security which any such Holder did not
surrender for purchase. The Company shall announce the results of a Change of
Control Offer on or as soon as practicable after the Change of Control Purchase
Date. For purposes of this Section 9.15, the Trustee will act as the Paying
Agent.
(e) The Company shall comply with Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable, in the event that a Change of Control occurs and the
Company is required to purchase Securities as described in this Section 9.15.
Section 9.16 Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries 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,
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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 Subsidiary Guarantor that made such Asset Sale (other than liabilities of
a Subsidiary Guarantor that are by their terms subordinated to such Subsidiary
Guarantor's Subsidiary Guarantee), 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
7.5% 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 or such 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) repay
Indebtedness of the Company under the Bank Credit Facility, (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 Senior Indebtedness on a pro rata
basis (excluding Securities and Senior Indebtedness owned by the Company or an
Affiliate of the Company). Pending any reinvestment pursuant to clause (ii) in
the preceding sentence, 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 $10,000,000, 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. 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 9.8), (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
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paid on the Purchase Date) pursuant to the Prepayment Offer shall cease to
accrue interest on the Purchase Date, (iii) that 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 9.16(a). On such date, the Company shall also
irrevocably deposit with the Trustee or with the Paying Agent (or, if the
Company is the Paying Agent, shall segregate and hold in trust) in cash 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 cancellation 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 this Section
9.16. 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.
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Section 9.17 Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of Property or the rendering of any
services) with, or for the benefit of, any Affiliate of the Company (other than
the Company or a Wholly Owned Restricted Subsidiary), unless (a) such
transaction or series of related transactions is on terms that are no less
favorable to the Company or such Restricted Subsidiary, as the case may be, than
would be available in a comparable transaction in arm's-length dealings with an
unrelated third party, (b) with respect to a transaction or series of related
transactions involving aggregate payments in excess of $2,500,000, the Company
delivers an Officers' Certificate to the Trustee certifying that such
transaction or series of related transactions complies with clause (a) above and
that such transaction or series of related transactions has been approved by a
majority of the Disinterested Directors of the Company, and (c) with respect to
any one transaction or series of related transactions involving aggregate
payments in excess of $10,000,000, the Officers' Certificate referred to in
clause (b) above also certifies that the Company has obtained a written opinion
from an independent nationally recognized investment banking firm or appraisal
firm specializing or having a speciality in the type and subject matter of the
transaction or series of related transactions at issue, which opinion shall be
to the effect set forth in clause (a) above or shall state that such transaction
or series of related transactions is fair from a financial point of view to the
Company or such Restricted Subsidiary; provided, however, that the foregoing
restriction shall not apply to (i) loans or advances to officers, directors and
employees of the Company or any Restricted Subsidiary made in the ordinary
course of business in an aggregate amount not to exceed $1,000,000 outstanding
at any one time, (ii) indemnities of officers, directors, employees and other
agents of the Company or any Restricted Subsidiary permitted by corporate
charter or other organizational document, bylaw or statutory provisions, (iii)
the payment of reasonable and customary fees to directors of the Company or any
of its Restricted Subsidiaries who are not employees of the Company or any
Affiliate, (iv) the Company's employee compensation and other benefit
arrangements, (v) transactions exclusively between or among the Company and any
of the Restricted Subsidiaries or exclusively between or among such Restricted
Subsidiaries, provided such transactions are not otherwise prohibited by the
Indenture, and (vi) any Restricted Payment permitted to be paid pursuant Section
9.9.
Section 9.18 Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or suffer to exist or allow to become effective
any consensual encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary to (a) pay dividends, in cash or otherwise, or make any
other distributions on or in respect of its Capital Stock, or make payments on
any Indebtedness owed, to the Company or any other Restricted Subsidiary, (b) to
make loans or advances to the Company or any other Restricted Subsidiary or (c)
to transfer any of its Property to the Company or any other Restricted
Subsidiary (any such restrictions being collectively referred to herein as a
"Payment Restriction"), except for such encumbrances or restrictions existing
under or by reason of (i) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Company or any
Restricted Subsidiary, or customary restrictions in licenses relating to the
Property covered thereby and entered into in the ordinary course of business,
(ii) any instrument governing Indebtedness of a Person acquired by the Company
or any Restricted Subsidiary at the time of such acquisition, which encumbrance
or restriction is not applicable to any other Person, other than the Person, or
the Property of the Person, so acquired, provided that such Indebtedness was not
incurred in anticipation of such acquisition or (iii) the Bank Credit Facility
as in effect on the date of this Indenture or any agreement that amends,
modifies, supplements, restates, extends, renews, refinances or replaces the
Bank Credit Facility, provided that the terms and conditions of any Payment
Restriction thereunder are not materially less favorable to the Holders of the
Securities than those under the Bank Credit Facility as in effect on the date of
this Indenture.
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Section 9.19 Limitation on Sale and Leaseback Transactions.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale/Leaseback Transaction unless (i) the
Company or such Restricted Subsidiary, as the case may be, would be able to
incur Indebtedness in an amount equal to the Attributable Indebtedness with
respect to such Sale/Leaseback Transaction or (ii) the Company or such
Restricted Subsidiary receives proceeds from such Sale/Leaseback Transaction at
least equal to the fair market value thereof (as determined in good faith by the
Company's Board of Directors, whose determination in good faith, evidenced by a
resolution of such Board shall be conclusive) and such proceeds are applied in
the same manner and to the same extent as Net Available Cash and Excess Proceeds
from an Asset Sale.
Section 9.20 Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 9.5 through 9.11, Sections 9.13 and
9.14 and Sections 9.17 through 9.19 hereof if, before or after the time for such
compliance, the Holders of at least a majority in aggregate principal amount of
the Outstanding Securities and the Subsidiary Guarantors, by Act of such Holders
and written agreement of the Subsidiary Guarantors, waive such compliance in
such instance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
ARTICLE X.
REDEMPTION OF SECURITIES
Section 10.1 Notice 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 60 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. Any election to redeem
Securities shall be revocable until the Company gives a notice of redemption
pursuant to Section 10.2 to the Holders of Securities to be redeemed.
Section 10.2 Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not less than 30 days nor more than
60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities not previously called for redemption, pro rata, by lot or by any
other method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions of the principal of
Securities; provided, however, that any such partial redemption shall be in
integral multiples of $1,000.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
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For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
Section 10.3 Notice of Redemption.
Notice of redemption shall be given in the manner provided for in Section
13.5 hereof not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Securities to be redeemed.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be redeemed, the
identification (and, in the case of a partial redemption, the principal amounts)
of the particular Securities to be redeemed;
(d) that on the Redemption Date the Redemption Price (together with accrued
interest, if any, to the Redemption Date payable as provided in Section 10.5
hereof) will become due and payable upon each such Security, or the portion
thereof, to be redeemed, and that, unless the Company shall default in the
payment of the Redemption Price and any applicable accrued interest, interest
thereon will cease to accrue on and after said date; and
(e) the place or places where such Securities are to be surrendered for
payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company. Failure to give such
notice by mailing to any Holder of Securities or any defect therein shall not
affect the validity of any proceedings for the redemption of other Securities.
Section 10.4 Deposit of Redemption Price.
On or before 10:00 a.m., Eastern time, on any Redemption Date, the Company
shall deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 9.3 hereof) an amount of money sufficient to pay the Redemption Price
of, and accrued and unpaid interest on, all the Securities which are to be
redeemed on such Redemption Date.
Section 10.5 Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued and unpaid interest,
if any, to the Redemption Date), and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued and
unpaid interest) such Securities shall cease to bear interest. Upon surrender of
any such Security for redemption in accordance with said notice, such Security
shall be paid by the Company at the Redemption Price, together with accrued and
unpaid interest, if any, to the Redemption Date.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Securities.
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Section 10.6 Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at
the office or agency of the Company maintained for such purpose pursuant to
Section 9.2 hereof (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal amount of the Security so
surrendered.
ARTICLE XI.
DEFEASANCE AND COVENANT DEFEASANCE
Section 11.1 Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may, at its option by Board Resolution, at any time, with
respect to the Securities, elect to have either Section 11.2 or Section 11.3
hereof be applied to all Outstanding Securities upon compliance with the
conditions set forth below in this Article XI.
Section 11.2 Defeasance and Discharge.
Upon the Company's exercise under Section 11.1 hereof of the option
applicable to this Section 11.2, the Company and the Subsidiary Guarantors shall
be deemed to have been discharged from their respective obligations with respect
to all Outstanding Securities on the date the conditions set forth in Section
11.4 hereof are satisfied (hereinafter, "legal defeasance"). For this purpose,
such legal defeasance means that the Company and the Subsidiary Guarantors shall
be deemed (i) to have paid and discharged their respective obligations under the
Outstanding Securities; provided, however, that the Securities shall continue to
be deemed to be "Outstanding" for purposes of Section 11.5 hereof and the other
Sections of this Indenture referred to in clauses (A) and (B) below, and (ii) to
have satisfied all their other obligations with respect to such Securities and
this Indenture (and the Trustee, at the expense and direction of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of Outstanding Securities to receive,
solely from the trust fund described in Section 11.4 hereof and as more fully
set forth in such Section, payments in respect of the principal of (and premium
if any, on) and interest on such Securities when such payments are due (or at
such time as the Securities would be subject to redemption at the option of the
Company in accordance with this Indenture), (B) the respective obligations of
the Company and the Subsidiary Guarantors under Sections 2.3, 2.4, 2.5, 2.6,
2.7, 2.8, 2.9, 4.8, 4.14, 5.6, 5.9, 5.10, 9.2, 9.3, 12.1 (to the extent it
relates to the foregoing Sections and this Article XI), 12.4 and 12.5 hereof,
(C) the rights, powers, trusts, duties and immunities of the Trustee hereunder,
and (D) the obligations of the Company and the Subsidiary Guarantors under this
Article XI. Subject to compliance with this Article XI, the Company may exercise
its option under this Section 11.2 notwithstanding the prior exercise of its
option under Section 11.3 hereof with respect to the Securities.
Section 11.3 Covenant Defeasance.
Upon the Company's exercise under Section 11.1 hereof of the option
applicable to this Section 11.3, the Company and each Subsidiary Guarantor shall
be released from their respective obligations under any covenant contained in
Article VII, in Sections 9.5 through 9.19 and in Section 12.2 hereof with
respect to the Outstanding Securities on and after the date the conditions set
forth below are satisfied (hereinafter, "covenant defeasance"), and the
Securities shall thereafter be deemed not to be "Outstanding" for the purposes
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of any direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Securities, the Company and each Subsidiary Guarantor may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 4.1(c) or 4.1(d) hereof, but, except as specified above, the
remainder of this Indenture and such Securities shall be unaffected thereby.
Section 11.4 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 11.2
or Section 11.3 hereof to the Outstanding Securities:
(a) The Company or any Subsidiary Guarantor shall irrevocably have
deposited or caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 5.7 hereof who shall agree to comply with
the provisions of this Article XI applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such Securities, (A)
cash in United States dollars in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect thereof
in accordance with their terms will provide, not later than one day before the
due date of any payment, money in an amount, or (C) a combination thereof,
sufficient, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, and which shall be applied by the Trustee (or
other qualifying trustee) to pay and discharge, the principal of (and premium,
if any, on) and interest on the Outstanding Securities on the Stated Maturity
thereof (or Redemption Date, if applicable), provided that the Trustee shall
have been irrevocably instructed in writing by the Company to apply such money
or the proceeds of such U.S. Government Obligations to said payments with
respect to the Securities. Before such a deposit, the Company may give to the
Trustee, in accordance with Section 10.1 hereof, a notice of its election to
redeem all of the Outstanding Securities at a future date in accordance with
Article X hereof, which notice shall be irrevocable. Such irrevocable redemption
notice, if given, shall be given effect in applying the foregoing. For this
purpose, "U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (y) 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 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.
(b) No Default or Event of Default with respect to the Securities shall
have occurred and be continuing on the date of such deposit or, insofar as
Sections 4.1(h) and 4.1(i) are concerned, at any time during the period ending
on the 91st day after the date of such deposit.
(c) Such legal defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest under this Indenture or the Trust
Indenture Act with respect to any securities of the Company or any Subsidiary
Guarantor.
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(d) Such legal defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, any other material
agreement or instrument to which the Company or any Subsidiary Guarantor is a
party or by which it is bound, as evidenced to the Trustee in an Officers'
Certificate delivered to the Trustee concurrently with such deposit.
(e) In the case of an election under Section 11.2 hereof, 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 laws, in either case providing that the
Holders of the Outstanding Securities will not recognize income, gain or loss
for federal income tax purposes as a result of such legal defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such legal defeasance had not occurred
(it being understood that (x) such Opinion of Counsel shall also state that such
ruling or applicable law is consistent with the conclusions reached in such
Opinion of Counsel and (y) the Trustee shall be under no obligation to
investigate the basis or correctness of such ruling).
(f) In the case of an election under Section 11.3 hereof, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding Securities will not recognize income, gain or loss
for federal income tax purposes as a result of such covenant defeasance and will
be subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such covenant defeasance had not
occurred.
(g) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, which, taken together, state that all
conditions precedent provided for relating to either the legal defeasance under
Section 11.2 hereof or the covenant defeasance under Section 11.3 (as the case
may be) have been complied with.
Section 11.5 Deposited Money and U.S. Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 9.3 hereof, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee--collectively for purposes of this
Section 11.5, the "Trustee") pursuant to Section 11.4 hereof in respect of the
Outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against all taxes, fees or
other charges imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to Section 11.4 hereof or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the Outstanding Securities.
Anything in this Article XI to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 11.4
hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent legal defeasance or covenant defeasance, as
applicable, in accordance with this Article.
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Section 11.6 Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 11.5 hereof by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's and the Subsidiary Guarantors' obligations
under this Indenture and the Securities shall be revived and reinstated as
though no deposit had occurred pursuant to Section 11.2 or 11.3 hereof, as the
case may be, until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 11.5 hereof; provided, however,
that if the Company or any Subsidiary Guarantor makes any payment of principal
of (or premium, if any, on) or interest on any Security following the
reinstatement of its obligations, the Company or such Subsidiary Guarantor shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE XII.
SUBSIDIARY GUARANTEES
Section 12.1 Unconditional Guarantee.
Each Subsidiary Guarantor hereby unconditionally, jointly and severally,
guarantees (each such guarantee being referred to herein as this "Subsidiary
Guarantee," with all such guarantees being referred to herein as the "Subsidiary
Guarantees") to each Holder of Securities authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, the full and prompt
performance of the Company's obligations under this Indenture and the Securities
and that:
(a) the principal of (and premium, if any, on) and interest on the
Securities will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of
and interest on the Securities, if any, to the extent lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and
(b) in case of any extension of time of payment or renewal of any
Securities or of any such other obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration or otherwise; subject,
however, in the case of clauses (a) and (b) above, to the limitations set forth
in Section 12.4 hereof.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and
severally obligated to pay the same immediately. Each Subsidiary Guarantor
hereby agrees that its obligations hereunder shall, to the extent permitted by
law, be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Securities with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Each Subsidiary Guarantor hereby waives, to the extent permitted by
law, diligence, presentment, demand of payment, filing of claims with a court in
the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that its Subsidiary Guarantee will not be discharged except by
complete performance of the obligations contained in the Securities, this
Indenture and in this Subsidiary Guarantee. If any Holder or the Trustee is
required by any court or otherwise to return to the Company, any Subsidiary
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Company or any Subsidiary Guarantor, any amount paid
by the Company or any Subsidiary Guarantor to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect. Each Subsidiary Guarantor agrees it shall not be
entitled to enforce any right of subrogation in relation to the Holders in
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respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Subsidiary Guarantor further agrees that, as
between each Subsidiary Guarantor, 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 IV hereof for the purposes of
this Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article IV hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by each Subsidiary Guarantor for
the purpose of this Subsidiary Guarantee.
Section 12.2 Subsidiary Guarantors May Consolidate, etc., on Certain Terms.
(a) Except as set forth in Article VII hereof, nothing contained in this
Indenture or in any of the Securities shall prevent any consolidation or merger
of a Subsidiary Guarantor with or into the Company or another Subsidiary
Guarantor or shall prevent any sale, conveyance or other disposition of all or
substantially all the Properties of a Subsidiary Guarantor to the Company or
another Subsidiary Guarantor.
(b) Except as set forth in Article VII hereof, nothing contained in this
Indenture or in any of the Securities shall prevent any consolidation or merger
of a Subsidiary Guarantor with or into a Person other than the Company or
another Subsidiary Guarantor (whether or not Affiliated with the Subsidiary
Guarantor), or successive consolidations or mergers in which a Subsidiary
Guarantor or its successor or successors shall be a party or parties, or shall
prevent any sale, conveyance or other disposition of all or substantially all
the Properties of a Subsidiary Guarantor to a Person other than the Company or
another Subsidiary Guarantor (whether or not Affiliated with the Subsidiary
Guarantor) authorized to acquire and operate the same; provided, however, that
(i) immediately after such transaction, and giving effect thereto, no Default or
Event of Default shall have occurred as a result of such transaction and be
continuing, (ii) such transaction shall not violate any of the covenants of
Sections 9.1 through 9.19 hereof, and (iii) each Subsidiary Guarantor hereby
covenants and agrees that, upon any such consolidation, merger, sale, conveyance
or other disposition, such Subsidiary Guarantor's Subsidiary Guarantee set forth
in this Article XII, and the due and punctual performance and observance of all
of the covenants and conditions of this Indenture to be performed by such
Subsidiary Guarantor, shall be expressly assumed (in the event that the
Subsidiary Guarantor is not the surviving corporation in a merger), by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by such Person formed by such consolidation, or into
which the Subsidiary Guarantor shall have merged, or by the Person that shall
have acquired such Property (except to the extent the following Section 12.3
would result in the release of such Subsidiary Guarantee, in which case such
surviving Person or transferee of such Property shall not have to execute any
such supplemental indenture and shall not have to assume such Subsidiary
Guarantor's Subsidiary Guarantee). In the case of any such consolidation,
merger, sale, conveyance or other disposition and upon the assumption by the
successor Person, by supplemental indenture executed and delivered to the
Trustee and satisfactory in form to the Trustee of the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Subsidiary Guarantor, such successor Person shall succeed to
and be substituted for the Subsidiary Guarantor with the same effect as if it
had been named herein as the initial Subsidiary Guarantor.
Section 12.3 Release of Subsidiary Guarantors.
Upon the sale or disposition (by merger or otherwise) of a Subsidiary
Guarantor (or all or substantially all of its Properties) to a Person other than
the Company or another Subsidiary Guarantor and pursuant to a transaction that
is otherwise in compliance with the terms of this Indenture, including but not
limited to the provisions of Section 12.2 hereof or pursuant to Article VII
hereof, such Subsidiary Guarantor shall be deemed released from its Subsidiary
Guarantee and all related obligations under this Indenture; provided, however,
that any such release shall occur only to the extent that all obligations of
such Subsidiary Guarantor under all of its guarantees of, and under all of its
pledges of assets or other security interests which secure, other Indebtedness
of the Company or any other Restricted Subsidiary shall also be released upon
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such sale or other disposition. The Trustee shall deliver an appropriate
instrument evidencing such release upon receipt of a Company Request accompanied
by an Officers' Certificate and an Opinion of Counsel certifying that such sale
or other disposition was made by the Company in accordance with the provisions
of this Indenture. Each Subsidiary Guarantor that is designated as an
Unrestricted Subsidiary in accordance with the provisions of this Indenture
shall be released from its Subsidiary Guarantee and all related obligations
under this Indenture for so long as it remains an Unrestricted Subsidiary. The
Trustee shall deliver an appropriate instrument evidencing such release upon its
receipt of the Board Resolution designating such Unrestricted Subsidiary. Any
Subsidiary Guarantor not released in accordance with this Section 12.3 shall
remain liable for the full amount of principal of (and premium, if any, on) and
interest on the Securities as provided in this Article XII.
Section 12.4 Limitation of Subsidiary Guarantors' Liability.
Each Subsidiary Guarantor, and by its acceptance hereof each Holder, hereby
confirm that it is the intention of all such parties that the guarantee by such
Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Federal Bankruptcy Code,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law. To effectuate the foregoing intention, the
Holders and each Subsidiary Guarantor hereby irrevocably agree that the
obligations of such Subsidiary Guarantor under its Subsidiary Guarantee shall be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under its Subsidiary Guarantee or pursuant to Section 12.5 hereof,
result in the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee not constituting such a fraudulent conveyance or fraudulent transfer.
This Section 12.4 is for the benefit of the creditors of each Subsidiary
Guarantor.
Section 12.5 Contribution.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under its Subsidiary Guarantee, such Funding Guarantor
shall be entitled to a contribution from each other Subsidiary Guarantor (if
any) in a pro rata amount based on the Adjusted Net Assets of each Subsidiary
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Securities or any other Subsidiary Guarantor's
obligations with respect to its Subsidiary Guarantee.
Section 12.6 Severability.
In case any provision of this Subsidiary Guarantee shall be invalid,
illegal or unenforceable, that portion of such provision that is not invalid,
illegal or unenforceable shall remain in effect, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
ARTICLE XIII.
MISCELLANEOUS
Section 13.1 Compliance Certificates and Opinions.
Upon any application or request by the Company or any Subsidiary Guarantor
to the Trustee to take any action under any provision of this Indenture, the
Company or such Subsidiary Guarantor, as the case may be, shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
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Indenture Act or this Indenture. Each such certificate and each such legal
opinion shall be in the form of an Officers' Certificate or an Opinion of
Counsel, as applicable, and shall comply with the requirements of this
Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(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 each such Person, such Person
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, in the opinion of each such Person,
such condition or covenant has been complied with.
The certificates and opinions provided pursuant to this Section 13.1 and
the statements required by this Section 13.1 shall be satisfactory to the
Trustee and comply in all respects with TIA Sections 314(c) and (e).
Section 13.2 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such Opinion of Counsel may be based, insofar as it relates to factual matters,
upon an officers' certificate, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate with respect to such matters
is erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 13.3 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 agents 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
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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.
(b) 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 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.
(c) The ownership, principal amount and serial numbers of Securities held
by any Person, and the date of holding the same, shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders of Securities 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 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 TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection therewith and
not later than the date such 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 the purposes of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date, provided that no such authorization, agreement or consent 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 eleven
months after the record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
Section 13.4 Notices, etc. to Trustee, Company and Subsidiary Guarantors.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to or filed with,
(1) the Trustee by any Holder, the Company, any Subsidiary Guarantor
or any holder of Senior Indebtedness shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing (in the English
language) and delivered in person or mailed by certified or registered mail
(return receipt requested) to the Trustee at its Corporate Trust Office; or
(2) the Company or any Subsidiary Guarantor by the Trustee or by any
Holder shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing (in the English language) and
delivered in person or mailed by certified or registered mail (return
receipt requested) to the Company or such Subsidiary Guarantor, as
applicable, addressed to it at the Company's offices located at 5005 LBJ
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Freeway, Suite 1000, Dallas, Texas 75244, Attention: Chief Financial
Officer, or at any other address otherwise furnished in writing to the
Trustee by the Company.
Section 13.5 Notice to Holders; Waiver.
Where this Indenture provides for notice of any event to Holders by the
Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing (in the English language) and
mailed, first-class postage prepaid, to each Holder affected by such event, at
his address as it appears in the Security Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder, whether or
not such Holder actually receives such notice. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
Section 13.6 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 13.7 Successors and Assigns.
All covenants and agreements in this Indenture by the Company and the
Subsidiary Guarantors shall bind their respective successors and assigns,
whether so expressed or not. All agreements of the Trustee in this Indenture
shall bind its successor.
Section 13.8 Severability.
In case any provision in this Indenture or in the Securities or the
Subsidiary Guarantees 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, and a Holder shall have no claim therefor against
any party hereto.
Section 13.9 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person (other than the parties hereto, any Paying Agent, any
Registrar and their successors hereunder, the Holders and, to the extent set
forth in Section 12.4 hereof, creditors of Subsidiary Guarantors and the holders
of Senior Indebtedness) any benefit or any legal or equitable right, remedy or
claim under this Indenture.
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Section 13.10 Governing Law; Trust Indenture Act Controls.
(a) THIS INDENTURE, THE SUBSIDIARY GUARANTEES AND THE SECURITIES SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY. THE COMPANY AND EACH SUBSIDIARY
GUARANTOR IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN, THE
CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
INDENTURE, THE SECURITIES OR THE SUBSIDIARY GUARANTEES, AND THE COMPANY AND EACH
SUBSIDIARY GUARANTOR IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED BY ANY SUCH COURT.
(b) This Indenture is subject to the provisions of the Trust Indenture Act
that are required to be part of this Indenture and shall, to the extent
applicable, be governed by such provisions. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by operation of Section 318(c) of the Trust Indenture Act, or conflicts
with any provision (an "incorporated provision") required by or deemed to be
included in this Indenture by operation of such Trust Indenture Act section,
such imposed duties or incorporated provision shall control.
Section 13.11 Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, or Stated
Maturity or Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities or
the Subsidiary Guarantee) payment of interest or principal (and premium, if any)
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the Interest Payment Date,
Redemption Date or at the Stated Maturity or Maturity; provided, however, that
no interest shall accrue for the period from and after such Interest Payment
Date, Redemption Date, Stated Maturity or Maturity, as the case may be.
Section 13.12 No Recourse Against Others.
A director, officer, employee, stockholder, incorporator or Affiliate, as
such, past, present or future, of the Company or any Subsidiary Guarantor shall
not have any personal liability under the Securities or this Indenture by reason
of his or its status as a director, officer, employee, stockholder, incorporator
or Affiliate or any liability for any obligations of the Company or any
Subsidiary Guarantor under the Securities or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Holder, by accepting any of the Securities, waives and releases all such
liability to the extent permitted by applicable law.
Section 13.13 Duplicate Originals.
The parties may sign any number of copies or counterparts of this
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.
Section 13.14 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
ISSUER:
COMSTOCK RESOURCES, INC.
By: /s/ M. JAY ALLISON
----------------------
Name: M. Jay Allison
Title: Chairman of the Board, President
and Cheif Executive Officer
SUBSIDIARY GUARANTORS:
COMSTOCK OIL & GAS, INC.
By: /s/ M. JAY ALLISON
----------------------
Name: M. Jay Allison
Title: Chairman of the Board, President
and Cheif Executive Officer
COMSTOCK OIL & GAS-LOUISIANA, INC.
By: /s/ M. JAY ALLISON
----------------------
Name: M. Jay Allison
Title: Chairman of the Board, President
and Cheif Executive Officer
COMSTOCK OFFSHORE, LLC
By: /s/ M. JAY ALLISON
----------------------
Name: M. Jay Allison
Title: Chairman of the Board, President
and Cheif Executive Officer
TRUSTEE:
U.S. TRUST COMPANY OF TEXAS, N.A.
By: /s/ MELISSA SCOTT
---------------------
Name: Melissa Scott
Title: Vice President
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