EXHIBIT 4.1
________________________________________________________________________________
FORMAN PETROLEUM CORPORATION
and
U.S. TRUST COMPANY OF TEXAS, N.A.
Trustee
__________________
INDENTURE
Dated as of June 3, 1997
__________________
$70,000,000
13.5% SENIOR SECURED NOTES DUE 2004, SERIES A
13.5% SENIOR SECURED NOTES DUE 2004, SERIES B
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CROSS-REFERENCE TABLE
Indenture Section
310(a)(1)...................................................... 7.10
(a)(2)....................................................... 7.10
(a)(3)....................................................... N.A.
(a)(4)....................................................... N.A.
(a)(5)....................................................... 7.8; 7.10
(b).......................................................... 7.8; 7.10
(c).......................................................... N.A.
311(a)......................................................... 7.11
(b).......................................................... 7.11
(c).......................................................... N.A.
312(a)......................................................... 2.5
(b).......................................................... 1.33
(c).......................................................... 1.33
313(a)......................................................... 7.6
(b)(1)....................................................... N.A.
(b)(2)....................................................... 7.6
(c).......................................................... 7.6; 1.32
(d).......................................................... 7.6
314(a)......................................................... 4.2; 4.3; 1.32
(b).......................................................... 1.23
(c)(1)....................................................... 1.34
(c)(2)....................................................... 1.34
(c)(3)....................................................... N.A.
(d).......................................................... 1.24
(e).......................................................... 1.35
(f).......................................................... N.A.
315(a)......................................................... 7.1
(b).......................................................... 7.5; 1.32
(c).......................................................... 7.1
(d).......................................................... 7.1
(e).......................................................... 6.11
316(a)(last sentence).......................................... 2.9
(a)(1)(A).................................................... 6.5
(a)(1)(B).................................................... 6.2; 6.4; 9.2
(a)(2)....................................................... N.A.
(b).......................................................... 6.7
(c).......................................................... N.A.
317(a)(1)...................................................... 6.8
(a)(2)....................................................... 6.9
(b).......................................................... 2.4
318(a)......................................................... 1.31
318(c)......................................................... 1.31
_____________
N.A. means Not Applicable.
NOTE: This Cross-Reference table shall not, for any purpose, be deemed to be
part of this Indenture.
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions........................................ 1
Section 1.2 Other Definitions.................................. 18
Section 1.3 Incorporation by Reference of Trust Indenture Act.. 19
Section 1.4 Rules of Construction.............................. 19
ARTICLE TWO
THE SECURITIES
Section 2.1 Form and Dating.................................... 20
Section 2.2 Execution and Authentication....................... 20
Section 2.3 Registrar and Paying Agent......................... 22
Section 2.4 Paying Agent to Hold Money in Trust................ 22
Section 2.5 Holder Lists....................................... 22
Section 2.6 Transfer and Exchange.............................. 23
Section 2.7 Book-Entry Provisions for Global Securities........ 26
Section 2.8 Replacement Securities............................. 27
Section 2.9 Outstanding Securities............................. 27
Section 2.10 Treasury Securities................................ 27
Section 2.11 Temporary Securities............................... 27
Section 2.12 Cancellation....................................... 27
Section 2.13 Defaulted Interest................................. 28
Section 2.14 Private Placement Legend........................... 28
Section 2.15 Additional Interest Under Registration
Rights Agreement.................................. 28
ARTICLE THREE
REDEMPTION
Section 3.1 Notice to Trustee.................................. 28
Section 3.2 Selection of Securities To Be Redeemed............. 29
Section 3.3 Notice of Redemption............................... 29
Section 3.4 Effect of Notice of Redemption..................... 30
Section 3.5 Deposit of Redemption Price........................ 30
Section 3.6 Securities Redeemed in Part........................ 30
ARTICLE FOUR
COVENANTS
Section 4.1 Payment of Securities.............................. 30
Section 4.2 SEC Reports........................................ 31
Section 4.3 Compliance Certificate............................. 31
Section 4.4 Maintenance of Office or Agency.................... 32
Section 4.5 Corporate Existence................................ 32
Section 4.6 Waiver of Stay, Extension or Usury Laws............ 32
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Section 4.7 Payment of Taxes and Other Claims.................. 32
Section 4.8 Maintenance of Properties and Insurance............ 33
Section 4.9 Limitation on Incurrence of Additional
Indebtedness...................................... 33
Section 4.10 Limitation on Restricted Payments.................. 34
Section 4.11 Limitation on Disposition of Assets................ 35
Section 4.12 Limitation on Liens Securing Indebtedness.......... 37
Section 4.13 Limitation on Payment Restrictions Affecting
Subsidiaries...................................... 37
Section 4.14 Limitation on Transactions with Related Persons.... 37
Section 4.15 Limitation on Conduct of Business.................. 38
Section 4.16 Change of Control.................................. 38
Section 4.17 Provision of Financial Information................. 40
Section 4.18 Registration Rights Agreement...................... 40
Section 4.19 Qualification of Indenture......................... 40
Section 4.20 Payment of Existing Secured Debt................... 40
Section 4.21 Replacement Mortgages.............................. 40
Section 4.22 Impairment of Security Interest.................... 41
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.1 When Company May Merge, etc........................ 41
Section 5.2 Successor Corporation Substituted.................. 42
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.1 Events of Default.................................. 42
Section 6.2 Acceleration....................................... 44
Section 6.3 Other Remedies..................................... 44
Section 6.4 Waiver of Past Defaults............................ 44
Section 6.5 Control by Majority................................ 45
Section 6.6 Limitation on Remedies............................. 45
Section 6.7 Rights of Holders To Receive Payment............... 45
Section 6.8 Collection Suit by Trustee......................... 45
Section 6.9 Trustee May File Proofs of Claim................... 46
Section 6.10 Priorities......................................... 46
Section 6.11 Undertaking for Costs.............................. 46
ARTICLE SEVEN
TRUSTEE
Section 7.1 Duties of Trustee.................................. 47
Section 7.2 Rights of Trustee.................................. 48
Section 7.3 Individual Rights of Trustee....................... 48
Section 7.4 Trustee's Disclaimer............................... 48
Section 7.5 Notice of Defaults................................. 49
Section 7.6 Reports by Trustee to Holders...................... 49
Section 7.7 Compensation and Indemnity......................... 49
Section 7.8 Replacement of Trustee............................. 50
Section 7.9 Successor Trustee by Merger, etc................... 50
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Section 7.10 Eligibility; Disqualification...................... 51
Section 7.11 Preferential Collection of Claims Against Company.. 51
ARTICLE EIGHT
DISCHARGE OF INDENTURE
Section 8.1 Termination of Company's Obligations............... 51
Section 8.2 Application of Trust Money......................... 52
Section 8.3 Repayment to Company............................... 53
Section 8.4 Reinstatement...................................... 53
Section 8.5 Survival of Certain Obligations.................... 53
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Without Consent of Holders......................... 54
Section 9.2 With Consent of Holders............................ 54
Section 9.3 Compliance with Trust Indenture Act................ 55
Section 9.4 Revocation and Effect of Consents.................. 55
Section 9.5 Notation on or Exchange of Securities.............. 55
Section 9.6 Trustee Protected.................................. 56
ARTICLE TEN
SUBORDINATION
Section 10.1 Subordination of Security Interest................. 56
Section 10.2 Holders Authorize Trustee To Effectuate
Subordination..................................... 56
ARTICLE ELEVEN
GUARANTEES
Section 11.1 Unconditional Guarantee............................ 56
Section 11.2 Subsidiary Guarantors May Consolidate, etc.,
on Certain Terms.................................. 57
Section 11.3 Release of a Subsidiary Guarantor.................. 58
Section 11.4 Limitation of Subsidiary Guarantor's Liability..... 58
Section 11.5 Contribution....................................... 59
Section 11.6 Execution and Delivery of Guarantee................ 59
Section 11.7 Severability....................................... 59
ARTICLE TWELVE
SECURITY
Section 12.1 Grant of Security Interest......................... 60
Section 12.2 Execution of Security Documents.................... 60
Section 12.3 Recording and Opinions............................. 60
Section 12.4 Release of Collateral.............................. 61
Section 12.5 Specified Releases of Collateral................... 61
Section 12.6 Form and Sufficiency of Release.................... 63
Section 12.7 Purchaser Protected................................ 64
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Section 12.8 Authorization of Actions To Be Taken by the
Trustee Under the Security Documents.............. 64
Section 12.9 Authorization of Receipt of Funds by the
Trustee Under the Security Documents.............. 64
Section 12.10 Disbursement Account............................... 64
Section 12.11 Escrow Account..................................... 65
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.1 Trust Indenture Act Controls....................... 66
Section 13.2 Notices............................................ 66
Section 13.3 Communication by Holders with Other Holders........ 67
Section 13.4 Certificate and Opinion as to Conditions
Precedent......................................... 67
Section 13.5 Statements Required in Certificate or Opinion...... 68
Section 13.6 Rules by Trustee and Agents........................ 68
Section 13.7 Legal Holidays..................................... 68
Section 13.8 Governing Law...................................... 68
Section 13.9 No Adverse Interpretation of Other Agreements...... 68
Section 13.10 No Recourse Against Others......................... 68
Section 13.11 Successors......................................... 69
Section 13.12 Duplicate Originals................................ 69
Section 13.13 Severability....................................... 69
EXHIBITS
Exhibit A - Form of Security
Exhibit A-1 - Form of Notation on Security Relating to Guarantee
Exhibit A-2 - Form of Legend for Global Securities
Exhibit A-3 - Certificate Upon Exchange or Registration of Transfer
of Securities
Exhibit A-4 - Certificate in Connection with Transfers to Institutional
Accredited Investors
Exhibit A-5 - Certificate in Connection with Regulation S Transfers
Exhibit B - Registration Rights Agreement
Exhibit C - Subordination Agreement
Exhibit D - Assignment
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THIS INDENTURE, dated as of June 3, 1997, is between FORMAN PETROLEUM
CORPORATION, a Louisiana corporation (hereinafter called the "Company"), and
U.S. TRUST COMPANY OF TEXAS, N.A. (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 13.5% Senior
Secured Notes due 2004, Series A, and an issue of 13.5% Senior Secured Notes due
2004, Series B (such two issues, as amended or supplemented from time to time in
accordance with the terms hereof, being herein collectively called the
"Securities"), of substantially the tenor and in the aggregate principal amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.
The 13.5% Senior Secured Notes due 2004, Series A, are to be issued and
sold in transactions exempt from registration under the Securities Act, pursuant
to the Purchase Agreement, and the 13.5% Senior Secured Notes due 2004, Series
B, are to be issued in exchange for the 13.5% Senior Secured Notes due 2004,
Series A, pursuant to the Registration Rights Agreement. The Securities will be
secured by a first lien and security interest in the Collateral (as defined
below) pursuant to the terms of the Security Documents (as defined below).
All things necessary have been done on the part of the Company to make the
Securities, when issued against consideration received and executed by the
Company and authenticated and delivered by the Trustee as herein provided, the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company and the Trustee, in accordance with their respective terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
(together with the related Guarantees) by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Securities (together with the related Guarantees), without preference of one
series of Securities over the other, as follows:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Additional Interest" shall have the meaning set forth in the Registration
Rights Agreement.
"Adjusted Consolidated Net Tangible Assets" means (without duplication), as
of the date of determination, (A) the sum of (i) the Present Value of Oil and
Gas Reserves, (ii) the Net Working Capital on a date no earlier than the date of
the Company's latest consolidated annual or quarterly financial statements and
(iii) with respect to each other tangible asset of the Company or its
consolidated Subsidiaries, the greater of (a) the net book value of such other
tangible asset on a date no earlier than the date of the Company's latest
consolidated annual or quarterly financial statements, and (b) the appraised
value, as estimated by a qualified independent appraiser, of such other tangible
asset, as of a date no earlier than the date that is three years prior to the
date of determination (or such later date on which the Company shall have a
reasonable basis to believe that there has occurred a material decrease in value
since the
determination of such appraised value), minus (B) minority interests and, to the
extent not otherwise taken into account in determining Adjusted Consolidated Net
Tangible Assets, any gas balancing liabilities of the Company and its
consolidated Subsidiaries. In addition to, but without duplication of, the
foregoing, for purposes of this definition, "Adjusted Consolidated Net Tangible
Assets" shall be calculated after giving effect, on a pro forma basis, to (1)
any Investment not prohibited by this Indenture, to and including the date of
the transaction giving rise to the need to calculate Adjusted Consolidated Net
Tangible Assets (the "Assets Transaction Date"), in any other Person that, as a
result of such Investment, becomes a Subsidiary of the Company, (2) the
acquisition, to and including the Assets Transaction Date (by merger,
consolidation or purchase of stock or assets), of any business or assets,
including, without limitation, Permitted Industry Investments, and (3) any sales
or other dispositions of assets permitted by this Indenture (other than sales of
Hydrocarbons or other mineral products in the ordinary course of business)
occurring on or prior to the Assets Transaction Date. For purposes of
calculating the ratio of the Adjusted Consolidated Net Tangible Assets to
Indebtedness of the Company and its Subsidiaries, Indebtedness of a Subsidiary
that is not a Wholly Owned Subsidiary (which Indebtedness is non-recourse to the
Company or any other Subsidiary or any of their assets) shall be included only
to the extent of the Company's pro rata ownership interest in such Subsidiary.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the
lesser of the amount by which (x) the fair value of the property 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 the Guarantee, of such Subsidiary Guarantor at such date and
(y) the present fair saleable value of the assets of such Subsidiary Guarantor
at such date exceeds the amount that will be required to pay the probable
liability of such Subsidiary Guarantor on its debts (after giving effect to all
other fixed and contingent liabilities incurred or assumed on such date and
after giving effect to any collection from any Subsidiary of such Subsidiary
Guarantor in respect of the obligations of such Subsidiary under the Guarantee),
excluding debt in respect of the Guarantee, as they become absolute and matured.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset" means each of the assets that are owned by the Company or a
Subsidiary on the date of this Indenture or that are acquired by the Company or
a Subsidiary after the date of this Indenture.
"Asset Disposition" means any sale, lease (other than a sale and leaseback
that creates a Capitalized Lease Obligation), transfer, exchange or other
disposition (or series of related sales, leases, transfers, exchanges or
dispositions) of shares of Capital Stock of a Subsidiary (other than directors'
qualifying shares), or of property or assets (including any interests therein)
(each referred to for purposes of this definition as a "disposition") by the
Company or any of its Subsidiaries, including any disposition by means of a
merger, consolidation or similar transaction (other than (A) by the Company to a
Subsidiary or by a Subsidiary to the Company or a Subsidiary (in the case of a
transfer to a Subsidiary that is not a wholly owned Subsidiary, dispositions
shall be excluded pursuant to clause (A) only to the extent of the Company's
interest in such Subsidiary after giving effect to such transfer), (B) any
Investment in an
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Unrestricted Subsidiary not prohibited under the provisions of Section 4.10, (C)
a disposition of Hydrocarbons or other mineral products in the ordinary course
of business, including farmouts in the ordinary course of business, and (D) the
disposition of all or substantially all of the assets of the Company in
compliance with Article Five of this Indenture).
"Assigned Mortgage" means the Act of Mortgage, Security Agreement,
Assignment of Production and Financing Statement, assigned by the Assignment.
"Assigned Mortgage Amendment" means the amendment to the Assigned Mortgage
executed by the Company and the Trustee, dated as of the Issue Date.
"Assignment" means the Act of Assignment of Note and Liens executed by
Joint Energy Development Investments Limited Partnership and the Trustee, dated
as of the Issue Date, related to the Collateral substantially in the form
attached hereto as Exhibit D.
"Average Life" means, as of the date of determination, with respect to any
Indebtedness, the quotient obtained by dividing (i) the sum of the products of
(x) the number of years from such date to the date of each successive scheduled
principal payment of such Indebtedness multiplied by (y) the amount of such
principal payment by (ii) the sum of all such principal payments.
"Bank Credit Agreement" means one or more credit agreements that may be
entered into between the Company and one or more lenders that may be secured by
certain assets of the Company, as such agreement may be amended, modified
(without limitation as to amount), supplemented, extended, restated, replaced,
renewed or refinanced from time to time in whole or in part in one or more
credit agreements, loan agreements, instruments or similar agreements, as such
may be further amended, modified (without limitation as to amount),
supplemented, extended, restated, replaced, renewed or refinanced from time to
time.
"Board of Directors" means, with respect to any Person, the board of
directors of such Person or any committee of the board of directors of such
Person duly authorized to act on behalf of the board of directors of such
Person.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions in the City of New York are required or authorized
by law or other governmental action to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock and any and all warrants, options and rights with respect thereto,
including each class of common stock and preferred stock of such Person.
"Capitalized Lease Obligation" means the discounted present value of the
rental obligations of any Person under any lease of Property, which in
accordance with GAAP, is required to be capitalized on the balance sheet of such
Person.
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"Cash Equivalents" shall mean Permitted Obligations.
"Change of Control" means (i) an event or series of events by which any
Person or other entity or group of Persons or other entities acting in concert
as a partnership or other group other than, in the case of the Company, the
Principals (a "Group of Persons") shall, as a result of a tender or exchange
offer, open market purchases, privately negotiated purchases, merger,
consolidation or otherwise, have become the beneficial owner (within the meaning
of Rule 13d-3 under the Exchange Act) of 40% or more of the combined voting
power of the then outstanding Voting Stock of the Company; provided, however,
that such event or series of events shall not constitute a Change of Control if
the Principals continue to beneficially own more than 50% of the combined voting
power of the then outstanding Voting Stock of the Company, (ii) during any
period of two consecutive years, Continuing Directors cease for any reason to
constitute a majority of the Board of Directors then in office, or (iii) the
direct or indirect sale, lease, exchange or other transfer of all or
substantially all of the Assets to any Person or Group of Persons.
"Company" means the party named as such above, until a successor replaces
such Person in accordance with the terms of this Indenture, and thereafter means
such successor.
"Company Properties" means all Properties, and equity, partnership or other
ownership interests therein, that are related or incidental to, or used or
useful in connection with, the conduct or operation of any business activities
of the Company or the Subsidiaries, which business activities are not prohibited
by the terms of this Indenture.
"Consolidated EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period increased (to the extent
deducted in determining Consolidated Net Income) by the sum of: (i) all income
taxes of such Person and its subsidiaries paid or accrued according to GAAP for
such period (other than income taxes attributable to extraordinary, unusual or
non-recurring gains or losses), (ii) all interest expense of such Person and its
subsidiaries paid or accrued in accordance with GAAP for such period (including
amortization of original issue discount and the interest portion of deferred
payment obligations), (iii) depreciation and depletion of such Person and its
subsidiaries, (iv) amortization of such Person and its subsidiaries including,
without limitation, amortization of capitalized debt issuance costs, (v) the
amount of any Preferred Stock dividends paid by such Person on its Preferred
Stock and (vi) any other non-cash charges to the extent deducted from
Consolidated Net Income.
"Consolidated EBITDA Coverage Ratio" means, with respect to any Person, the
ratio of (1) Consolidated EBITDA of such Person for the period (the "Pro Forma
Period") consisting of the most recent four full fiscal quarters for which
financial information in respect thereof is available immediately prior to the
date of the transaction giving rise to the need to calculate the Consolidated
EBITDA Coverage Ratio (the "Transaction Date") to (2) the aggregate Fixed
Charges that such Person will accrue during the fiscal quarter in which the
Transaction Date occurs and the three fiscal quarters immediately subsequent to
such fiscal quarter (the "Forward Period") on the aggregate amount of
Indebtedness outstanding on the Transaction Date, including any Indebtedness
proposed to be incurred on such date and excluding any Indebtedness repaid with
the proceeds of such Indebtedness (as though all such Indebtedness was incurred
or repaid on the first day of the quarter in which the Transaction Date
occurred). In addition to, but without duplication of, the foregoing, for
purposes of this definition, "Consolidated EBITDA" shall be calculated after
giving effect (without duplication), on a pro forma basis for the Pro Forma
Period (but no longer), to (a) any Investment, during the period commencing on
the first day of the Pro Forma Period to and including the Transaction Date (the
"Reference Period"), in any other Person that, as a result of such Investment,
becomes a subsidiary of such Person, (b) the acquisition, during the Reference
Period (by
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merger, consolidation or purchase of stock or assets) of any business or assets,
which acquisition is not prohibited by this Indenture, including but not limited
to Permitted Industry Investments, as if such acquisition had occurred on the
first day of the Reference Period, (c) any sales or other dispositions of assets
(other than sales of Hydrocarbons and other mineral products in the ordinary
course of business) occurring during the Reference Period, in each case as if
such incurrence, Investment, repayment, acquisition or asset sale had occurred
on the first day of the Reference Period and (d) interest income reasonably
anticipated by the Company to be received during the Pro Forma Period from
Investments in Permitted Obligations, which Investments exist on the Transaction
Date or will exist as a result of the transaction giving rise to the need to
calculate the Consolidated EBITDA Coverage Ratio. For purposes of this
definition, "Fixed Charges" shall be calculated after giving effect (without
duplication), on a pro forma basis for the Forward Period, to any Indebtedness
incurred or repaid on or after the first day of the Forward Period and prior to
the Transaction Date. For purposes of calculating the Company's Consolidated
EBITDA Coverage Ratio, Indebtedness of a Subsidiary that is not a Wholly Owned
Subsidiary (which Indebtedness is non-recourse to the Company or any other
Subsidiary or any of their assets) shall be included only to the extent of the
Company's pro rata ownership interest in such Subsidiary.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate net income (or loss) of such Person and its subsidiaries for such
period on a consolidated basis, determined in accordance with GAAP, provided
that (a) the net income of (i) any Unrestricted Subsidiary and (ii) any other
Person in which such Person or any subsidiary thereof has an interest (which
interest, in the case of those Persons referred to in clause (ii), does not
cause the net income of such other Person to be consolidated with the net income
of such Person in accordance with GAAP) will be included only to the extent of
the amount of dividends or distributions actually paid to such Person or its
subsidiaries by such other Person in such period; (b) the net income of any
subsidiary of such Person that is subject to any Payment Restriction will be
excluded to the extent of such Payment Restriction; and (c) (i) the net income
(or loss) of any other Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition, (ii) any net gain (but not
loss) on the sale or other disposition by such Person or any of its subsidiaries
of assets and of the Capital Stock of any subsidiary of such Person, and (iii)
after-tax items classified as extraordinary or nonrecurring gains, will each be
excluded.
"Consolidated Net Worth" means with respect to any Person as of any date
the amount by which the assets of such Person and its subsidiaries on a
consolidated basis exceed (i) the total liabilities of such Person and its
subsidiaries on a consolidated basis, plus (ii) Disqualified Capital Stock of
such Person or Disqualified Capital Stock of any subsidiary of such Person
issued to any Person other than such Person or another wholly owned Subsidiary
of such Person, in each case determined in accordance with GAAP.
"Continuing Directors" means any member of the Board of Directors of the
Company on the Issue Date, any director elected since the date thereof in any
annual meeting of the stockholders upon the recommendation of the Board of
Directors of the Company and any other member of the Board of Directors of the
Company who will be recommended or elected to succeed a Continuing Director by a
majority of Continuing Directors who are then members of the Board of Directors
of the Company.
"Currency Agreement" means the obligations of any Person pursuant to any
foreign exchange contract, currency swap agreement or other similar agreement or
arrangement designed to protect such Person or any of its subsidiaries against
fluctuations in currency values.
"Default" means any event that is, or after notice or passage of time would
be, an Event of Default.
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"Disbursement Account" means the custodial account in the name of the
Company, under the sole dominion and control of the Trustee, into which the
Company, under certain circumstances, will deposit proceeds received pursuant to
a release of Collateral from the Security Interest.
"Disqualified Capital Stock" means, with respect to any Person, any Capital
Stock of such Person or its subsidiaries that, by its terms, by the terms of any
agreement related thereto or by the terms of any security into which,
mandatorily or at the option of the holder, it is convertible or exchangeable,
is, or upon the happening of an event or the passage of time would be, required
to be redeemed or repurchased by such Person or its subsidiaries, including at
the option of the holder, in whole or in part, or has, upon the happening of an
event or the passage of time would have, a redemption or similar payment due, in
each such case on or prior to the Maturity Date.
"Escrow Account" means that custodial account in the name of the Company,
under the sole dominion and control of the Trustee, pursuant to which the
Company has deposited the Escrow Funds in immediately available funds.
"Escrow Funds" means that certain $9.45 million of proceeds from the sale
of the Series A Securities to pay interest on the Securities that accrues and is
unpaid from the Issue Date through and including the Interest Payment Date of
June 1, 1998.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Exchange Offer" means the offer by the Company, pursuant to an effective
registration statement filed with the SEC, to exchange for any and all of the
Series A Securities a like aggregate principal amount of Series B Securities in
accordance with the terms and provisions of the Registration Rights Agreement.
"Exchange Offer Consummation Date" means the date on which the Exchange
Offer is consummated in accordance with the terms and provisions of the
Registration Rights Agreement.
"Farmout Interest" means an undivided interest in a portion of the
Collateral that has been assigned, transferred, subleased, granted or conveyed
pursuant to a farmout, conditional assignment or similar type agreement.
"Fixed Charges" means, with respect to any Person, for any period, the
aggregate amount of (i) interest, whether expensed or capitalized, paid, accrued
or scheduled to be paid or accrued during such period (except to the extent
accrued in a prior period) in respect of all Indebtedness of such Person and its
consolidated subsidiaries (including (a) original issue discount on any
Indebtedness and (b) the interest portion of all deferred payment obligations,
calculated in accordance with the effective interest method, in each case to the
extent attributable to such period) and (ii) the product of (a) the dividend
requirements on Disqualified Capital Stock of such Person and its consolidated
subsidiaries and, in the case of the Company, on the Series A Preferred Stock
(in each case, whether in cash or otherwise (except dividends payable in shares
of Qualified Capital Stock) (non-cash dividends being valued as determined in
good faith by the Board of Directors of such Person, as evidenced by a Board
Resolution)) paid, accrued or scheduled to be paid or accrued during such period
(except to the extent accrued in a prior period) times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current effective consolidated federal, state and local income tax rate of such
Person and its consolidated subsidiaries, expressed as a decimal, and, with
respect to all of the foregoing items in this definition, excluding items
eliminated in consolidation.
-6-
For purposes of the definition of Fixed Charges, (a) interest on a
Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by the Board of Directors of such Person (as evidenced by
a Board Resolution) to be the rate of interest implicit in such Capitalized
Lease Obligation in accordance with GAAP; (b) interest on Indebtedness that is
determined on a fluctuating basis shall be deemed to have accrued at a fixed
rate per annum equal to the rate of interest of such Indebtedness in effect on
the date Fixed Charges are being calculated, subject to the proviso in clause
(c); (c) interest on Indebtedness that may optionally be determined at an
interest rate based upon a factor of a prime or similar rate, a eurocurrency
interbank offered rate, or other rate, shall be deemed to have been based upon
the rate actually chosen, or, if none, then based upon such optional rate chosen
as the Company may designate, (provided that, for the period following the date
on which the rate actually chosen ceases to be in effect, the Company may
designate an optional rate other than that actually chosen, which optional rate
shall be deemed to accrue at a fixed per annum equal to the rate of interest on
such optional rate in effect on the date Fixed Charges are being calculated);
and (d) Fixed Charges shall be increased or reduced by the net cost (including
amortization of discount) or benefit associated with obligations under Interest
Rate Agreements attributable to such period.
"GAAP" means generally accepted accounting principles as in effect in the
United States of America as of any date of determination.
"Guarantee" means, individually and collectively, the guarantees given by
the Subsidiary Guarantors pursuant to Article Eleven, including a notation in
the Securities substantially in the form attached hereto as Exhibit A-1.
"Holder" means a Person in whose name a Security is registered on the
Registrar's books.
"Hydrocarbons" means oil, gas, casinghead gas, drip gasoline, natural
gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and
all constituents, elements or compounds thereof and products refined or
processed therefrom.
"Immediate Family" of any specified Person means a spouse, sibling, child
or grandchild of such specified Person, whether related through blood, marriage
or adoption.
"Indebtedness" means, with respect to any Person, without duplication, any
liability, contingent or otherwise, of such Person (i) for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof), (ii) evidenced by bonds, notes, debentures
or similar instruments, (iii) representing the deferred and unpaid balance of
the purchase price of any property or interest therein (other than any such
balance that represents an account payable or any other monetary obligation to a
trade creditor created, incurred, assumed or guaranteed by such Person in the
ordinary course of business of such Person in connection with obtaining goods,
materials or services and due within 12 months (or such longer period for
payment as is customarily extended by such trade creditor) of the incurrence
thereof, which account is not overdue by more than 150 days, according to the
original terms of sale, unless such account payable is being contested in good
faith or has been extended, (iv) for the payment of a Capitalized Lease
Obligation of such Person, (v) with respect to the reimbursement of any letter
of credit, banker's acceptance or similar credit transaction, (vi) with respect
to Indebtedness (as otherwise defined in this definition) of another Person
secured by a Lien on any asset of such Person, whether or not such Indebtedness
is assumed by such Person (provided that if the obligations so secured have not
been assumed in full by such Person or are not otherwise such Person's legal
liability in full, then such obligations shall be deemed to be in an amount
equal to the greater of (A) the lesser of (1) the full amount of such
obligations, and (2) the fair market value of such assets, as determined in good
faith by the
-7-
Board of Directors of such Person, which determination shall be evidenced by a
Board Resolution, and (B) the amount of obligations as have been assumed by such
Person or which are otherwise such Person's legal liability), (vii) with respect
to production payments in connection with oil and gas properties of such Person,
other than any Permitted Production Payment Obligations, (viii) to the extent
not otherwise included, under Currency Agreements and Interest Rate Agreements
entered into other than in the ordinary course of such Person's business, (ix)
in the case of such Person, the liquidation preference and any mandatory
redemption payment obligations in respect of Disqualified Capital Stock, and, in
the case of a subsidiary of such Person, the liquidation preference and any
mandatory redemption payment obligations in respect of preferred stock of such
subsidiary, and (x) in respect of all Indebtedness of others which such Person
has guaranteed, endorsed with recourse (otherwise than for collection, deposit
or other similar transactions in the ordinary course of business), agreed to
purchase or repurchase or in respect of which such Person has agreed
contingently to supply or advance funds or for which such Person has otherwise
become liable; provided, however, Indebtedness arising pursuant to clause (iii)
of this definition as a result of such account payable becoming overdue by more
than 150 days shall only be deemed to be incurred at a time when Indebtedness,
other than such Indebtedness, is incurred.
"Indenture" means this Indenture as amended or supplemented from time to
time in accordance with the terms hereof.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Insolvency or Liquidation Proceeding" means, with respect to any Person,
(a) an insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization proceeding or other similar case or proceeding,
relative to such Person or to its creditors, as such, or its assets, or (b) any
liquidation, dissolution, or reorganization 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 marshalling of
assets and liabilities of such Person.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Securities.
"Interest Rate Agreement" means the obligations of any Person pursuant to
any interest swap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect such Person or any of its
subsidiaries against fluctuations in interest rates.
"Investment" means, in respect of any Person, any investment in another
Person, whether by means of a share purchase, capital contribution, loan,
advance (other than advances to employees for moving and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
similar credit extension constituting Indebtedness of such other Person and any
guaranty of Indebtedness of any other Person. For purposes of Section 4.10 and
the definition of Permitted Unrestricted Subsidiary Investments, (i) an
"Investment" in an Unrestricted Subsidiary shall be deemed to include and be
valued at the fair market value of the net assets of any Subsidiary at the time
that such Subsidiary is designated an Unrestricted Subsidiary, and (ii) any
Investment in an Unrestricted Subsidiary shall be valued at fair market value at
the time of such Investment (except, however, when such Investment consists of a
loan or advance by a Person to another Person that is of an intercompany or
similar nature between such Persons and arises pursuant to an agreement or
understanding in the ordinary course of business relating to tax sharing,
administrative or similar arrangements, then such Investment shall be valued at
fair market value at the time that the investing Person shall have paid monies
or transferred other consideration to another Person for the benefit of the
Person in whom the agreement to make such loan or advance was made), in
-8-
each case as determined by the Board of Directors of the Company and such
Subsidiary, as applicable, in good faith.
"Issue Date" means the date of first issuance of the Series A Securities
under this Indenture.
"Lien" means, with respect to any Person, any mortgage, pledge, lien,
encumbrance, easement, restriction, covenant, right-of-way, charge or adverse
claim affecting title or resulting in an encumbrance against real or personal
property of such Person, or a security interest of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option, right of first refusal or other similar agreement to sell,
in each case securing obligations of such Person and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statute or statutes) of any jurisdiction).
"Material Change" means an increase or decrease of more than 10% during a
fiscal quarter in the discounted future net cash flows (excluding changes that
result solely from changes in prices) from proved oil and gas reserves of the
Company and consolidated Subsidiaries (before any state or federal income tax);
provided, however, that the following will be excluded from the Material Change
calculation: (i) any acquisitions during the quarter of oil and gas reserves
that have been estimated by independent petroleum engineers and on which a
report or reports exist, (ii) any reserves added during the quarter attributable
to the drilling or recompletion of wells not included in previous reserve
estimates, but which will be included in future quarters, and (iii) any
disposition of properties existing at the beginning of such quarter that have
been disposed of as provided in Section 4.11.
"Material Subsidiary" means any Subsidiary of the Company that, as of the
relevant date of determination, would be a "significant subsidiary" as defined
in Reg. (S) 230.405 promulgated pursuant to the Securities Act as in effect on
the Issue Date, assuming the Company is the "registrant" referred to in such
definition, except that the 10% amounts referred to in such definition shall be
deemed to be 5%.
"Maturity Date" means June 1, 2004.
"Moody's" means Moody's Investors Service, Inc. and any successor to the
rating agency business thereof.
"Net Available Proceeds" means, with respect to any Asset Disposition of
any Person, cash proceeds received (including 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 excluding any other consideration
until such time as such consideration is converted into cash) therefrom, in each
case net of (i) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred, and (ii) all federal, state or local taxes
required to be accrued as a liability as a consequence of such Asset
Disposition, and in each case net of all Indebtedness which is secured by such
Assets, in accordance with the terms of any Lien upon or with respect to such
Assets, or that must, by its terms or in order to obtain a necessary consent to
such Asset Disposition or by applicable law, be repaid out of the proceeds from
such Asset Disposition and which is actually so repaid.
"Net Proceeds" means (a) in the case of any sale by the Company of
Qualified Capital Stock, the aggregate net cash proceeds received by the
Company, after payment of expenses, commissions and the like incurred in
connection therewith, and (b) in the case of any exchange, exercise, conversion
or surrender of any outstanding securities or Indebtedness of the Company for or
into shares of Qualified Capital Stock of the Company, the net book value of
such outstanding securities or Indebtedness as adjusted
-9-
on the books of the Company on the date of such exchange, exercise, conversion
or surrender (plus any additional amount required to be paid by the holder of
such Indebtedness or securities to the Company upon such exchange, exercise,
conversion or surrender and less any and all payments made to the holders of
such Indebtedness or securities, and all other expenses incurred by the Company
in connection therewith).
"Net Working Capital" means (i) all current assets of the Company and its
consolidated Subsidiaries, minus (ii) all current liabilities of the Company and
its consolidated Subsidiaries, except current liabilities included in
Indebtedness.
"Non-Recourse Indebtedness" means Indebtedness that, under the terms
thereof or pursuant to applicable law, neither the Company nor any Subsidiary of
the Company (other than a Subsidiary being designated as an Unrestricted
Subsidiary) is directly or indirectly liable for and there is no recourse
against any of the assets or properties of the Company or such Subsidiary.
"Obligations" mean the due and punctual payment of principal of and
interest on the Securities when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company under
this Indenture and the Securities and the due and punctual performance of all
other obligations of the Company under this Indenture and the Securities.
"Officer" means, with respect to any Person, the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer or the Treasurer of
such Person.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Officers or by an Officer and either a Secretary, Assistant
Secretary or Assistant Treasurer of such Person.
"Oil and Gas Hedge Agreements" means, with respect to any Person, any oil
and gas agreements and other agreements or arrangements or any combination
thereof entered into by such Person in the ordinary course of business and that
is designed to provide protection against oil and natural gas price
fluctuations.
"Oil and Gas Properties" means all Properties, including equity or other
ownership interests therein, owned by any Person that have been assigned "proved
oil and gas reserves" as defined in Rule 4-10 of Regulation S-X of the
Securities Act as in effect on the Issue Date.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company (or any Subsidiary Guarantor, if applicable).
"Payment Restriction" means a consensual encumbrance or restriction of any
kind (i) on the ability of any of the Subsidiaries (a) to pay dividends or make
other distributions on its Capital Stock or make payments on any Indebtedness
owed to the Company or any other Subsidiary, (b) to make loans or advances to
the Company or any other Subsidiary, or (c) to transfer any of its Property to
the Company or any other Subsidiary; or (ii) on the ability of such Person or
any other subsidiary of such Person to receive or retain any such (a) dividends,
distributions or payments, (b) loans or advances, or (c) transfers of Property.
"Permitted Indebtedness" means (i) Indebtedness under the Series A
Securities and any Series B Securities issued in exchange for Series A
Securities of equal principal amount; (ii) Indebtedness outstanding under the
Bank Credit Agreement in an aggregate principal amount at any one time
outstanding
-10-
not to exceed (a) $10.0 million if the Present Value of Oil and Gas Reserves is
less than $125.0 million and (b) 15% of the Present Value of Oil and Gas
Reserves if the Present Value of Oil and Gas Reserves is equal to or greater
than $125.0 million; (iii) the Guarantees of the Securities (and any assumption
of the obligations guaranteed thereby); (iv) Permitted Refinancing Indebtedness;
(v) Indebtedness of the Company to any Wholly Owned Subsidiary, and any
Indebtedness of any Wholly Owned Subsidiary to the Company or to any Wholly
Owned Subsidiary of the Company; provided, that in each case, such Indebtedness
has not been incurred in contemplation of any subsequent issuance or transfer of
any Capital Stock or any other event that would result in any such Wholly Owned
Subsidiary ceasing to be a Wholly Owned Subsidiary or any other subsequent
transfer of any such Indebtedness (except to the Company or a Wholly Owned
Subsidiary), and if incurred in contemplation of any of the foregoing events,
then such Indebtedness shall be deemed to be incurred and shall be treated as an
incurrence of Indebtedness for purposes of Section 4.9 at the time the Wholly
Owned Subsidiary in question ceased to be a Wholly Owned Subsidiary; (vi)
obligations arising in connection with Oil and Gas Hedge Agreements of the
Company or a Subsidiary; (vii) Permitted Operating Obligations; (viii) other
Indebtedness outstanding at any time in an aggregate principal amount not to
exceed the greater of $5.0 million or 5% of Adjusted Consolidated Net Tangible
Assets; and (ix) Indebtedness outstanding on the Issue Date. Permitted
Refinancing Indebtedness that constitutes a refinancing of amounts referred to
in clauses (ii) and (viii) shall be deemed to be incurred pursuant to and
subject to the limitations in clauses (ii) and (viii), respectively. The Company
may elect at any time that amounts of Indebtedness incurred under clauses (ii)
or (viii) be deemed to be incurred pursuant to the first paragraph of
Section 4.9 (if then permitted to be so incurred), in which event such amounts
so incurred shall be deemed not to be incurred under clause (ii) or (viii);
provided, however, any such Indebtedness deemed not to be incurred under clause
(ii) shall still be treated as Indebtedness under and governed by the Bank
Credit Agreement for purposes of all other provisions of this Indenture.
"Permitted Industry Investments" means (i) capital expenditures, including,
without limitation, acquisitions of Company Properties and interests therein;
(ii) (a) entry into operating agreements, joint ventures, working interests,
royalty interests, mineral leases, unitization agreements, pooling arrangements
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, or (b) exchanges of Company Properties for other
Company Properties of at least equivalent value as determined in good faith by
the Board of Directors of the Company; (iii) Investments by the Company or any
Subsidiary in any Subsidiary (or in any Person that becomes a Subsidiary as a
result of such Investment) that are not subject to any Payment Restriction; (iv)
Investments in the Company or another Subsidiary that are not subject to any
Payment Restriction by any Subsidiary; and (v) Investments of operating funds on
behalf of co-owners of Oil and Gas Properties of the Company or the Subsidiaries
pursuant to joint operating agreements.
"Permitted Investments" means Permitted Obligations and Permitted Industry
Investments (in each case, other than Investments in Unrestricted Subsidiaries).
"Permitted Liens" means (i) Liens for taxes, assessments and governmental
charges not yet delinquent or being contested in good faith and for such
adequate reserves have been established to the extent required by GAAP, (ii)
landlord's, carriers, warehouseman's, storage, mechanics', workmen's,
materialmen's, operator's or similar Liens arising in the ordinary course of
business, (iii) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on the use
of Company Properties or minor imperfections in title thereto which, in the
aggregate, are not material in amount, and that do not in any case materially
detract from the Company Properties subject thereto or interfere with the
ordinary conduct of the business of the Company or the Subsidiaries, (iv) Liens
on, or related to,
-11-
Properties to secure all or part of the costs incurred in the ordinary course of
business of exploration, drilling, development, production, processing,
transportation, marketing or storage, or operation thereof, (v) Liens on
pipeline or pipeline facilities, Hydrocarbons or Company Properties that arise
out of operation of law, (vi) judgment and attachment Liens not giving rise to
an Event of Default or Liens created by or existing from any litigation or legal
proceeding that are currently being contested in good faith by appropriate
proceedings and for which adequate reserves have been made, (vii) (a) Liens upon
any Property of any Person existing at the time of acquisition thereof by the
Company, (b) Liens upon any Property of a Person existing at the time such
Person is merged or consolidated with the Company or any Subsidiary or existing
at the time of the sale or transfer of any such Property of such Person to the
Company or any Subsidiary, or (c) Liens upon any Property of a Person existing
at the time such Person becomes a Subsidiary; provided that in each case such
Lien has not been created in contemplation of such sale, merger, consolidation,
transfer or acquisition, and provided further that in each such case no such
Lien shall extend to or cover any Property of the Company or any Subsidiary
other than the Property being acquired and improvements thereon, (viii) Liens
existing on the Issue Date, (ix) Liens on deposits made in the ordinary course
of business, including, without limitation, pledges or deposits under worker's
compensation, unemployment insurance and other social security legislation and
deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a similar nature incurred in the
ordinary course of business, (x) Liens in favor of collecting or payor banks
having a right of setoff, revocation, refund or chargeback with respect to money
or instruments of the Company or any Subsidiary on deposit with or in possession
of such bank, (xi) royalties, overriding royalties, revenue interests, net
revenue interests, net profit interests, reversionary interests, production
payments, production sales contracts, operating agreements and other similar
interests, properties, arrangements and agreements, all as ordinarily exist with
respect to Company Properties, (xii) Liens upon any Property that were created
solely for the purpose of securing Indebtedness representing, or incurred to
finance, refinance or refund, the cost (including the cost of construction) of
such Property; provided that no such Lien shall extend to or cover any Property
of the Company or any Subsidiary other than the Property so acquired and
improvements thereon, (xiii) Liens securing the Securities and the Guarantees,
(xiv) with respect to any Company Properties, Liens arising under, or in
connection with, or related to, farm-out, farm-in, joint operating, area of
mutual interest agreements and/or other similar or customary arrangements,
agreements or interests that the Company or any Subsidiary determines in good
faith to be necessary for the economic development of such Property, (xv) Liens
upon any Property securing obligations under hedging agreements, swap agreements
or other similar agreements entered into for the purpose of protecting against
fluctuations in oil or natural gas prices and (xvi) Liens upon any Property
securing Indebtedness under the Bank Credit Agreement; provided that, if such
Property is part of the Collateral, the amount of Indebtedness so secured by
such Liens does not exceed, at the time of and after giving effect to the
incurrence of such Indebtedness, the greater of (A) $10.0 million if the ratio
of the Company's Consolidated EBITDA to all of the Company's consolidated
interest expense paid or accrued in accordance with GAAP for the prior four
quarter period (including amortization of original issue discount and the
interest portion of deferred payment obligations) is equal to or exceeds 1.5 to
1 and the Adjusted Consolidated Net Tangible Assets at such time equals or
exceeds 120% of the Company's Consolidated Indebtedness or (B) the amount, if
any, that Adjusted Consolidated Net Tangible Assets at such time exceeds 200% of
the Company's Consolidated Indebtedness.
"Permitted Obligations" means (a) the following kinds of instruments if, in
the case of instruments referred to in clauses (i) through (iv) below, on the
date of purchase or other acquisition of any such instrument by the Company, any
Subsidiary or, in the case of the Disbursement Account and the Escrow Account,
the Trustee, the remaining term to maturity is not more than one year: (i)
readily marketable obligations issued or unconditionally guaranteed as to
principal and interest by the United States of America
-12-
or by any agency or authority controlled or supervised by and acting as an
instrumentality of the United States of America; (ii) repurchase obligations for
instruments of the type described in clause (i) for which delivery of the
instrument is made against payment; (iii) obligations (including, but not
limited to, demand or time deposits, bankers' acceptances and certificates of
deposit) issued by a depository institution or trust company incorporated or
doing business under the laws of the United States of America, any state thereof
or the District of Columbia or a branch or subsidiary of any such depository
institution or trust company operating outside the United States, provided that
such depository institution or trust company has, at the time of the Company's
or such Subsidiary's investment therein or contractual commitment providing for
such investment, capital, surplus or undivided profits (as of the date of such
institution's most recently published financial statements), in excess of $100.0
million; and (iv) commercial paper issued by any Person, if such commercial
paper has, at the time of the Company's or any Subsidiary's investment therein
or contractual commitment providing for such investment, credit ratings of A-1
by S&P and P-1 by Moody's; and (b) money market mutual or similar funds having
assets in excess of $100.0 million.
"Permitted Operating Obligations" means Indebtedness of the Company or any
Subsidiary in respect of one or more standby letters of credit, bid, performance
or surety bonds, or other reimbursement obligations, issued for the account of,
or entered into by, the Company or any Subsidiary in the ordinary course of
business (excluding obligations related to the purchase by the Company or any
Subsidiary of Hydrocarbons for which the Company or such Subsidiary has
contracts to sell), or in lieu of any thereof or in addition to any thereto,
guarantees and letters of credit supporting any such obligations and
Indebtedness (in each case, other than for an obligation for borrowed money,
other than borrowed money represented by any such letter of credit, bid,
performance or surety bond, or reimbursement obligation itself, or any guarantee
and letter of credit related thereto).
"Permitted Production Payment Obligations" means obligations with respect
to production payments entered into in the ordinary course of the Company's or
any Subsidiary's business, which obligations are non-recourse to the Company and
its Subsidiaries other than to Hydrocarbon production from the properties
subject to such obligations.
"Permitted Refinancing Indebtedness" means Indebtedness of the Company or
any 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 as required by the terms of the Securities) outstanding
Indebtedness of the Company or any Subsidiary, provided that (i) 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 Guarantees, then such Indebtedness is pari passu
with or subordinated in right of payment to, as the case may be, the Securities
or the Guarantees at least to the same extent as the Indebtedness being renewed,
extended, refinanced, refunded or repurchased, (ii) such Indebtedness is
scheduled to mature no earlier than the Indebtedness being renewed, extended,
refinanced, refunded or repurchased, and (iii) such Indebtedness has an Average
Life at the time such Indebtedness is incurred that is greater than the Average
Life of the Indebtedness being renewed, extended, refinanced, refunded or
repurchased; provided, further, that such Indebtedness (to the extent that such
Indebtedness constitutes Permitted Refinancing 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 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 reasonable fees and expenses and premium, if any,
incurred by the Company or such Subsidiary in connection therewith.
-13-
"Permitted Unrestricted Subsidiary Investments" means Investments in
Unrestricted Subsidiaries in a cumulative aggregate amount (in cash or the fair
market value of property other than cash, as determined in good faith by the
Board of Directors of the Company) not to exceed the sum of (i) $3.0 million and
(ii) cash or Cash Equivalent distributions made from any Unrestricted Subsidiary
and received, after the Issue Date, as such by the Company, provided that any
amount included in this clause (ii) shall be deducted from any amounts referred
to in clause (y)(3) of Section 4.10. Notwithstanding the foregoing, Permitted
Unrestricted Subsidiary Investments shall also include any Investments in
Unrestricted Subsidiaries to the extent such Investment consists of (A)
Qualified Capital Stock of the Company or (B) amounts referred to in clause
(y)(2) of Section 4.10, which Investments shall be excluded from the sum in the
previous sentence, provided that the amount of any Investments pursuant to
clause (B) shall be deducted from amounts referred to in clause (y)(2) of
Section 4.10.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Stock" of an entity means the Capital Stock of that entity which
is preferred as to the payment of dividends or the distribution of assets on any
voluntary or involuntary liquidation, over the shares of any other class or
series of Capital Stock of said entity.
"Present Value of Oil and Gas Reserves" means the discounted future net
cash flows from proved oil and gas reserves of the Company and its consolidated
Subsidiaries, calculated in accordance with SEC guidelines (before any state or
federal income tax), as estimated by independent petroleum engineers as of a
date no earlier than the date of the Company's latest annual consolidated
financial statements (or, in the case that the date of determination is after
the end of the first fiscal quarter of the fiscal year of the Company, as
estimated by Company engineers as of a date no earlier than the end of the most
recent fiscal quarter, which estimates shall be confirmed in writing by a report
by independent petroleum engineers in accordance with SEC guidelines in the
event of a Material Change if the amount of Adjusted Consolidated Net Tangible
Assets or Permitted Indebtedness is required to be computed under this
Indenture).
The term "principal" of a debt security means the principal amount of the
security plus the premium, if any, on the security.
"Principals" means (i) McLain J. Forman, (ii) Persons controlled by
McLain J. Forman, (iii) any member of the Immediate Family of McLain J. Forman,
(iv) a corporation that is wholly owned by any member of the Immediate Family of
McLain J. Forman, (v) a testamentary trust, the sole beneficiaries of which are
members of the Immediate Family of McLain J. Forman or (vi) the Officers of the
Company, and "Principal" means any one of such Persons.
"Private Placement Legend" means the legend initially set forth on the
Securities in the form set forth in Exhibit A attached hereto.
The term "pro forma" means, with respect to any calculation made or
required to be made pursuant to the terms of this Indenture, a calculation in
accordance with Article 11 of Regulation S-X under the Securities Act.
"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, partnership
interests and other equity or ownership interests in any other Person.
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"Public Equity Offering" means an underwritten public offer and sale of
common stock (that is Qualified Capital Stock) of the Company pursuant to a
registration statement that has been declared effective by the SEC 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).
"Purchase Agreement" means the Purchase Agreement dated June 3, 1997,
between the Company and the Purchaser.
"Purchaser" means the initial purchaser of Series A Securities named in
Schedule I attached to the Purchase Agreement.
"Purchase Money Obligations" means indebtedness evidenced by a note,
debenture, bond or other security or investment (whether or not secured by any
lien or other security interest) issued to or assumed in favor of a vendor as
all or part of the purchase price of property acquired by the Company or any
Subsidiary; provided, however, that such term shall not include any account
payable or any other indebtedness incurred, created or assumed in the ordinary
course of business in connection with the obtaining of material, products or
services.
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.
"Qualified Institutional Buyer" has the meaning attributed thereto in Rule
144A under the Securities Act.
"Registration Default" shall have the meaning ascribed thereto in the
Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights Agreement
dated June 3, 1997, between the Company and the Purchaser, substantially in the
form attached hereto as Exhibit B, with such changes thereto that do not have a
material adverse effect on the Holders.
"Regulation S" means Regulation S under the Securities Act.
"Related Person" means (i) any Affiliate of the Company, (ii) any
individual or other Person who directly or indirectly holds 10% or more of the
combined voting power of the then outstanding Voting Stock of the Company, (iii)
any relative of any individual referred to in clauses (i), (ii) and (iv) hereof
by blood, marriage or adoption not more remote than first cousin and (iv) any
officer or director of the Company.
"Restricted Debt Prepayment" means any purchase, redemption, defeasance
(including, but not limited to, in substance or legal defeasance) or other
acquisition or retirement for value, directly or indirectly, by the Company or a
Subsidiary, prior to the scheduled maturity or prior to any scheduled repayment
of principal or sinking fund payment, as the case may be, in respect of
Indebtedness of the Company or any Subsidiary that is subordinate in right to
the Securities or the Guarantees, provided, however, that any such acquisition
shall be deemed not to be a Restricted Debt Prepayment to the extent it is made
(x) in exchange for or with the proceeds from the substantially concurrent
issuance of Qualified Capital Stock or (y) in exchange for or with the proceeds
from the substantially concurrent issuance of Indebtedness, in a principal
amount (or, if such Indebtedness provides for an amount less than the principal
amount thereof to be due and payable upon the acceleration thereof, with an
original issue price) not to exceed the lesser of (i) the principal amount of
Indebtedness being acquired in exchange therefor (or with
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the proceeds therefrom) and (ii) if such Indebtedness being acquired was issued
at an original issue discount, the original issue price thereof plus
amortization of the original issue discount at the time of the incurrence of the
Indebtedness being issued in exchange therefor (or the proceeds of which will
finance such acquisition), and provided further that any such Indebtedness shall
have an Average Life not less than the Average Life of the Indebtedness being
acquired, and shall contain subordination and default provisions no less
favorable, in any material respect, to holders of the Securities than those
contained in such Indebtedness being acquired.
"Restricted Payment" means any (i) Stock Payment, (ii) Investment (other
than Permitted Investments and other than Permitted Unrestricted Subsidiary
Investments) or (iii) Restricted Debt Prepayment.
"Restricted Security" has the meaning attributed thereto in Rule 144(a)(3)
under the Securities Act; provided, however, that the Trustee shall be entitled
to request and conclusively rely upon an Opinion of Counsel with respect to
whether or not any Security is a Restricted Security.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw Hill
Companies, Inc. and any successor to the rating agency business thereof.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means, with respect to any Person, any Indebtedness
of such Person that is secured by a Lien.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Series A Securities or any Series B Securities
authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Security Documents" means, collectively, the Assignment, the Assigned
Mortgage and the Replacement Mortgages, as the same may be in force from time to
time.
"Security Interest" means the Lien on the Collateral created by this
Indenture and the Security Documents in favor of the Trustee for the benefit of
the Holders.
"Series A Preferred Stock" means the series of Preferred Stock of the
Company designated as Series A Cumulative Preferred Stock, $.01 par value.
"Series A Securities" means the 13.5% Senior Secured Notes due 2004,
Series A, being issued and sold pursuant to the Purchase Agreement and this
Indenture.
"Series B Securities" means the 13.5% Senior Secured Notes due 2004,
Series B, being issued and sold pursuant to the Registration Rights Agreement
and this Indenture.
"Stock Payment" means, with respect to any Person, (a) the declaration or
payment by such Person, either in cash or in property, of any dividend on
(except, in the case of the Company, dividends
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payable solely in Qualified Capital Stock of the Company), or the making by such
Person or any of its subsidiaries of any other distribution in respect of, such
Person's Capital Stock or any warrants, rights or options to purchase or acquire
shares of any class of such Capital Stock (except for the issuance of Qualified
Capital Stock pursuant to the exercise thereof), or (b) the redemption,
repurchase, retirement or other acquisition for value by such Person or any of
its subsidiaries, directly or indirectly, of such Person's or any of its
subsidiaries' Capital Stock or any warrants, rights or options to purchase or
acquire shares of any class of such Capital Stock other than, in the case of the
Company, through the issuance in exchange therefor solely of Qualified Capital
Stock of the Company; provided, however, that in the case of a Subsidiary, the
term "Stock Payment" shall not include (i) any such payment with respect to its
Capital Stock or warrants, rights or options to purchase or acquire shares of
any class of its Capital Stock payable to the Company or a Wholly-Owned
Subsidiary, or (ii) the payment of pro rata dividends to holders of minority
interests in Capital Stock of a Subsidiary.
"Subordinated Indebtedness" means any Indebtedness of the Company or a
Subsidiary Guarantor that is expressly subordinated in right of payment to the
Securities or the Guarantees, as the case may be.
"Subordination Agreement" means an agreement between the Company and any
lender pursuant to the terms of the Bank Credit Agreement, substantially in the
form attached hereto as Exhibit C, with such changes thereto that do not have a
material adverse effect on the Holders.
A "subsidiary" of any Person means (i) a corporation a majority of whose
Voting Stock is at the time, directly or indirectly, owned by such Person, by
one or more wholly-owned subsidiaries of such Person or by such Person and one
or more wholly-owned subsidiaries of such Person, (ii) a partnership in which
such Person or a wholly-owned subsidiary of such Person is, at the date of
determination, a general or limited partner of such partnership, but only if
such Person or its wholly-owned subsidiary is entitled to receive more than
fifty percent of the assets of such partnership upon its dissolution, or (iii)
any other Person (other than a corporation or partnership) in which such Person,
a wholly-owned subsidiary of such Person or such Person and one or more wholly-
owned subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has (x) at least a majority ownership interest or (y) the
power to elect or direct the election of a majority of the directors or other
governing body of such Person.
"Subsidiary" means any subsidiary of the Company; provided, that an
Unrestricted Subsidiary shall not be deemed a subsidiary of the Company for
purposes of this Indenture.
"Subsidiary Guarantor" means (i) each of the Company's Subsidiaries that
becomes a guarantor of the Securities in compliance with the provisions of
Article Eleven and (ii) each of the Company's Subsidiaries executing a
supplemental indenture in which such Subsidiary agrees to be bound by the terms
of this Indenture.
"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 until
such time as this Indenture is qualified under the TIA, and thereafter as in
effect on the date on which this Indenture is qualified under the TIA, except as
provided in Section 9.3.
"Trust Officer" means any officer or assistant officer within the corporate
trust department of the Trustee assigned by the Trustee to administer its
corporate trust matters.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor.
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"U.S. Legal Tender" means such coin or currency of the United States as at
the time of payment shall be legal tender for the payment of public and private
debts.
"United States" means the United States of America.
"Unrestricted Subsidiary" means (1) any subsidiary of the Company that at
the time of determination shall be an Unrestricted Subsidiary (as designated by
the Board of Directors of the Company, as provided below) and (2) any subsidiary
of an Unrestricted Subsidiary. The Board of Directors of the Company may
designate any Subsidiary (including any newly acquired or newly formed
Subsidiary or a Person becoming a Subsidiary through merger or consolidation or
Investment therein) to be an Unrestricted Subsidiary only if: (A) such
Subsidiary does not own any Capital Stock of, or own or hold any Lien on any
property of, any other Subsidiary of the Company which is not a Subsidiary of
the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary; (B)
all the Indebtedness of such Subsidiary shall at the date of designation, and
will at all times thereafter, consist of Non-Recourse Indebtedness; (C) the
Company certifies that such designation complies with Section 4.10; and (D) such
Subsidiary, either alone or in the aggregate with all other Unrestricted
Subsidiaries, does not operate, directly or indirectly, all or substantially all
of the business of the Company and the Subsidiaries. Any such designation by
the Board of Directors of the Company shall be evidenced to the Trustee by
filing with the Trustee a Board Resolution of the Board of Directors of the
Company giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions. If, at
any time, such Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of
such Subsidiary shall be deemed to be incurred as of such date. The Board of
Directors of the Company may designate any Unrestricted Subsidiary to be a
Subsidiary; provided that immediately after giving effect to such designation,
the Company could incur at least $1.00 of additional Indebtedness (excluding
Permitted Indebtedness) pursuant to the first paragraph of Section 4.9 on a pro
forma basis taking into account such designation.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
board of directors or other governing body of such Person.
"Wholly-Owned Subsidiary" means a Subsidiary all the Capital Stock (other
than directors' qualifying shares, if applicable) of which is owned by the
Company or another Wholly-Owned Subsidiary.
Section 1.2 Other Definitions.
Term Defined in Section
"Agent Members"................................... 2.7
"Bankruptcy Law".................................. 6.1
"Change of Control Offer"......................... 4.16
"Change of Control Notice"........................ 4.16
"Change of Control Purchase Date"................. 4.16
"Collateral"...................................... 12.1
"Custodian"....................................... 6.1
"DTC"............................................. 2.1
"Event of Default"................................ 6.1
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"Funding Guarantor"............................... 11.5
"Global Security"................................. 2.1
"incur"........................................... 4.9
"Net Proceeds Offer".............................. 4.11
"Net Proceeds Offer Amount"....................... 4.11
"Net Proceeds Payment Date"....................... 4.11
"Paying Agent".................................... 2.3
"Physical Securities"............................. 2.1
"Project Period".................................. 4.11
"Registrar"....................................... 2.3
"Related Person Transaction"...................... 4.14
"Released Interests".............................. 12.5
"Replacement Mortgages"........................... 4.21
"Security Register"............................... 2.6
"U.S. Government Obligations"..................... 8.2
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, if used in this Indenture, have the following meanings:
"indenture securities" means the Securities and the Guarantees.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the
Subsidiary Guarantors and any other obligor on the Securities or the
Guarantees.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them therein.
Section 1.4 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accor dance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
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(5) any gender used in this Indenture shall be deemed to include the
neuter, masculine or feminine genders;
(6) provisions apply to successive events and transactions;
(7) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
Subdivision; and
(8) when used with reference to the Securities, the expression "of
like tenor" refers to Securities of the same series.
ARTICLE TWO
THE SECURITIES
Section 2.1 Form and Dating.
The definitive Securities shall be printed, lithographed or engraved
on steel-engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities or notations of Guarantees,
as the case may be, as evidenced by their execution of such Securities or
notations of Guarantees, as the case may be.
Except as indicated in the next succeeding paragraph, Securities
(including the notations thereon relating to the Guarantees and the Trustee's
certificate of authentication) shall be issued initially in the form of one or
more permanent global Securities substantially in the form set forth in Exhibits
A, A-1 and A-2 (each being herein called a "Global Security") deposited with the
Trustee, as custodian for The Depository Trust Company ("DTC"), duly executed by
the Company and authenticated by the Trustee as hereinafter provided, and each
shall bear the legend set forth on Exhibit A hereto. Subject to the limitation
set forth in Section 2.2, the principal amounts of the Global Securities may be
increased or decreased from time to time by adjustments made on the records of
the Trustee, as custodian for DTC, as hereinafter provided.
Securities (including the notations thereon relating to the Guarantees
and the Trustee's certificate of authentication) originally issued and sold in
reliance on any exemption from registration under the Securities Act other than
Rule 144A shall be issued, and Securities originally offered and sold in
reliance on Rule 144A may be issued, in the form of permanent certificated
securities in registered form in substantially the form set forth in Exhibits A
and A-1 ("Physical Securities"). The Securities may also have such insertions,
omissions, substitutions and variations as may be permitted by or consistent
with this Indenture. The provisions of Exhibits A, A-1 and A-2 are part of this
Indenture. The Securities may have notations, legends and endorsements required
by law, stock exchange rule or usage. The Company shall approve the form of the
Securities and any notation, legend or endorsement on them. Each Security shall
be dated the date of its authentication.
The terms and provisions contained in the Securities and the
Guarantees shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company, the Subsidiary Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby.
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Section 2.2 Execution and Authentication.
One Officer and the Secretary or an Assistant Secretary of the Company
shall sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be reproduced on the Physical Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall be valid
nevertheless.
A Security shall not be valid until the Trustee or an authenticating
agent 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 aggregate principal amount of Series A Securities that may be
authenticated and delivered under this Indenture for original issue is limited
to $70.0 million, and the aggregate principal amount of Series B Securities that
may be authenticated and delivered under this Indenture for original issue is
limited to $70.0 million. The aggregate principal amount of Securities
outstanding at any one time may not exceed $70.0 million except as provided in
Section 2.8.
The Series A Securities and the Series B Securities shall be
considered collectively to be a single class for all purposes of this Indenture,
including, without limitation, waivers, amendments, redemptions and offers to
purchase.
As provided in the Registration Rights Agreement and subject to the
limitations set forth therein, at the option of the Holders, the Series A
Securities shall be exchangeable for Series B Securities of like aggregate
principal amount pursuant to the Exchange Offer.
At any time after the execution and delivery of this Indenture, the
Company may deliver Series A Securities executed by the Company and, if there
are Subsidiary Guarantors, having the notations of Guarantees executed by the
Subsidiary Guarantors to the Trustee for authentication, together with a request
from the Company for the authentication and delivery of such Series A
Securities, and the Trustee in accordance with such request shall authenticate
and deliver such Series A Securities with the notations of Guarantees thereon,
if applicable, as provided in this Indenture. Such request from the Company
shall specify the principal amount of the Series A Securities to be
authenticated and the date on which the original issue of Series A Securities is
to be authenticated. In addition, on or prior to the Exchange Offer
Consummation Date, the Company may deliver Series B Securities executed by the
Company and, if there are Subsidiary Guarantors, having the notations of
Guarantees executed by the Subsidiary Guarantors to the Trustee for
authentication, together with a request from the Company for the authentication
and delivery of such Series B Securities, and the Trustee in accordance with
such request shall authenticate and deliver such Series B Securities with the
notations of Guarantees thereon, if applicable, as provided in this Indenture.
Such request from the Company shall specify the principal amount of the Series B
Securities to be authenticated and the date on which the Series B Securities are
to be exchanged for an equal principal amount of Series A Securities.
In connection with the transfer of an entire Global Security to
beneficial owners pursuant to this Section, the Global Security shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall upon a request from the Company authenticate and
deliver, to each beneficial owner identified by DTC, in exchange for its
beneficial interest in the Global Security, an equal aggregate principal amount
of Physical Securities of authorized denominations.
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The Holder of a Global Security may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so except on original issuance. Each reference in this Indenture
to authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
its Affiliates.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
Section 2.3 Registrar and Paying Agent.
The Company shall maintain an office or agency designated pursuant to
Section 4.4 where Securities may be presented for registration of transfer or
for exchange (the "Registrar") and an office or agency designated pursuant to
Section 4.4 where Securities may be presented for payment (the "Paying Agent").
The Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional paying
agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. Such agency agreement shall provide for
reasonable compensation for such services. 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 and shall furnish
the Trustee with an executed counterpart of any such agency agreement. If the
Company fails to maintain or act as Registrar or Paying Agent, the Trustee shall
act as such and shall be duly compensated therefor.
The Registrar or a co-registrar and a Paying Agent shall be maintained
by the Company in the City of New York. The Company initially designates the
Trustee as the Registrar and Paying Agent.
Section 2.4 Paying Agent to Hold Money in Trust.
On or prior to each due date of the principal and interest on any
Security, the Company shall deposit with the Paying Agent immediately available
funds sufficient to pay such principal and interest becoming due. The Company
shall require each Paying Agent other than the Trustee to hold in trust for the
benefit of Holders or the Trustee all money held by such Paying Agent for the
payment of principal or interest on the Securities, and to notify the Trustee of
any Default by the Company or any Subsidiary Guarantor in making any such
payment. While any such Default continues, the Trustee may require the Paying
Agent to pay all money held by it to the Trustee. Except as provided in the
immediately preceding sentence, the Company at any time may require a Paying
Agent to pay all money held by it to the Trustee. Upon doing so, such Paying
Agent (other than the Company or a Subsidiary) shall have no further liability
for the money. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate and hold as separate trust funds all money held by it as Paying Agent.
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Section 2.5 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the name and addresses of
Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is not
the Registrar, the Company shall furnish or cause to be furnished to the Trustee
at least five Business Days before each semiannual 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 Holders, and the Company shall otherwise comply with TIA (S) 312(a).
Section 2.6 Transfer and Exchange.
The Company shall cause to be kept a register (the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities. The Security Register shall be in written form or any other form
capable of being converted into written form within a reasonable time. At all
reasonable times and during normal business hours, the Security Register shall
be open to inspection by the Trustee.
Subject to the provisions of this Section 2.6 and Section 2.7, upon
surrender for registration of transfer of any Security at the office or agency
of the Company designated pursuant to Section 4.4, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of like tenor and of any
authorized denomination and of a like aggregate principal amount, each such
Security having the notation of Guarantees thereon.
Furthermore, any Holder of a Global Security shall, by acceptance of
such Global Security, be deemed to have agreed that transfers of beneficial
interests in such Global Security may be effected only through a book-entry
system maintained by DTC (or its agent), and that ownership of a beneficial
interest in a Global Security shall be required to be reflected in book entry
form.
At the option of any Holder, Securities may be exchanged for other
Securities of like tenor and of any authorized denomination and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
the office or agency of the Company designated pursuant to Section 4.4. Further,
at the option of any Holder Series A Securities may be exchanged, pursuant to
the Exchange Offer, for Series B Securities of like aggregate principal amount,
upon surrender of the Series A Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, the Subsidiary Guarantors shall execute notations of Guarantees
on, and the Trustee shall authenticate and deliver, the Securities which the
Holder making the exchange is entitled to receive.
All Securities and the Guarantees noted thereon issued upon any
registration of transfer or exchange of Securities shall be the valid
obligations of the Company and the respective Subsidiary Guarantors, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. As a special condition to
registration of transfer or exchange of any Restricted Securities involving
removal of a Private Placement Legend (other than pursuant to an effective
registration statement under the Securities Act), the Holder requesting such
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registration of transfer or exchange shall furnish the Opinion of Counsel called
for by Section 2.14. The following additional special conditions shall apply to
the indicated types of transfers or exchanges:
(a) Respecting any requested registration of transfer or exchange of
Restricted Securities in the form of Physical Securities, such Physical
Securities shall be accompanied, in the sole discretion of the Company, by
the following additional information and documents, as applicable:
(1) if such Physical Security is being delivered to the Registrar
by a Holder for registration in the name of such Holder, without
transfer, a certification from such Holder to that effect (in
substantially the form of Exhibit A-3 hereto); or
(2) if such Physical Security is being transferred to a Qualified
Institutional Buyer in accordance with Rule 144A, a certification to
that effect (in substantially the form of Exhibit A-3 hereto); or
(3) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a certification to that
effect (in substantially the form of Exhibit A-3 hereto), a Transferee
Certificate for Institutional Accredited Investors in the form of
Exhibit A-4 hereto and an Opinion of Counsel to the effect that such
transfer is in compliance with the Securities Act; or
(4) if such Physical Security is being transferred in reliance on
Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit A-3 hereto), a Transferor
Certificate for Regulation S Transfers in the form of Exhibit A-5
hereto and an Opinion of Counsel to the effect that such transfer is
in compliance with the Securities Act; or
(5) if such Physical Security is being transferred in reliance on
Rule 144 promulgated under the Securities Act, delivery of a
certification to that effect (substantially in the form of Exhibit A-3
hereto) and an Opinion of Counsel to the effect that such transfer is
in compliance with the Securities Act; or
(6) if such Physical Security is being transferred in reliance on
another exemption from the registration requirements of the Securities
Act, a certification to that effect (in substantially the form of
Exhibit A-3 hereto) and an Opinion of Counsel to the effect that such
transfer is in compliance with the Securities Act.
(b) Respecting any requested exchange of a Physical Security for a
beneficial interest in a Global Security, such Physical Security shall be
accompanied, in the sole discretion of the Company, by the following
additional information and documents:
(1) a certification, substantially in the form of Exhibit A-3
hereto, that such Physical Security is being transferred to a
Qualified Institutional Buyer; and
(2) written instructions directing the Registrar to make, or to
direct DTC to make, an endorsement on the Global Security to reflect
an increase in the aggregate amount of the Securities represented by
the Global Security;
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whereupon the Registrar shall cancel such Physical Security and cause, or
direct DTC to cause, in accordance with the standing instructions and
procedures existing between DTC and the Registrar, the aggregate principal
amount of Securities represented by the Global Security to be increased
accordingly. If no Global Security is then outstanding, the Company shall
issue and the Trustee shall upon a request from the Company authenticate a
new Global Security in the appropriate amount.
(c) Any Person having a beneficial interest in a Global Security may
upon request to the Registrar exchange such beneficial interest for a
Physical Security. Upon receipt by the Registrar of written instructions
(or such other form of instructions as is customary for DTC) from DTC or
its nominee on behalf of any Person having a beneficial interest in a
Global Security and upon receipt by the Registrar of a written order or
such other form of instructions as is customary for DTC or the Person
designated by DTC as having such a beneficial interest containing
registration instructions and, in the case of any such transfer or exchange
of a beneficial interest in Restricted Securities, the following additional
information and documents:
(1) if such beneficial interest is being transferred to the
Person designated by DTC as being the beneficial owner, a
certification from such Person to that effect (in substantially the
form of Exhibit A-3 hereto); or
(2) if such beneficial interest is being transferred to a
Qualified Institutional Buyer in accordance with Rule 144A, a
certification to that effect (in substantially the form of Exhibit A-3
hereto); or
(3) if such beneficial interest is being transferred to an
Institutional Accredited Investor, delivery of a certification to that
effect (substantially in the form of Exhibit A-3 hereto), a Transferee
Certificate for Institutional Accredited Investors in the form of
Exhibit A-4 hereto and an Opinion of Counsel to the effect that such
transfer is in compliance with the Securities Act; or
(4) if such beneficial interest is being transferred in reliance
on Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit A-3 hereto), a Transferor
Certificate for Regulation S Transfers in the form of Exhibit A-5
hereto and an Opinion of Counsel to the effect that such transfer is
in compliance with the Securities Act; or
(5) if such beneficial interest is being transferred in reliance
on Rule 144 under the Securities Act, delivery of a certification to
that effect (substantially in the form of Exhibit A-3 hereto) and an
Opinion of Counsel to the effect that such transfer is in compliance
with the Securities Act; or
(6) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act, a certification to that effect (in substantially the
form of Exhibit A-3 hereto) and an Opinion of Counsel to the effect
that such transfer is in compliance with the Securities Act,
then the Registrar will cause, in accordance with the standing instructions
and procedures existing between DTC and the Registrar, the aggregate
principal amount of the Global Security to be reduced and, following such
reduction, the Company will execute and, upon receipt of a request
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from the Company, the Trustee will authenticate and deliver to the
transferee a Physical Security. Securities issued in exchange for a
beneficial interest in a Global Security pursuant to this Section 2.6 shall
be registered in such names and in such authorized denominations as DTC,
pursuant to instructions from Agent Members or otherwise, shall instruct
the Registrar in writing. The Registrar shall deliver such Physical
Securities to the Persons in whose names such Physical Securities are so
registered.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to the Exchange Offer or Section 2.11, 3.6 or 9.5 not
involving any transfer.
Neither the Trustee, the Registrar nor the Company shall be required
(i) to issue, register the transfer of or exchange any Physical Security during
a period of 30 days before a selection of Securities to be redeemed or (ii) to
register the transfer of or exchange any Physical Security so selected for
redemption in whole or in part, except the unredeemed portion of any such
Security being redeemed in part.
Section 2.7 Book-Entry Provisions for Global Securities.
Each Global Security shall be (i) registered in the name of DTC or its
nominee, (ii) delivered to the Trustee as custodian for DTC and (iii) bear the
legend set forth in Exhibit A-2 hereto.
Members of, or participants in, DTC ("Agent Members") shall have no
rights under this Indenture with respect to any Global Security held on their
behalf by DTC, or the Trustee as its custodian, or under such Global Security,
and DTC may be treated by the Company, the Subsidiary Guarantors, the Trustee
and any agent of the Company, the Subsidiary Guarantors or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Subsidiary Guarantors, the Trustee or any agent of the Company, the Subsidiary
Guarantors or the Trustee from giving effect to any written certification, proxy
or other authorization furnished by DTC or shall impair, as between DTC and its
Agent Members, the operation of customary practices governing the exercise of
the rights of a holder of any Security.
Transfers of a Global Security shall be limited to transfers of such
Global Security in whole, but not in part, to DTC, its successors or their
respective nominees. Interests of beneficial owners in a Global Security may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of DTC and the provisions of Section 2.6. In addition, Physical
Securities shall be transferred to all beneficial owners in exchange for their
beneficial interests in a Global Security if, and only if, either (1) DTC
notifies the Company that it is unwilling or unable to continue as depositary
for the Global Security and a successor depositary is not appointed by the
Company within 90 days of such notice, (2) an Event of Default has occurred and
is continuing and the Registrar has received a request from DTC to issue
Physical Securities in lieu of all or a portion of the Global Security (in which
case the Company shall deliver Physical Securities within 30 days of such
request) or (3) the Company determines not to have the Securities represented by
the Global Security and notifies DTC and the Registrar thereof.
In connection with the transfer of an entire Global Security to
beneficial owners pursuant to this Section, the Global Security shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall upon request of the Company authenticate and
deliver,
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to each beneficial owner identified by DTC, in exchange for its beneficial
interest in the Global Security, an equal aggregate principal amount of Physical
Securities of authorized denominations.
The Holders of a Global Security may grant proxies or otherwise
authorize any Persons, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
Section 2.8 Replacement Securities.
If a mutilated Security is surrendered to the Trustee or the Registrar
or if the Holder of a Security claims that the Security has been lost, destroyed
or wrongfully taken, the Company shall issue and the Trustee shall authenticate
a replacement Security if the requirements of the Trustee are met. An indemnity
bond may be required by the Trustee, the Company or any Subsidiary Guarantor
that is sufficient in the judgment of the Company, the Subsidiary Guarantors and
the Trustee to protect the Company, the Subsidiary Guarantors, the Trustee or
any Agent from any loss which any of them may suffer if a Security is replaced.
The Company may charge for its expenses (including fees and expenses of the
Trustee) in replacing a Security.
Section 2.9 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 2.9 as not outstanding. Except
as set forth in Section 2.10, a Security does not cease to be outstanding
because the Company, the Subsidiary Guarantors or any of their respective
Subsidiaries or Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.8, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under
Section 4.1, it ceases to be outstanding and interest on it ceases to accrue.
Section 2.10 Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, any Subsidiary Guarantor or an Affiliate of the Company shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that the Trustee actually knows,
without investigation by the Trustee, are so owned shall be so disregarded.
Section 2.11 Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and, upon written order of the Company, 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 and deliver definitive
Securities in exchange for temporary Securities surrendered to it.
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Section 2.12 Cancellation.
The Company or any Subsidiary Guarantor at any time may deliver
Securities to the Trustee for cancellation. The Registrar and Paying Agent
shall forward to the Trustee any Securities surrendered to them for transfer,
exchange or payment. The Trustee shall cancel all Securities surrendered for
registration, transfer, exchange, payment or cancellation and shall destroy
canceled Securities or retain canceled Securities in accordance with the
Trustee's standard retention policy unless the Company directs their return to
the Company. Except as provided in Section 2.8, the Company may not issue new
Securities to replace Securities that it has paid or delivered to the Trustee
for cancellation.
Securities that are mandatorily or optionally redeemed by the Company
or that are purchased by the Company pursuant to a Net Proceeds Offer, or
pursuant to a Change of Control Offer, or that are otherwise acquired by the
Company, will be surrendered to the Trustee for cancellation.
Section 2.13 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 interest on such
defaulted interest to the extent lawful) to the persons who are Holders on a
subsequent special record date, in each case at the rate provided in the
Securities and in Section 4.1. The Company shall fix the special record date and
payment date. At least 10 days before the special record date, the Company shall
mail to each Holder a notice that states the special record date, the payment
date and the amount of defaulted interest to be paid.
Section 2.14 Private Placement Legend.
(a) All Series A Securities issued hereunder on the Issue Date shall
bear the Private Placement Legend. Upon the transfer, exchange or replacement
of Securities bearing the Private Placement Legend, the Registrar shall deliver
only Securities that bear the Private Placement Legend unless, and the Trustee
is hereby authorized to deliver Securities without the Private Placement Legend
if, (i) there is delivered to the Trustee an Opinion of Counsel to the effect
that neither such legend nor the related restrictions on transfer are required
to maintain compliance with the provisions of the Securities Act or (ii) such
Security has been sold pursuant to an effective registration statement under the
Securities Act, which fact has been certified to the Trustee in an Officers'
Certificate. Upon the transfer, exchange or replacement of Securities not
bearing the Private Placement Legend, the Registrar shall deliver Securities
that do not bear the Private Placement Legend.
(b) By its acceptance of any Security bearing the Private Placement
Legend, each Holder of such a Security acknowledges the restrictions on transfer
of such Security set forth in this Indenture and in the Private Placement Legend
and agrees that it will transfer such Security only as provided in this
Indenture.
Section 2.15 Additional Interest Under Registration Rights Agreement.
Under certain circumstances, the Company shall be obligated to pay
Additional Interest to the Holders, all as set forth in Section 4 of the
Registration Rights Agreement. The terms thereof are hereby incorporated herein
by reference.
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ARTICLE THREE
REDEMPTION
Section 3.1 Notice to Trustee.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the redemption price and the
principal amount of Securities to be redeemed.
The Company shall give each notice provided for in this Section 3.1 at
least 45 days before the redemption date (unless a shorter notice period shall
be satisfactory to the Trustee). Any notice given pursuant to this Section 3.1
may be canceled at any time prior to notice of such redemption being mailed to
any Holder and shall thereby be void and of no effect.
Section 3.2 Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed in multiples of $1,000 pro rata, by
lot or by any other method that the Trustee considers fair and appropriate and,
if the Securities are listed on any securities exchange, by a method that
complies with the requirements of such exchange. The Trustee shall make the
selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000. Securities and portions of them it
selects shall be in amounts of $1,000 or whole multiples of $1,000. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly of the Securities or portions of Securities to be called for
redemption.
Section 3.3 Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first-class mail to each Holder
of Securities to be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) that, unless the Company defaults in the payment of the
redemption price or accrued interest, interest on Securities called for
redemption ceases to accrue on and after the redemption date;
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(6) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion will be
issued; and
(7) the subparagraph of paragraph 5 of the Securities pursuant to
which the Securities called for redemption are being redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
Section 3.4 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.3,
Securities called for redemption become due and payable on the redemption date
at the redemption price. Upon surrender to the Paying Agent, such Securities
shall be paid at the redemption price, plus accrued interest to the redemption
date.
Section 3.5 Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the
Paying Agent immediately available funds sufficient to pay the redemption price
of, and accrued interest on, the Securities to be redeemed on that date. The
Paying Agent shall promptly return to the Company any money so deposited that is
not required for that purpose upon the written request of the Company, except
with respect to monies owed as obligations to the Trustee pursuant to Article
Seven.
If any Security called for redemption shall not be so paid upon
redemption because of the failure of the Company to comply with the preceding
paragraph, interest will continue to be payable on the unpaid principal,
including from the redemption date until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case at
the rate provided in the Securities and in Section 4.1.
Section 3.6 Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the
Trustee shall authenticate for the Holder a new Security or Securities equal in
aggregate amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
Section 4.1 Payment of Securities.
The Company shall pay the principal of and interest on the Securities
on the dates and in the manner provided in the Securities and this Indenture.
Principal of and interest on the Securities shall be considered paid on the date
due if the Trustee or Paying Agent holds on that date money deposited by the
Company designated for and sufficient to pay all principal and interest then
due.
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The Company shall pay interest on overdue principal at the rate borne
by the Securities and shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
The Company shall notify the Trustee and any Paying Agent immediately
upon the occur rence of any Registration Default and, with respect to
Additional Interest payments pursuant to Section 4 of the Registration Rights
Agreement, the Company shall notify the Trustee and any Paying Agent prior to
the date of any interest payment of the amount of Additional Interest payable to
each Holder.
Section 4.2 SEC Reports.
(a) Each of the Company and the Subsidiary Guarantors shall file with
the Trustee within 15 days after it files them with the SEC 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 SEC may by rules and regulations
prescribe) that each of the Company and the Subsidiary Guarantors is required to
file with the SEC pursuant to Section 1.3 or 15(d) of the Exchange Act. If the
Company is not subject to the requirements of such Section 1.3 or 15(d) of the
Exchange Act, the Company shall file with the Trustee such reports, information
and other documents as required pursuant to Section 4.17. The Company and each
of the Subsidiary Guarantors also shall comply with the other provisions of TIA
(S) 3.14(a).
(b) So long as any of the Securities remain outstanding, the Company
shall cause each annual, quarterly and other financial report mailed or
otherwise furnished by it generally to stockholders to be filed with the Trustee
and mailed to the Holders at their addresses appearing in the register of
Securities maintained by the Registrar, in each case at the time of such mailing
or furnishing to stockholders.
(c) The Company and the Subsidiary Guarantors shall provide the
Trustee with a sufficient number of copies of all reports and other documents
and information that the Trustee may be required to deliver to Holders under
this Section 4.2.
Section 4.3 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days after the
end of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and 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 covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, 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) and that
to the best of such Officer's knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Securities are prohibited. Such Officers' Certificate
shall comply with TIA (S) 314(a)(4).
(b) The Company and the Subsidiary Guarantors will, so long as any of
the Securities are outstanding, deliver to the Trustee forthwith upon any
Officer becoming aware of any Default or Event of Default or default in the
performance of any covenant, agreement or condition contained in this
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Indenture, an Officers' Certificate specifying such Default or Event of Default
and what action the Company or any Subsidiary Guarantor proposes to take with
respect thereto.
(c) The Company shall promptly deliver to the Trustee an Officers'
Certificate notifying the Trustee of any refunding, refinancing or replacement
of each Bank Credit Agreement.
Section 4.4 Maintenance of Office or Agency.
The Company will maintain in the City of New York, an office or agency
where Securities may be surrendered for registration of transfer or exchange or
for presentation for payment and where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 13.2.
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 such designations;
provided that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the City of New
York, for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
Section 4.5 Corporate Existence.
Subject to Article Five, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each Material
Subsidiary in accordance with the respective organizational documents of the
Company and each Material Subsidiary and the material rights (charter and
statutory) and material franchises of the Company and the Material Subsidiaries;
provided, that the Company shall not be required to preserve any such right or
franchise, or the corporate existence of any Material Subsidiary, 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 that the loss
thereof is not, and will not be, adverse to the payment and performance of the
obligations under the Securities and otherwise under this Indenture.
Section 4.6 Waiver of Stay, Extension or Usury Laws.
The Company and each Subsidiary Guarantor 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, that would prohibit or forgive the Company
or any Subsidiary Guarantor from paying all or any portion of the principal of
and/or interest on the Securities as contemplated herein, wherever enacted, now
or at any time hereafter in force, or that may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company and each Subsidiary Guarantor hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
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Section 4.7 Payment of Taxes and Other Claims.
The Company and each Material Subsidiary will pay or discharge or
cause to be paid or discharged, before the same shall become delinquent, (1) all
taxes, assessments and governmental charges levied or imposed upon the Company
or any Material Subsidiary or upon the income, profits or property of the
Company or any Material Subsidiary other than 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, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a Lien (other than a Permitted
Lien) upon the property of the Company or any Material Subsidiary, in each case
except to the extent the failure to do so would have, in the judgment of the
Company, a material adverse effect on the Company and the Subsidiaries taken as
a whole.
Section 4.8 Maintenance of Properties and Insurance.
(a) The Company shall cause all material Property used or useful in
the conduct of its business or the business of any Subsidiary to be maintained
and kept in good condition, repair and working order (ordinary wear and tear
excepted) and supplied with all necessary equipment and shall cause to be made
all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section 4.8
shall prevent the Company or any Subsidiary from discontinuing the operation or
maintenance of any such Property, or disposing of it, if such discontinuance or
disposal is, in the judgment of the Company or such Subsidiary, desirable in the
conduct of its business and not adverse to the payment and performance of the
obligations under the Securities and otherwise under this Indenture.
(b) The Company shall provide or cause to be provided, for itself and
each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the reasonable, good faith opinion
of the Company are adequate and appropriate for the conduct of the business of
the Company and such Subsidiaries in a prudent manner, with reputable insurers
or with the government of the United States or an agency or instrumentality
thereof, in such amounts, with such deductibles, and by such methods as shall be
either (i) consistent with past practices of the Company or the applicable
Subsidiary or (ii) customary, in the reasonable, good faith opinion of the
Company, for corporations similarly situated in the industry, unless the failure
to provide such insurance (together with all other such failures) would not have
a material adverse effect on the financial condition or results of operations of
the Company and its Subsidiaries, taken as a whole.
Section 4.9 Limitation on Incurrence of Additional Indebtedness.
The Company will not, and will not permit any of the Subsidiaries
directly or indirectly, to issue, incur, assume, guarantee, become liable,
contingently or otherwise, with respect to or otherwise become responsible for
the payment of (collectively, "incur") any Indebtedness (other than Permitted
Indebtedness); provided, however, that if no Default or Event of Default with
respect to the Securities shall have occurred and be continuing at the time or
as a consequence of the incurrence of such Indebtedness, the Company and the
Subsidiaries or any of them may incur Indebtedness if on the date of the
incurrence, (i) both (A) the Company's Consolidated EBITDA Coverage Ratio would
have been greater than 2.25 to 1.0 for the period from the Issue Date through
May 31, 1998 and 2.5 to 1.0 from June 1, 1998, and thereafter, respectively, and
(B) the Adjusted Consolidated Net Tangible Assets are equal to or greater than
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150% of Indebtedness of the Company and the Subsidiaries, or (ii) the Adjusted
Consolidated Net Tangible Assets are equal to or greater than 250% of
Indebtedness of the Company and the Subsidiaries.
For purposes of determining any particular amount of Indebtedness
incurred under this Section 4.9, (i) guarantees of Indebtedness otherwise
included in the determination of such amount shall not also be included and (ii)
any Indebtedness incurred by the Company or any Subsidiary incurred for, or
related to, a Person other than another Subsidiary or the Company, as
applicable, shall be deemed to be in an amount equal to the greater of (i) the
lesser of (A) the full amount of the Indebtedness of such other Person or (B)
the fair market value of the assets and properties of the Company or such
Subsidiary, as to which the holder or holders of such Indebtedness are expressly
limiting the obligations of the Company or such Subsidiary, the value of which
assets and properties of the Company or any Subsidiary will be as determined in
good faith by the Board of Directors of the Company or such Subsidiary, as
applicable (which determination shall be evidenced by a Board Resolution of the
applicable Person), and (ii) the amount of the Indebtedness of such other Person
as has been expressly contractually assumed or guaranteed by the Company or such
Subsidiary.
The Company will not, and will not permit any Subsidiary Guarantor to,
incur any Indebtedness that by its terms (or by the terms of any agreement
governing such Indebtedness) is subordinated in right of payment to any other
Indebtedness of the Company or such Subsidiary Guarantor unless such
Indebtedness is also by its terms (or by the terms of any agreement governing
such Indebtedness) made expressly subordinate in right of payment to the
Securities or the Guarantee of such Subsidiary Guarantor, as the case may be,
pursuant to subordination provisions that are substantively identical to the
subordination provisions of such Indebtedness (or such agreement) that are the
most favorable to the holders of any other Indebtedness of the Company or such
Subsidiary Guarantor, as the case may be.
Notwithstanding anything to the contrary in this Section 4.9, no
Subsidiary that is not already a Subsidiary Guarantor shall incur any
Indebtedness with respect to any Indebtedness of the Company or any other
Subsidiary unless such Subsidiary, the Company and the Trustee execute and
deliver a supplemental indenture evidencing such Subsidiary's Guarantee of the
Securities, such Guarantee to be a senior unsecured obligation of such
Subsidiary.
Section 4.10 Limitation on Restricted Payments.
The Company will not, and will not permit any of the Subsidiaries to,
directly or indirectly, make any Restricted Payment, if at the time of such
Restricted Payment, or on a pro forma basis after giving effect thereto:
(x) a Default or an Event of Default under this Indenture has occurred
and is continuing;
(y) the aggregate amount expended for all Restricted Payments
subsequent to the Issue Date exceeds the sum of (without duplication):
(1) 50% of aggregate Consolidated Net Income (net of losses
resulting from full costs ceiling writedowns attributable to any oil
and gas properties of the Company or any Subsidiary) of the Company
(or if such Consolidated Net Income is a loss, minus 100% of such
loss) earned on a cumulative basis during the period beginning on the
Issue Date and ending on the last date of the Company's fiscal quarter
immediately preceding such Restricted Payment; plus
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(2) 100% of the aggregate Net Proceeds received by the Company
from any Person other than a Subsidiary from the issuance and sale
subsequent to the Issue Date of Qualified Capital Stock (excluding (A)
any Qualified Capital Stock paid as a dividend on any Capital Stock or
as interest on any Indebtedness, (B) the issuance of Qualified Capital
Stock upon the conversion of, or in exchange for, any Qualified
Capital Stock and (C) any Qualified Capital Stock with regard to
issuances and sales financed directly or indirectly using funds
borrowed from the Company or any Subsidiary, until and to the extent
such borrowing is repaid); plus
(3) to the extent not otherwise included in Consolidated Net
Income, dividends, repayments of loans or advances, or other transfers
of assets, in each case to the Company or a Subsidiary after the Issue
Date from any Unrestricted Subsidiary or from the redesignation of an
Unrestricted Subsidiary as a Subsidiary (valued in each case as
provided in the definition of Investment) other than amounts
constituting Permitted Unrestricted Subsidiary Investments; plus
(4) $1.0 million; or
(z) the Company would not be able to incur $1.00 of additional
Indebtedness (excluding Permitted Indebtedness) as provided in the first
paragraph of Section 4.9.
The foregoing provisions of this covenant will not prevent the payment of
(a) any dividend within 60 days after the date of its declaration if the
dividend would have been permitted on the date of declaration and (b) cash
dividends by the Company in respect of its Series A Preferred Stock if (i) no
Default or Event of Default under this Indenture shall have occurred and be
continuing at the time or as a consequence of the payment of such cash dividends
and (ii) on the date of the payment of such cash dividends and after giving
effect to such payment, the Company's Consolidated EBITDA Coverage Ratio would
have been greater than 1.5 to 1.0; provided, however, that payments made in
accordance with this paragraph shall be counted for purposes of computing
amounts expended pursuant to subclause (y) in the immediately preceding
paragraph. The Company will not issue any additional shares of its Series A
Preferred Stock except for dividends paid in kind.
Section 4.11 Limitation on Disposition of Assets.
The Company will not, and will not permit any Subsidiary to, make any
Asset Disposition unless:
(a) in the case of any Asset Disposition or series of related Asset
Dispositions having a fair market value of more than $5.0 million, the
Company or such Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value as determined by either
(a) a majority of the disinterested directors of the Company or (b) a
nationally recognized investment banking firm,
(b) at least (i) 70% of the consideration received by the Company or
such Subsidiary, as the case may be, from such Asset Disposition shall be
in the form of cash or Cash Equivalents and is received at the time of such
Asset Disposition and (ii) 15% of such consideration received if in a form
other than cash or Cash Equivalents is converted into or exchanged for cash
or Cash Equivalents within 120 days of such Asset Disposition, and
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(c) within 365 days following the receipt of the Net Available
Proceeds from such Asset Disposition, 100% of the Net Available Proceeds
from such Asset Disposition are applied by the Company or such Subsidiary:
(i) to repay Indebtedness (other than Subordinated
Indebtedness) of the Company or any Subsidiary, provided, in each
case, that the related loan commitment of any revolving credit
facility or other borrowing (if any) is thereby permanently reduced by
the amount of such Indebtedness so repaid;
(ii) at the Company's option to the extent that such Net
Available Proceeds are not applied to repay Indebtedness, to Permitted
Industry Investments made by the Company or a Subsidiary (or, to the
extent not so applied during such 365 day period, to Permitted
Industry Investments specifically identified during such 365 day
period reasonably anticipated in good faith by the Board of Directors
of the Company to be expended within 180 days after being specifically
identified (such 180-day period, the "Project Period")); and
(iii) to the extent that any Net Available Proceeds are not
applied to repay Indebtedness or applied or to be applied to Permitted
Industry Investments, to make an offer to purchase (the "Net Proceeds
Offer") (on a Business Day (the "Net Proceeds Payment Date") not later
than the later of (1) 365 days following the receipt of such Net
Available Proceeds or (2) in the case of application of proceeds
intended to be applied under clause (b), 35 Business Days following
any Project Period) the Securities at a price equal to 100% of the
principal amount of the Securities plus accrued interest to the Net
Proceeds Payment Date.
Notwithstanding the foregoing, the Company and its Subsidiaries will
not be required to apply any Net Available Proceeds in accordance with such
provisions except to the extent that the Net Available Proceeds from all Asset
Dispositions that are not applied in accordance with such provisions exceed $5.0
million.
Notice of a Net Proceeds Offer to purchase the Securities will be made
on behalf of the Company not less than 25 Business Days nor more than 60
Business Days before the Net Proceeds Payment Date. Securities tendered to the
Company pursuant to a Net Proceeds Offer will cease to accrue interest after the
Net Proceeds Payment Date. The Company will not be entitled to any credit
against the above obligations for the principal amount of Securities previously
acquired by the Company. For purposes of this covenant, the term "Net Proceeds
Offer Amount" means the principal of outstanding Securities in an aggregate
principal amount equal to any remaining Net Available Proceeds.
To exercise the repurchase right, the Holder must deliver on or before
the fifth calendar day prior to the Net Proceeds Payment Date, written notice to
the Company (or an agent designated by the Company for such purpose) of the
Holder's exercise of such right, together with (i) the Security or Securities
with respect to which the right is being exercised, duly endorsed for transfer
with the form entitled "Option of Holder to Elect Purchase" on the reverse side
of the Security completed, and (ii) if the Net Proceeds Payment Date falls
between any record date for the payment of interest on the Securities and the
next succeeding interest payment date, an amount equal to the interest which the
Holder is entitled to receive on such interest payment date; provided, however,
that with respect to Securities held of record by DTC, the Company or its
designated agent may accept as tendered for repurchase pursuant to this Section
4.11 Securities tendered by means of book entry in accordance with the normal
procedures of
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DTC, provided that any such interest amount shall be delivered by the Holder to
the Company or its designated agent.
On the Net Proceeds Payment Date, the Company will (i) accept for
payment Securities or portions thereof tendered pursuant to the Net Proceeds
Offer in an aggregate principal amount equal to the Net Proceeds Offer Amount or
such lesser amount of Securities as has been tendered, (ii) deposit with the
Paying Agent money sufficient to pay the purchase price of all Securities or
portions thereof so tendered in an aggregate principal amount equal to the Net
Proceeds Offer Amount or such lesser amount, and (iii) deliver or cause to be
delivered to the Trustee, Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof tendered to the Company.
If the aggregate principal amount of Securities tendered exceeds the Net
Proceeds Offer Amount, the Trustee will select the Securities to be purchased on
a pro rata basis based on the principal amount of Securities so tendered. The
Paying Agent will promptly mail or deliver to Holders of Securities so accepted
payment in an amount equal to the purchase price, and the Company will execute
and the Trustee will promptly authenticate and mail or make available for
delivery to such Holders of Physical Securities a new Security equal in
principal amount to any unpurchased portion of the Security surrendered. Any
Securities not so accepted will be promptly mailed or delivered to the Holder
thereof. The Company will publicly announce the results of the Net Proceeds
Offer on or as soon as practicable after the Net Proceeds Payment Date. For
purposes of this Section 4.11, the Trustee will act as the Paying Agent. The
Company may make Asset Dispositions in accordance with this Section 4.11 and
receive consideration in the form of equity, partnership or other ownership
interests where it might not control such resulting entity.
Section 4.12 Limitation on Liens Securing Indebtedness.
The Company will not, and will not permit any of the Subsidiaries to,
create, incur, assume or suffer to exist any Liens (other than Permitted Liens)
upon any of their respective Properties securing (i) any Indebtedness of the
Company, unless the Securities are equally and ratably secured or (ii) any
Indebtedness of any Subsidiary Guarantor, unless the Securities or the
Guarantees, as the case may be, are equally and ratably secured; provided that
if such Indebtedness is expressly subordinated to the Securities or the
Guarantees, the Lien securing such Indebtedness will be subordinated and junior
to the Lien securing the Securities or the Guarantees, with the same relative
priority as such Subordinated Indebtedness will have with respect to the
Securities or the Guarantees, as the case may be.
Section 4.13 Limitation on Payment Restrictions Affecting Subsidiaries.
The Company will not, and will not permit any Subsidiary to, directly
or indirectly, create or suffer to exist or allow to become effective any
Payment Restriction, except for such encumbrances or restrictions existing under
or by reason of (A) the Bank Credit Agreement, (B) customary provisions
restricting subletting or assignment of any lease governing a leasehold interest
of the Company or any Subsidiary, (C) any instrument governing Indebtedness of a
Person acquired by the Company or a Subsidiary at the time of such acquisition,
which encumbrance or restriction is not applicable to any 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, (D) with
respect to clauses (i)(c) and (ii)(c) contained in the definition of Payment
Restriction, Purchase Money Obligations for Property acquired in the ordinary
course of business, (E) Indebtedness existing pursuant to a written agreement in
effect on the date of this Indenture, (F) Indebtedness under this Indenture, or
(G) Indebtedness incurred to refinance, refund, extend or renew Indebtedness
referred to in clauses (A), (C), (D), (E) or (F) above; provided that the
Payment Restrictions contained therein are not materially more restrictive than
those provided for in the Indebtedness being refinanced, refunded, extended or
renewed.
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Section 4.14 Limitation on Transactions with Related Persons.
Neither the Company nor any of the Subsidiaries will (i) sell, lease,
transfer or otherwise dispose of any of its Property to, (ii) purchase any
property from, (iii) make any Investment (other than Permitted Unrestricted
Subsidiary Investments and other Investments in accordance with the provisions
of Section 4.10) in, or (iv) enter into any contract or agreement with or for
the benefit of, a Related Person of the Company or any Subsidiary (other than
the Company or any such Subsidiary in which no Related Person (other than the
Company or another Wholly Owned Subsidiary) owns, directly or indirectly, an
equity interest) (a "Related Person Transaction"), other than Related Person
Transactions that are on terms (which terms are in writing) no less favorable to
the Company or a Subsidiary, as applicable, than could be obtained in a
comparable arm's length transaction from an unaffiliated party; provided that,
if the Company or any Subsidiary enters into a Related Person Transaction or s
eries of Related Person Transactions involving or having an aggregate value of
more than (i) $1.0 million, such Related Person Transaction will have been
approved by a majority of the disinterested directors of the Company and (ii)
$5.0 million ($1.0 million if there are no disinterested directors of the
Company), such Related Person Transaction will have been determined by a
nationally recognized investment banking firm to be fair from a financial
standpoint to the Company and its Subsidiaries. Notwithstanding anything to the
contrary in the foregoing, the foregoing restrictions shall not apply to (i)
Related Person Transactions that are approved by the Board of Directors of the
Company and such Subsidiary, if applicable, as in the best interests of the
Company or such Subsidiary, which transactions together with all other Related
Person Transactions in a related series involve or have an aggregate value not
exceeding $1.0 million in each fiscal year; (ii) fees and compensation paid to
or agreements with officers, directors, employees or consultants of the Company
or any Subsidiary in each case that are reasonable, as determined by the Board
of Directors or senior management thereof in good faith; and (iii) Restricted
Payments that are not prohibited by Section 4.10.
Section 4.15 Limitation on Conduct of Business.
The Company and the Subsidiaries will be operated in a manner such
that it will not engage in any business other than the exploration for and the
development, acquisition, production, gathering, treating, processing,
marketing, storage, selling and transportation of, Hydrocarbons and such other
businesses as are reasonably necessary or desirable to facilitate the conduct
and operations of the foregoing businesses.
Section 4.16 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 from the Holders of such Securities 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 4.16.
The Company shall, subject to the provisions described below, be required to
purchase all Securities properly tendered pursuant to a Change of Control Offer
and not withdrawn.
(b) The Change of Control Offer shall 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).
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(c) Not later than the 30th day following the occurrence of the Change
of Control, the Company shall mail to the Trustee and to each Holder of the
Securities a notice (the "Change of Control Notice") 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;
(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 after the occurrence of a Change of Control;
(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 making payments therefor, 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
4.16.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repurchase right.
(d) To exercise the repurchase right, the Holder must deliver, on or
before the fifth calendar day prior to the Change of Control Purchase Date,
written notice to the Company (or an agent designated by the Company for such
purpose) of the Holder's exercise of such right, together with (i) the Security
or Securities with respect to which the right is being exercised, duly endorsed
for transfer with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security completed, and (ii) if the Change of Control Purchase
Date falls between any record date for the payment of interest on the Securities
and the next succeeding interest payment date, an amount equal to the interest
which the Holder is entitled to receive on such interest payment date; provided,
however, that with respect to Securities held of record by DTC, the Company or
its designated agent may accept as tendered for repurchase pursuant to this
Section 4.16 Securities tendered by means of a book entry in accordance with the
normal procedures of DTC, provided that any such interest amount shall be
delivered by the Holder to the Company or its designated agent. Notwithstanding
the foregoing, if prior to the date that a Change of Control Notice is required
to be mailed, a notice of optional redemption of all of the outstanding
Securities has been mailed in accordance with the terms of this Indenture, the
Company's obligation to send the Change of Control Notice shall be suspended
(unless the Company shall default in the payment of the redemption price or
accrued interest).
(e) On the Change of Control Purchase Date, the Company shall (i)
accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Notice, (ii) if the Company
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appoints a depository or Paying Agent, deposit with such depository or Paying
Agent money sufficient to pay the purchase price of all Securities or portions
thereof so tendered and (iii) deliver to the Trustee Securities so accepted
together with an Officers' Certificate stating the Securities or portions
thereof tendered to the Company. DTC, the Company or the Paying Agent, as the
case may be, shall promptly mail to the Holder of Securities so accepted payment
in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail to such Holders of Physical Securities a new Security
equal in principal amount to any unpurchased portion of the Security
surrendered. The Company will publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Purchase
Date. For purposes of this Section 4.16, the Trustee shall act as the Paying
Agent.
(f) The Company, to the extent applicable and if required by law, will
comply with Sections 1.3 and 1.4 of the Exchange Act and the provisions of
Regulation 14E and any other tender offer rules under the Exchange Act and any
other federal and state securities laws, rules and regulations that may then be
applicable to any offer by the Company to purchase the Securities pursuant to
the provisions of this Section 4.16.
Section 4.17 Provision of Financial Information.
The Company shall file on a timely basis with the SEC, to the extent
such filings are accepted by the SEC 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 1.3 or 1.5 of the Exchange Act. The Company 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 files such reports
and documents with the SEC or the date on which the Company would be required to
file such reports and documents if the Company were so required and, if filing
such reports and documents with the SEC is not accepted by the SEC 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.
Section 4.18 Registration Rights Agreement.
The Company will comply with all of the terms and provisions of the
Registration Rights Agreement, including, without limitation, its obligation to
pay Additional Interest (as defined therein) and to notify the Trustee
immediately of the occurrence of any Registration Default (as defined therein)
thereunder.
Section 4.19 Qualification of Indenture.
The Company shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agreement and shall pay
all costs and expenses (including attorneys' fees for the Company and the
Trustee) incurred in connection therewith. In connection with any such
qualification of this Indenture under the TIA, the Trustee shall be entitled to
receive from the Company any such Officers' Certificates, Opinions of Counsel or
other documentation as it may reasonably request.
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Section 4.20 Payment of Existing Secured Debt.
Concurrently with the execution of this Indenture, the Indebtedness
under the Endowment Energy Partners loan, the Endowment Energy Co-Investment
Partnership loan and the Joint Energy Development Investments Limited
Partnership loan shall be paid in full.
Section 4.21 Replacement Mortgages.
The Company will enter into one or more Acts of Mortgage, Security
Agreement, Assignment of Production and Financing Statement (the "Replacement
Mortgages") in form and substance acceptable to the Purchaser covering the
Collateral together with any related documents within 60 days of the Issue Date,
which Replacement Mortgages shall replace the Assigned Mortgage. The Company
will cause to be prepared by title attorneys acceptable to the Purchaser and to
be delivered to the Purchaser title opinions in form and substance satisfactory
to the Purchaser covering the Collateral within 60 days of the Issue Date.
Section 4.22 Impairment of Security Interest.
Subject to any Subordination Agreement, neither the Company nor any of
its Subsidiaries will take or omit to take any action which action or omission
would have the result of adversely affecting or impairing the Security Interest
in favor of the Trustee, on behalf of itself and the Holders, with respect to
the Collateral, and neither the Company nor any of its Subsidiaries shall grant
to any Person, or suffer any Person (other than the Company) to have (other than
to the Trustee on behalf of the Trustee and the Holders) any interest whatsoever
in the Collateral other than Liens securing the Bank Credit Agreement and Liens
permitted by the Security Documents. Neither the Company nor any of its
Subsidiaries will enter into any agreement or instrument that by its terms
requires the proceeds received from any sale of Collateral to be applied to
repay, redeem, defease or otherwise acquire or retire any Indebtedness of any
Person, other than pursuant to any Subordination Agreement, this Indenture, the
Securities and the Security Documents.
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.1 When Company May Merge, etc.
The Company shall not consolidate with or merge with any Person or
convey, transfer or lease all or substantially all of its Property to any
Person, unless:
(1) the Company survives such merger or the Person formed by such
consolidation or into which the Company is merged or that acquires by
conveyance or transfer, or which leases, all or substantially all of the
Property of the Company is a corporation organized and existing under the
laws of the United States, any state thereof or the District of Columbia
and expressly assumes, by supplemental indenture, the due and punctual
payment of the principal of (and premium, if any) and interest on all the
Securities and the performance of every other covenant and obligation of
the Company under this Indenture;
(2) immediately before and after giving effect to such transaction no
Default or Event of Default exists;
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(3) immediately after giving effect to such transaction on a pro forma
basis, the Consolidated Net Worth of the Company (or, if not the Company,
the surviving or transferee entity) is equal to or greater than the
Consolidated Net Worth of the Company immediately before such transaction;
and
(4) immediately after giving effect to such transaction on a pro forma
basis, the Company (or, if not the Company, the surviving or transferee
entity) would be able to incur $1.00 of additional Indebtedness (excluding
Permitted Indebtedness) under the test, described in the first paragraph of
Section 4.9.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
Section 5.2 Successor Corporation Substituted.
Upon any consolidation, merger, conveyance, lease or transfer in
accordance with Section 5.1, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, lease or
transfer is made 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 successor had been named as the Company herein and thereafter (except
in the case of a lease) the predecessor corporation will be relieved of all
further obligations and covenants under this Indenture and the Securities.
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.1 Events of Default.
An "Event of Default" occurs upon:
(1) default in the payment of principal of, or premium, if any, on,
the Securities when due at maturity, upon repurchase, upon acceleration or
otherwise, including failure of the Company to repurchase the Securities
required to be repurchased, at the required purchase price, upon a Change
of Control or in the event of a Net Proceeds Offer, and failure to make any
optional redemption payment;
(2) default in the payment of any installment of interest on the
Securities when due (including any interest payable in connection with
optional redemption payments) and continuance of such default for 30 days;
(3) default on any other Indebtedness of the Company, any Subsidiary
Guarantor or any other Subsidiary if either (a) such default results from
the failure to pay principal of, premium, if any, or interest on any such
Indebtedness when due which aggregates in excess of $5.0 million and
continuance of such default beyond any applicable cure, forbearance or
notice period, or (b) as a result of such default, the maturity of such
Indebtedness has been accelerated prior to its scheduled maturity, without
such default and acceleration having been rescinded or annulled within
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a period of 10 days, and the principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in
default, or the maturity of which has been so accelerated, aggregates $5.0
million or more;
(4) default in the performance, or breach, of any other covenant of
the Company or any Subsidiary Guarantor in this Indenture and failure to
remedy such default within a period of 60 days after written notice thereof
from the Trustee or Holders of 25% in principal amount of the outstanding
Securities;
(5) the entry by a court of one or more judgments or orders against
the Company, any Subsidiary Guarantor or any other Subsidiary in an
aggregate amount in excess of $5.0 million and which are not covered by
insurance written by third parties that has not been vacated, discharged,
satisfied or stayed pending appeal within 60 days from the entry thereof;
(6) a Guarantee by a Subsidiary Guarantor that is a Material
Subsidiary shall cease to be in full force and effect (other than a release
of a Guarantee by designation of a Subsidiary Guarantor as an Unrestricted
Subsidiary) or any Subsidiary Guarantor shall deny or disaffirm its
obligations with respect thereto;
(7) the Company or any Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief against it in an
involuntary case or proceeding,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
or
(E) admits in writing that it generally is unable to pay its
debts as the same become due;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief (with respect to the petition commencing such
case) against the Company or any Material Subsidiary in an involuntary
case or proceeding,
(B) appoints a Custodian of the Company or any Material
Subsidiary or for all or substantially all of its respective property,
or
(C) orders the liquidation of the Company or any Material
Subsidiary,
and the order or decree remains unstayed and in effect for 60 days; or
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(9) any of the Security Documents cease to be in full force and effect
(other than in accordance with their respective terms or the terms of this
Indenture), or any of the Security Documents cease to give the Trustee the
Liens, rights, powers and privileges purported to be created thereby, or
any Security Document is declared null and void, or the Company denies any
of its obligations under any Security Document or any Collateral becomes
subject to any Lien other than the Liens created or permitted by the
Security Documents and a Bank Credit Agreement.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
Section 6.2 Acceleration.
If an Event of Default (other than an Event of Default specified in
clauses (7) and (8)) under Section 6.1 occurs and is continuing, then and in
every such case the Trustee or the Holders of not less than 25% in principal
amount of the Securities then outstanding may declare the unpaid principal of
(or the Change of Control Purchase Price if the Event of Default includes
failure to pay the Change of Control Purchase Price), and accrued and unpaid
interest on, all the Securities then outstanding to be due and payable, by a
notice in writing to the Company (and to the Trustee, if given by Holders) and
upon any such declaration such principal, premium, if any, and accrued and
unpaid interest shall become immediately due and payable, notwithstanding
anything contained in this Indenture or the Securities to the contrary. If an
Event of Default specified in clauses (7) or (8) above occurs, all unpaid
principal of, premium, if any, and accrued interest on, the Securities then
outstanding will become due and payable, without any declaration or other act on
the part of the Trustee or any Holder. Except as set forth in the first
sentence of this paragraph, the Company hereby waives presentment, demand,
notice of dishonor, notice of acceleration, notice of intent to accelerate, and
all other notices and demands.
The Holders of a majority in principal amount of the then outstanding
Securities, by written notice to the Company, the Subsidiary Guarantors and the
Trustee, may rescind and annul a declaration of acceleration and its
consequences if (1) the Company or any Subsidiary Guarantor has paid or
deposited with such Trustee a sum sufficient to pay (A) all overdue installments
of interest on all the Securities, (B) the principal of and premium, if any, on
any Securities that have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed therefor in
the Securities, (C) to the extent that payment of such interest is lawful,
interest on the defaulted interest at the rate or rates prescribed therefor in
the Securities, and (D) all money paid or advanced by the Trustee thereunder and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; (2) all Events of Default, other than the non-
payment of the principal of any Securities that have become due solely by such
declaration of acceleration, have been cured or waived as provided in this
Indenture; and (3) the rescission would not conflict with any judgment or decree
of a court of competent jurisdiction. No such rescission will affect any
subsequent Event of Default or impair any right consequent thereon.
Section 6.3 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue, in its own name and as trustee of an express trust, any available remedy
by proceeding at law or in equity to collect the payment of principal or
interest on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
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The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of
any other remedy. All available remedies are cumulative.
Section 6.4 Waiver of Past Defaults.
Subject to Sections 6.7 and 9.2, the Holders of at least a majority in
principal amount of Securities then outstanding by notice to the Trustee may
waive an existing Default or Event of Default and its consequences, except a
Default or Event of Default in payment of principal or interest on the
Securities, including any optional redemption payments or Change of Control or
Net Proceeds Offer payments.
Section 6.5 Control by Majority.
The Holders of a majority in principal amount of the Securities will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exer cising any trust or power
conferred on such Trustee, provided that (1) such direction is not in conflict
with any rule of law or with this Indenture and (2) the Trustee may take any
other action deemed proper by such Trustee that is not inconsistent with such
direction.
Section 6.6 Limitation on Remedies.
No Holder of any of the Securities will have any right to institute
any proceeding, judicial or otherwise, or for the appointment of a receiver or
trustee or pursue any remedy under this Indenture, unless:
(1) such Holder has previously given notice to the Trustee of a
continuing Event of Default,
(2) the Holders of not less than 25% in principal amount of the
outstanding Securities have made written request to such Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee under this Indenture,
(3) such Holder or Holders have offered to such Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request,
(4) such Trustee for 30 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding, and
(5) no direction inconsistent with such written request has been given
to such Trustee during such 30-day period by the Holders of a majority in
principal amount of the outstanding Securities.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over other Holders.
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Section 6.7 Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the Holder of
any Securities will have the right, which is absolute and unconditional, to
receive payment of the principal, of premium, if any, and interest on such
Securities on the stated maturity therefor and to institute suit for the
enforcement of any such payment, and such right may not be impaired without the
consent of such Holder.
Section 6.8 Collection Suit by Trustee.
If an Event of Default in payment of interest or principal specified
in Section 6.1(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any Subsidiary Guarantor for the whole amount of principal of and interest on
the Securities remaining unpaid and such further amounts as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation and expenses of the Trustee, its agents and counsel.
Section 6.9 Trustee May File Proofs of Claim.
(a) The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Holders allowed in any judicial proceedings relative to the
Company, the Subsidiary Guarantors, their creditors or their property and may
collect and receive any money or other property payable or deliverable on any
such claims and to distribute the same.
(b) 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 rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article Six, it
shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.7;
Second: to Holders for interest accrued on the Securities, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Securities for interest, if any;
Third: to Holders for the principal amounts (including any premium)
owing under the Securities, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for the
principal thereof (including any premium); and
Fourth: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10.
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Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7, or a suit by Holders of more than 10% in principal
amount of the then outstanding Securities.
ARTICLE SEVEN
TRUSTEE
Section 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such rights and powers vested in it by this Indenture and use the
same degree of care and skill in such exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically
set forth (or incorporated by reference) in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine such certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph (c) does not limit the effect of paragraph (b) of
this Section 7.1.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by an officer of the Trustee, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.5 or any other direction permitted by this Indenture,
and the Trustee shall be entitled from time to time to request such a
direction.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.1.
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(e) The Trustee shall be under no obligation and may refuse to perform
any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.2 Rights of Trustee.
Subject to Section 7.1:
(a) The Trustee may rely on and shall be protected in acting or
refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper person. 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 or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney, to the extent reasonably required by such inquiry or
investigation.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) For all purposes under this Indenture, the Trustee shall not be
deemed to have notice or knowledge of any Event of Default (other than under
Section 6.1(1) or (2)) unless a Trust Officer knows of such Event of Default or
unless written notice of any Event of Default (other than under Section 6.1(1)
or (2)) is received by the Trustee at its address in Section 13.2 and such
notice references the Securities generally, the Company or this Indenture.
Section 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Subsidiaries or Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
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Section 7.4 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities other than its certificate of authentication.
Section 7.5 Notice of Defaults.
If a Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Holder pursuant to Section 13.2 a notice
of the Default within 90 days after it occurs. Except in the case of a Default
in any payment on any Security, the Trustee may withhold the notice if and so
long as the board of directors, executive committee or a trust committee of its
directors and/or officers in good faith determines that withholding the notice
is in the interests of Holders.
Section 7.6 Reports by Trustee to Holders.
Within 60 days after each May 15, beginning with May 15, 1998, the
Trustee shall mail to each Holder a brief report dated as of such May 15 that
complies with TIA (S) 313(a), but only if such report is required in any year
under TIA (S) 313(a). The Trustee also shall comply with TIA (S)(S) 313(b) and
313(c).
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each stock exchange, if any, on which the Securities are
listed. The Company shall promptly notify the Trustee in writing if the
Securities become listed on any national securities exchange or of any delisting
thereof.
Section 7.7 Compensation and Indemnity.
The Company shall pay the Trustee from time to time reasonable
compensation (including compensation for extraordinary services relating to
default administration) for its services (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust). The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses, disbursements and advances incurred by it.
Such expenses may include the reasonable compensation and expenses of the
Trustee's agents and counsel.
The Trustee shall not be under any obligation to institute any suit,
or take any remedial action under this Indenture, or to enter any appearance or
in any way defend any suit in which it may be a defendant, or to take any steps
in the execution of the trusts created hereby or thereby or in the enforcement
of any rights and powers under this Indenture, until it shall be indemnified to
its satisfaction against any and all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture, including compensation for services, costs, expenses, outlays,
counsel fees and other disbursements, and against all liability not due to its
negligence or willful misconduct. The Company shall indemnify the Trustee
against any loss or liability incurred by it in connection with the acceptance
and administration of the trust and its duties hereunder as Trustee, Registrar
and/or Paying Agent, 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. The Trustee shall notify the Company of
any claim for which it may seek indemnity; however, unless the position of the
Company is prejudiced by such failure, the failure of the Trustee to promptly
notify the Company shall not limit its right to indemnification. The Company
shall defend each such claim and the Trustee shall
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cooperate in the defense. The Trustee may retain separate counsel and the
Company shall reimburse the Trustee for the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through the Trustee's negligence or
willful misconduct.
To satisfy the Company's payment obligations in this Section 7.7, the
Trustee shall have a claim prior to that of the Holders of the Securities on all
money or property held or collected by the Trustee, except that held in trust to
pay principal of and interest on particular Securities.
When the Trustee incurs expenses or renders services after the
occurrence of any Event of Default specified in Sections 6.1(7) or (8), the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
Section 7.8 Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee, in writing. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting as Trustee hereunder.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the claim provided for in Section 7.7, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession
to each Holder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee. Any successor Trustee shall comply with
TIA (S) 310(a)(5).
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Section 7.9 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust assets to, another corporation, the
successor corporation without any further act shall be the successor Trustee;
provided such corporation or association shall be otherwise eligible and
qualified under this Article.
Section 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA (S)(S) 310(a)(1), (2) and (5). The Trustee (or, in the case
of a Trustee that is a corporation included in a bank holdings company system,
the related bank holding company) shall have a combined capital and surplus of
at least $100 million as set forth in its most recent published annual report of
condition, and have a Corporate Trust Office in the City of New York. In
addition, if the Trustee is a corporation included in a bank holding company
system, the Trustee, independently of such bank holding company, shall meet the
capital requirements of TIA (S) 310(a)(2). The Trustee shall comply with TIA (S)
310(b); provided, however, that there shall be excluded from the operation of
TIA (S) 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 (S)
310(b)(1) are met. The provisions of TIA (S) 310 shall apply to the Company, as
obligor of the Securities.
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA (S) 311(a). A Trustee who has
resigned or been removed shall be subject to TIA (S) 311(a) to the extent
indicated therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
Section 8.1 Termination of Company's Obligations.
(a) This Indenture shall cease to be of further effect (subject to
Section 8.5) when all outstanding Securities theretofore authenticated and
issued hereunder have been delivered (other than any Securities which shall have
been destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.7) to the Trustee for cancellation and the Company has
paid all sums payable hereunder and under the Securities.
(b) In addition to the provisions of Section 8.1, at the Company's
option, either (i) the Company and the Subsidiary Guarantors shall be deemed to
have been discharged from their obligations with respect to the Securities and
the provisions of this Indenture (subject to Section 8.5) on the 91st day after
the applicable conditions set forth below have been satisfied or (ii) the
Company and the Subsidiary Guarantors shall cease to be under any obligation to
comply with any term, provision or condition set forth in Sections 4.2, 4.3, 4.7
through 4.17, 5.1 and the last paragraph of Section 11.1 with respect to the
Securities at any time after the applicable conditions set forth below have been
satisfied:
(1) the Company or any Subsidiary Guarantor shall have deposited or
caused to be deposited irrevocably with the Trustee as trust funds in
trust, specifically pledged as security for,
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and dedicated solely to, the benefit of the Holders (i) money, or (ii) U.S.
Government Obligations, which through the payment of interest and principal
in respect thereof in accordance with their terms will provide (without any
reinvestment of such interest or principal), not later than one day before
the due date of any payment, money or (iii) a combination of (i) and (ii),
in an amount sufficient, in the opinion (with respect to (ii) and (iii)) of
a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee at or prior to the
time of such deposit, to pay and discharge each installment of principal of
and interest on the outstanding Securities on the dates such installments
are due;
(2) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or a
Subsidiary Guarantor or any Subsidiary is a party or by which any of them
is bound, as evidenced to the Trustee in an Officers' Certificate delivered
to the Trustee concurrently with such deposit;
(3) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that Holders will not recognize income, gain or loss
for federal income tax purposes as a result of the Company's exercise of
its option under this Section 8.1 and will be subject to federal income tax
on the same amount and in the same manner and at the same time as would
have been the case if such option had not been exercised, and, in the case
of the Securities being discharged pursuant to clause (i) of this Section
8.1(b), accompanied by a ruling to that effect received from or published
by the Internal Revenue Service (it being understood that (A) such Opinion
of Counsel shall also state, if applicable, that such ruling is consistent
with the conclusions reached in such Opinion of Counsel and (B) the Trustee
shall be under no obligation to investigate the basis of correctness of
such ruling);
(4) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
Section 8.1 will not result in any of the Company, the Trustee or the trust
created by the Company's deposit of funds hereunder becoming or being
deemed to be an "investment company" under the Investment Company Act of
1940, as amended;
(5) the Company or any Subsidiary Guarantor shall have paid or duly
provided for payment of all amounts then due to the Trustee pursuant to
Section 7.7; and
(6) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for in this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with.
(c) The Company or any Subsidiary Guarantor may make an irrevocable
deposit pursuant to this Section 8.1 only if at such time it is not prohibited
from doing so under the provisions of the Subordination Agreement and the
Company shall have delivered to the Trustee and any Paying Agent an Officers'
Certificate to that effect.
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Section 8.2 Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.1. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with the provisions of the Securities and this Indenture to the
payment of principal of and interest on the Securities. Money and securities so
held in trust need not be segregated from other funds except to the extent
required by law.
The term "U.S. Government Obligations" means direct obligations of the
United States for the payment of which the full faith and credit of the United
States is pledged.
Section 8.3 Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company
upon request any money or securities held by them at any time in excess of
amounts required to pay principal of or interest on the Securities. The Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for one
year; provided, however, that the Trustee or such Paying Agent before being
required to make any such repayment, may at the expense of the Company cause to
be published once in a newspaper of general circulation in the City of New York
or mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing any unclaimed balance of such money then
remaining will be paid to the Company. After repayment to the Company, any
Holder entitled to such money shall thereafter, as an unsecured general
creditor, look (unless an applicable law designates another Person) only to the
Company for payment, 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 8.4 Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.1 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and the Subsidiary Guarantors' obligations under this Indenture and
the Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.1 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with Section 8.1; provided, however, that if the Company or any Subsidiary
Guarantor has made any payment of interest on or principal of any Securities
because of 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 or U.S. Government Obligations held by the
Trustee or Paying Agent.
Section 8.5 Survival of Certain Obligations.
Notwithstanding the satisfaction and discharge of this Indenture and
of the Securities referred to in Section 8.1(a) and (b)(i), the respective
obligations of the Company, the Subsidiary Guarantors and the Trustee under
Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 4.1 (with respect to Section
8.1(a)), 4.4, 6.7, 7.7, 7.8, 8.2, 8.3, 8.4, 11.3, and 11.4 shall survive until
the Securities are no longer outstanding, and thereafter the obligations of the
Company and the Trustee under Sections 7.7, 8.2,
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8.3, and 8.4 shall survive. Nothing contained in this Article Eight shall
abrogate any of the obligations or duties of the Trustee under this Indenture.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities without notice to or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Sections 5.1 or 11.2;
(3) to provide for uncertificated Securities in addition to
certificated Securities;
(4) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(5) to make any change that would provide any additional benefit or
rights to the Holders or that does not adversely affect the rights of any
Holder.
Notwithstanding the above, the Trustee and the Company may not make
any change that adversely affects the legal rights of any Holders hereunder.
Section 9.2 With Consent of Holders.
Subject to Section 6.7, the Company, when authorized by a Board
Resolution, and the Trustee may amend or supplement this Indenture or the
Securities with the written consent of the Subsidiary Guarantors and the Holders
of at least a majority of the principal amount of the Securities then
outstanding, and the Holders of a majority in principal amount of the
Securities, together with the Subsidiary Guarantors, may waive compliance by the
Company with any provision of this Indenture or the Securities, including, but
not limited to, a release of items of Collateral pursuant to Section 12.5(b).
However, without the consent of each Holder affected, an amendment, supplement
or waiver, including a waiver pursuant to Section 6.4, may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of interest on the Securities;
(3) reduce the principal amount of the Securities or extend the
maturity schedule of the Securities or modify the redemption or repurchase
provisions of the Securities;
(4) waive a default in the payment of the principal or interest on the
Securities;
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(5) make any Security payable in money other than that stated in the
Security;
(6) make any change in the subordination of the Securities in a manner
that is adverse to the Holders; or
(7) make any change in Section 6.4 or Section 6.7 or in this sentence
of this Section 9.2.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof. Any amendment, waiver or consent shall be deemed effective upon
receipt by the Trustee of the necessary consents and shall not require execution
of any supplemental indenture to be effective.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders of each Security
affected thereby, with a copy to the Trustee, a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such notice,
or any defect therein, shall not, however, in any way impair or affect the
validity of any such amendment, waiver, consent or supplemental indenture.
Except as otherwise provided in Section 6.4 and this Section 9.2, the Holders of
a majority in aggregate principal amount of the Securities then outstanding may
waive compliance in a particular instance by the Company or the Subsidiary
Guarantors with any provisions of this Indenture or the Securities.
Section 9.3 Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Holder of a
Security shall bind the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security. However,
until an amendment, supplement or waiver becomes effective, any such Holder or
subsequent Holder may revoke the consent as to his Security or portion of a
Security. For such revocation to be effective, the Trustee must receive the
notice of revocation before the date the amendment, supplement or waiver becomes
effective.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it makes a change described in any of clauses (1)
through (7) of Section 9.2. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
Section 9.5 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company
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or the Trustee so determines, the Company in exchange for the Security shall
issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
Section 9.6 Trustee Protected.
The Trustee shall sign any amendment or supplement or waiver
authorized pursuant to this Article if the amendment or supplement or waiver
does not adversely affect the rights of the Trustee. If it does adversely
affect the rights of the Trustee, the Trustee may but need not sign it. In
signing such amendment or supplement or waiver the Trustee shall be entitled to
receive, and (subject to Article Seven) shall be fully protected in relying
upon, an Opinion of Counsel stating that such amendment or supplement or waiver
is authorized or permitted by and complies with this Indenture. The Company may
not sign an amendment or supplement until the Board of Directors of the Company
approves it.
ARTICLE TEN
SUBORDINATION
Section 10.1 Subordination of Security Interest.
The Company agrees, and each Holder by its acceptance thereof likewise
agrees, that the Trustee, on behalf of each Holder, may enter into a
Subordination Agreement with the Company and any lender pursuant to the terms of
the Bank Credit Agreement; provided that (i) entering into the Bank Credit
Agreement at the time the Subordination Agreement is entered into is not
prohibited by Section 4.9 and (ii) the Liens upon any Property securing
Indebtedness under the Bank Credit Agreement are Permitted Liens both as
evidenced to the Trustee in an Officers' Certificate delivered to the Trustee
concurrently with the entering into of the Subordination Agreement.
Section 10.2 Holders Authorize Trustee To Effectuate Subordination.
Each Holder by his acceptance thereof authorizes and expressly directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article Ten and appoints the
Trustee his attorney-in-fact for such purpose.
ARTICLE ELEVEN
GUARANTEES
Section 11.1 Unconditional Guarantee.
Each Subsidiary Guarantor will unconditionally, jointly and severally,
guarantees (such guarantee to be referred to herein as the "Guarantee") 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:
(1) the principal of 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
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the Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the terms hereof
and thereof; and
(2) in case of any extension of time of payment or renewal of any
Securities or of any such other obligations, that same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise,
subject, however, in the case of clauses (1) and (2) above, to the limitations
set forth in Section 11.4.
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 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 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, notice of intent to
accelerate, notice of acceleration, and all other notices and all demands
whatsoever and covenants that this Guarantee will not be discharged except by
complete performance of the obligations contained in the Securities, this
Indenture and in this 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 Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor agrees it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Subsidiary Guarantor further agrees that, as between 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 Six for the purposes of this 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 Six, such obligations (whether or not due and
payable) shall forthwith become due and payable by each Subsidiary Guarantor for
the purpose of this Guarantee.
The Company agrees to cause each Person (other than an Unrestricted
Subsidiary) that shall become a Material Subsidiary after the date of this
Indenture to become a Subsidiary Guarantor and execute and deliver a supplement
to this Indenture pursuant to which such Person will guarantee the payment of
the Securities on the same terms and conditions as contained in this Section
11.1.
Section 11.2 Subsidiary Guarantors May Consolidate, etc., on Certain
Terms.
(a) Except as set forth in Articles Four and Five, 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 or conveyance of the property of a
Subsidiary Guarantor as an entirety or substantially as an entirety, to the
Company or another Subsidiary Guarantor.
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(b) Except as set forth in Articles Four and Five, 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 corporation or corporations
other than the Company or a 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 or conveyance of the property of a Subsidiary
Guarantor as an entirety or substantially as an entirety, to a corporation 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, subject to Section 11.2(a) and 11.3, (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 in Sections 4.1 through 4.16,
and (iii) each Subsidiary Guarantor hereby covenants and agrees that, upon any
such consolidation, merger, sale or conveyance, such Subsidiary Guarantor's
Guarantee set forth in this Article Eleven, 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 the merger),
by supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by the corporation formed by such consolidation, or
into which the Subsidiary Guarantor shall have merged, or by the corporation
that shall have acquired such property. In the case of any such consolidation,
merger, sale or conveyance and upon the assumption by the successor corporation,
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 corporation shall succeed to and be substituted for
the Subsidiary Guarantor with the same effect as if it had been named herein as
a Subsidiary Guarantor.
Section 11.3 Release of a Subsidiary Guarantor.
Upon the sale or disposition of a Subsidiary Guarantor (or
substantially all of its assets), which is otherwise in compliance with the
terms of this Indenture, including but not limited to the provisions of Section
11.2, such Subsidiary Guarantor shall be deemed released from all of its
Guarantee and related obligations in this Indenture; provided that any such
termination 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 Subsidiary shall also terminate or be released upon such
sale or transfer. Each Subsidiary Guarantor that is designated as an
Unrestricted Subsidiary in accordance with this Indenture shall be released from
all of its Guarantee and related obligations set forth in this Indenture for so
long as it remains an Unrestricted Subsidiary. The Trustee shall deliver an
appropriate instrument evidencing such release upon receipt of a request by the
Company 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. Any Subsidiary Guarantor not
so released remains liable for the full amount of principal of and interest on
the Securities as provided in this Article Eleven.
Section 11.4 Limitation of Subsidiary Guarantor's Liability.
Each Subsidiary Guarantor and by its acceptance hereof each Holder
hereby confirms that it is the intention of all such parties that the guarantee
by such Subsidiary Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of any federal or state law. To
effectuate the foregoing intention, the Holders and each Subsidiary Guarantor
hereby irrevocably agree that the obligations of each Subsidiary Guarantor under
the Guarantee shall be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor
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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 Guarantee or pursuant to Section 11.5, result in
the obligations of such Subsidiary Guarantor under the Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law. This Section 11.4 is for the benefit of the creditors of each
Subsidiary Guarantor.
Section 11.5 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 the Guarantee, such Funding Guarantor shall be
entitled to a contribution from each other Subsidiary Guarantor 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 the
Guarantee.
Section 11.6 Execution and Delivery of Guarantee.
To evidence its Guarantee set forth in Section 11.1, each Subsidiary
Guarantor hereby agrees to execute the Guarantee in substantially the form of
Exhibit A-1 to be endorsed on each Security ordered to be authenticated and
delivered by the Trustee and each Subsidiary Guarantor agrees that this
Indenture shall be executed on behalf of each Subsidiary Guarantor by its
President or one of its Vice Presidents and attested to by an Officer. Each
Subsidiary Guarantor hereby agrees that its Guarantee set forth in Section 11.1
shall remain in full force and effect notwithstanding any failure to endorse on
each Security a notation of such Guarantee. Each such Guarantee shall be signed
on behalf of each Subsidiary Guarantor by one Officer, (who shall have been duly
authorized by all requisite corporate actions) prior to the authentication of
the Security on which it is endorsed, and the delivery of such Security by the
Trustee, after the authentication thereof hereunder, shall constitute due
delivery of the Guarantee set forth in this Indenture on behalf of the
Subsidiary Guarantors. Such signatures upon the Guarantee may be by manual or
facsimile signature of such officers and may be imprinted or otherwise
reproduced on the Guarantee, and in case any such officer who shall have signed
the Guarantee shall cease to be such officer before the Security on which such
Guarantee is endorsed shall have been authenticated and delivered by the Trustee
or disposed of by the Company, such Security nevertheless may be authenticated
and delivered or disposed of as though the person who signed the Guarantee had
not ceased to be such officer of the Subsidiary Guarantor.
Section 11.7 Severability.
In case any provision of this 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.
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ARTICLE TWELVE
SECURITY
Section 12.1 Grant of Security Interest.
To secure the due and punctual payment of the principal of, premium,
if any, and interest on the Securities when and as the same shall be due and
payable, whether on an Interest Payment Date, at maturity, by acceleration,
purchase, repurchase, redemption or otherwise, and interest on the overdue
principal of, premium, if any, and interest (to the extent permitted by law), if
any, on the Securities and the performance of all other Obligations of the
Company to the Holders or the Trustee under this Indenture and the Securities,
the Company hereby covenants to (a) cause the Assignment to be executed and
delivered concurrently with this Indenture and (b) execute and deliver the
Replacement Mortgages within the period provided for by Section 4.21. The
Security Documents shall grant to the Trustee a security interest in the
collateral therein described (collectively referred to herein as the
"Collateral") and when filed shall be deemed hereby incorporated by reference
herein to the same extent and as fully as if set forth in their entirety at this
place, and reference is made hereby to each Security Document for a more
complete description of the terms and provisions thereof. Each Holder, by
accepting a Security, agrees to all of the terms and provisions of the Security
Documents and the Trustee agrees to all of the terms and provisions of the
Security Documents signed by it.
Section 12.2 Execution of Security Documents.
Concurrently with the execution and delivery of this Indenture, the
Trustee, on behalf of each Holder, will execute and deliver the Assignment, and
the Company and the Trustee, on behalf of each Holder, will execute and deliver
the Assigned Mortgage Amendment. Within the period provided for by Section
4.21, the Company and the Trustee, on behalf of each Holder, will execute and
deliver the Replacement Mortgages.
Section 12.3 Recording and Opinions.
(a) The Company shall take or cause to be taken all action required to
perfect, maintain, preserve and protect the Security Interest, including,
without limitation, the filing of financing statements, continuation statements
and any instruments of further assurance, in such manner and in such places as
may be required by law fully to preserve and protect the rights of the Holders
and the Trustee under this Indenture and the Security Documents to all property
comprising the Collateral. The Company shall from time to time promptly pay all
financing and continuation statement recording and/or filing fees, charges and
taxes relating to this Indenture and the Security Documents, any amendments
thereto and any other instruments of further assurance required pursuant to the
Security Documents.
(b) The Company shall furnish to the Trustee, at such time as required
by (S) 314(b) of the TIA, Opinion(s) of Counsel either (a) substantially to the
effect that, in the opinion of such counsel, this Indenture and the grant of a
Security Interest in the Collateral intended to be made by the Security
Documents and all other instruments of further assurance, including, without
limitation, financing statements, have been properly recorded and filed to the
extent necessary to perfect the Security Interest in the Collateral created by
the Security Documents and reciting the details of such action, and stating that
as to the Security Interests created pursuant to the Security Documents, such
recordings and filings are the only recordings and filings necessary to give
notice thereof and that no re-recordings or refilings are
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necessary to maintain such notice (other than as stated in such opinion), or (b)
to the effect that, in the opinion of such counsel, no such action is necessary
to perfect such Security Interest.
(c) To the extent required by the TIA, the Company shall furnish to
the Trustee on June 1 in each year, beginning with 1998, an Opinion of Counsel,
dated as of such date, either (i)(A) stating that, in the opinion of such
counsel, action has been taken with respect to the recording, filing, re-
recording and refiling of all supplemental indentures, financing statements,
continuation statements and other documents as is necessary to maintain the Lien
of the Security Documents and reciting with respect to the Security Interest in
the Collateral the details of such action or referring to prior Opinions of
Counsel in which such details are given, and (B) stating that, based on relevant
laws as in effect on the date of such Opinion of Counsel, all financing
statements, continuation statements and other documents have been executed and
filed that are necessary as of such date and during the succeeding 24 months
fully to maintain the Security Interests of the Holders and the Trustee
hereunder and under the Security Documents with respect to the Collateral, or
(ii) stating that, in the opinion of such counsel, no such action is necessary
to maintain such Lien.
Section 12.4 Release of Collateral.
(a) The Trustee, in its capacity as Trustee under the Security
Documents, shall not at any time release Collateral from the Security Interest
created by this Indenture and the Security Documents unless such release is in
accordance with the provisions of this Indenture and the Security Documents.
(b) At any time when an Event of Default shall have occurred and be
continuing, no release of Collateral pursuant to the provisions of this
Indenture and the Security Documents shall be effective as against the Holders
of the Securities.
(c) The release of any Collateral from the terms of the Security
Documents shall not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Collateral is
released pursuant to this Indenture and the Security Documents. To the extent
applicable, the Company shall cause TIA (S) 314(d) relating to the release of
property from the Lien of the Security Documents and relating to the
substitution therefor of any property to be subjected to the Lien of the
Security Documents to be complied with. Any certificate or opinion required by
TIA (S) 314(d) may be made by an Officer of the Company, except in cases where
TIA (S) 314(d) requires that such certificate or opinion be made by an
independent Person, which Person shall be an independent engineer, appraiser or
other expert selected or approved by the Trustee in the exercise of reasonable
care. A Person is "independent" if such Person (a) is in fact independent, (b)
does not have any direct financial interest or any material indirect financial
interest in the Company or in any Affiliate of the Company and (c) is not an
officer, employee, promoter, underwriter, trustee, partner or director or person
performing similar functions to any of the foregoing for the Company. The
Trustee shall be entitled to receive and rely upon a certificate provided by any
such Person confirming that such Person is independent within the foregoing
definition.
Section 12.5 Specified Releases of Collateral.
(a) The Company shall be entitled to obtain a full release of all of
the Collateral from the Security Interest upon compliance with the conditions
precedent set forth in Section 8.1 for satisfaction and discharge of this
Indenture pursuant to Section 8.1. Upon delivery by the Company to the Trustee
of an Officers' Certificate and an Opinion of Counsel, each to the effect that
such conditions precedent have been complied with (and which may be the same
Officers' Certificate and Opinion of Counsel required by
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Article Eight), the Trustee shall forthwith take all necessary action (at the
request of and the expense of the Company) to release and reconvey to the
Company all of the Collateral, and shall deliver such Collateral in its
possession to the Company and its applicable Subsidiary Guarantors including,
without limitation, the execution and delivery of releases and satisfactions
wherever required.
(b) Subject to compliance by the Company with the conditions set forth
in Sections 4.11 and 12.5(c), the Company shall be entitled to obtain a release
of, and the Trustee shall release, items of Collateral (the "Released
Interests") from the Security Interest under any of the following circumstances:
(i) Oil and gas properties of the Company that are located
onshore in South Louisiana that are not a part of the Collateral and
are of equal or greater fair market value to the Released Interests
are then subjected to the Security Interest.
(ii) All of the proceeds from the disposition of the Released
Interests are used to develop the Collateral.
(iii) The Released Interests are comprised of Farmout Interests
entered into with any Person other than a Related Person.
(iv) If, as of the date of the release of the Released
Interests, the Adjusted Consolidated Net Tangible Assets equal or
exceed the following percentages of the Company's Secured
Indebtedness:
(A) 150%, then the value of the Released Interests may be in
an amount up to $5.0 million less the value of the Released Interests
previously released pursuant to this Section 12.5(b)(iv) and Section
12.5(b)(v) at the time released;
(B) 160%, then the value of the Released Interests may be in
an amount up to $6.0 million less the value of the Released Interests
previously released pursuant to this Section 12.5(b)(iv) and Section
12.5(b)(v) at the time released;
(C) 170%, then the value of the Released Interests may be in
an amount up to $7.0 million less the value of the Released Interests
previously released pursuant to this Section 12.5(b)(iv) and Section
12.5(b)(v) at the time released;
(D) 180%, then the value of the Released Interests may be in
an amount up to $8.0 million less the value of the Released Interests
previously released pursuant to this Section 12.5(b)(iv) and Section
12.5(b)(v) at the time released;
(E) 190%, then the value of the Released Interests may be in
an amount up to $9.0 million less the value of the Released Interests
previously released pursuant to this Section 12.5(b)(iv) and Section
12.5(b)(v) at the time released; and
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(F) 200%, then the value of the Released Interests may be in
an amount up to $10.0 million less the value of the Released Interests
previously released pursuant to this Section 12.5(b)(iv) and Section
12.5(b)(v) at the time released.
(v) If, as of the date of the release of the Released Interests,
the Adjusted Consolidated Net Tangible Assets exceed 200% of the
Company's Secured Indebtedness, then the value of the Released
Interests may be in an amount equal to the positive number, if any, of
the difference of (x) the amount obtained by multiplying the
percentage amount by which the Adjusted Consolidated Net Tangible
Assets exceed 200% of the Company's Secured Indebtedness (e.g., if
Adjusted Consolidated Net Tangible Assets equal 250% of the Company's
Secured Indebtedness, then the percentage amount equals 50%) by the
principal amount of the Securities then outstanding, less (y) the
value of the Released Interests previously released pursuant to this
Section 12.5(b)(v).
(c) The release of Collateral pursuant to Section 12.5(b) is subject
to the condition that the Company deliver to the Trustee the following:
(i) a notice from the Company requesting the release of the
Released Interests, (A) describing the proposed Released Interests,
(B) in the case of Sections 12.5(b)(i), 12.5(b)(iv) and 12.5(b)(v)
above, specifying the value of such Released Interests on such date,
(C) stating that the release of such Released Interests will not
interfere with the Trustee's ability to realize the value of the
remaining Collateral and will not impair the maintenance and operation
of the remaining Collateral, (D) certifying that release of the
Released Interests complies with the terms and conditions of this
Indenture with respect thereto, (E) specifying which of the
circumstances described in Sections 12.5(b)(i), 12.5(b)(ii),
12.5(b)(iii), 12.5(b)(iv) and 12.5(b)(v) pursuant to which the
Collateral is requested to be released and (F) in the event there is
to be a substitution of property for the Released Interests,
specifying the property intended to be substituted for the Released
Interests;
(ii) an Officers' Certificate of the Company stating that (A)
the disposition covers only the Released Interests and complies with
the terms and conditions of this Indenture with respect to Asset
Dispositions, (B) there is no Default or Event of Default in effect or
continuing on the date thereof, (C) the release of the Collateral will
not result in a Default or Event of Default under this Indenture and
(D) all conditions precedent in this Indenture relating to the release
in question have been complied with; and
(iii) all documentation required by the TIA, if any, prior to
the release of the Collateral by the Trustee and, in the event there
is to be a substitution of property for the Released Interests, all
documentation necessary to effect the substitution of such new
Collateral.
Section 12.6 Form and Sufficiency of Release.
In the event that the Company has sold, exchanged, or otherwise
disposed of or proposes to sell, exchange or otherwise dispose of any portion of
the Collateral that may be sold, exchanged or otherwise disposed of by the
Company, and the Company requests the Trustee to furnish a written disclaimer,
release or quit-claim of any interest in such property under this Indenture and
the Security
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Documents, the Trustee, in its capacity as Trustee under the Security Documents,
shall execute, acknowledge and deliver to the Company (in proper form) such an
instrument promptly after satisfaction of the conditions set forth herein for
delivery of any such release. Notwithstanding the preceding sentence, all
purchasers and grantees of any property or rights purporting to be released
herefrom shall be entitled to rely upon any release executed by the Trustee
hereunder as sufficient for the purpose of this Indenture and as constituting a
good and valid release of the property therein described from the Lien of this
Indenture or of the Security Documents.
Section 12.7 Purchaser Protected.
No purchaser or grantee of any property or rights purporting to be
released herefrom shall be bound to ascertain the authority of the Trustee to
execute the release or to inquire as to the existence of any conditions herein
prescribed for the exercise of such authority; nor shall any purchaser or
grantee or any property or rights permitted by this Indenture to be sold or
otherwise disposed of by the Company be under any obligation to ascertain or
inquire into the authority of the Company to make such sale or other
disposition.
Section 12.8 Authorization of Actions To Be Taken by the Trustee Under
the Security Documents.
Subject to the provisions of the applicable Security Document and the
Subordination Agreement, (a) the Trustee may, in its sole discretion and without
the consent of the Holders, take all actions it deems necessary or appropriate
to (i) enforce any of the terms of the Security Documents and (ii) collect and
receive any and all amounts payable in respect of the Obligations of the Company
hereunder and (b) the Trustee shall have power to institute and to maintain such
suits and proceedings as it may deem expedient to prevent any impairment of the
Collateral by any act that may be unlawful or in violation of the Security
Documents or this Indenture, and such suits and proceedings as the Trustee may
deem expedient to preserve or protect its interests and the interests of the
Holders in the Collateral (including the power to institute and maintain suits
or proceedings to restrain the enforcement of or compliance with any legislative
or other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest thereunder or be prejudicial to
the interests of the Holders or of the Trustee).
Section 12.9 Authorization of Receipt of Funds by the Trustee Under the
Security Documents.
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Security Documents, and to make further
distributions of such funds to the Holders in accordance with the provisions of
Section 6.10 and the other provisions of this Indenture.
Section 12.10 Disbursement Account.
(a) To the extent that proceeds received from the disposition and
release of Collateral from the Security Interest pursuant to Section 12.5(b)(ii)
are not to be used to develop Collateral within 30 days of the receipt thereof,
such proceeds shall be deposited in the Disbursement Account, which the Trustee
shall establish and maintain in accordance with the terms and provisions of this
Indenture. The proceeds deposited in the Disbursement Account shall be invested
by the Trustee in Permitted Obligations. If no written instructions are provided
to the Trustee concerning investment of the funds in the Deposit Account, then
the Trustee is authorized to invest such funds in the Trustee's cash management
Federated Funds.
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(b) The Trustee shall release from the Disbursement Account such
proceeds or a portion thereof, as applicable, upon the delivery by the Company
to the Trustee of the following:
(i) a notice from the Company requesting the release of such
proceeds or a portion thereof, as applicable, (A) stating the amount
of such proceeds to be released, (B) stating that such proceeds will
be used to develop the Collateral within the next 30 days, (C) stating
that all prior releases of proceeds from the Disbursement Account have
been used to develop the Collateral and (D) certifying that release of
such proceeds complies with the terms and conditions of this Indenture
with respect thereto.
(ii) an Officers' Certificate of the Company stating that (A)
there is no Default or Event of Default in effect or continuing on the
date thereof, (B) the release of such proceeds will not result in a
Default or Event of Default under this Indenture and (C) all
conditions precedent in this Indenture relating to the release of the
proceeds in question have been complied with; and
(iii) all documentation required by the TIA, if any, prior to
the release of such proceeds by the Trustee.
Section 12.11 Escrow Account.
(a) Of the proceeds from the issuance of the Series A Securities, the
Escrow Funds shall be deposited in the Escrow Account on the Issue Date. The
Trustee shall establish and maintain the Escrow Account in accordance with the
terms and provisions of this Indenture, and the Trustee shall hold the Escrow
Funds for the equal and ratable benefit of the Holders without preference,
priority or distinction of any thereof over any other by reason of difference in
time of issuance, sale or otherwise, as security for the Company's Obligations
under this Indenture and the Securities to pay interest from the Issue Date
through the Interest Payment Date of June 1, 1998. The Trustee shall have sole
dominion and control over the Escrow Account and the funds from time to time on
deposit therein, and such funds may be withdrawn or transferred from the Escrow
Account only in accordance with the provisions of this Indenture to pay unpaid
and accrued interest on the Securities from the Issue Date through and including
the Interest Payment on June 1, 1998.
(b) The Escrow Funds shall be invested by the Trustee in Permitted
Obligations. All interest and other earnings on investments held in the Escrow
Account shall be for the Company's account and shall be disbursed to the Company
after the payment of all accrued and unpaid interest due on the Interest Payment
Date on June 1, 1998, to such accounts as may be designated by the Company in
written instructions delivered to the Trustee.
(c) Not earlier than June 1, 1998, the Trustee shall release from the
Escrow Account all interest and earnings on investments held in the Escrow
Account upon the delivery by the Company to the Trustee of the following:
(i) a notice from the Company requesting the release of such
earnings certifying that release of such earnings complies with the
terms and conditions of this Indenture with respect thereto.
(ii) an Officers' Certificate of the Company stating that (A)
there is no Default or Event of Default in effect or continuing on the
date thereof, (B) the release of such
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earnings will not result in a Default or Event of Default under this
Indenture and (C) all conditions precedent in this Indenture relating
to the release of the earnings in question have been complied with;
and
(iii) all documentation required by the TIA, if any, prior to
the release of such earnings by the Trustee.
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of TIA (S) 318(c), the imposed duties shall
control; provided, however, that this Section 13.1 shall not of itself require
that this Indenture or the Trustee be qualified under the TIA or constitute any
admission or acknowledgment by any party hereto that any such qualification is
required prior to the time this Indenture and the Trustee are required by the
TIA to be so qualified.
Section 13.2 Notices.
Any notice or communication shall be sufficiently given if in writing
and delivered in person, mailed by certified or registered mail (return receipt
requested) or overnight courier guaranteeing next-day delivery addressed as
follows or by facsimile transmission:
If to the Company or any Subsidiary Guarantor:
Forman Petroleum Corporation
650 Poydras Street
Suite 2200
New Orleans, Louisiana 70130-6101
Facsimile No.: (504) 522-1796
Attention: President
If to the Trustee:
U.S. Trust Company of Texas, N.A.
2001 Ross Avenue
Suite 2700
Dallas, Texas 75201
Facsimile No.: (214) 754-1303
Attention: Corporate Trust
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For purposes of the Company's obligation hereunder to maintain an
office or agency in the City of New York for purposes of surrendering
Securities, the address of the Trustee's agent is:
By hand:
U.S. Trust Company of Texas, N.A.
111 Broadway, L.L.
New York, New York 10006
Telephone: (212) 374-4056
Attention: Corporate Trust
By mail:
U.S. Trust Company of Texas, N.A.
P.O. Box 841
Cooper Station
New York, New York 10276
The Company or any Subsidiary Guarantor or the Trustee by notice to
the other may designate additional or different addresses for subsequent notices
or communications.
Any notice or communication mailed to a Holder shall be mailed to him
by first-class mail at his address as it appears on the registration books of
the Registrar and shall be sufficiently given to him if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it. If the Company mails notice or
communications to Holders it shall mail a copy to the Trustee and each Agent at
the same time. All notices, requests or other communications shall be in
writing.
Section 13.3 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The
Company, the Subsidiary Guarantors, the Trustee, the Registrar and anyone else
shall have the protection of TIA (S) 312(c).
Section 13.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company and/or any Subsidiary
Guarantor to the Trustee to take any action under this Indenture, the Company
and/or such Subsidiary Guarantor, as the case may be, shall furnish to the
Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, the conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, such conditions precedent have been complied with.
-67-
Section 13.5 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of each such
person, such covenant or condition has been complied with.
Section 13.6 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules for its
functions.
Section 13.7 Legal Holidays.
If a payment date is not a Business Day at a place of payment, payment
may be made at the place on the next succeeding Business Day, without additional
interest.
Section 13.8 Governing Law.
THIS INDENTURE AND THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THAT
THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Each of the parties hereto agrees to submit to the non-exclusive jurisdiction of
the competent courts of the State of New York sitting in the City of New York or
the Untied States District Court for the Southern District of New York, in any
action or proceeding arising out of or relating to this Indenture or the
Securities.
Section 13.9 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
-68-
Section 13.10 No Recourse Against Others.
All liability described in paragraph 17 of the Securities of any
director, officer, employee or stockholder, as such, of the Company, the
Subsidiary Guarantors or the Trustee is waived and released.
Section 13.11 Successors.
All agreements of the Company and any Subsidiary Guarantor in this
Indenture and the Securities and under any Subsidiary Guarantee, as the case may
be, shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors.
Section 13.12 Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
instrument.
Section 13.13 Severability.
In case any provision in this Indenture or in the Securities 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.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first written above.
Dated: June 3, 1997
FORMAN PETROLEUM CORPORATION
By /s/ McLain J. Forman
________________________________
McLain J. Forman
Chairman of the Board, President
and Chief Executive Officer
U.S. TRUST COMPANY OF TEXAS, N.A.
By /s/ J. C. Stohlmann
________________________________
John C. Stohlmann
Vice President
-69-
EXHIBIT A
[Form of Security]
[If a Series A Security or a Series B Security constituting a Restricted
Security --
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR"); (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THE SECURITY EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE
SECURITY EVIDENCED HEREBY, EXCEPT (A) TO FORMAN PETROLEUM CORPORATION (THE
"COMPANY"), (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO U.S. TRUST COMPANY OF TEXAS, N.A., AS TRUSTEE, A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRUSTEE), (D) OUTSIDE THE UNITED STATES TO FOREIGN PURCHASERS IN OFFSHORE
TRANSACTIONS MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY ARE TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF SUCH SECURITY, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH
ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO U.S. TRUST COMPANY OF TEXAS, N.A., AS REGISTRAR. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE COMPANY AND U.S. TRUST COMPANY OF TEXAS, N.A., AS
TRANSFER AGENT, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE SECURITY EVIDENCED
HEREBY IF THE PROVISIONS OF SECTION 2.14(a)(1) OF THE INDENTURE ARE SATISFIED.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S.
PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE
SECURITIES ACT. THIS SECURITY IS SUBJECT TO A REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 3, 1997, BETWEEN THE COMPANY AND JEFFERIES & COMPANY, INC., A
COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
A-1
REGISTERED
13.5% SENIOR SECURED NOTE DUE 2004
CUSIP:
NO. R- $
FORMAN PETROLEUM CORPORATION
(a Louisiana corporation)
promises to pay to ______________________________
or registered assigns
the principal sum of ____________________ Dollars on June 1, 2004
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
Dated: FORMAN PETROLEUM CORPORATION
Attest: By:
__________________________________ _______________________________
Secretary President
[Seal]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
U.S. TRUST COMPANY OF TEXAS, N.A.,
as Trustee
By:_______________________________
Authorized Signatory
OR
as Authenticating Agent
By:_______________________________
Authorized Signatory
[Seal]
A-2
[Reverse Side of Security]
FORMAN PETROLEUM CORPORATION
13.5% Senior Secured Note Due 2004
1. Interest.
Forman Petroleum Corporation, a Louisiana corporation (the "Company"),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest semiannually on June 1 and
December 1 of each year, commencing [if a Series A Security - on December 1,
1997, and continuing semiannually thereafter, on June 1 and December 1 in each
year] [if a Series B Security - on the first June 1 or December 1 following the
original issuance of the Series B Securities and continuing semiannually
thereafter, on June 1 and December 1 in each year, from the date of the original
issuance of the Series B Securities], or from the most recent date to which
interest has been paid or duly provided for, until the principal hereof is paid
or duly provided for. Interest will be computed on the basis of a 360-day year
of twelve 30-day months. Accrued but unpaid interest on any Series A Security
that is exchanged for a Series B Security pursuant to the Registration Rights
Agreement shall be paid on or before the first interest payment date on the
Series B Securities.
The interest rate on the Securities is subject to increase under certain
circumstances described in the Registration Rights Agreement.
The Company shall pay interest on overdue principal of and interest on
overdue installments of interest, to the extent lawful, at a rate equal to the
rate of interest otherwise payable on the Securities.
2. Method of Payment.
The Company will pay interest on the Securities to the persons who are
registered holders of Securities at the close of business on the May 15 or
November 15 immediately preceding the interest payment date even though
Securities are canceled after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal of and interest on the
Securities in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
interest by check payable in such money or by wire transfer of immediately
available funds. It may mail an interest check to a Holder's registered
address.
3. Paying Agent and Registrar.
Initially, the Trustee will act as Paying Agent and Registrar. The Company
may change any Paying Agent, Registrar or co-registrar without notice. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
A-3
4. Indenture and Guarantees.
The Company issued the Securities under an Indenture dated as of June 3,
1997 (the "Indenture") between the Company and the Trustee. Capitalized terms
herein are used as defined in the Indenture unless otherwise defined herein.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code (S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Securities are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Securities are senior secured obligations of the
Company limited to $70.0 million aggregate principal amount, except as otherwise
provided in the Indenture. Payment on each Security is guaranteed on a senior
basis, jointly and severally, by the Subsidiary Guarantors pursuant to Article
Eleven of the Indenture.
5. Optional Redemption.
At any time on or after June 1, 2002, the Company may, at its option,
redeem all or any portion of the Securities at the redemption prices (expressed
as percentages of the principal amount of the Securities) set forth below, plus,
in each case, accrued interest thereon to the applicable redemption date, if
redeemed during the 12-month period beginning June 1, of the years indicated
below:
Year Percentage
2002.................... 103.375%
2003 and thereafter..... 100.000%
In addition, at any time on or prior to June 1, 1999, up to $17.5 million in
aggregate principal amount of Securities may be redeemed, at the option of the
Company, upon not less than 30 or more than 60 days' notice, from the Net
Proceeds of a Public Equity Offering, at a price equal to 113.5% of the
principal amount thereof, together with accrued and unpaid interest to the date
of redemption, provided that at least $52.5 million in aggregate principal
amount of Securities remains Outstanding immediately after such redemption and
that such redemption occurs within 60 days following the closing of such Public
Equity Offering.
In the case of any redemption of Securities, interest installments due and
payable on or prior to the date of redemption will be payable to Holders of such
Securities of record at the close of business on the relevant Record Date
referred to on the face hereof. Securities (or portions thereof) for whose
redemption and payment provision is made in accordance with the Indenture shall
cease to bear interest from and after the date of redemption. In the event of
redemption or purchase of this Series __ Security in part only, a new Series __
Security or Securities for the unredeemed or unpurchased portion hereof shall be
issued in the name of the Holder hereof upon the cancellation hereof.
The Securities do not have the benefit of any sinking fund obligations.
6. Notice of Redemption.
Notice of redemption will be mailed to the Holder's registered address at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed. If less than all Securities are to be
redeemed, the Trustee shall select pro rata the Securities to be redeemed in
multiples of $1,000. Securities in denominations larger than $1,000 may be
redeemed in part.
A-4
7. Change of Control.
Upon the occurrence of a Change of Control, the Company shall be obligated
to make an offer to purchase all of the then outstanding Securities (a "Change
of Control Offer"), and shall purchase, on a Business Day (the "Change of
Control Purchase Date") not more than 60 nor less than 30 days following the
occurrence of a Change of Control, all of the then outstanding Notes validly
tendered pursuant to such Change of Control Offer, at a purchase price (the
"Change of Control Purchase Price") equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the Change of Control
Purchase Date. 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.
To effect such Change of Control Offer, the Company shall, not later than
the 30th day after the occurrence of such Change of Control, mail to the Trustee
and to each Holder of the Notes notice of the Change of Control Offer, which
notice shall govern the terms of the Change of Control Offer and shall state,
among other things, the procedures that Holders of the Notes must follow to
accept the Change of Control Offer.
8. Net Proceeds Offer.
In the event of certain Asset Dispositions, the Company may be required to
make a Net Proceeds Offer to purchase all or any portion of each Holder's
Securities, at 100% of the principal amount of the Securities plus accrued
interest to the Net Proceeds Payment Date.
9. Restrictive Covenants.
The Indenture imposes certain limitations on, among other things, the
ability of the Company to merge or consolidate with any other Person or sell,
lease or otherwise transfer all or substantially all of its properties or
assets, the ability of the Company or the Subsidiaries to dispose of certain
assets, to pay dividends and make certain other distributions and payments, to
make certain investments or redeem, retire, repurchase or acquire for value
shares of capital stock, to incur additional Indebtedness or incur encumbrances
against certain property, to engage in other business activities, and to enter
into certain transactions with Related Persons, all subject to certain
limitations described in the Indenture.
10. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Securities selected
for redemption. Also, it need not transfer or exchange any Securities for a
period of 30 days before a selection of Securities to be redeemed.
11. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of it for
all purposes and neither the Company, the Trustee nor any Agent shall be
affected by notice to the contrary.
A-5
12. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for one
year, the Trustee or Paying Agent will pay the money back to the Company at its
request. After that, all liability of the Trustee and such Paying Agents with
respect to such money shall cease.
13. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Securities, and any past default or noncompliance
with any provision may be waived with the consent of the Holders of a majority
in principal amount of the Securities. Without the consent of any Holder, the
Company may amend or supplement the Indenture or the Securities to, among other
things, cure any ambiguity, defect or incon sistency or to provide for
uncertificated Securities in addition to certificated Securities or to make any
change that does not adversely affect the rights of any Holder.
14. Successor Corporation.
When a successor corporation assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor corporation will be
released from those obligations.
15. Defaults and Remedies.
An event of default generally is: default in payment of principal on the
Securities; default for 30 days in payment of interest on the Securities;
failure by the Company or any Subsidiary Guarantor for 60 days after notice to
comply with any of its other agreements in the Indenture; certain defaults under
or acceleration prior to maturity of other indebtedness; certain final judgments
against the Company or Subsidiaries; a failure of any Guarantee of a Material
Subsidiary to be in full force and effect or denial by any Subsidiary Guarantor
of its obligations with respect thereto; and certain events of bankruptcy or
insolvency. Subject to certain limitations in the Indenture, if an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Securities may declare all the
Securities to be due and payable immediately, except that in the case of an
Event of Default arising from certain events of bankruptcy, insolvency or
reorganization relating to the Company, all outstanding Securities shall become
due and payable immediately without further action or notice. Holders may not
enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of a
majority in principal amount of the Securities may direct the Trustee in its
exercise of any trust or power. The Company must furnish an annual compliance
certificate to the Trustee.
16. Trustee Dealings with Company.
U.S. Trust Company of Texas, N.A., the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Subsidiaries or Affiliates with
the same rights it would have if it were not Trustee.
A-6
17. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company, any
Subsidiary Guarantor or the Trustee, shall not have any liability for any
obligations of the Company, any Subsidiary Guarantor or the Trustee, under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee or an authenticating
agent signs the certificate of authentication on the other side of this
Security.
19. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT
TEN (=joint tenants with right of survivorship and not as tenants in common),
CUST (=Custodian), and U/G/M/A (=Uniform Gifts to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities as a convenience to Holders. No representation is
made as to the accuracy of such numbers as printed on the Securities and
reliance may be placed only on the other identification numbers printed hereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to: Secretary, Forman
Petroleum Corporation, 650 Poydras Street, Suite 2200, New Orleans, Louisiana
70130-6101.
21. Exchange Option.
[If a Series A Security -- At the option of the Holders hereof, the Series
A Securities may be exchanged, pursuant to the Registration Rights Agreement,
for a like aggregate principal amount of Series B Securities.]
A-7
[FORM OF ASSIGNMENT]
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
_________________________________________________________________
_________________________________________________________________
(Insert assignee's soc. sec. or tax ID no.)
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
_________________________________________________________________
_________________________________________________________________
Your Signature: ________________________________________________________
(Sign exactly as your name appears on the other
side of this Security)
Date:_____________________________
Signature Guarantee: __________________________________________
A-8
[FORM OF OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.11 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.11 [ ]
Section 4.16 [ ]
If you want to have only part of this Security purchased by the Company
pursuant to Section 4.11 or Section 4.16 of the Indenture, state the amount (in
integral multiples of $1,000):
$_____________________________
Date:_________________________ Signature:_______________________________
(Sign exactly as your name
appears on the other side of
this Security)
Signature Guarantee:______________________________________
A-9
EXHIBIT A-1
[Form of Notation on Security
Relating to Guarantee]
GUARANTEE
Subject to the limitations set forth in the Indenture, the Subsidiary
Guarantors (as defined in the Indenture referred to in the Security upon which
this notation is endorsed and each hereinafter referred to as a "Subsidiary
Guarantor," which term includes any successor or additional Subsidiary Guarantor
under the Indenture) have unconditionally guaranteed (a) the due and punctual
payment of the principal of and interest on the Securities, whether at maturity,
acceleration, redemption or otherwise, (b) the due and punctual payment of
interest on the overdue principal of and interest on the Securities, if any, to
the extent lawful, (c) the due and punctual performance of all other obligations
of the Company to the Holders or the Trustee, all in accordance with the terms
set forth in the Indenture, and (d) in case of any extension of time of payment
or renewal of any Securities or any of such other obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Capitalized terms used herein have the meanings assigned to them in the
Indenture unless otherwise indicated.
No stockholder, officer, director or incorporator, as such, past, present
or future, of the Subsidiary Guarantors shall have any personal liability under
this Guarantee by reason of his or its status as such stockholder, officer,
director or incorporator.
This Guaranty shall be binding upon each Subsidiary Guarantor and its
successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
herein conferred upon that party shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof and
in the Indenture.
This Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Security upon which this Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.
Subsidiary Guarantors:
A-1/1
EXHIBIT A-2
[Form of Legend For Global Securities]
Any Global Security authenticated and delivered hereunder shall bear a
legend in addition to the Private Placement Legend, if required pursuant to
Section 2.14, in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER
OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-2/1
EXHIBIT A-3
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 13.5% Senior Secured Notes due 2004, Series A, and
13.5% Senior Secured Notes due 2004, Series B
(the "Securities"), of Forman Petroleum Corporation
This Certificate relates to $_______ principal amount of Securities held in
the form of * a beneficial interest in a Global Security or * Physical
Securities by _______________ (the "Transferor").
The Transferor:*
[ ] has requested by written order that the Registrar deliver in exchange
for its beneficial interest in the Global Security held by DTC a Physical
Security or Physical Securities in definitive, registered form of authorized
denominations and in an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
[ ] has requested that the Registrar by written order exchange or register
the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such Security, the
Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Securities and the restrictions on
transfers thereof as provided in Section 2.6 of such Indenture, and that the
transfer of these Securities does not require registration under the Securities
Act of 1933, as amended (the "Act") because *:
[ ] Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of subparagraph (a)(1) or (c)(1) of
Section 2.6 of the Indenture).
[ ] Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
[ ] Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule
501 under the Act).
[ ] Such Security is being transferred in reliance on Regulation S under
the Act.
[ ] Such Security is being transferred in reliance on Rule 144 under the
Act.
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[ ] Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act other than Rule
144A or Rule 144 or Regulation S under the Act to a person other than an
institutional "accredited investor."
_______________________________________
[INSERT NAME OF TRANSFEROR]
By:____________________________________
[Authorized Signatory]
Date:___________________________
_____________
* Check applicable box.
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EXHIBIT A-4
FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS TO
INSTITUTIONAL ACCREDITED INVESTORS
__________________________________, _______
U.S. TRUST COMPANY OF TEXAS, N.A.
111 Broadway, L.L.
New York, New York 10006
Re: Forman Petroleum Corporation Indenture (the "Indenture")
relating to 13.5% Senior Secured Notes due 2004, Series A,
or 13.5% Senior Secured Notes due 2004, Series B
Ladies and Gentlemen:
In connection with our proposed purchase of 13.5% Senior Secured Notes due
2004, Series A, or 13.5% Senior Secured Notes due 2004, Series B (the
"Securities"), of Forman Petroleum Corporation (the "Company"), we confirm that:
1. We have received such information as we deem necessary in order to
make our investment decision.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture and
the undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Securities except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Securities have not been
registered under the Securities Act, and that the Securities may not be offered
or sold within the United States or to, or for the account or benefit of, U.S.
persons except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Securities, we will do so only (A) to the
Company or any subsidiary thereof, (B) inside the United States in accordance
with Rule 144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) inside the United States to an institutional "accredited
investor" (as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to the Trustee a signed letter
substantially in the form hereof, (D) outside the United States in accordance
with Regulation S under the Securities Act, (E) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available), or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing Securities from us a
notice advising such purchaser that resales of the Securities are restricted as
stated herein.
4. We understand that, on any proposed resale of Securities, we will be
required to furnish to you and the Company, such certification, legal opinions
and other information as you and the Company
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may reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Securities purchased by
us will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or their investment, as the case may be, for an indefinite period.
6. We are acquiring the Securities purchased by us for our account or for
one or more accounts (each of which is an institutional "accredited investor")
as to each of which we exercise sole investment discretion, for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act.
You and the Company and your and their respective counsel are entitled to
rely upon this letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:__________________________________
[Authorized Signatory]
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EXHIBIT A-5
FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION
WITH REGULATION S TRANSFERS
_______________________________________,____
U.S. TRUST COMPANY OF TEXAS, N.A.
111 Broadway, L.L.
New York, New York 10006
Re: Forman Petroleum Corporation Indenture (the "Company")
13.5% Senior Secured Notes due 2004, Series A, and
13.5% Senior Secured Notes due 2004, Series B
Ladies and Gentlemen:
In connection with our proposed sale of $__________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knew that the transaction had been pre-
arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
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You and the Company and your and their respective counsel are entitled to
rely upon this letter and are irrevocably authorized to produce this letter or a
copy thereof to any interested party in any administrative or legal proceeding
or official inquiry with respect to the matters covered hereby. Defined terms
used herein without definition have the respective meanings provided in
Regulation S.
Very truly yours,
[Name of Transferor]
By:__________________________________
[Authorized Signatory]
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2.1 7.10
2.2 7.11
2.3 8.1
2.4 8.1(a)
2.5 8.1(b)
2.6 8.2
2.6(c) 8.3
2.7 8.4
2.8 8.5
2.9 9.2
2.10 9.3
2.11 9.5
2.14 10.1
3.1 ?
3.3 ?
3.6 ?
4.1 ?
4.2 ?
4.3 11.1
4.4 11.2(a)
4.7 11.2
4.8 11.3
4.9 11.4
4.10 11.5
4.11 12.1
4.13 12.3
4.14 12.4
4.16 13.1
4.17 13.2
5.1 13.3
6.1 13.4
6.2 13.5
6.4 13.7
6.5
6.7
6.8
6.9
6.10
6.11
7.1
7.1(a)
7.1(b)
7.1(c)
7.2
7.5
7.6
7.7
7.8
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EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
Dated as of June 3, 1997
by and between
FORMAN PETROLEUM CORPORATION
and
JEFFERIES & COMPANY, INC.
_________________________________
13.5% SENIOR SECURED NOTES DUE JUNE 1, 2004
and
70,000 COMMON STOCK PURCHASE WARRANTS
TABLE OF CONTENTS
Page
1. Definitions......................................................... 1
2. Exchange Offer...................................................... 5
3. Shelf Registration.................................................. 8
4. Additional Interest................................................. 9
5. Notes Registration Procedures....................................... 10
6. Registration Expenses............................................... 17
7. Indemnification..................................................... 18
8. Rules 144 and 144A.................................................. 20
9. Underwritten Registrations of Registrable Notes..................... 21
10. Registration of Registrable Securities.............................. 21
11. Miscellaneous....................................................... 24
(a) No Inconsistent Agreements................................... 24
(b) Adjustments Affecting Registrable Securities or
Registrable Notes........................................... 24
(c) Amendments and Waivers....................................... 24
(d) Notices...................................................... 24
(e) Successors and Assigns....................................... 25
(f) Counterparts................................................. 26
(g) Headings..................................................... 26
(h) Governing Law................................................ 26
(i) Severability................................................. 26
(j) Notes Held by the Issuer or Its Affiliates................... 26
(k) Third Party Beneficiaries.................................... 26
(1) Entire Agreement............................................. 26
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of June 3, 1997, by and between Forman Petroleum Corporation, a
Louisiana corporation (the "Issuer"), and Jefferies & Company, Inc. (the
"Initial Purchaser").
This Agreement is entered into in connection with the Purchase Agreement,
dated June 3, 1997, by and between the Issuer and the Initial Purchaser (the
"Purchase Agreement") which provides for, among other things, the issuance and
sale to the Initial Purchaser of (i) 70,000 units (the "Units"), each consisting
of $1,000 principal amount of the Issuer's 13.5% Senior Secured Notes due June
1, 2004 (the "Notes"), and one warrant (collectively, along with the Additional
Warrants, the "Warrants") to purchase 0.41524 shares of common stock, no par
value, of the Issuer (the "Common Stock"). In order to induce the Initial
Purchaser to enter into the Purchase Agreement, the Issuer has agreed to provide
the registration rights set forth in this Agreement for the benefit of the
Initial Purchaser and its direct and indirect transferees and assigns. The
execution and delivery of this Agreement is a condition to the Initial
Purchaser's obligation to purchase the Units under the Purchase Agreement. The
Issuer is to deposit $9.45 million of the proceeds of the issuance of the Units
(representing the aggregate amount of interest due on the Notes through June 1,
1998) into a custodial account to be maintained by the Trustee (as defined in
Section 1 below).
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the term "day", unless otherwise expressly
provided, shall mean a calendar day and following terms shall have the following
meanings:
Additional Interest: See Section 4(a).
Additional Warrants: The 11,666 Warrants to purchase 4,844 shares of
Common Stock granted to the Initial Purchaser.
Advice: See the last paragraph of Section 5.
Agreement: See the first introductory paragraph to this Agreement.
Applicable Period: See Section 2(b).
Business Day: A day that is not a Saturday, a Sunday, or a day on which
banking institutions in New York, New York or Houston, Texas are required to be
closed.
Common Stock: See the second introductory paragraph to this Agreement.
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Effectiveness Date: The 120th day after the Issue Date.
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(b).
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Exchange Notes: See Section 2(a).
Exchange Offer: See Section 2(a).
Exchange Registration Statement: See Section 2(a).
Filing Date: The 60th day after the Issue Date.
Holder: Any registered holder of Registrable Notes or Registrable
Securities.
Indemnified Person: See Section 7(c).
Indemnifying Person: See Section 7(c).
Indenture: The Indenture, dated as of the Issue Date, by and between the
Issuer and U.S. Trust Company of Texas, N.A., as trustee, pursuant to which the
Notes are being issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Initial Purchaser: See the first introductory paragraph to this Agreement.
Initial Shelf Registration: See Section 3(a).
Inspectors: See Section 5(o).
IPO Effectiveness Date: See Section 10(a).
Issue Date: The date on which the Units were sold to the Initial Purchaser
pursuant to the Purchase Agreement.
Issuer: See the first introductory paragraph to this Agreement.
NASD: National Association of Securities Dealers, Inc.
Notes: See the second introductory paragraph to this Agreement.
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Notes Prospectus: The prospectus included in any Notes Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Notes covered by such Notes Registration Statement,
and all other amendments and supplements to such prospectus, including post-
effective amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
Notes Registration Statement: Any registration statement of the Issuer
(and any then existing Subsidiary Guarantor) filed with the SEC under the
Securities Act, including, but not limited to, the Exchange Registration
Statement, that covers any of the Registrable Notes pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
Participant: See Section 7(a).
Participating Broker-Dealer: See Section 2(b).
Person: An individual, trustee, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
union, business association, firm or other legal entity.
Piggy-Back Registration: See Section 10(a).
Private Exchange: See Section 2(b).
Private Exchange Notes: See Section 2(b).
Prospectus: Any Notes Prospectus or Warrants Prospectus.
Purchase Agreement: See the second introductory paragraph to this
Agreement.
Records: See Section 5(o).
Registrable Notes: Each Note upon original issuance thereof and at all
times subsequent thereto, each Exchange Note as to which Section 2(c)(iv) hereof
is applicable upon original issuance thereof and at all times subsequent thereto
and each Private Exchange Note upon original issuance thereof and at all times
subsequent thereto, until, in the case of any such Note, Exchange Note or
Private Exchange Note, as the case may be, the earliest to occur of (i) a Notes
Registration Statement (other than, with respect to any Exchange Note as to
which Section 2(c)(iv) hereof is applicable, the Exchange Registration
Statement) covering such Note, Exchange Note
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or Private Exchange Note, as the case may be, has been declared effective by the
SEC and such Note, Exchange Note or Private Exchange Note, as the case may be,
has been disposed of in accordance with such effective Notes Registration
Statement, (ii) such Note, Exchange Note or Private Exchange Note, as the case
may be, is sold in compliance with Rule 144, (iii) in the case of any Note, such
Note has been exchanged pursuant to the Exchange Offer for an Exchange Note or
Exchange Notes which may be resold without restriction under state and federal
securities laws, or (iv) such Note, Exchange Note or Private Exchange Note, as
the case may be, ceases to be outstanding for purposes of the Indenture.
Registrable Securities: Any of (i) the Warrant Shares (whether or not the
related Warrants have been exercised) and (ii) any other securities issued or
issuable with respect to any Warrant Shares by way of stock dividends or stock
splits or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (i) a Warrants Registration Statement with respect to the offering of such
securities by the Holder thereof shall have been declared effective under the
Securities Act and such securities shall have been disposed of by such Holder
pursuant to such Warrants Registration Statement, (ii) such securities are
eligible for sale to the public pursuant to Rule 144(k) (or an similar provision
then in force, but not Rule 144A) or are all otherwise eligible for sale under
Rule 144 by such Holder in the current calendar quarter, (iii) such securities
shall have been otherwise transferred by such Holder and new certificates for
such securities not bearing a legend restricting further transfer shall have
been delivered by the Issuer or its transfer agent and subsequent disposition of
such securities shall not require registration or qualification under the
Securities Act or any similar state law then in force or (iv) such securities
shall have ceased to be outstanding.
Registration Expenses: All expenses incident to the Issuer's performance
of or compliance with Section 10 of this Agreement, including, without
limitation, all SEC and stock exchange or NASD registration and filing fees and
expenses, fees and expenses of compliance with securities or blue sky laws
(including, without limitation, reasonable fees and disbursements of counsel for
any underwriters in connection with blue sky qualifications of the Registrable
Securities), preparing, printing, filing, duplicating and distributing a
Warrants Registration Statement and the related Prospectus, the cost of printing
stock certificates, the cost and charges of any transfer agent, rating agency
fees, printing expenses, messenger, telephone and delivery expenses, fees and
disbursements of any counsel for the Issuer and all independent certified public
accountants, the fees and disbursements of underwriters customarily paid by
issuers or sellers or securities (but not including any underwriting discounts
or commissions or transfer taxes, if any, attributable to the sale of
Registrable Securities by Selling Holders), fees and expenses of one counsel for
the Selling Holders and other reasonable out-of-pocket expenses of the Selling
Holders.
Registration Statement: Any Notes Registration Statement or Warrants
Registration Statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by
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the SEC providing for offers and sales of securities made in compliance
therewith resulting in offers and sales by subsequent holders that are not
affiliates of an issuer of such securities being free of the registration and
prospectus delivery requirements of the Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.
Selling Holder: A Holder who is selling Registrable Securities in
accordance with Section 10 hereof.
Shelf Notice: See Section 2(c).
Shelf Registration: See Section 3(b).
Subsequent Shelf Registration: See Section 3(b).
Subsidiary Guarantor: Each subsidiary of the Issuer that guarantees the
obligations of the Issuer under the Notes and the Indenture.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and, if existent, the trustee
under any indenture governing the Exchange Notes and Private Exchange Notes (if
any).
Underwritten registration or underwritten offering: A registration in
which securities of one or more of the issuers are sold to an underwriter for
reoffering to the public.
Units: See the second introductory paragraph to this Agreement.
Warrants: See the second introductory paragraph to this Agreement.
Warrants Prospectus: The prospectus included in any Warrants Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or
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supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such Warrants
Registration Statement, and all other amendments and supplements to such
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
Warrants Registration Statement: Any registration statement of the Issuer
that covers any Warrant Shares filed with the SEC under the Securities Act
(except for a Warrant Shares Shelf Registration Statement), including the
Prospectus, amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
Warrant Shares: The shares of Common Stock issuable upon exercise of the
Warrants.
Warrant Shares Shelf Registration Statement: See Section 10(a).
2. Exchange Offer
(a) The Issuer agrees to use its best efforts to file (and to cause any
then existing Subsidiary Guarantor to file) with the SEC no later than the
Filing Date, an offer to exchange (the "Exchange Offer") any and all of the
Registrable Notes (other than the Private Exchange Notes, if any) for a like
aggregate principal amount of debt securities of the Issuer, guaranteed by each
such Subsidiary Guarantor and secured by the same collateral as the Notes, which
are identical in all material respects to the Notes (the "Exchange Notes") (and
which are entitled to the benefits of the Indenture or a trust indenture which
is identical in all material respects to the Indenture (other than such changes
to the Indenture or any such identical trust indenture as are necessary to
comply with any requirements of the SEC to effect or maintain the qualification
thereof under the TIA) and which, in either case, has been qualified under the
TIA), except that the Exchange Notes shall have been registered pursuant to an
effective Registration Statement under the Securities Act, shall not provide for
Additional Interest and shall contain no restrictive legend thereon. The
Exchange Offer shall be registered under the Securities Act on the appropriate
form (the "Exchange Registration Statement") and shall comply with all
applicable tender offer rules and regulations under the Exchange Act. The
Issuer agrees to use its best efforts to (x) cause the Exchange Registration
Statement to be declared effective under the Securities Act on or before the
Effectiveness Date; (y) keep the Exchange Offer open for at least 30 calendar
days (or longer if required by applicable law) after the date that notice of the
Exchange Offer is mailed to Holders; and (z) consummate the Exchange Offer on or
prior to the 45th day following the date on which the Exchange Registration
Statement is declared effective. If after such Exchange Registration Statement
is initially declared effective by the SEC, the Exchange Offer or the issuance
of the Exchange Notes thereunder is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court, such Exchange Registration Statement shall be deemed not to
have become effective for purposes of this Agreement. Each Holder who
participates in the Exchange Offer will be required to represent (i) that any
Exchange
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Notes received by it will be acquired in the ordinary course of its business,
(ii) that at the time of the commencement of the Exchange Offer such Holder has
not entered into any arrangement or understanding with any Person to participate
in the distribution (within the meaning of the Securities Act) of the Exchange
Notes in violation of the provisions of the Securities Act, (iii) that such
Holder is not an affiliate of any of the Issuers within the meaning of the
Securities Act, (iv) if such Holder is not a broker-dealer, that it is not
engaged in, and does not intend to engage in, the distribution of the Notes and
(v) if such Holder is a Participating Broker-Dealer (as hereinafter defined),
that it will receive Exchange Notes for its own account in exchange for Notes
that were acquired as a result of market-making or other trading activity, and
that it will deliver a prospectus in connection with any resale of the Exchange
Notes. Upon consummation of the Exchange Offer in accordance with this Section
2, the provisions of this Agreement shall continue to apply, mutatis mutandis,
solely with respect to Registrable Notes that are Private Exchange Notes and
Exchange Notes held by Participating Broker-Dealers, and the Issuers shall have
no further obligation to register Registrable Notes (other than Private Exchange
Notes and other than in respect of any Exchange Notes as to which clause
2(c)(iv) hereof applies) pursuant to Section 3 of this Agreement.
(b) The Issuer shall include within the Notes Prospectus contained in the
Exchange Registration Statement a section entitled "Plan of Distribution",
reasonably acceptable to the Initial Purchaser, which shall contain a summary
statement of the positions taken or policies made by the staff of the SEC with
respect to the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Notes received by such broker-dealer in the Exchange Offer for its own account
in exchange for Notes that were acquired by it as a result of market-making or
other trading activity (a "Participating Broker-Dealer"), whether such positions
or policies have been publicly disseminated by the staff of the SEC or such
positions or policies, in the judgment of the Initial Purchaser, represent the
prevailing views of the staff of the SEC. Such "Plan of Distribution" section
shall also allow, to the extent permitted by applicable policies and regulations
of the SEC, the use of the Notes Prospectus by all Persons subject to the
prospectus delivery requirements of the Securities Act, including, to the extent
so permitted, all Participating Broker-Dealers, and include a statement
describing the manner in which Participating Broker-Dealers may resell the
Exchange Notes.
The Issuer shall use its best efforts to keep the Exchange Registration
Statement effective and to amend and supplement the Notes Prospectus contained
therein, in order to permit such Notes Prospectus to be lawfully delivered by
all Persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such Persons must comply with such requirements
in order to resell the Exchange Notes (the "Applicable Period").
If, upon consummation of the Exchange Offer, the Initial Purchaser holds
any Notes acquired by it and having the status of an unsold allotment in the
initial distribution, the Issuer (upon the request of such Initial Purchaser)
shall, simultaneously with the delivery of the Exchange Notes in the Exchange
Offer, issue and deliver to the Initial Purchaser, in exchange (the "Private
Exchange") for the Notes held by the Initial Purchaser, a like principal amount
of debt securities of the Issuer, guaranteed by any then existing Subsidiary
Guarantor and secured by the same
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collateral as the Exchange Notes, that are identical in all material respects to
the Exchange Notes except for the existence of restrictions on transfer thereof
under the Securities Act and securities laws of the several states of the U.S.
(the "Private Exchange Notes") (and which are issued pursuant to the same
indenture as the Exchange Notes); provided, however, the Issuer shall not be
required to effect such exchange if, in the written opinion of counsel for the
Issuer (a copy of which shall be delivered to the Initial Purchaser and any
Holder affected thereby), such exchange cannot be effected without registration
under the Securities Act. The Private Exchange Notes shall bear the same CUSIP
number as the Exchange Notes, if permissible.
Interest on the Exchange Notes and the Private Exchange Notes will accrue
from (A) the later of (i) the last interest payment date on which interest was
paid on the Notes surrendered in exchange therefor or (ii) if the Notes are
surrendered for exchange on a date in a period which includes the record date
for an interest payment date to occur on or after the date of such exchange and
as to which interest will be paid, the date of such interest payment date or (B)
if no interest has been paid on the Notes, from the Issue Date.
In connection with the Exchange Offer, the Issuer shall:
(1) mail to each Holder a copy of the Notes Prospectus forming part of
the Exchange Registration Statement, together with an appropriate letter of
transmittal and related documents;
(2) utilize the services of a depositary for the Exchange Offer, which
may be the Trustee or an affiliate thereof;
(3) permit Holders to withdraw tendered Registrable Notes at any time
prior to the close of business on the last business day on which the
Exchange Offer shall remain open; and
(4) otherwise comply in all material respects with all applicable
laws.
As soon as practicable after the close of the Exchange Offer or the Private
Exchange, as the case may be, the Issuer shall:
(1) accept for exchange all Registrable Notes validly tendered and not
validly withdrawn pursuant to the Exchange Offer or the Private Exchange,
as the case may be;
(2) deliver to the Trustee for cancellation all Registrable Notes so
accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each
Holder tendering such Registrable Notes, Exchange Notes or Private Exchange
Notes, as the case may be, equal in principal amount to the Notes of such
Holder so accepted for exchange.
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The Exchange Offer and the Private Exchange shall be subject to only the
following conditions: (i) the Exchange Offer or the Private Exchange, as the
case may be, does not violate applicable law or any applicable interpretation of
the staff of the SEC, (ii) no action or proceeding is instituted or threatened
in any court or by any governmental agency which might materially impair the
ability of the Issuer to proceed with the Exchange Offer or the Private Exchange
and (iii) all governmental approvals have been obtained, which approvals the
Issuer deem necessary for the consummation of the Exchange Offer or Private
Exchange.
The Exchange Notes and the Private Exchange Notes may be issued under (i)
the Indenture or (ii) an indenture identical in all material respects to the
Indenture, which in either event will provide that the Exchange Notes will not
be subject to the transfer restrictions set forth in the Indenture and that the
Exchange Notes, the Private Exchange Notes and the Notes, if any, will be deemed
one class of security (subject to the provisions of the Indenture) and entitled
to participate in all the security granted by the Issuer pursuant to the
Security Documents and in any Subsidiary Guarantee (as such terms are defined in
the Indenture) on an equal and ratable basis.
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the staff of the SEC, the Issuer (and any then existing
Subsidiary Guarantor) are not permitted to effect an Exchange Offer, (ii) the
Exchange Offer is not consummated within 180 days of the Issue Date, (iii) any
holder of Private Exchange Notes so requests in writing to the Issuer or (iv) in
the case of any Holder that participates in the Exchange Offer, such Holder does
not receive Exchange Notes on the date of the exchange that may be sold without
restriction under state and federal securities laws (other than due solely to
the status of such Holder as an affiliate of the Issuer within the meaning of
the Securities Act) and so notifies the Issuer within 60 days after such Holder
first becomes aware of such restrictions and providing a reasonable basis for
its conclusions, in the case of each of clauses (i)-(iv), then the Issuer (and
any then existing Subsidiary Guarantor) shall promptly deliver to the Holders
and the Trustee written notice thereof (the "Shelf Notice") and shall file a
Shelf Registration pursuant to Section 3.
3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section 2(c), then:
(a) Shelf Registration. The Issuer shall as promptly as reasonably
practicable use its best efforts to file (and shall cause any then existing
Subsidiary Guarantor to file) with the SEC a Notes Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 covering all of
the Registrable Notes (the "Initial Shelf Registration"). If the Issuer (and
any then existing Subsidiary Guarantor) shall have not yet filed the Exchange
Registration Statement, the Issuer shall use its best efforts to file (and shall
cause any then existing Subsidiary Guarantor to file) with the SEC the Initial
Shelf Registration as promptly as practicable and shall use its best efforts to
cause such Initial Shelf Registration to be declared effective under the
Securities Act. Otherwise, the Issuer shall use its best efforts to file (and
shall cause any then existing Subsidiary Guarantor to file) with the SEC the
Initial Shelf Registration as promptly as practicable after delivery of the
Shelf Notice and shall use its best efforts to cause such Shelf
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Registration to be declared effective under the Securities Act as promptly as
practicable thereafter. The Initial Shelf Registration shall be on Form S-1 or
another appropriate form permitting registration of such Registrable Notes for
resale by Holders in the manner or manners designated by them (including,
without limitation, one or more underwritten offerings). The Issuer shall not
permit any securities other than the Registrable Notes to be included in any
Shelf Registration (as defined below). The Issuer shall use its best efforts to
keep the Initial Shelf Registration continuously effective under the Securities
Act until the second anniversary of the Issue Date (subject to extension
pursuant to the last paragraph of Section 5 hereof) or such earlier date as may
be then authorized under Rule 144(k) under the Securities Act (the
"Effectiveness Period"), or such shorter period ending when (i) all Registrable
Notes covered by the Initial Shelf Registration have been sold in the manner set
forth and as contemplated in the Initial Shelf Registration or are otherwise
eligible for sale under Rule 144 by the Holders without restriction by virtue of
the operation of the volume limitations set forth in such Rule or (ii) a
Subsequent Shelf Registration (as defined below) covering all of the Registrable
Notes has been declared effective under the Securities Act.
(b) Subsequent Shelf Registrations. If the Initial Shelf Registration or
any Subsequent Shelf Registration ceases to be effective for any reason at any
time during the Effectiveness Period (other than because of the sale of all of
the securities registered thereunder), the Issuer shall use its best efforts to
obtain the prompt withdrawal of any order suspending the effectiveness thereof,
and in any event shall within 45 days of such cessation of effectiveness amend
such Shelf Registration in a manner to obtain the withdrawal of the order
suspending the effectiveness thereof, or file (and cause any then existing
Subsidiary Guarantor to file) an additional "shelf" Notes Registration Statement
pursuant to Rule 415 covering all of the Registrable Notes (a "Subsequent Shelf
Registration"). If a Subsequent Shelf Registration is filed, the Issuer shall
use its best efforts to cause the Subsequent Shelf Registration to be declared
effective as soon as practicable after such filing and to keep such Subsequent
Shelf Registration continuously effective for a period equal to the number of
days in the Effectiveness Period less the aggregate number of days during which
the Initial Shelf Registration or any Subsequent Shelf Registrations was
previously continuously effective. As used herein the term "Shelf Registration"
means the Initial Shelf Registration and any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Issuer shall promptly supplement and
amend any Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably requested by
the Holders of a majority in aggregate principal amount of the Registrable Notes
covered by such Shelf Registration or by any underwriter of such Registrable
Notes.
4. Additional Interest
(a) The Issuer and the Initial Purchaser agree that the Holders of
Registrable Notes will suffer damages if the Issuer fails to fulfill its
obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly,
the Issuer agrees to pay, as liquidated damages, additional interest on the
Notes ("Additional
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Interest") under the circumstances and to the extent set forth below (each of
which shall be given independent effect):
(i) if the Exchange Registration Statement has not been filed on or
prior to the Filing Date, then commencing on the day after the Filing Date,
Additional Interest shall accrue on the Notes over and above any stated
interest at a rate of 0.50% per annum of the principal amount of such Notes
for the first 90 days immediately following the Filing Date, such
Additional Interest rate increasing by an additional 0.50% per annum at the
beginning of each subsequent 90-day period;
(ii) if the Exchange Registration Statement is not declared effective
on or prior to the Effectiveness Date, then commencing on the day after the
Effectiveness Date, Additional Interest shall accrue on the Notes over and
above any stated interest at a rate of 0.50% per annum of the principal
amount of such Notes for the first 90 days immediately following the day
after the Effectiveness Date, such Additional Interest rate increasing by
an additional 0.50% per annum at the beginning of each subsequent 90-day
period; and
(iii) if (A) the Issuer (and any then existing Subsidiary Guarantor)
has not exchanged Exchange Notes for all Notes validly tendered in
accordance with the terms of the Exchange Offer on or prior to the 45th day
after the date on which the Exchange Registration Statement is declared
effective or (B) the Initial Shelf Registration, if required to be filed
hereunder, is not declared effective on or prior to the Effectiveness Date
or (C) if applicable, a Shelf Registration has been declared effective and
such Shelf Registration ceases to be effective at any time during the
Effectiveness Period, then Additional Interest shall accrue on the Notes
over and above any stated interest at a rate of 0.50% per annum of the
principal amount of such Notes for the first 90 days commencing on the (x)
60th day after the date on which the Exchange Registration Statement is
declared effective, in the case of (A) or (B) above, or (y) the day such
Shelf Registration ceases to be effective in the case of (C) above, such
Additional Interest rate increasing by an additional 0.50% per annum at the
beginning of each such subsequent 90-day period;
provided, however, that the Additional Interest rate on the Notes may not exceed
at any one time in the aggregate 2.0% per annum; and provided further, that (1)
upon the filing of the Exchange Registration Statement (in the case of (i)
above), (2) upon the effectiveness of the Exchange Registration Statement (in
the case of (ii) above), or (3) upon the exchange of Exchange Notes for all
Notes tendered (in the case of (iii)(A) above), upon the effectiveness of the
Initial Shelf Registration (in the case of (iii)(B) above) or upon the
effectiveness of a Shelf Registration which had ceased to remain effective (in
the case of (iii)(C) above), Additional Interest on the Notes as a result of
such clause (or the relevant subclause thereof), as the case may be, shall cease
to accrue.
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(b) The Issuer shall notify the Trustee within one business day after each
and every date on which an event occurs in respect of which Additional Interest
is required to be paid (an "Event Date"). Any amounts of Additional Interest
due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable
semi-annually, on the dates and in the manner provided in the Indenture and
whether or not any cash interest would then be payable on such date, commencing
with the first such semi-annual date occurring after any such Additional
Interest commences to accrue. The amount of Additional Interest will be
determined by multiplying the applicable Additional Interest rate by the
principal amount of the Notes, multiplied by a fraction, the numerator of which
is the number of days such Additional Interest rate was applicable during such
semi-annual period (determined on the basis of a 360-day year comprised of
twelve 30-day months and, in the case of a partial month, the actual number of
days elapsed), and the denominator of which is 360.
5. Notes Registration Procedures
In connection with the filing of any Notes Registration Statement pursuant
to Section 2 or 3 hereof, the Issuer shall effect such registrations to permit
the sale of such securities covered thereby in accordance with the intended
method or methods of disposition thereof, and pursuant thereto and in connection
with any Notes Registration Statement filed by the Issuer hereunder, the Issuer
shall:
(a) Prepare and file with the SEC prior to the Filing Date, the
Exchange Registration Statement or if the Exchange Registration Statement
is not filed because of the circumstances contemplated by Section 2(c)(i),
a Shelf Registration as prescribed by Section 2 or 3, and use its best
efforts to cause each such Notes Registration Statement to become effective
and remain effective as provided herein; provided that, if (1) a Shelf
Registration is filed pursuant to Section 3, or (2) a Notes Prospectus
contained in an Exchange Registration Statement filed pursuant to Section 2
is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, before filing any Notes Registration Statement or Notes Prospectus
or any amendments or supplements thereto, the Issuer shall, if requested,
furnish to and afford the Holders of the Registrable Notes to be registered
pursuant to such Shelf Registration or each such Participating Broker-
Dealer, as the case may be, covered by such Notes Registration Statement,
their counsel and the managing underwriters, if any, a reasonable
opportunity to review copies of all such documents (including copies of any
documents to be incorporated by reference therein and all exhibits thereto)
proposed to be filed (in each case at least five business days prior to
such filing). The Issuer shall not file any such Notes Registration
Statement or Notes Prospectus or any amendments or supplements thereto if
the Holders of a majority in aggregate principal amount of the Registrable
Notes covered by such Notes Registration Statement, or any such
Participating Broker-Dealer, as the case may be, their counsel, or the
managing underwriters, if any, shall reasonably object.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration or Exchange Registration Statement,
as the case
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may be, as may be necessary to keep such Notes Registration Statement
continuously effective for the Effectiveness Period or the Applicable
Period, as the case may be; cause the related Notes Prospectus to be
supplemented by any Prospectus supplement required by applicable law, and
as so supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) promulgated under the Securities Act; and comply
with the provisions of the Securities Act and the Exchange Act applicable
to it with respect to the disposition of all securities covered by such
Notes Registration Statement as so amended or in such Notes Prospectus as
so supplemented and with respect to the subsequent resale of any securities
being sold by a Participating Broker-Dealer covered by any such Prospectus.
The Issuer shall be deemed not to have used its best efforts to keep a
Notes Registration Statement effective during the Applicable Period if it
voluntarily takes any action that would result in selling Holders of the
Registrable Notes covered thereby or Participating Broker-Dealers seeking
to sell Exchange Notes not being able to sell such Registrable Notes or
such Exchange Notes during that period unless such action is required by
applicable law or unless the Issuer complies with this Agreement,
including, without limitation, the provisions of paragraph 5(k) hereof and
the last paragraph of this Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Notes Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period from whom the Issuer has received written notice that
it will be a Participating Broker-Dealer in the Exchange Offer, notify the
selling Holders of Registrable Notes, or each such Participating Broker-
Dealer, as the case may be, their counsel and the managing underwriters, if
any, promptly (but in any event within two business days), (i) when a Notes
Prospectus or any Notes Prospectus supplement or post-effective amendment
has been filed, and, with respect to a Notes Registration Statement or any
post-effective amendment, when the same has become effective (including in
such notice a written statement that any Holder may, upon request, obtain,
without charge, one conformed copy of such Notes Registration Statement or
post-effective amendment including financial statements and schedules,
documents incorporated or deemed to be incorporated by reference and
exhibits), (ii) of the issuance by the SEC of any stop order suspending the
effectiveness of a Notes Registration Statement or of any order preventing
or suspending the use of any Notes Prospectus or the initiation of any
proceedings for that purpose, (iii) if at any time when a prospectus is
required by the Securities Act to be delivered in connection with sales of
the Registrable Notes the representations and warranties of the Issuer
contained in any agreement (including any underwriting agreement)
contemplated by Section 5(n) hereof cease to be true and correct, (iv) of
the receipt by the Issuer of any notification with respect to the
suspension of the qualification or exemption from qualification of a Notes
Registration Statement or any of the Registrable Notes or the Exchange
Notes to be sold by any Participating Broker-Dealer for offer or sale in
any jurisdiction, or the initiation or threatening of any proceeding for
such purpose, (v) of the happening of any event, the existence of any
condition or any information becoming known that makes any statement made
in such Notes Registration Statement or related Notes Prospectus or any
document
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incorporated or deemed to be incorporated therein by reference untrue in
any material respect or that requires the making of any changes in, or
amendments or supplements to, such Notes Registration Statement, Notes
Prospectus or documents so that, in the case of the Notes Registration
Statement, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and that in the case of the
Notes Prospectus, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (vi) of any of the Issuer's
reasonable determination that a post-effective amendment to a Notes
Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Notes Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, use its best efforts to prevent the issuance of any
order suspending the effectiveness of a Notes Registration Statement or of
any order preventing or suspending the use of a Notes Prospectus or
suspending the qualification (or exemption from qualification) of any of
the Registrable Notes or the Exchange Notes to be sold by any Participating
Broker-Dealer, for sale in any jurisdiction, and, if any such order is
issued, to use its best efforts to obtain the withdrawal of any such order
at the earliest possible date.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriters, if any, or the Holders of a
majority in aggregate principal amount of the Registrable Notes being sold
in connection with an underwritten offering, (i) as promptly as practicable
incorporate in a prospectus supplement or post-effective amendment such
information or revisions to information therein relating to such
underwriters or selling Holders as the managing underwriters, if any, or
such Holders or their counsel reasonably request to be included or made
therein and (ii) make all required filings of such prospectus supplement or
such post-effective amendment as soon as practicable after the Issuer has
received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment.
(f) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Notes Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, furnish to each selling Holder of Registrable Notes
and to each such Participating Broker-Dealer who so requests and to counsel
and each managing underwriter, if any, without charge, one conformed copy
of the Notes Registration Statement or Notes Registration Statements and
each post-effective amendment thereto, including financial statements and
schedules, and, if requested, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits.
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(g) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Notes Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, deliver to each selling Holder of Registrable Notes
or each such Participating Broker-Dealer, as the case may be, their
respective counsel, and the underwriters, if any, without charge, as many
copies of the Notes Prospectus and each amendment or supplement thereto and
any documents incorporated by reference therein as such Persons may
reasonably request; and, subject to the last paragraph of this Section 5,
the Issuer hereby consents to the use of such Notes Prospectus and each
amendment or supplement thereto by each of the selling Holders of
Registrable Notes or each such Participating Broker-Dealer, as the case may
be, and the underwriters or agents, if any, and dealers (if any), in
connection with the offering and sale of the Registrable Notes covered by,
or the sale by Participating Broker-Dealers of the Exchange Notes pursuant
to, such Notes Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any delivery
of a Notes Prospectus contained in the Exchange Registration Statement by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use its best efforts to register or qualify, and to
cooperate with the selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, the underwriters, if any,
and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of
such Registrable Notes or Exchange Notes, as the case may be, for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any selling Holder, Participating Broker-Dealer, or the
managing underwriter or underwriters, if any, reasonably request in
writing; provided that where Exchange Notes held by Participating Broker-
Dealers or Registrable Notes are offered other than through an underwritten
offering, the Issuer agrees to cause its counsel to perform Blue Sky
investigations and file any registrations and qualifications required to be
filed pursuant to this Section 5(h); keep each such registration or
qualification (or exemption therefrom) effective during the period such
Notes Registration Statement is required to be kept effective and do any
and all other acts or things reasonably necessary or advisable to enable
the disposition in such jurisdictions of the Exchange Notes held by
Participating Broker-Dealers or the Registrable Notes covered by the
applicable Registration Statement; provided that neither the Issuer nor any
Subsidiary Guarantor shall be required to (A) qualify generally to do
business in any jurisdiction where it is not then so qualified, (B) take
any action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or (C) subject itself to
taxation in excess of a nominal dollar amount in any such jurisdiction
where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3, cooperate
with the selling Holders of Registrable Notes and the managing underwriter
or underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Notes to be sold, which
certificates shall not bear any restrictive legends and shall be in
-15-
a form eligible for deposit with The Depository Trust Company; and enable
such Registrable Notes to be in such denominations and registered in such
names as the managing underwriter or underwriters, if any, or Holders may
reasonably request.
(j) Use its best efforts to cause the Registrable Notes covered by any
Notes Registration Statement to be registered with or approved by such
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof or the underwriters, if any, to consummate the
disposition of such Registrable Notes, except as may be required solely as
a consequence of the nature of such selling Holder's business, in which
case the Issuer will cooperate in all reasonable respects with the filing
of such Notes Registration Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Notes Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, upon the occurrence of any event contemplated by
paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare
and (subject to Section 5(a) hereof) file with the SEC, at the expense of
the Issuer, a supplement or post-effective amendment to the Notes
Registration Statement or a supplement to the related Notes Prospectus or
any document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Notes being sold thereunder
or to the purchasers of the Exchange Notes to whom such Notes Prospectus
will be delivered by a Participating Broker-Dealer, any such Notes
Prospectus will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(l) Use its best efforts to cause the Registrable Notes covered by a
Notes Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate
principal amount of Registrable Notes covered by such Notes Registration
Statement or the managing underwriter or underwriters, if any.
(m) Prior to the initial issuance of the Exchange Notes, (i) provide
the Trustee with one or more certificates for the Registrable Notes in a
form eligible for deposit with The Depository Trust Company and (ii)
provide a CUSIP number for the Exchange Notes.
(n) In connection with an underwritten offering of Registrable Notes
pursuant to a Shelf Registration, enter into an underwriting agreement as
is customary in underwritten offerings of debt securities similar to the
Notes and take all such other actions as are reasonably requested by the
managing underwriter or underwriters in order to expedite or facilitate the
registration or the disposition of such Registrable Notes and, in such
connection, (i) make such representations, warranties to, and covenants
with, the underwriters, with respect to the business of the Issuer and its
subsidiaries and the Notes
-16-
Registration Statement, Notes Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each
case, as are customarily made by issuers to underwriters in underwritten
offerings of debt securities similar to the Notes, and confirm the same in
writing if and when requested; (ii) obtain the opinion of counsel to the
Issuer and updates thereof in form and substance reasonably satisfactory to
the managing underwriter or underwriters, addressed to the underwriters
covering the matters customarily covered in opinions requested in
underwritten offerings of debt securities similar to the Notes and such
other matters as may be reasonably requested by underwriters; (iii) obtain
copies of "cold comfort" letters and updates thereof in form and substance
reasonably satisfactory to the managing underwriter or underwriters from
the independent certified public accountants of the Issuer (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Issuer or of any business acquired by the Issuer for
which financial statements and financial data are, or are required to be,
included in the Notes Registration Statement), addressed to each of the
underwriters, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings of debt securities similar to the Notes and such
other matters as reasonably requested by the managing underwriter or
underwriters; and (iv) if an underwriting agreement is entered into, the
same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 7 hereof (or such other
provisions and procedures acceptable to Holders of a majority in aggregate
principal amount of Registrable Notes covered by such Notes Registration
Statement and the managing underwriter or underwriters or agents) with
respect to all parties to be indemnified pursuant to said Section. The
above shall be done at each closing under such underwriting agreement, or
as and to the extent required thereunder.
(o) If (1) a Shelf Registration is filed pursuant to Section 3, or (2)
a Notes Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act
by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, make available for inspection by any selling Holder
of such Registrable Notes being sold, or each such Participating Broker-
Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Notes, if any, and any attorney, accountant or
other agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable
business hours, all financial and other records and pertinent corporate
documents of the Issuers and their respective subsidiaries (collectively,
the "Records") as shall be reasonably necessary to enable them to exercise
any applicable due diligence responsibilities, and cause the officers,
directors and employees of the Issuer and its subsidiaries to supply all
information reasonably requested by any such Inspector in connection with
such Notes Registration Statement. Such Records shall be kept confidential
by each Inspector and shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in such Notes Registration Statement, (ii) the
release of such Records is ordered pursuant to
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a subpoena or other order from a court of competent jurisdiction, (iii) the
information in such Records is public or has been made generally available
to the public other than as a result of a disclosure or failure to
safeguard by such Inspector or (iv) disclosure of such information is, in
the opinion of counsel for any Inspector, necessary or advisable in
connection with any action, claim, suit or proceeding, directly or
indirectly, involving or potentially involving such Inspector and arising
out of, based upon, related to, or involving this Agreement, or any
transactions contemplated hereby or arising hereunder. Each selling Holder
of such Registrable Notes and each such Participating Broker-Dealer will be
required to agree that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Issuer unless
and until such is made generally available to the public. Each selling
Holder of such Registrable Notes and each such Participating Broker-Dealer
will be required to further agree that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Issuer and allow the Issuer to undertake appropriate
action to prevent disclosure of the Records deemed confidential at their
expense.
(p) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a), as the case may be, to be qualified
under the TIA not later than the effective date of the Exchange Offer or
the first Notes Registration Statement relating to the Registrable Notes;
and in connection therewith, cooperate with the trustee under any such
indenture and the Holders of the Registrable Notes, to effect such changes
to such indenture as may be required for such indenture to be so qualified
in accordance with the terms of the TIA; and execute, and use its best
efforts to cause such trustee to execute, all documents as may be required
to effect such changes, and all other forms and documents required to be
filed with the SEC to enable such indenture to be so qualified in a timely
manner.
(q) Comply with all applicable rules and regulations of the SEC and
make generally available to the securityholders of the Issuer earnings
statements satisfying the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period is a fiscal
year) (i) commencing at the end of any fiscal quarter in which Registrable
Notes are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the
Issuer after the effective date of a Notes Registration Statement, which
statements shall cover said 12-month periods.
(r) Upon consummation of the Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Issuer, in a form customary for
underwritten transactions, addressed to the Trustee for the benefit of all
Holders of Registrable Notes participating in the Exchange Offer or the
Private Exchange, as the case may be, that the Exchange
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Notes or the Private Exchange Notes, as the case may be, and the related
indenture constitute legally valid and binding obligations of the Issuer,
enforceable against the Issuer in accordance with their respective terms
subject to customary exceptions and qualifications; provided that the
Issuer need not comply with this Section 5(r) if all Exchange Notes and
Private Notes are issued pursuant to the Indenture.
(s) If the Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Notes by Holders to the Issuer (or to such
other Person as directed by the Issuer) in exchange for the Exchange Notes
or the Private Exchange Notes, as the case may be, the Issuer shall mark,
or caused to be marked, on such Registrable Notes that such Registrable
Notes are being canceled in exchange for the Exchange Notes or the Private
Exchange Notes, as the case may be; in no event shall such Registrable
Notes be marked as paid or otherwise satisfied.
(t) Cooperate with each seller of Registrable Notes covered by any
Notes Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Notes and their respective counsel in
connection with any filings required to be made with the NASD.
(u) Use its best efforts to take all other steps reasonably necessary
to effect the registration of the Registrable Notes covered by a Notes
Registration Statement contemplated hereby.
The Issuer may require each seller of Registrable Notes as to which any
registration is being effected to furnish to the Issuer such information
regarding such seller and the distribution of such Registrable Notes as the
Issuer may, from time to time, reasonably request. The Issuer may exclude from
such registration the Registrable Notes of any seller who fails to furnish such
information within a reasonable time (which time in no event shall exceed 30
days) after receiving such request. Each seller as to which any Shelf
Registration is being effected agrees to furnish promptly to the Issuer all
information required to be disclosed in order to make the information previously
furnished to the Issuer by such seller not materially misleading.
Each Holder of Registrable Notes and each Participating Broker-Dealer
agrees by acquisition of such Registrable Notes or Exchange Notes to be sold by
such Participating Broker-Dealer, as the case may be, that, upon receipt of any
notice from the Issuer of the happening of any event of the kind described in
Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi), such Holder will forthwith
discontinue disposition of such Registrable Notes covered by a Notes
Registration Statement and such Participating Broker-Dealer will forthwith
discontinue disposition of such Exchange Notes pursuant to any Notes Prospectus
and, in each case, forthwith discontinue dissemination of such Prospectus until
such Holder's or Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Notes Prospectus contemplated by Section 5(k), or until
it is advised in writing (the "Advice") by the Issuer that the use of the
applicable Prospectus may be resumed, and has received copies of any amendments
or supplements thereto and, if so directed by the Issuer, such Holder or
Participating Broker-Dealer, as the case may be, will
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deliver to the Issuer all copies, other than permanent file copies, then in such
Holder's or Participating Broker-Dealer's possession, of the Notes Prospectus
covering such Registrable Securities current at the time of the receipt of such
notice. In the event the Issuer shall give any such notice, the Applicable
Period shall be extended by the number of days during such periods from and
including the date of the giving of such notice to and including the date when
each Participating Broker-Dealer shall have received (x) the copies of the
supplemented or amended Notes Prospectus contemplated by Section 5(k) or (y) the
Advice.
6. Registration Expenses
(a) All fees and expenses incident to the performance of or compliance with
this Agreement by the Issuer (other than Registration Expenses, which are dealt
with exclusively in Section 10 hereof) shall be borne by the Issuer, whether or
not the Exchange Offer or a Shelf Registration is filed or becomes effective,
including, without limitation, (i) all registration and filing fees (including,
without limitation, (A) fees with respect to filings required to be made with
the NASD in connection with an underwritten offering and (B) fees and expenses
of compliance with state securities or Blue Sky laws as provided in Section 5(h)
hereof, (ii) printing expenses, including, without limitation, expenses of
printing prospectuses if the printing of prospectuses is requested by the
managing underwriter or underwriters, if any, or by the Holders of a majority in
aggregate principal amount of the Registrable Notes included in any Notes
Registration Statement or by any Participating Broker-Dealer during the
Applicable Period, as the case may be, (iii) reasonable messenger, telephone and
delivery expenses incurred in connection with the Exchange Registration
Statement and any Shelf Registration, (iv) fees and disbursements of counsel for
the Issuer and reasonable fees and disbursements of special counsel for the
sellers of Registrable Notes (subject to the provisions of Section 6(b)), (v)
fees and disbursements of all independent certified public accountants referred
to in Section 5(n)(iii) (including, without limitation, the expenses of any
special audit and "cold comfort" letters required by or incident to such
performance), (vi) rating agency fees, (vii) Securities Act liability insurance,
if the Issuer desires such insurance, (viii) fees and expenses of all other
Persons retained by the Issuer, (ix) internal expenses of the Issuer (including,
without limitation, all salaries and expenses of officers and employees of the
Issuer performing legal or accounting duties), (x) the expense of any annual
audit, (xi) the fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange and (xii) the expenses
relating to printing, word processing and distributing all Registration
Statements, underwriting agreements, securities sales agreements, indentures and
any other documents necessary in order to comply with this Agreement.
(b) In connection with any Shelf Registration hereunder, the Issuer shall
reimburse the Holders of the Registrable Notes being registered in such
registration for the fees and disbursements, not to exceed $25,000, of not more
than one counsel (in addition to appropriate local counsel) chosen by the
Holders of a majority in aggregate principal amount of the Registrable Notes to
be included in such Shelf Registration and other out-of-pocket expenses of
Holders of Registrable Notes incurred in connection with the registration and
sale of Registrable Notes.
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7. Indemnification
(a) The Issuer agrees to indemnify and hold harmless each Holder of
Registrable Notes, each Holder of Registrable Securities and each Participating
Broker-Dealer selling Exchange Notes during the Applicable Period, the officers
and directors of each such Person, and each Person, if any, who controls any
such Person within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act (each, a "Participant"), from and against any and
all losses, claims, damages and liabilities (including, without limitation, the
reasonable legal fees and other reasonable expenses actually incurred in
connection with any suit, action or proceeding or any claim asserted) caused by,
arising out of or based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (as amended
or supplemented if the Issuer shall have furnished any amendments or supplements
thereto) or caused by, arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Prospectus (as amended or supplemented if the Issuer shall have furnished any
amendments or supplements thereto) or caused by, arising out of or based upon
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Participant furnished to the Issuer
in writing by or on behalf of such Participant expressly for use therein;
provided, however, that the Issuer will not be liable if such untrue statement
or omission or alleged untrue statement or omission was contained or made in any
preliminary prospectus and corrected in the Prospectus or any amendment or
supplement thereto and the Prospectus does not contain any other untrue
statement or omission or alleged untrue statement or omission of a material fact
that was the subject matter of the related proceeding and any such loss,
liability, claim, damage or expense suffered or incurred by the Participants
resulted from any action, claim or suit by any Person who purchased Registrable
Securities, Registrable Notes or Exchange Notes which are the subject thereof
from such Participant and it is established in the related proceeding that such
Participant failed to deliver or provide a copy of the Prospectus (as amended or
supplemented) to such Person with or prior to the confirmation of the sale of
such Registrable Securities, Registrable Notes or Exchange Notes sold to such
Person if required by applicable law, unless such failure to deliver or provide
a copy of the Prospectus (as amended or supplemented) was a result of
noncompliance by the Issuer with Section 5 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to indemnify and
hold harmless the Issuer, its directors and officers and each Person who
controls the Issuer within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Issuer to each Participant, but only with reference to information
relating to such Participant furnished to the Issuer in writing by such
Participant expressly for use in any Registration Statement or Prospectus, any
amendment or supplement thereto, or any preliminary prospectus. The liability
of any Participant under this paragraph shall in no event
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exceed the proceeds received by such Participant from sales of Registrable
Securities, Registrable Notes or Exchange Notes giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding; provided, however, that the failure to so notify the
Indemnifying Person shall not relieve it of any obligation or liability which it
may have hereunder or otherwise (unless and only to the extent that such failure
directly results in the loss or compromise of any material rights or defenses by
the Indemnifying Person and the Indemnifying Person was not otherwise aware of
such action or claim). In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed in
writing to the contrary, (ii) the Indemnifying Person has failed within a
reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that, unless there is a conflict among Indemnified Persons, the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed promptly after
receipt of the invoice therefor as they are incurred. Any such separate firm for
the Participants and such control Persons of Participants shall be designated in
writing by Participants who sold a majority in interest of the securities sold
by all such Participants and any such separate firm for the Issuer, its
directors, its officers and such control Persons of the Issuer shall be
designated in writing by the Issuer. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its prior written
consent, but if settled with such consent or if there is a final non-appealable
judgment for the plaintiff for which the Indemnified Person is entitled to
indemnification pursuant to this Agreement, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested an Indemnifying Person
to reimburse the Indemnified Person for reasonable fees and expenses actually
incurred by counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its prior written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement; provided, however,
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that the Indemnifying Person shall not be liable for any settlement effected
without its consent pursuant to this sentence if the Indemnifying Person is
contesting, in good faith, the request for reimbursement. No Indemnifying Person
shall, without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement (A) includes
an unconditional release of such indemnified Person, in form and substance
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement as
to an admission of fault, culpability or failure to act by or on behalf of an
Indemnified Person.
(d) If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable (other than by reason of the exceptions
specifically provided therein) to, or insufficient to hold harmless, an
Indemnified Person in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraphs, in
lieu of indemnifying such Indemnified Person thereunder and in order to provide
for just and equitable contribution, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect (i) the relative
benefits received by the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other from the offering of the Registrable
Securities, Registrable Notes or Exchange Notes, as the case may be, or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the Indemnifying Person or Persons on the one hand and the Indemnified Person or
Persons on the other in connection with the statements or omissions (or alleged
statements or omissions) that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Issuers on the one hand or
by the Participants or such other Indemnified Person, as the case may be, on the
other, such Persons' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission and any other
equitable considerations appropriate under the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable
Securities, Registrable Notes or Exchange Notes, as the case may be, exceeds the
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amount of any damages that such Participant has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this Section 7
will be in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A
The Issuer covenants that it will file the reports required to be filed by
it under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder in a timely manner and, if at any time it is not
required to file such reports, it will, upon the request of any Holder of
Registrable Securities or Registrable Notes, make publicly available other
information so long as necessary to permit sales pursuant to Rule 144 and Rule
144A. The Issuer further covenants, for so long as any Registrable Securities
or Registrable Notes remain outstanding, to make available to any Holder or
beneficial owner thereof in connection with any sale thereof and any prospective
purchaser of such Registrable Securities or Registrable Notes from such Holder
or beneficial owner, the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of such Registrable Securities or
Registrable Notes pursuant to Rule 144A.
9. Underwritten Registrations of Registrable Notes
If any of the Registrable Notes covered by any Shelf Registration is to be
sold in an underwritten offering, the investment banker or investment bankers
and manager or managers that will manage the offering will be selected by the
Holders of a majority in aggregate principal amount of such Registrable Notes
included in such offering and reasonably acceptable to the Issuer.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
10. Registration of Registrable Securities
(a) Shelf Registration of Registrable Securities. The Company shall,
within 90 days after the effectiveness date (the "IPO Effectiveness Date") of a
registration statement filed with the Commission in connection with an initial
public offering of the Common Stock, use its best efforts to (a) file a shelf
registration statement covering resales of the Warrant Shares (the
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"Warrant Shares Shelf Registration Statement"), (b) cause the Warrant Shares
Shelf Registration Statement to be declared effective under Securities Act and
(c) keep effective the Warrant Shares Shelf Registration Statement until the
earlier of one year after the IPO Effectiveness Date (or such earlier date as
may be authorized under Rule 144(k), as it may be amended from time to time) or
such time as all of the applicable Warrant Shares have been sold thereunder or
are otherwise eligible for sale under Rule 144 under the Securities Act. The
Company shall, in the event that a Warrant Shares Shelf Registration Statement
is filed, provide to each Holder copies of the prospectus that is a part of the
Warrant Shares Shelf Registration Statement, notify each such Holder when the
Warrant Shares Shelf Registration Statement for the Warrant Shares has become
effective and take certain other actions as are required to permit unrestricted
resales of the Warrant Shares. The Company shall require a Holder that sells
Warrant Shares pursuant to the Warrant Shares Shelf Registration Statement to be
named as a selling security holder in the related prospectus and to deliver a
prospectus to purchasers, and any such Holder shall be bound by the provisions
of this Agreement that are applicable to such a Holder (including certain
indemnification rights and obligations). Each holder of the Warrant Shares shall
deliver information to be used in connection with the Warrant Shares Shelf
Registration Statement and provide comments on the Warrant Shares Shelf
Registration Statement within the time periods set forth in this Agreement in
order to have its Warrant Shares included in the Warrant Shares Shelf
Registration Statement.
(b) Piggy-Back Registration of Registrable Securities. If at any time
after the Issue Date the Issuer proposes to file a registration statement under
the Securities Act with respect to an offering by the Issuer for its own account
or for the account of any holders of its Common Stock (other than (i) a
registration statement on Form S-4 or S-8 (or any substitute form that may be
adopted by the SEC), (ii) a registration statement filed in connection with an
exchange offer or offering of securities solely to the Issuer's existing
securityholders or (iii) any Notes Registration Statement), then the Issuer
shall give written notice of such proposed filing to the Holders of Registrable
Securities as soon as practicable (but in no event fewer than 20 days before the
anticipated filing date), and such notice shall offer such Holders the
opportunity to register such number of Registrable Securities as each Holder may
request in writing within 20 days after receipt of such written notice from the
Issuer (which request shall specify the Registrable Securities intended to be
disposed of by such Selling Holder and the intended method of distribution
thereof) (a "Piggy-Back Registration"). The Issuer shall use its best efforts
to keep such Piggy-Back Registration continuously effective under the Securities
Act until at least the earlier of (A) an aggregate of 180 days after the
effective date thereof or (B) the consummation of the distribution by the
Holders of all of the Registrable Securities covered thereby. The Issuer shall
use its best efforts to cause the managing underwriter or underwriters, if any,
of such proposed offering to permit the Registrable Securities requested to be
included in a Piggy-Back Registration to be included on the same terms and
conditions as any similar securities of the Issuer or any other security holder
included therein and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method of distribution thereof. Any
Selling Holder shall have the right to withdraw its request for inclusion of its
Registrable Securities in any Registration Statement pursuant to this Section 10
by giving written notice to the Issuer of its request to withdraw at any time
prior to the filing of such Registration Statement with the SEC.
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The Issuer will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 10,
and each Holder of Registrable Securities shall pay all underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of such Holder's Registrable Securities pursuant to a Piggy-Back Registration
effected pursuant to this Section 10.
No registration effected under this Section 10, and no failure to
effect a registration under this Section 10, shall relieve the Issuer of its
obligation to effect a registration upon the request of Holders of Registrable
Notes pursuant to Section 2 or 3 hereof, and no failure to effect a registration
under this Section 10 and to complete the sale of securities registered
thereunder in connection therewith shall relieve the Issuer of any other
obligation under this Agreement.
(c) Priority in Piggy-Back Registration. In a registration pursuant to
this Section 10 involving an underwritten offering, if the managing underwriter
or underwriters of such underwritten offering have informed, in writing, the
Issuer and the Selling Holders requesting inclusion in such offering that in
such underwriter's or underwriters' opinion the total number of securities which
the Issuer, the Selling Holders and any other Persons desiring to participate in
such registration intend to include in such offering is such as to adversely
affect the success of such offering, including the price at which such
securities can be sold, then the Issuer will be required to include in such
registration only the amount of securities which it is so advised should be
included in such registration. In such event: (x) in cases initially involving
the registration for sale of securities for the Issuer's own account, securities
shall be registered in such offering in the following order of priority: (i)
first, the securities which the Issuer proposes to register, (ii) second,
provided that no securities proposed to be registered by the Issuer have been
excluded from such registration, the securities which have been requested to be
included in such registration by the Selling Holders and by Persons entitled to
exercise "piggy-back" registration rights pursuant to contractual commitments to
"piggy-back" registration rights of the Issuer entered into prior to, and in
existence on, the date hereof (pro rata based on the amount of securities sought
to be registered by such Persons), and (iii) third, provided that no securities
sought to be included by the Selling Holders or such Persons have been excluded
from such registration, the securities of other Persons entitled to exercise
"piggy-back" registration rights pursuant to contractual commitments of the
Issuer entered into subsequent to the date hereof (pro rata based on the amount
of securities sought to be registered by such Persons); and (y) in cases not
initially involving the registration for sale of securities for the Issuer's own
account, securities shall be registered in such offering in the following order
of priority: (i) first, the securities of any Person whose exercise of a
"demand" registration right pursuant to a contractual commitment of the Issuer
is the basis for the registration, (ii) second, provided that no securities of
any Person whose exercise of a "demand" registration right pursuant to a
contractual commitment of the Issuer is the basis for such registration have
been excluded from such registration, the securities requested to be included in
such registration by the Selling Holders pursuant to this Agreement and by
Persons entitled to exercise "piggy-back" registration rights pursuant to
contractual commitments to "piggy-back" registration rights of the Issuer
entered into prior to, and in existence on, the date hereof (pro rata based on
the total amount of securities sought to be included by such Persons), (iii)
third, provided that no securities sought to be included by the Selling Holders
or such Persons have been excluded
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from such registration, securities of other Persons entitled to exercise "piggy-
back" registration rights pursuant to contractual commitments entered into
subsequent to the date hereof (pro rata based on the amount of securities sought
to be registered by such Persons) and (iv) fourth, provided that no securities
sought to be included by other Persons entitled to exercise "piggy-back"
registration rights pursuant to such contractual commitments have been excluded
from such registration, any securities which the Issuer proposes to register.
(d) Suspension of Sales, etc. Subject to the next sentence of this
paragraph, the Issuer shall be entitled to postpone, for a reasonable period of
time, the effectiveness of, or suspend the rights of any Holders to make sales
pursuant to any Warrants Registration Statement otherwise required to be
prepared, filed and made and kept effective by it under this Section 10;
provided, however, that the duration of such postponement or suspension may not
exceed the earlier to occur of (A) 15 days after the cessation of the
circumstances described in the next sentence of this paragraph on which such
postponement or suspension is based or (B) 120 days after the date of the
determination of the Board of Directors referred to in the next sentence. Such
postponement or suspension may only be effected if the Board of Directors of the
Issuer determines in good faith that the effectiveness of, or sales pursuant to,
such Warrants Registration Statement would materially impede, delay or interfere
with any financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction involving the Issuer or any of
its affiliates or require disclosure of material information which the Issuer
has a bona fide business purpose for preserving as confidential. If the Issuer
shall so postpone the effectiveness of, or suspend the rights of any Holders to
make sales pursuant to, a Warrants Registration Statement, it shall, as promptly
as possible, notify any Selling Holders of such determination, and the Selling
Holders shall (y) have the right, in the case of a postponement of the
effectiveness of a Warrants Registration Statement, upon the affirmative vote of
Selling Holders of not less than a majority of the Registerable Securities to be
included in such Warrants Registration Statement, to withdraw the request for
registration by giving written notice to the Issuer within 10 days after receipt
of such notice or (z) in the case of a suspension of the right to make sales,
receive an extension of the registration period referred to in Section 10(a)
hereof equal to the number of days of the suspension.
(e) Exclusion of Registrable Securities. The Issuer shall not be required
by this Section 10 to include Registrable Securities in a Piggy-Back
Registration if (i) in the written opinion of counsel to the Issuer, addressed
to the Holders of Registrable Securities and delivered to them, the Holders of
such Registrable Securities seeking registration would be free to sell all such
Registrable Securities within the current calendar quarter without registration
under Rule 144, which opinion may be based in part upon the representation by
the Holders of such Registrable Securities seeking registration, which
representation shall not be unreasonably withheld, that each such Holder is not
an affiliate of the Issuer within the meaning of the Securities Act, and (ii)
all requirements under the Securities Act for effecting such sales are satisfied
at such time.
(f) Obligations of Selling Holders. The Issuer's obligations under this
Section 10 shall be subject to the obligations of the Selling Holders, which the
Selling Holders acknowledge, to
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furnish all information and materials and to take any and all actions as may be
required under applicable federal and state securities laws and regulations to
permit the Issuer to comply with all applicable requirements of the SEC and to
obtain any acceleration of the effective date of a Warrants Registration
Statement.
(g) No Special Audit. The Issuer shall not be obligated to cause any
special audit to be undertaken in connection with any Piggy-Back Registration
unless such audit is requested by the underwriters with respect to such Piggy-
Back Registration.
11. Miscellaneous
(a) No Inconsistent Agreements. The Issuer has not entered, as of the
date hereof, and the Issuer shall not enter, after the date of this Agreement,
into any agreement with respect to any of its securities that is inconsistent
with the rights granted to the Holders of Registrable Securities or Registrable
Notes in this Agreement or otherwise conflicts with the provisions hereof. The
Issuer has not entered and will not enter into any agreement with respect to any
of its securities which will grant to any Person piggy-back rights with respect
to a Notes Registration Statement.
(b) Adjustments Affecting Registrable Securities or Registrable Notes.
The Issuer shall not, directly or indirectly, take any action with respect to
the Registrable Securities or Registrable Notes as a class that would adversely
affect the ability of the Holders to include such Registrable Securities or
Registrable Notes in a registration undertaken pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of (A) in circumstances that would adversely affect any Holders of
Registrable Securities or Registrable Notes, the Holders of a majority of the
Registrable Securities or the Holders of not less than a majority in aggregate
principal amount of the then outstanding Registrable Notes, as the case may be,
and (B) in circumstances that would adversely affect Participating Broker-
Dealers, the Participating Broker-Dealers holding not less than a majority in
aggregate principal amount of the Exchange Notes held by all Participating
Broker-Dealers; provided, however, that Section 7 and this Section 11(c) may not
be amended, modified or supplemented without the prior written consent of each
Holder and each Participating Broker-Dealer (including any Person who was a
Holder or Participating Broker-Dealer of Registrable Securities or Registrable
Notes or Exchange Notes, as the case may be, disposed of pursuant to any
Registration Statement). Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Notes whose securities are
being tendered pursuant to the Exchange Offer or sold pursuant to a Notes
Registration Statement and that does not directly or indirectly affect, impair,
limit or compromise the rights of other Holders of Registrable Notes may be
given by Holders of at least a majority in aggregate principal amount of the
Registrable Notes being tendered or being sold by such Holders pursuant to such
Notes Registration Statement.
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(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, next-day air courier or telecopier:
1. if to a Holder of Registrable Securities or Registrable Notes or
to any Participating Broker-Dealer, at the most current address of such
Holder or Participating Broker-Dealer, as the case may be, set forth on the
records of the registrar of the Warrants or the Notes, with a copy in like
manner to the Initial Purchaser as follows:
JEFFERIES & COMPANY, INC.
Two Houston Center
909 Fannin St., Suite 3100
Houston, Texas 77010
Facsimile No.: (713) 650-8730
Attention: Robert W. Carington
with a copy to:
Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010
Facsimile No.: (713) 651-5246
Attention: Charles L. Strauss
2. if to the Initial Purchaser, at the address specified in Section
11(d)(1);
3. if to the Issuer, as follows:
Forman Petroleum Corporation
650 Poydras Street, Suite 2200
New Orleans, Louisiana 70130-6101
Facsimile No.: (504) 522-1796
Attention: President
with copies to:
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin
Houston, Texas 77002-6760
Facsimile No.: (713) 615-5437
Attention: Alan P. Baden
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All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the United States mail, postage prepaid, if mailed, one
business day after being timely delivered to a next-day air courier guaranteeing
overnight delivery; and when receipt is acknowledged by the addressee, if
telecopied.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties hereto and
the Holders; provided, however, that the provisions of this Agreement relating
to registration rights shall not inure to the benefit of or be binding upon a
successor or assign of a Holder unless such successor or assign holds
Registrable Securities or Registrable Notes.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE NON-
EXCLUSIVE JURISDICTION OF THE COMPETENT COURTS OF THE STATE OF NEW YORK SITTING
IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(j) Notes Held by the Issuer or Its Affiliates. Whenever the consent or
approval of Holders of a specified percentage of Registrable Securities or
Registrable Notes is required
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hereunder, Registrable Securities or Registrable Notes, as the case may be, held
by the Issuer or its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
(k) Third Party Beneficiaries. Holders and Participating Broker-Dealers
are intended third party beneficiaries of this Agreement and this Agreement may
be enforced by such Persons.
(1) Entire Agreement. This Agreement, together with the Purchase
Agreement, the Indenture and the Security Documents, is intended by the parties
as a final and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein and
any and all prior oral or written agreements, representations, or warranties,
contracts, understandings, correspondence, conversations and memoranda between
the Initial Purchaser on the one hand and the Issuer on the other, or between or
among any agents, representatives, parents, subsidiaries, affiliates,
predecessors in interest or successors in interest with respect to the subject
matter hereof and thereof are merged herein and replaced hereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
FORMAN PETROLEUM CORPORATION
By:________________________________
McLain J. Forman
Chairman of the Board,
Chief Executive Officer and President
JEFFERIES & COMPANY, INC.
By:________________________________
Robert W. Carington
Senior Vice President
VEHOU05:52593.1
VEHOU05:54518.1: Exhibit B
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EXHIBIT C
FORM OF
INTERCREDITOR AND SUBORDINATION AGREEMENT
LIENS
This Intercreditor and Subordination Agreement dated as of ___________,199_
(this "Agreement") is made by and between U.S. TRUST COMPANY OF TEXAS, N.A., AS
TRUSTEE under and pursuant to the hereinafter defined "Subordinated Creditor
Indenture" (the "Subordinated Creditor"), and ___________________________, as
Collateral Agent ("Collateral Agent") for the lenders ("Lenders") signatory to
the hereinafter defined "Lender Credit Agreement".
RECITALS
A. As of June ____, 1997, Forman Petroleum Corporation, a Delaware
corporation (the "Borrower"), and the Subordinated Creditor entered into an
Indenture (the "Subordinated Creditor Indenture") pursuant to which and upon the
terms and conditions stated therein indebtedness was incurred by the Borrower
(the "Subordinated Indenture Indebtedness") in order to refinance existing term
loans ("Existing Loans") secured by certain oil and gas properties of Borrower
located in the State of Louisiana in the Parishes of Jefferson, Lafourche, St.
Charles and Terrebonne (the "Collateral").
B. The Existing Loans were secured by liens and security interests (the
"Existing Liens") upon the Collateral created by and existing under that certain
Act of Mortgage, Security Agreement, Assignment of Production and Financing
Statement dated November 21, 1996, executed by Borrower, passed before Diane L.
Bailey, Notary Public, recorded in the parishes in the State of Louisiana as set
forth on Schedule I attached hereto, as amended by Act of First Amendment of
Mortgage, Security Agreement, Assignment of Production and Financing Statement
dated effective as of December 16, 1996, passed before Judy M. Sullivan, Notary
Public, recorded in the parishes in the State of Louisiana as set forth on
attached Schedule I (as so amended, the "Existing Mortgage").
C. The Subordinated Indenture Indebtedness to the extent of $_________
represents a renewal, rearrangement, extension and modification of Existing
Loans, and otherwise represents additional debts and obligations which
constitute additional "Obligations" under the terms of the Existing Mortgage,
and is secured by the Existing Liens.
D. The Existing Liens were assigned to the Subordinated Creditor, and the
Existing Mortgage has been further amended by Borrower and the Subordinated
Creditor pursuant to that
certain Act of Second Amendment of Mortgage, Security Agreement, Assignment of
Production and Financing Statement dated June ____, 1997, passed before
__________________________, Notary Public, recorded in the parishes in the State
of Louisiana as set forth on attached Schedule I (the Existing Mortgage, as so
amended, hereinafter called the "Subordinated Creditor Mortgage"), to fully
secure all amounts advanced to Borrower pursuant to the Subordinated Creditor
Indenture [Note: This recital may need to be revised to reflect additional
amendments to the Existing Mortgage or that the Subordinated Creditor Mortgage
is a new mortgage replacing the Existing Mortgage.]
E. As of ____________, the Borrower, the Lenders and the Collateral Agent
entered into a Credit Agreement (the "Lender Credit Agreement") pursuant to
which each Lender agreed, upon the terms and conditions stated therein, to make
a loan to the Borrower, secured by a first and prior lien upon the Collateral
pursuant to the "Lender Mortgage" as defined below.
F. One of the conditions of the Lender Credit Agreement is that the liens
and security interests in the Collateral under the Lender Mortgage be senior to
the liens and security interests in the Collateral under the Subordinated
Creditor Mortgage, in the manner and to the extent provided in this Agreement.
G. The Lenders, the Collateral Agent and the Subordinated Creditor desire
to enter into this Agreement concerning the various loans, credits and other
liabilities (actual or contingent) for which the Borrower is or shall be
obligated, and the respective rights of the Lenders, the Collateral Agent and
the Subordinated Creditor with respect to the Collateral.
H. In order to induce the Lenders and the Collateral Agent to extend
credit to the Borrower and for purposes of certain conditions precedent and
covenants of the Lender Loan Documents, the Subordinated Creditor hereby agrees
with the Lenders and the Collateral Agent, and in order to induce the
Subordinated Creditor to approve the Senior Liabilities and the Lenders' and
Collateral Agent's liens and security interests in the Collateral for purposes
of certain conditions precedent and covenants of the Subordinated Creditor Loan
Documents, the Lenders, the Collateral Agent and the Subordinated Creditor agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Terms Defined Above and in the Recitals. As used in this
Agreement, the following terms shall have the respective meanings indicated in
the opening paragraph hereof and in the above Recitals:
"Agreement"
"Borrower"
"Collateral"
"Collateral Agent"
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"Indenture Indebtedness"
"Lenders"
"Lender Credit Agreement"
"Lender Mortgage"
"Subordinated Creditor Indenture"
"Subordinated Creditor"
"Subordinated Creditor Mortgage"
Section 1.02 Lender Credit Agreement Definitions. All capitalized terms
which are used but not defined herein shall have the same meaning as in the
Lender Credit Agreement.
Section 1.03 Other Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below:
"Insolvency Proceeding" shall mean any proceeding for the purposes of
dissolution, winding up, liquidation, arrangement or reorganization of the
Borrower or its successors or assigns, whether in bankruptcy, insolvency,
arrangement, reorganization or receivership proceedings or upon an assignment
for the benefit of creditors or any other marshaling of the assets and
liabilities of the Borrower or its successors or assigns.
"Lender Loan Documents" shall mean the ["Loan Documents"], as defined or
referred to in the Lender Credit Agreement, and shall include the Lender Credit
Agreement, the Lender Mortgage and the Lender Notes, as any or all of the same
may be amended or supplemented from time to time.
"Lender Mortgage" shall mean ______________________________________________
________________________________________________________________________________
"Lender Notes" shall mean the promissory notes executed by the Borrower in
favor of the Lenders pursuant to the Lender Credit Agreement.
"Lien" shall mean any interest in property securing an obligation owed to,
or a claim by, a person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the lien or security interest arising from a mortgage, encumbrance,
pledge, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. For the purposes of this
Agreement, the Borrower or any subsidiary of the Borrower shall be deemed to be
the owner of any property which it has acquired or holds subject to a
conditional sale agreement, financing lease or other arrangement pursuant to
which title to the property has been retained by or vested in some other person
for security purposes.
"Lien Priority" shall mean with respect to any Lien of the Collateral
Agent, the Lenders or the Subordinated Creditor in the Collateral, the order of
priority of such Lien as specified in Section 2.01.
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"Loan Documents" shall mean the Lender Loan Documents and the Subordinated
Creditor Loan Documents.
"Party" shall mean any signatory to this Agreement.
"Senior Liabilities" shall mean the "Obligations", contingent or otherwise,
of the Borrower to the Lender defined in Section ______ of the Lender Mortgage
(including interest, as provided in the Lender Notes, after the filing of a
petition initiating any Insolvency Proceeding), fees, expenses or otherwise.
"Subordinated Creditor Enforcement Event" shall mean an "Event of Default"
under Section 6.01(1) of the Subordinated Creditor Indenture, or any event or
condition which does not materially affect the Lenders or their interests in the
Collateral, but which the Subordinated Creditor reasonably determines does
materially affect repayment of the Subordinated Liabilities or the Subordinated
Creditor's interests in the Collateral.
"Subordinated Creditor Loan Documents" shall mean the "Security Documents",
as defined or referred to in the Subordinated Creditor Indenture, the
Subordinated Creditor Indenture, the Subordinated Creditor Mortgage, the
Subordinated Creditor Note and any and all other instruments or documents
executed in connection with or as security for the Subordinated Liabilities, as
any or all of the same may be amended or supplemented from time to time.
"Subordinated Liabilities" shall mean the "Obligations", contingent or
otherwise, of the Borrower to the Subordinated Creditor defined in Section 1.15
of the Subordinated Creditor Mortgage (including interest after the filing of a
petition initiating any Insolvency Proceeding), fees, expenses or otherwise, and
including the secured claim of the Subordinated Creditor in respect of the
Collateral in any Insolvency Proceeding.
"Subordinated Creditor Note" shall mean the "Note", as defined in Section
1.14 of the Subordinated Creditor Mortgage.
"Trigger Event" shall mean any of (a) an Event of Default under Section
_____ of the Lender Credit Agreement, (b) the acceleration of or demand for
payment on any of the Lender Notes by the Collateral Agent or any Lender
pursuant to Section _____ of the Lender Credit Agreement, or (c) the
commencement of any action by the Collateral Agent or the Lenders or the
Subordinated Creditor, whether judicial or otherwise, for the enforcement of the
Lenders' or the Subordinated Creditor's rights and remedies under any of the
Loan Documents, including (i) commencement of any receivership or foreclosure
proceedings against or any other sale of, collection on or disposition of any
Collateral, including any notification to third parties to make payment directly
to the Collateral Agent or the Lenders, (ii) exercise of any right of set-off,
(iii) commencement of any Insolvency Proceeding, and (iv) commencement of any
action or proceeding against the Borrower to recover all or any part of the
Senior Liabilities or Subordinated Liabilities.
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Section 1.04. Singular and Plural. All definitions herein (whether set
forth herein directly or by reference to definitions in other documents) shall
be equally applicable to both the singular and the plural forms of the terms
defined.
Section 1.05. Miscellaneous. The words "hereof", "herein" or "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Article and section references are to articles and sections of this Agreement
unless otherwise specified. The term "including" shall mean "including,
without limitation".
ARTICLE 2
LIEN PRIORITY
Section 2.01. Agreement to Subordinate. The Subordinated Creditor hereby
agrees that the liens and security interests of the Subordinated Creditor in the
Collateral are and shall be subordinate in priority of lien to the Lenders' and
the Collateral Agent's liens and security interests in the Collateral. The
subordination of liens and security interests in favor of the Collateral Agent
and the Lenders herein shall not be deemed to subordinate the Subordinated
Creditor's liens and security interests to the liens and security interests of
any other Person. Except to the extent provided in Section 2.02, the
Subordinated Liabilities are not subordinated to the Senior Liabilities.
Section 2.02. Payment on the Subordinated Liabilities. Except as
permitted in this Section, the Subordinated Creditor agrees not to ask, demand,
sue for, take or receive from the Borrower, directly or indirectly, in cash or
other property or by set-off or in any other manner from the Collateral, payment
of all or any of the Subordinated Liabilities unless and until the Senior
Liabilities shall have been paid in full. The Subordinated Creditor may receive
or seek payment of or on the Subordinated Liabilities to the extent that any of
the following circumstances are applicable:
(a) The Subordinated Creditor may receive payment from the Borrower of
the Subordinated Liabilities if, at the time of making such payment and
immediately after giving effect thereto, (i) no Trigger Event is then
existing of which the Subordinated Creditor has been notified pursuant to
Section 2.04 or Section 2.05, (ii) in the case of scheduled payments of
principal and/or interest on the Subordinated Liabilities, all scheduled
payments of principal and/or interest which shall have become due under the
Lender Notes, and all payments due by demand under the Lender Notes, are
paid first or simultaneously with the Subordinated Liabilities then owing.
(b) The Subordinated Creditor may exercise, and nothing herein shall
constitute a waiver of, any right it may have at law or equity to receive
notice of, or to join or participate in, any action or proceeding or other
activity described in Section 3.01 (a) or (b) if the Collateral Agent or
any Lender has commenced or joined in the commencement of such action,
proceeding or activity or is seeking to enforce the Senior Liabilities
thereby or
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therein; provided, however, that exercise of any such right by the
Subordinated Creditor shall be subject to the Lien Priority and prior
application of proceeds of Collateral to the Senior Liabilities.
(c) If a Subordinated Creditor Enforcement Event has occurred and is
continuing, the Subordinated Creditor may give the Collateral Agent written
notice thereof, specifying the nature of the Subordinated Creditor
Enforcement Event in reasonable detail. If such Subordinated Creditor
Enforcement Event is continuing for more than 45 days after the delivery of
such notice, and if the Collateral Agent has not by the expiration of such
45 days period notified the Subordinated Creditor that the Collateral Agent
has commenced one or more types of enforcement actions described in Section
3.01, then the Subordinated Creditor may, subject to the Lien Priority and
prior application of proceeds of the Collateral to the Senior Liabilities,
take one or more types of enforcement actions described in Section 3.01. If
the Collateral Agent thereafter discontinues such enforcement action or
actions, and no other action described in Section 3.01 is then being taken
by the Collateral Agent, and such Subordinated Creditor Enforcement Event
is then continuing, then the Subordinated Creditor may, subject to the Lien
Priority and prior application of proceeds of the Collateral to the Senior
Liabilities, take one or more types of enforcement actions described in
Section 3.01.
(d) The Subordinated Creditor may make such demands or file such
claims in respect of the Subordinated Liabilities as may be necessary to
prevent the waiver or bar of such claims under applicable statutes of
limitations or other statutes, court orders or rules of procedure, but
except as provided in this Section 2.02, the Subordinated Creditor shall
not take any actions restricted by Article 3 in respect of such claims
until the Senior Liabilities are paid in full. For the purposes of this
Agreement, the Senior Liabilities shall not be deemed to have been paid in
full until the Lenders shall have received payment of the Senior
Liabilities in cash; provided, however, the Lenders shall credit payment on
the Senior Liabilities all amounts received from liquidation of the
Collateral less costs and expenses of collection and foreclosure reasonably
incurred.
Section 2.03. Priority of Liens. Irrespective of the order of recording
of mortgages, financing statements, security agreements or other instruments,
and irrespective of the descriptions of Collateral contained in the Loan
Documents, including any financing statements, the Parties agree among
themselves that their respective liens and security interests in the Collateral
shall be governed by the Lien Priority, which shall be controlling in the event
of any conflict between this Agreement and any of the Loan Documents.
Section 2.04. Payments to the Subordinated Creditor Prior to Notice. The
Subordinated Creditor may retain all payments received on the Subordinated
Liabilities permitted by Section 2.02(a) notwithstanding the existence of a
Trigger Event, unless either the Subordinated Creditor has actual knowledge of
such Trigger Event or the Collateral Agent has delivered written notice to the
Subordinated Creditor of such Trigger Event in accordance with Section 5.06.
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Section 2.05. Notice of Trigger Event. The Collateral Agent and the
Subordinated Creditor each agree that it will use best efforts to notify the
other if it receives actual notice of the occurrence of a Trigger Event or
Subordinated Creditor Enforcement Event, in accordance with Section 5.06;
provided, however, that, except as provided in Section 2.02(b), neither of such
Parties shall be liable to the other for failure to send such notice, nor shall
they have any duty of inquiry to one another in respect of the occurrence of a
Trigger Event or Subordinated Creditor Enforcement Event.
ARTICLE 3
ACTIONS OF THE PARTIES
Section 3.01. Limitation on Certain Actions by the Subordinated Creditor.
Subject to Section 2.02, so long as the Senior Liabilities remain unpaid, the
Subordinated Creditor will not, without the prior written consent of the
Collateral Agent, take any of the following actions:
(a) commence, or join with any creditor other than the Lenders in
commencing, any Insolvency Proceeding;
(b) commence receivership or foreclosure proceedings against or
otherwise sell, collect or dispose of any Collateral; or
(c) notify third parties (including, without limitation, purchasers of
production of the oil and gas properties comprising the Collateral) to make
payment directly to the Subordinated Creditor or any of its agents or other
Persons acting on its behalf.
Section 3.02. Change in or Disposition of Subordinated Liabilities. While
the Senior Liabilities remain unpaid, the Subordinated Creditor will not sell,
assign, pledge, encumber or otherwise dispose of any of the Subordinated
Liabilities unless such sale, assignment, pledge, encumbrance or disposition is
made expressly subject to this Agreement.
Section 3.03. Payments from Purchasers of Production. Notwithstanding
anything to the contrary contained in the Loan Documents, prior to an event of
default under any Loan Document, neither Party to this Agreement may, without
the prior written consent of the other Party, require direct payments from the
purchasers of production from the oil and gas properties comprising the
Collateral.
Section 3.04. Notices. The Collateral Agent shall provide the
Subordinated Creditor with notice of any event of default under the Lender
Mortgage concurrently with delivery of such notice to the Borrower. In
addition, the Lenders or the Collateral Agent shall provide the Subordinated
Creditor with written notice at least 15 days prior to the Lenders or the
Collateral Agent exercising any remedies with respect to the Collateral, other
than directing the purchasers of production from
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the Collateral to make payments of production proceeds directly to the
Collateral Agent or Lenders pursuant to the terms of the Lender Mortgage.
Section 3.05. Foreclosure. The Lenders and the Collateral Agent shall
take reasonable steps as permitted by applicable law to foreclose upon only such
portion of the Collateral as shall be reasonably necessary to fully repay the
Senior Liabilities.
ARTICLE 4
ENFORCEMENT OF PRIORITIES
Section 4.01. In Furtherance of Subordination. The Subordinated Creditor
agrees as follows:
(a) Upon any distribution of all or any of the assets of the Borrower
to creditors of the Borrower (whether in cash, securities or other
property) in connection with any Insolvency Proceeding which otherwise
would be payable or deliverable upon or with respect to the Collateral
securing the Subordinated Liabilities shall be paid or delivered directly
to the Collateral Agent for application (in the case of cash) to or as
collateral (in the case of securities or other non-cash property) for the
payment or prepayment of the Senior Liabilities until the Senior
Liabilities shall have been paid in full.
(b) If any Insolvency Proceeding is commenced by or against the
Borrower, the Subordinated Creditor shall duly and promptly take such
action as the Collateral Agent may reasonably request (i) to collect the
proceeds of Collateral securing the Subordinated Liabilities for account of
the Lenders and to file appropriate claims or proofs of claim in respect of
the Subordinated Liabilities and (ii) to collect and receive any and all
payments or distributions which may be payable or deliverable upon or with
respect to the Collateral securing the Subordinated Liabilities.
(c) All payments or distributions upon or with respect to the
Subordinated Liabilities which are received by the Subordinated Creditor
contrary to the provisions of this Agreement shall be segregated from other
funds and property held by the Subordinated Creditor and shall be forthwith
paid over to the Collateral Agent in the same form as so received (with any
necessary indorsement) to be applied (in the case of cash) to or held as
collateral (in the case of non-cash property or securities) for the payment
or prepayment of the Senior Liabilities in accordance with the terms of the
Lender Credit Agreement.
(d) The Collateral Agent is hereby authorized to demand specific
performance of this Agreement, whether or not the Borrower shall have
complied with any of the provisions hereof applicable to it, at any time
when the Subordinated Creditor shall have failed to comply with any of the
provisions of this Agreement applicable to it, provided,
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however, the remedy of specific performance shall not be available, and the
Subordinated Creditor shall be free to assert any and all legal defenses it
may possess, if such remedy would result in, or otherwise constitute, a
violation of ERISA. The Subordinated Creditor hereby irrevocably waives any
defense based on the adequacy of a remedy at law, which might be asserted
as a bar to such remedy of specific performance.
(e) This Agreement shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Senior
Liabilities is, other than as a result of any malfeasance, intentional
fraud or negligence of a Lender or the Collateral Agent, rescinded or must
otherwise be returned by the Collateral Agent or any of the Lenders upon
the insolvency, bankruptcy or reorganization of the Borrower or otherwise,
all as though such payment had not been made.
ARTICLE 5
MISCELLANEOUS
Section 5.01. Rights of Subrogation. The Subordinated Creditor agrees
that no payment or distribution to the Collateral Agent or the Lenders pursuant
to the provisions of this Agreement shall entitle the Subordinated Creditor to
exercise any rights of subrogation in respect thereof until the Senior
Liabilities shall have been paid in full.
Section 5.02. Further Assurances. The Parties will, at the Subordinated
Creditor's expense and at any time and from time to time, promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that either Party may reasonably request, in
order to protect any right or interest granted or purported to be granted hereby
or to enable the Collateral Agent and the Lenders to exercise and enforce their
rights and remedies hereunder; provided, however, that neither Party shall be
required to pay over any payment or distribution, execute any instruments or
documents, or take any other action referred to in this Section 5.02 to the
extent that such action would contravene any law, order or other legal
requirement, and in the event of a controversy or dispute, either Party may
interplead any payment or distribution in any court of competent jurisdiction,
without further responsibility in respect of such payment or distribution under
this Section 5.02.
Section 5.03. Defenses Similar to Suretyship Defenses. All rights and
interests of the Collateral Agent and the Lenders hereunder, and all agreements
and obligations of the Subordinated Creditor under this Agreement, shall remain
in full force and effect irrespective of:
(a) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Senior Liabilities, or any other amendment
or waiver of or any consent to departure from the Lender Notes or the
Lender Credit Agreement, provided, however, that this clause (a) shall not
apply to, and the Subordinated Creditor's liens and security interests in
the Collateral shall not be subordinated in priority by virtue of this
Agreement to the
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Lenders' or the Collateral Agent's liens and security interests therein, if
there is any amendment, without the express written consent of the
Subordinated Creditor, which alters the amount of the Senior Liabilities or
the rate of interest or commission payable with respect thereto or alters
the schedule of payments of principal or interest thereon, or which
subordinates the Senior Liabilities to the claims of any other Person or
which subordinates the liens and security interests of the Lenders or the
Collateral Agent in the Collateral to the liens and security interests in
the Collateral of any other Person, or which has the effect stated in the
proviso to clause (b) below; or
(b) any exchange, release or non-perfection of any Collateral, or any
release, amendment or waiver of or consent to departure from any guaranty,
for all or any of the Senior Liabilities, provided, however, that this
clause (b) shall not apply to, and the Subordinated Creditor's liens and
security interests in the Collateral shall not be subordinated in priority
by virtue of this Agreement to the Lenders' or the Collateral Agent's liens
and security interests therein, if there is any such release, amendment,
waiver or consent, without the express written consent of the Subordinated
Creditor, which releases any material items or amount of Collateral
(excluding substitutions or releases of Collateral expressly contemplated
by the Loan Documents).
Section 5.04. Waiver. Except as otherwise provided herein, the
Subordinated Creditor hereby waives (i) any failure, omission, delay or lack on
the part of the Collateral Agent or the Lenders to enforce, assert or exercise
any right, power or remedy conferred on any of them in any of the Lender Loan
Documents or this Agreement or the inability of the Collateral Agent or the
Lenders to enforce any provision of the Lender Loan Documents or this Agreement,
and (ii) without limiting the generality of the foregoing, any requirement that
the Collateral Agent or the Lenders to protect, secure, perfect or insure any
liens and security interests or other Lien or any property subject thereto or
exhaust any right or take any action against the Borrower or any other Person or
any Collateral; provided, however, that this Section 5.04 shall not be
applicable to, and the Subordinated Creditor's liens and security interests in
the Collateral shall not be subordinated in priority by virtue of this Agreement
to the Lenders' or the Collateral Agent's liens and security interests therein,
if, due to the Collateral Agent's or any Lender's malfeasance, intentional fraud
or negligence, or for any other reason, there is any lack of validity or
enforceability, in any material respect, of the Lender Loan Documents.
Section 5.05. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by any Party shall in any event be
effective unless the same shall be in writing and signed by the each Party, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
Section 5.06. Addresses for Notices. All demands, notices and other
communications provided for hereunder shall be in writing and, if to the
Subordinated Creditor, mailed or sent by telecopy or delivered to it, addressed
to it as follows:
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U.S. Trust Company of Texas, N.A., as Trustee
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201
Attention: Corporate Trust
Facsimile Number: 214/754-1303
and if to the Collateral Agent or the Lenders, mailed, sent or delivered to
such party or parties, addressed to it or them at the address of the Collateral
Agent or the Lenders (as the case may be) specified in the Lender Credit
Agreement, or as to any party at such other address as shall be designated by
such party in a written notice to the other parties complying as to delivery
with the terms of this Section. All such demands, notices and other
communications shall be effective, when mailed, two business days after deposit
in the mails, postage prepaid, when sent by telecopy, when receipt is
acknowledged by the receiving telecopy equipment (or at the opening of the next
business day if receipt is after normal business hours), or when delivered, as
the case may be, addressed as aforesaid.
Section 5.07. No Waiver; Remedies. No failure on the part of any Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 5.08. Continuing Agreement; Transfer of Lender Notes. This
Agreement is a continuing agreement and shall (i) remain in full force and
effect until the Senior Liabilities and, solely for the purposes of Section
5.14, the Subordinated Liabilities shall have been paid in full, (ii) be binding
upon the Parties and their successors and assigns, and (iii) inure to the
benefit of and be enforceable by the Parties and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (iii), any of the Lenders may assign or otherwise transfer its Lender
Note to any other Person (other than Borrower or an Affiliate of Borrower), and
such other Person shall thereupon become vested with all the rights in respect
thereof granted to such Lender herein or otherwise.
Section 5.09. Governing Law; Entire Agreement. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of [New
York] except as otherwise preempted by applicable federal law, and except to the
extent the law of the State of Louisiana mandatorily governs, being the
jurisdiction in which the Collateral is located. This Agreement constitutes the
entire agreement and understanding among the Parties with respect to the subject
matter hereof and supersedes any prior agreements, written or oral, with respect
thereto.
Section 5.10. Counterparts. This Agreement may be executed in any number
of counterparts, and it is not necessary that the signatures of all Parties be
contained on any one counterpart hereof; each counterpart will be deemed to be
an original, and all together shall constitute one and the same document.
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Section 5.11. No Third Party Beneficiary. This Agreement is solely for
the benefit of the Parties (and their permitted assignees). No other Person
(including Borrower or any Affiliate of Borrower) shall be deemed to be a third
party beneficiary of this Agreement.
Section 5.12. Headings. The headings of the articles and sections of this
Agreement are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof.
Section 5.13. Severability. If any of the provisions in this Agreement
shall, for any reason, be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement and shall not invalidate the Payment Priority or
Lien Priority set forth in this Agreement.
Section 5.14. Payment in Full of Senior Liabilities. Upon payment in full
of the Senior Liabilities:
(a) All payments or distributions from the Borrower or with respect to
the Collateral received by the Collateral Agent or any Lender shall be
segregated from other funds and property held by the Collateral Agent or
such Lender and shall be promptly paid over to the Subordinated Creditor in
the same form as received (with any necessary endorsement without recourse
or warranty) to be applied to or held for the payment or prepayment of the
Subordinated Liabilities in accordance with the terms of the Subordinated
Creditor Indenture; and
(b) The Collateral Agent and any Lender will promptly execute and
deliver all further instruments and documents, and take all further acts
that may be necessary or desirable, or that the Subordinated Creditor may
reasonably request, to permit the Subordinated Creditor to enforce the
Subordinated Liabilities or recover any proceeds of the Collateral;
provided, however, that neither the Collateral Agent nor any Lender shall be
required to pay over any payment or distribution, execute any instruments or
documents, or take any other action referred to in this Section 5.14 to the
extent that such action would contravene any law, order or other legal
requirement, and in the event of a controversy or dispute, the Collateral Agent
or any Lender may interplead any payment or distribution in any court of
competent jurisdiction, without further responsibility in respect of such
payment or distribution under this Section 5.14.
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IN WITNESS WHEREOF, the Collateral Agent and the Subordinated Creditor each
has caused this Agreement to be duly executed and delivered as of the date first
above written.
COLLATERAL
AGENT: [____________________________________]
By:__________________________________
SUBORDINATED
CREDITOR: U.S. TRUST COMPANY OF TEXAS, N.A.,
AS TRUSTEE
By:__________________________________
Name:________________________________
Title:_______________________________
[APPROPRIATE ACKNOWLEDGMENTS TO BE ADDED]
VEHOU05:54519.1: Exhibit C
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EXHIBIT D
ACT OF ASSIGNMENT OF NOTE AND LIENS
STATE OF TEXAS (S)
(S)
COUNTY OF HARRIS (S)
BE IT KNOWN, that on the dates set forth below, before us, the undersigned
Notaries Public duly commissioned and qualified in and for the County of Harris,
State of Texas, therein residing, and in the presence of the witnesses whose
names are hereunto subscribed, personally came and appeared:
JOINT ENERGY DEVELOPMENT INVESTMENTS LIMITED PARTNERSHIP, a Delaware
limited partnership, whose Federal Tax Identification Number is 76-0407964
with a mailing address of 1400 Smith Street, Houston, Texas, 77002,
appearing herein through its general partner Enron Capital Management
Limited Partnership, a Delaware limited partnership, appearing herein
through its general partner Enron Capital Corp., a Delaware corporation,
appearing herein through Wynne M. Snoots, Jr., its duly authorized Agent
and Attorney-in-Fact (hereinafter called "Assignor"), and
U.S. TRUST COMPANY OF TEXAS, N.A., as Trustee under and pursuant to the
Indenture (hereinafter defined), whose Federal Tax Identification Number is
75-23537458 with a mailing address of 2001 Ross Avenue, Suite 2700, Dallas,
Texas 75201, Attention: Corporate Trust appearing herein through John C.
Stohlmann, its duly authorized Vice President ("hereinafter called
Assignee"),
which Assignor and Assignee through their respective representative declared
unto us, Notaries as follows:
That, for and in consideration of the sum of Ten Dollars ($10.00) and other
good and valuable consideration to Assignor in hand paid by Assignee under and
pursuant to that certain Indenture dated as of June 3, 1997, by and between
Forman Petroleum Corporation and Assignee, the receipt and sufficiency of which
is hereby acknowledged, Assignor has GRANTED, TRANSFERRED and ASSIGNED, and does
by these presents GRANT, TRANSFER and ASSIGN, unto Assignee, without recourse on
or warranty or representation (except such warranty or representation as is
hereinafter expressly set forth) by Assignor, the following:
1. Promissory note (the "Note") dated December 16, 1996, in the original
principal amount of $10,000,000, executed by FORMAN PETROLEUM CORPORATION,
a Delaware corporation ("Forman"), payable to the order of Assignor on or
before June 16, 1997;
2. All of Assignor's liens, mortgages, security interests and assignments held
by Assignor as security for the payment of the Note and the indebtedness
evidenced thereby (collectively, the "Liens and Security Interests"),
including, without limitation, all such Liens and Security Interests
created by and existing and to exist under the following (collectively, the
"Mortgage"):
Act of Mortgage, Security Agreement, Assignment of Production and
Financing Statement dated November 21, 1996, executed by Forman,
passed before Diane L. Bailey, Notary Public, recorded in the
following parishes in the State of Louisiana:
Parish Book Page/Folio Entry No.
------ ---- ---------- ---------
Jefferson Mineral Lease 151 96-63909
Book 136
MOB 3775 163 96-63909
Lafourche COB 1290 226 806225
MOB 728 673 806225
St. Charles COB 515 663 206916
MOB 622 586 206916
Terrebonne COB 1532 987329
MOB 1081 987329,
as amended by Act of First Amendment of Mortgage, Security Agreement,
Assignment of Production and Financing Statement dated December 23,
1996, executed by Forman, passed before Judy M. Sullivan, Notary
Public, recorded in the following parishes in the State of Louisiana:
Parish Book Page/Folio Entry No.
------ ---- ---------- ---------
Jefferson Mineral Lease
Book 136 166 96-68975
MOB 3778 580 96-68975
Lafourche COB 1293 358 807596
MOB 731 136 807596
St. Charles COB 516 659 207615
MOB 624 583 207615
Terrebonne COB 1538 989317
MOB 1085 989317.
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EXCLUDING, however, to the extent (if any) that the following could be
considered part of the conveyed interests hereunder, any right, title, and
interest of the Assignor in (a) the Option to Purchase Overriding Royalty and
Royalty Interests dated as of December 16, 1996, by and between Endowment Energy
Partners, L.P. ("EEP"), Endowment Energy Co-Investment Partnership ("EECIP") and
the Assignor (b) the letter agreement dated as of even date herewith made by
Forman in favor of the Assignor providing for certain continuing
indemnifications provided by Forman to the Assignor, (c) price swap agreements,
option agreements or other agreements entered into by and between Forman and
Assignor pursuant to which the price of hydrocarbons is hedged, (d) the fee
letter agreement dated December 16, 1996 between ECT Securities Corp. and Forman
and (e) all intercreditor and subordination agreements by and among EEP, EECIP
and the Assignor.
Assignor acknowledges that, immediately prior to the execution of this act,
other obligations of Forman to Assignor and its affiliates were secured by the
Liens and Security Interests. In order that this act shall be effective to
transfer all Liens and Security Interests to Assignee upon Assignor's assignment
of the Note and the indebtedness evidenced thereby, and to insure that Assignor
and its affiliates retain no rights under the Liens and Security Interests as
security for any outstanding obligations or obligations of Forman to Assignor
that may be incurred in the future, Assignor hereby waives and disclaims all
rights to the Liens and Security Interests to the extent they may secure
obligations owed to Assignor other than the Note and indebtedness evidenced
thereby, and agrees that any obligations now or hereafter owed to Assignor or
its affiliates are and shall be unsecured by the Liens and Security Interests.
TO HAVE AND TO HOLD the Note, together and along with all Liens and
Security Interests unto Assignee, its successors and assigns forever. Assignor
hereby represents and warrants that (i) Assignor is the owner and holder of the
Note, and the indebtedness evidenced thereby, (ii) Assignor has not assigned,
mortgaged or hypothecated the Note, the indebtedness evidenced thereby or any of
the Liens or Security Interests in connection therewith to any other party,
(iii) Assignor has not amended the Mortgage (other than waivers of certain
representations, warranties and covenants relating to the transfers of stock of
Forman) or the Note, (iv) Assignor has not executed any instruments to release
any of the Liens and Security Interests under the Mortgage, (v) that
$10,000,000.00 principal amount is still owing and unpaid on the Note, (vi) that
the Note is not overdue, and (vii) that Assignor has the full right and
authority to transfer and convey the Note, indebtedness, Liens and Security
Interests and to execute this instrument. The Assignee acknowledges that,
except for the foregoing representations and warranties with respect to the Note
and Mortgage, it is relying on representations and warranties from Forman with
respect to all other documents, agreements and matters.
Assignor authorizes and directs the Clerks of Court of the Parishes of
Jefferson, Lafourche, St. Charles, and Terrebonne, Louisiana, to note in the
margin of the inscription of the Mortgage, recorded as aforesaid, this Act of
Assignment of Note and Liens, in order to give notice that from and after the
date of execution hereof Assignee is the mortgagee of record under the Mortgage
within the meaning of La. R.S. 9:5556.
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And further, in the presence of the undersigned Notary Public, the Assignor
did endorse the Note "Pay to the order of U.S. Trust Company of Texas, N.A., as
Trustee, without representation, warranty or recourse, except as and to the
extent expressly set forth in the Act of Assignment of Note and Liens dated
effective as of June 3, 1997 from Lender to U.S. Trust Company of Texas, N.A.,
as Trustee". Assignor acknowledges that in accordance with the provisions of
Louisiana Civil Code article 3325 the Notary Public has not been requested to
paraph the Note or any other evidence of indebtedness for identification with
the Mortgage.
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THUS DONE AND PASSED in my office in Houston, Harris County, Texas, on the
____ day of June, 1997, effective for all purposes as of June 3, 1997, in my
presence and in the presence of the undersigned competent witnesses who hereunto
signed with the Assignor and me, Notary, after due reading of the whole.
ASSIGNOR:
WITNESSES: JOINT ENERGY DEVELOPMENT
INVESTMENTS LIMITED PARTNERSHIP,
a Delaware limited partnership
___________________________________ By: Enron Capital Management
Name:______________________________ Limited Partnership, a Delaware limited
partnership, its general partner
___________________________________ By: Enron Capital Corp., a
Name:______________________________ Delaware corporation, its
general partner
By:___________________________________
Name: Wynne M. Snoots, Jr.
Title: Agent and Attorney-in-Fact
____________________________
Notary Public
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THUS DONE AND PASSED in my office in Houston, Harris County, Texas, on the
____ day of June, 1997, effective for all purposes as of June 3, 1997, in my
presence and in the presence of the undersigned competent witnesses who hereunto
signed with the Assignee and me, Notary, after due reading of the whole.
ASSIGNEE:
WITNESSES: U.S. TRUST COMPANY OF TEXAS, N.A.,
AS TRUSTEE
_________________________________ By:_______________________________
Name:____________________________ Name: John C. Stohlmann
Title: Vice President
_________________________________
Name:____________________________
____________________________
Notary Public
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SCHEDULE OF RECORDING DATA
Act of Assignment of Note and Liens dated effective June 3, 1997, executed
by Joint Energy Development Investments Limited Partnership and U.S. Trust
Company of Texas, N.A., recorded in the following parishes in the State of
Louisiana:
Parish Book Page/Folio Entry No.
------ ---- ---------- ---------
Jefferson Mineral Lease 328 97-28808
Book 136
MOB 3800 104 97-28808
Lafourche COB 1310 146 815667
Miscellaneous
Book 81 623 815667
St. Charles COB 522 267 211523
MOB 636 67 211523
Terrebonne COB 1560 172 999452
MOB 1107 626 999452
VEHOU05:54525.1: Exhibit D
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