Exhibit 4.10
GIANT INDUSTRIES, INC.
AND
THE SUBSIDIARY GUARANTORS
AND
THE BANK OF NEW YORK,
AS TRUSTEE
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF _____________, 2004
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS................................................................................... 1
Section 1.01. Certain Terms Defined in the Indenture........................................... 1
Section 1.02. Definitions...................................................................... 1
ARTICLE II. FORM AND TERMS OF THE NOTES................................................................... 14
Section 2.01. Terms of the Notes............................................................... 14
Section 2.02. Events of Default................................................................ 15
Section 2.03. Covenants........................................................................ 15
Section 2.04. Consolidation, Merger, Sale or Conveyance........................................ 23
Section 2.05. Application of Article III of the Indenture Regarding Redemption of Notes........ 23
Section 2.06. Application of Article X of the Indenture Regarding Sinking Funds................ 24
Section 2.07. Subsidiary Guarantees............................................................ 24
ARTICLE III. MISCELLANEOUS................................................................................. 35
Section 3.01. Governing Law; Waiver of Jury Trial.............................................. 35
Section 3.02. Separability..................................................................... 35
Section 3.03. Ratification..................................................................... 36
Section 3.04. Effectiveness.................................................................... 36
EXHIBIT
EXHIBIT A - Form of __% Senior Subordinated Note due 2014.............................................. A-1
FIRST SUPPLEMENTAL INDENTURE (this "First Supplemental Indenture"),
dated as of _______________, 2004, among Giant Industries, Inc., a Delaware
corporation (the "Company"), the Subsidiary Guarantors listed as signatories
hereto, and The Bank of New York, a New York banking corporation, as Trustee
("Trustee").
RECITALS
The Company, Trustee and the Subsidiary Guarantors executed and
delivered an Indenture, dated as of _______, 2004 (the "Base Indenture" and, as
supplemented by this First Supplemental Indenture, the "Indenture"), to provide
for the issuance by the Company from time to time of Notes to be issued in one
or more series as provided in the Indenture.
The issuance and sale of $150 million aggregate principal amount of a
new series of the Company's ___% Senior Subordinated Notes due _____, 2014
guaranteed by the Subsidiary Guarantors (the "Notes") have been authorized by
resolutions adopted by the Board of Directors of the Company and the Subsidiary
Guarantors on _______, 2004.
The Company desires to issue and sell $150 million aggregate principal
amount of the Notes on the date hereof, with the terms set forth in this
Indenture.
All things necessary to make this First Supplemental Indenture a valid
supplement to the Indenture according to its terms and the terms of the
Indenture have been done.
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, the parties hereby enter into this First Supplemental
Indenture, and covenant and agree, for the equal and proportionate benefit of
all Holders of the Notes, as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Terms Defined in the Indenture. All capitalized
terms used but not defined in this First Supplemental Indenture shall have the
meanings ascribed to such terms in the Base Indenture, as amended hereby.
Section 1.02. Definitions.
(a) Except as may be provided in a future supplemental indenture,
for the benefit of the Holders of all Notes, Section 1.01 of the Indenture shall
be amended by adding or superceding the following definitions:
"Asset Sale" means any sale, capitalized lease (within the meaning of
GAAP), transfer, exchange or other disposition (or series of related sales,
capitalized leases, transfers, exchanges or dispositions) of shares of Capital
Stock of a Subsidiary (other than directors' qualifying shares), or of property
or assets or any interests therein (each referred to for purposes of this
definition as a "disposition") by the Company or any of its Restricted
Subsidiaries, including any disposition by means of a merger, consolidation or
similar transaction (other than, (i) by the Company to a Restricted Subsidiary
or by a Restricted Subsidiary to the Company or a Restricted Subsidiary, (ii) a
sale of inventory or hydrocarbons or other products (including both
crude oil and refined products), in each case in the ordinary course of business
of the Company's or a Restricted Subsidiary's operations, (iii) the merger or
consolidation of, or the disposition of all or substantially all of the assets
of the Company made in compliance with Section 5.01, (iv) the merger or
consolidation of a Restricted Subsidiary made in compliance with Section
12.02(b)(i)(A), (v) the sale or lease of equipment, inventory, accounts
receivable or other assets in the ordinary course of business, (vi) dispositions
of receivables in connection with the compromise, settlement or collection
thereof in the ordinary course of business or in bankruptcy or similar
proceedings and exclusive of factoring or similar arrangements, (vii) a
Restricted Payment that is permitted by Section 4.08, and (viii) any sale or
disposition of any property or equipment that has become damaged, worn out,
obsolete or otherwise unsuitable for use in connection with the business of the
Company or its Restricted Subsidiaries.
"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 (A) the number of years from such date to the date of each successive
scheduled principal payment of such Indebtedness multiplied by (B) the amount of
such principal payment by (ii) the sum of all such principal payments.
"Bank Credit Facility" means a revolving credit and/or letter of credit
and/or bankers' acceptance facility the proceeds of which are used for working
capital and other general corporate purposes existing on the Issue Date or
entered into after the Issue Date by one or more of the Company and its
Restricted Subsidiaries and one or more financial institutions, as amended,
extended or refinanced from time to time.
"Borrowing Base" means, as of any date, an amount equal to the sum of
(i) 85% of the book value of all accounts receivable owned by the Company and
its Restricted Subsidiaries (excluding any accounts receivable from an Affiliate
of the Company or that are more than 90 days past due, less (without
duplication) the allowance for doubtful accounts attributable to such current
accounts receivable) and (ii) 60% of the book value of all inventory owned by
the Company and its Restricted Subsidiaries as of such date, all calculated on a
consolidated basis and in accordance with GAAP. To the extent that information
is not available as to the amount of accounts receivable as of a specific date,
the Company may utilize the most recent available information for purposes of
calculating the Borrowing Base.
"Capitalized Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under a lease of property, real or
personal, that is required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.
"Change of Control" means any event or series of events by which:
(i) any "Person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) of 50% or more
of the total voting power of the Voting Stock of the Company;
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(ii) the Company consolidates with or merges or amalgamates
with or into another Person or conveys, transfers, or leases all or
substantially all of its assets to any Person, or any Person
consolidates with, or merges or amalgamates with or into the Company,
in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Company is changed into or exchanged for cash,
securities or other property, other than any such transaction where (A)
the outstanding Voting Stock of the Company is changed into or
exchanged for Voting Stock of the surviving corporation which is not
Disqualified Stock and (B) the holders of the Voting Stock of the
Company immediately prior to such transaction own, directly or
indirectly, not less than a majority of the Voting Stock of the
surviving corporation immediately after such transaction;
(iii) the stockholders of the Company approve any plan of
liquidation or dissolution of the Company; or
(iv) during any period of 12 consecutive months, individuals
who at the beginning of such period constituted the Board of Directors
of the Company (or whose appointment or nomination for election by the
stockholders of the Company was approved by a vote of not less than a
majority of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the
Company then in office.
"Change of Control Notice" has the meaning assigned to such term in
Section 4.15(b).
"Change of Control Offer" has the meaning assigned to such term in
Section 4.15(a).
"Change of Control Payment Date" has the meaning assigned to such term
in Section 4.15(a).
"Consolidated Coverage Ratio" means, for any Reference Period, the
ratio on a pro forma basis of (i) Consolidated EBITDA for the Reference Period
to (ii) Consolidated Interest Expense for such Reference Period; provided that,
in calculating Consolidated EBITDA and Consolidated Interest Expense (A) with
respect to any acquisition or disposition which occurs during the Reference
Period or subsequent to the Reference Period and on or prior to the date giving
rise to the need to calculate the Consolidated Coverage Ratio (the
"Determination Date"), such acquisition or disposition shall be assumed to have
occurred on the first day of the Reference Period, (B) with respect to the
incurrence of any Indebtedness (including the Notes) during the Reference Period
or subsequent to the Reference Period and on or prior to the Determination Date,
the incurrence of such Indebtedness shall be assumed to have occurred on the
first day of such Reference Period, (C) any Indebtedness that had been
outstanding during the Reference Period that has been repaid on or prior to the
Determination Date shall be assumed to have been repaid as of the first day of
such Reference Period, (D) the Consolidated Interest Expense attributable to
interest or dividends on any Indebtedness bearing a floating interest (or
dividend) rate shall be computed on a pro forma basis as if the rate in effect
on the Determination Date were the average rate in effect during the entire
Reference Period, and (E) in determining the amount of Indebtedness pursuant to
Section 4.07, the incurrence of Indebtedness giving rise to the need to
calculate the Consolidated Coverage Ratio and, to the extent the net proceeds
from
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the incurrence or issuance thereof are used to retire Indebtedness, the
application of the proceeds therefrom, shall be assumed to have occurred on the
first day of the Reference Period.
"Consolidated EBITDA" means, for any Reference Period, the Consolidated
Net Income of the Company and its Restricted Subsidiaries for such Reference
Period, increased (to the extent deducted in determining Consolidated Net
Income) by the sum of (i) all income taxes of the Company and its Restricted
Subsidiaries paid or accrued according to GAAP for such period (other than
income taxes attributable to extraordinary gains or losses), (ii) all interest
expense of the Company and its Restricted Subsidiaries paid or accrued in
accordance with GAAP for such period (including amortization of original issue
discount and other non-cash interest expense), (iii) depreciation and depletion
of the Company and its Restricted Subsidiaries, (iv) amortization of the Company
and its Restricted Subsidiaries including, without limitation, amortization of
capitalized debt issuance costs, (v) other non-cash charges (excluding any such
non-cash charges to the extent they require an accrual of, or a reserve for,
cash charges for any future periods) to the extent such non-cash charges are
deducted in connection with the determination of Consolidated Net Income minus
non-cash items increasing such Consolidated Net Income and (vi) extraordinary
losses to the extent deducted in connection with the determination of
Consolidated Net Income.
"Consolidated Interest Expense" means, with respect to the Company and
its Restricted Subsidiaries, for any Reference Period, the aggregate amount
(without duplication) of (i) interest expensed or capitalized in accordance with
GAAP (including, in accordance with the following sentence, interest
attributable to Capitalized Lease Obligations) during such period in respect of
all Indebtedness of the Company and its Restricted Subsidiaries, including (A)
amortization of original issue discount on any Indebtedness, (B) the interest
portion of all deferred payment obligations, calculated in accordance with GAAP,
and (C) all commissions, discounts and other fees and charges owed with respect
to bankers' acceptance financing and currency and interest rate swap
arrangements, in each case to the extent attributable to such Reference Period,
and (ii) dividend requirements of the Company and its Restricted Subsidiaries
with respect to Disqualified Stock of the Company or its Restricted
Subsidiaries, whether in cash or otherwise (except dividends paid solely in
shares of Qualified Stock of the Company), paid (other than to the Company or
any of its Restricted Subsidiaries), declared, accrued or accumulated during
such period, divided by the difference of one minus the applicable actual
combined federal, state, local and foreign income tax rate of the Company and
its Restricted Subsidiaries (expressed as a decimal), on a consolidated basis,
for the four quarters immediately preceding the date of the transaction giving
rise to the need to calculate Consolidated Interest Expense, in each case to the
extent attributable to such Reference Period and excluding items eliminated in
consolidation. For purposes of this definition, (i) interest on a Capitalized
Lease Obligation shall be deemed to accrue at an interest rate reasonably
determined by the Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP and (ii) interest expense
attributable to any Indebtedness represented by the guarantee by the Company or
a Restricted Subsidiary of the Company of an obligation of another Person shall
be deemed to be the interest expense attributable to the Indebtedness
guaranteed.
"Consolidated Net Income" of the Company means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP,
provided that (i) the net income for
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such period of any Person that is not a Restricted Subsidiary or that is
accounted for by the equity method of accounting will be included only to the
extent of the amount of dividends, payments or distributions actually paid to
the Company or its Restricted Subsidiaries by such other Person in such period;
(ii) the net income for such period of any Restricted Subsidiary of the Company
that is subject to any Payment Restriction will be included only to the extent
of the amount of dividends, payments or distributions which (A) are actually
paid by such Restricted Subsidiary in such period to the Company (or another
Restricted Subsidiary which is not subject to a Payment Restriction) and (B) are
not in excess of the amount which such Restricted Subsidiary would be permitted
to pay to the Company (or another Restricted Subsidiary which is not subject to
a Payment Restriction) in any future period under the Payment Restrictions
applicable to such Restricted Subsidiary, assuming that the net income of such
Restricted Subsidiary in each future period is equal to the net income for such
Restricted Subsidiary for such period; and (iii) the following will be excluded:
(A) any net gain on the sale or other disposition by the Company or any of its
Restricted Subsidiaries of assets (other than a sale of inventory or
hydrocarbons or other products (including both crude oil and refined products),
in each case in the ordinary course of business of the Company's operations) and
of the Capital Stock of any Restricted Subsidiary of the Company, (B) the net
income (or loss) of any other Person acquired by the Company or any Restricted
Subsidiary prior to the date of such acquisition, (C) extraordinary gains, and
(D) the $5.4 million reserve recorded in 2001 for a related party note and
interest thereon.
"Consolidated Net Tangible Assets" means, as of any date, the total
assets of the Company and its Restricted Subsidiaries on a consolidated basis as
of such date (less applicable reserves and other items properly deductible from
total assets) and after deducting therefrom: (i) total liabilities and total
capital items as of such date except the following: items constituting
Indebtedness, paid-in capital and retained earnings, provisions for deferred
income taxes and deferred gains, and reserves which are not reserves for any
contingencies not allocated to any particular purpose; (ii) goodwill, trade
names, trademarks, patents, unamortized debt discount and expense, and other
intangible assets; and (iii) all Investments other than Permitted Investments.
"Consolidated Tangible Net Worth" means, with respect to any Person, as
at any date of the determination, the sum of Capital Stock (other than
Disqualified Stock) and paid-in capital plus retained earnings (or minus
accumulated deficit) minus all intangible assets, including, without limitation,
organization costs, patents, trademarks, copyrights, franchise, research and
development costs, and any amount reflected in treasury stock, of such Person
determined on a consolidated basis in accordance with GAAP.
"Disqualified Stock" means any Capital Stock of a Person which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event or with the passage of
time, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the Maturity Date or which is exchangeable
or convertible into debt securities of such Person or any other Person, except
to the extent that such exchange or conversion rights cannot be exercised prior
to the Maturity Date.
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"Domestic Subsidiary" means any Restricted Subsidiary that was formed
under the laws of the United States or any state thereof or the District of
Columbia or that guarantees or otherwise provides direct credit support for any
Indebtedness of the Company or any Subsidiary Guarantor.
"Equity Offering" means a public or private sale of Capital Stock
(other than Disqualified Stock) of the Company.
"Indebtedness" means, without duplication, with respect to any Person,
(i) all obligations of such Person (A) in respect of borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof), (B) evidenced by bonds, notes, debentures or similar
instruments, (C) representing the balance deferred and unpaid of the purchase
price of any property or services (other than accounts payable or other
obligations arising in the ordinary course of business), (D) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks, (E) for
the payment of money relating to a Capitalized Lease Obligation, or (F)
evidenced by a letter of credit or a reimbursement obligation of such Person
with respect to any letter of credit; (ii) all net obligations of such Person as
of the date of a required calculation under interest rate swap obligations and
foreign currency hedges, other than interest rate swap obligations and foreign
currency hedges incurred to protect the Company or its Restricted Subsidiaries
from fluctuations in interest rates or foreign currency exchange rates; (iii)
all liabilities of others of the kind described in the preceding clauses (i) or
(ii) that such Person has guaranteed or that are otherwise its legal liability;
(iv) 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, the amount of such obligations being deemed to be the
lesser of (A) the full amount of such obligations so secured, and (B) the fair
market value of such asset, as determined in good faith by the Board of
Directors of such Person, which determination shall be evidenced by a Board
Resolution of such Person; (v) the liquidation preference and any mandatory
redemption payment obligations in respect of Disqualified Stock of such Person;
and (vi) any and all deferrals, renewals, extensions, refinancings and
refundings (whether direct or indirect) of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses (i), (ii), (iii), (iv), (v), or this clause (vi), whether or not between
or among the same parties.
"Investment" of any Person means (i) all investments by such Person in
any other Person in the form of loans, advances or capital contributions
(excluding advances to employees in the ordinary course of business in an
aggregate amount outstanding at any one time not to exceed $5 million), (ii) all
guarantees of Indebtedness or other obligations of any other Person by such
Person, (iii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iv) all other items that would be classified as investments or advances on
a balance sheet of such Person prepared in accordance with GAAP.
"Issue Date" means the date on which the Notes are originally issued
under this First Supplemental Indenture.
"Make-Whole Premium" means, with respect to a Note on any date of
redemption, the greater of (i) 1% of the principal amount of such Note or (ii)
the excess of (A) the present value
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at such date of redemption of (1) the redemption price of such Note at [ ], 2009
(as provided in Section 3.04(a)) plus (2) all remaining required interest
payments (exclusive of interest accrued and unpaid to the date of redemption)
due on such Note through [ ], 2009, computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (B) the then outstanding principal
amount of such Note.
"Maturity Date" means [ ], 2014.
"Net Available Proceeds" means, with respect to any Asset Sale 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 all legal, title and recording tax expenses, commissions and other
fees and expenses incurred, and all federal, state or local taxes required to be
accrued as a liability as a consequence of such Asset Sale, 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 which must, by its
terms or in order to obtain a necessary consent to such Asset Sale to prevent a
default or event of default under Senior Indebtedness or by applicable law, be
repaid out of the proceeds from such Asset Sale and which is actually so repaid.
"Net Cash Proceeds" means, in the case of any sale by the Company of
securities pursuant to Section 4.08(a)(iii)(B) or (C), the aggregate net cash
proceeds received by the Company, after payment of expenses, commissions,
discounts and any other transaction costs incurred in connection therewith.
"Pari Passu Indebtedness" means the 9% Notes and the 11% Notes and any
other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Notes in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company which is not Senior Indebtedness.
"Permitted Business Investments" means:
(i) Investments by the Company or any Restricted Subsidiary in
any Person which immediately prior to the making of such Investment is
a Restricted Subsidiary;
(ii) Investments in the Company by any Restricted Subsidiary;
(iii) Investments by the Company or any Restricted Subsidiary
of the Company in a Person, if as a result of such Investment (A) such
Person becomes a Restricted Subsidiary of the Company or (B) such
Person is merged, consolidated or amalgamated with or into, or
transfers or conveys all or substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the Company;
(iv) Investments arising in connection with interest rate
protection agreements, foreign currency hedging agreements and
commodity hedging agreements incurred in the ordinary course of
business for the purpose of fixing or hedging interest rate, currency
or
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commodity risk in connection with the conduct of the business of the
Company and its Restricted Subsidiaries and not for speculative
purposes;
(v) Investments received by the Company or any Restricted
Subsidiary in connection with Asset Sales, provided that the aggregate
fair market value of all Investments permitted pursuant to this clause
(v) after the Issue Date shall not exceed $10 million in the aggregate;
(vi) Investments to the extent acquired in exchange for, or
out of the Net Cash Proceeds of a substantially concurrent offering of,
Capital Stock (other than Disqualified Stock) of the Company;
(vii) stock, obligations or securities received in
satisfaction of judgments; and
(viii) other Investments in any Person that is not an
Affiliate of the Company (other than a Restricted Subsidiary) having an
aggregate fair market value (measured on the date each such Investment
was made and without giving effect to subsequent changes in value),
when taken together with all other Investments made pursuant to this
clause (viii) since the date of the Indenture, not to exceed $10
million.
"Permitted Financial Investments" means:
(i) United States dollars;
(ii) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or
instrumentality thereof;
(iii) certificates of deposit and eurodollar time deposits
with maturities of 12 months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding 12 months and
overnight bank deposits, in each case with any domestic commercial bank
having capital and surplus in excess of $300 million;
(iv) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (ii)
and (iii) entered into with any financial institution meeting the
qualifications specified in clause (iii) above;
(v) commercial paper rated at least A-2 or the equivalent
thereof at the time of purchase by Standard & Poor's or rated at least
P-2 or the equivalent at the time of purchase by Moody's Investors
Service, Inc., and in each case maturing within 12 months after the
date of acquisition;
(vi) money market mutual or similar funds having assets in
excess of $100 million; and
(vii) any debt securities or adjustable rate preferred stock
issued by a corporation organized under the laws of a state of the
United States of America or issued by any state, county or municipality
located within the United States of America which is rated at least AA-
or the equivalent thereof by Moody's Investors Service, Inc. and
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Standard & Poor's Corporation and maturing or having a call provision
not exceeding 24 months from the date of acquisition.
"Permitted Investments" means Permitted Business Investments and
Permitted Financial Investments.
"Permitted Liens" means:
(i) Liens existing on the Issue Date;
(ii) Liens on property of the Company now or hereafter
securing Senior Indebtedness of the Company and Liens on property of a
Subsidiary Guarantor now or hereafter securing Senior Indebtedness of
such Subsidiary Guarantor;
(iii) Liens now or hereafter securing any interest rate
hedging obligations (A) that the Company is required to enter into with
respect to the Bank Credit Facility or (B) that are entered into for
the purpose of managing interest rate risk with respect to Indebtedness
of the Company and its Restricted Subsidiaries, provided that such
interest rate obligations under clauses (A) and (B) do not have an
aggregate notional amount which exceeds the aggregate principal amount
of Indebtedness of the Company and its Restricted Subsidiaries;
(iv) Liens securing obligations under agreements that the
Company enters into in the ordinary course of business for the purpose
of protecting against fluctuations in oil, natural gas, or refined
products prices;
(v) Liens securing Indebtedness, the proceeds of which are
used to refinance secured Indebtedness of the Company or its Restricted
Subsidiaries; provided that such Liens extend to or cover only the
property or assets currently securing the Indebtedness being
refinanced;
(vi) Liens for taxes, assessments and governmental charges not
yet delinquent or being contested in good faith and for which adequate
reserves have been established to the extent required by GAAP;
(vii) mechanics', workmen's, materialmen's, operator's or
similar Liens arising in the ordinary course of business for sums that
are not yet delinquent or are being contested in good faith by
appropriate action;
(viii) Liens in connection with workmen's compensation,
unemployment insurance or other social security, old age pension or
public liability obligations not yet due or which are being contested
in good faith by appropriate action;
(ix) Liens, deposits or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of
money), leases, public or statutory obligations, surety, stay, appeal,
indemnity, performance or other similar bonds, or other similar
obligations arising in the ordinary course of business;
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(x) survey exceptions, encumbrances, easements or reservations, or
rights of others for, rights of way, zoning or other restrictions as to
the use of real properties, and minor defects in title which, in the case
of any of the foregoing, were not incurred or created to secure the
payment of borrowed money or the deferred purchase price of property or
services, and in the aggregate do not materially adversely affect the
value of such properties or materially impair use for the purposes of
which such properties are held by the Company or any Restricted
Subsidiaries;
(xi) Liens on, or related to, properties to secure all or part of
the costs incurred in the ordinary course of business of exploration,
drilling, development or operation thereof;
(xii) Liens on pipeline or pipeline facilities which arise out
of operation of law;
(xiii) 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 established to the
extent required by GAAP;
(xiv) (A) Liens upon any property of any Person existing at the time
of acquisition thereof by the Company or a Subsidiary, (B) Liens upon any
property of a Person existing at the time such Person is merged or
consolidated with the Company or any Restricted Subsidiary or existing at
the time of the sale or transfer of any such property of such Person to
the Company or any Restricted Subsidiary, or (C) Liens upon any property
of a Person existing at the time such Person becomes a Restricted
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 Restricted
Subsidiary other than the property being acquired and improvements
thereon;
(xv) Liens on deposits to secure public or statutory obligations or
in lieu of surety or appeal bonds entered into in the ordinary course of
business;
(xvi) 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 Restricted Subsidiary on deposit with or
in possession of such bank;
(xvii) purchase money Liens granted in connection with the
acquisition of fixed assets in the ordinary course of business and
consistent with past practices, provided that (A) such Liens attach only
to the property so acquired with the purchase money indebtedness secured
thereby and (B) such Liens secure only Indebtedness that is not in excess
of 100% of the purchase price of such fixed assets;
(xviii) Liens reserved in oil and gas mineral leases for bonus or
rental payments and for compliance with the terms of such leases;
(xix) Liens arising under partnership agreements, oil and gas
leases, farm-out agreements, division orders, contracts for the sale,
purchase, exchange, transportation or
10
processing of oil, gas or other hydrocarbons, unitization and pooling
declarations and agreements, development agreements, operating agreements,
area of mutual interest agreements, and other agreements which are
customary in the Principal Business; and
(xx) other Liens provided that such other Liens shall not secure
obligations in excess of $10 million in the aggregate at any one time
outstanding.
"Permitted Refinancing Indebtedness" means:
(i) Indebtedness of the Company or any Restricted Subsidiary, the
terms of which have been amended, modified or supplemented in a manner
that does not (A) affect the priority of such Indebtedness in right of
payment in relation to the Notes or the Guarantees, (B) accelerate the
maturity of such Indebtedness or (C) shorten the Average Life of such
Indebtedness, and
(ii) Indebtedness of the Company or any Restricted Subsidiary, the
net proceeds of which are used to renew, extend, refinance, defease,
refund or repurchase outstanding Indebtedness of the Company or such
Subsidiary, provided that (A) if the Indebtedness (including any guarantee
thereof) being renewed, extended, refinanced, defeased, refunded or
repurchased is pari passu with or subordinated in right of payment to the
Notes or Guarantees, then such Indebtedness is pari passu with or
subordinated in right of payment to, as the case may be, the Notes or
Guarantees at least to the same extent as the Indebtedness being renewed,
extended, refinanced, defeased, refunded or repurchased, (B) such
Indebtedness is scheduled to mature no earlier than the Indebtedness being
renewed, extended, refinanced, defeased, refunded or repurchased, (C) such
Indebtedness has an Average Life at the time such Indebtedness is incurred
that is equal to or greater than the remaining Average Life of the
Indebtedness being renewed, extended, refinanced, defeased, refunded or
repurchased and (D) such Indebtedness is incurred either by the Company or
the Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; 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 under the Indebtedness being renewed, extended, refinanced,
defeased, refunded or repurchased (or if the Indebtedness being renewed,
extended, refinanced, defeased, 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 all accrued interest thereon and the amount of any reasonably
determined premium necessary to accomplish such refinancing and such
reasonable expenses incurred in connection therewith.
"Principal Business" means (i) the business of the exploration for, and
development, acquisition, production, processing, marketing, refining, storage
and transportation of, hydrocarbons, (ii) any related energy and natural
resource business, (iii) any business currently engaged in by the Company or its
Subsidiaries, (iv) convenience stores, retail service stations,
11
truck stops and other public accommodations in connection therewith, and (v) any
activity or business that is a reasonable extension, development or expansion of
any of the foregoing.
"Publicly Traded Stock" means, with respect to any Person, Voting Stock of
such Person which is registered under Section 12 of the Exchange Act and which
is actively traded on the New York Stock Exchange or American Stock Exchange or
quoted in the Nasdaq National Market System.
"Qualified Stock" means any Capital Stock that is not Disqualified Stock.
"Reference Period" means, with respect to any Person, the four full fiscal
quarters ended immediately preceding any date upon which any determination is to
be made pursuant to the terms of the Notes or the Indenture.
"Restricted Payment" means, with respect to any Person, any of the
following:
(i) any dividend or other distribution in respect of such Person's
Capital Stock (other than (A) dividends or distributions payable solely in
Capital Stock (other than Disqualified Stock) of such Person and (B) in
the case of Restricted Subsidiaries of the Company, dividends or
distributions payable to the Company or to a Restricted Subsidiary of the
Company;
(ii) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock, or any option, warrant, or other right to
acquire shares of Capital Stock, of the Company or any of its Restricted
Subsidiaries other than any such purchase, redemption or other acquisition
or retirement for value by the Company or any Restricted Subsidiary of the
Company of any Capital Stock, or any option, warrant or other right to
acquire shares of Capital Stock, of any Restricted Subsidiary with respect
to such Capital Stock, option, warrant or other right which is owned, at
the time of any such transaction, by the Company or another Restricted
Subsidiary;
(iii) the making of any principal payment on, or the purchase,
defeasance, repurchase, redemption or other acquisition or retirement for
value, prior to any scheduled maturity, scheduled repayment or scheduled
sinking fund payment, of any Indebtedness which is subordinated in right
of payment to the Notes or any Guarantee; and
(iv) the making by such Person of any Investment other than a
Permitted Investment.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary. By a Board Resolution of the Company, as evidenced by
written notice thereof delivered to the Trustee, the Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that,
immediately after giving effect to such designation, (i) the Company could incur
at least $1.00 in additional Indebtedness pursuant to Section 4.07(a), and (ii)
no Default or Event of Default shall have occurred and be continuing.
12
"Senior Indebtedness" means any Indebtedness (other than the 9% Notes and
the 11% Notes and any Restricted Subsidiary's guarantee thereof) of a Person
(whether outstanding on the date hereof or hereafter incurred), unless such
Indebtedness is stated to be pari passu with or is contractually subordinate or
junior in right of payment to the Notes or Guarantee; provided that Senior
Indebtedness does not include (i) any liability for federal, state, local or
other taxes owed or owing by the Company; (ii) any Indebtedness of the Company
to any of its Subsidiaries or other Affiliates; (iii) any trade payables; or
(iv) the portion of any Indebtedness that is incurred in violation of the
Indenture.
"Subsidiary Guarantor" means (i) each of the Company's Subsidiaries in
existence on the Issue Date, except for Navajo Convenient Stores Co., LLC, (ii)
each of the Subsidiaries that becomes a guarantor of the Notes in compliance
with the provisions of the Indenture and (iii) each of the Subsidiaries
executing a supplemental indenture in which such Subsidiary agrees to be bound
by the terms of the Indenture; and their respective successors and assigns until
released from their obligations under their Guarantee in accordance with the
Indenture.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519)
which has become publicly available at least two Business Days prior to the date
fixed for prepayment (or, if such Statistical Release is no longer published,
any publicly available source for similar market data)) most nearly equal to the
then remaining term of the Notes to [ ], 2009; provided, however, that if the
then remaining term to [ ], 2009 is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the then
remaining term of the Notes to [ ], 2009 is less than one year, the weekly
average yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used.
"Unrestricted Subsidiary" means (i) any Subsidiary of an Unrestricted
Subsidiary or (ii) any Subsidiary of the Company or of a Restricted Subsidiary
that is designated as an Unrestricted Subsidiary by a Board Resolution of the
Company in accordance with the following sentence. The Company may designate any
Subsidiary of the Company or of a Restricted Subsidiary (including any
Restricted Subsidiary or any newly formed or newly acquired Subsidiary) to be an
Unrestricted Subsidiary by a Board Resolution of the Company, as evidenced by
written notice thereof delivered to the Trustee, if after giving effect to such
designation, (i) the Company could incur $1.00 of additional Indebtedness
pursuant to Section 4.07(a), (ii) the Company could make an additional
Restricted Payment of $1.00 pursuant to Section 4.08(a), (iii) such Subsidiary
does not own or hold any Capital Stock of, or any Lien on any property of, the
Company or any Restricted Subsidiary and (iv) such Subsidiary is not liable,
directly or indirectly, with respect to any Indebtedness other than Unrestricted
Subsidiary Indebtedness and Indebtedness to be released upon such Subsidiary's
designation as an Unrestricted Subsidiary.
"Unrestricted Subsidiary Indebtedness" of any Person means Indebtedness of
such Person (i) as to which neither the Company nor any Restricted Subsidiary is
directly or indirectly liable
13
(by virtue of the Company's or such Restricted Subsidiary's being the primary
obligor, or guarantor of, or otherwise liable in any respect on, such
Indebtedness), (ii) which, with respect to Indebtedness incurred after the date
of the Indenture by the Company or any Restricted Subsidiary, upon the
occurrence of a default with respect thereto, does not result in, or permit any
holder of any Indebtedness of the Company or any Restricted Subsidiary to
declare, a default on such Indebtedness of the Company or any Restricted
Subsidiary and (iii) which is not secured by any assets of the Company or of any
Restricted Subsidiary.
"9% Notes" means the 9% senior subordinated notes due 2007 of the Company
issued under an indenture, dated as of August 26, 1997, among the Company, the
guarantors party thereto and The Bank of New York, as trustee.
"11% Notes" means the 11% senior subordinated notes due 2012 of the
Company issued under an indenture, dated as of May 14, 2002, among the Company,
the guarantors party thereto and The Bank of New York, as trustee.
Article II
FORM AND TERMS OF THE NOTES
Section 2.01. Terms of the Notes. The following terms relating to the
Notes are hereby established:
(a) The Notes shall constitute a series of Notes having the title "[
]% Senior Subordinated Notes due 2014." The Notes shall form their own series
for voting purposes, and shall not be part of the same class or series as any
other notes issued by the Company.
(b) The aggregate principal amount of the Notes that may be
authenticated and delivered under this First Supplemental Indenture is
unlimited; provided, however, that the Company complies with the provisions of
this First Supplemental Indenture.
(c) The entire outstanding principal amount of the Notes shall be
payable on [ ], 2014.
(d) The rate at which the Notes shall bear interest shall be [ ]%.
Interest on the Notes shall accrue from the date hereof. The Interest Payment
Dates for the Notes on which interest shall be payable shall be [ ] and [ ] of
each year, beginning [ ], 2004. The Regular Record Dates for the interest
payable on the Notes on any Interest Payment Date shall be [ ] with respect to
the [ ] Interest Payment Date and [ ] with respect to the [ ] Interest Payment
Date. Interest on overdue principal and premium, if any, shall be at the same
rate as borne by the Notes, to the extent lawful, and interest on overdue
interest (without regard to any applicable grace period) shall be at the same
rate, to the extent lawful.
(e) Each of the Notes shall be issuable in whole in the registered
form of one or more Global Notes, without coupons, and the Depositary for such
Global Notes will be DTC.
(f) Each of the Notes shall be guaranteed by the Subsidiary
Guarantors in accordance with Article XII of the Base Indenture and Section 2.07
of this First Supplemental Indenture.
14
(g) The Notes shall rank pari passu with the Pari Passu Indebtedness
of the Company.
(h) All provisions of the Base Indenture shall apply to the Notes,
except as otherwise provided in this First Supplemental Indenture and except as
provided in any future Supplemental Indenture. Without limiting the generality
of the foregoing, the subordination provisions of Article XI of the Base
Indenture shall apply to the Notes.
(i) The Notes, Subsidiary Guarantees and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit A attached
hereto.
Section 2.02. Events of Default. Except as may be provided in a future
supplemental indenture, for the benefit of the Holders of the Notes, Section
6.01(a) of the Base Indenture is deleted in its entirety and replaced with the
following new Section 6.01(a):
"the Company or any Subsidiary Guarantor defaults in the payment of
the principal of or premium, if any, on any Note of such series when the same
becomes due and payable at maturity, upon repurchase pursuant to a Change of
Control Offer or a Asset Sale Offer, upon acceleration or otherwise (whether or
not prohibited by the subordination provisions of the Indenture);"
Section 2.03. Covenants. Except as may be provided in a future
supplemental indenture, for the benefit of the Holders of the Notes, the
following new Sections 4.07 through 4.15 are hereby added to the Indenture:
"4.07 Limitation on Incurrence of Additional Indebtedness.
(a) The Company will not, and will not permit any of the Restricted
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;
provided, however, that if no Default or Event of Default with respect to the
Notes shall have occurred and be continuing at the time or as a consequence of
the incurrence of such Indebtedness, the Company or the Restricted Subsidiaries
may incur Indebtedness if, on a pro forma basis, after giving effect to such
incurrence and the application of the proceeds therefrom, the Consolidated
Coverage Ratio would have been equal to or greater than 2.0 to 1.0.
(b) Notwithstanding the foregoing, (i) the Company may incur
Indebtedness consisting of the Notes to be issued on the Issue Date; (ii) the
Subsidiary Guarantors may incur the Guarantees; (iii) the Company and the
Subsidiary Guarantors may incur Indebtedness in existence on the date of this
Indenture; (iv) the Company or any Subsidiary may incur secured or unsecured
Indebtedness outstanding at any time in an aggregate principal amount not to
exceed the greater of (A) $100 million or (B) the Borrowing Base; (v) the
Company may incur Permitted Company Refinancing Indebtedness; (vi) any
Restricted Subsidiary may incur Permitted Subsidiary Refinancing Indebtedness;
(vii) the Company may incur Indebtedness to any Restricted Subsidiary, and any
Restricted Subsidiary may incur Indebtedness to the Company or to any Restricted
Subsidiary; provided that (X) any subsequent issuance or transfer that results
in any such Indebtedness being held by a Person other than the Company or a
Restricted Subsidiary
15
or (Y) any sale or other transfer of any such Indebtedness to a Person that is
not either the Company or a Restricted Subsidiary, shall be deemed, in each case
to constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be, that was not permitted by this clause
(vii); (viii) the Company or any Subsidiary Guarantor may incur Indebtedness
represented by Capitalized Lease Obligations, mortgage financings or purchase
money obligations, in each case, incurred for the purpose of financing all or
any part of the purchase price or cost of construction or improvement of
property, plant or equipment used in the business of the Company or such
Subsidiary Guarantor, in an aggregate principal amount, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (viii), not to exceed $15 million
at any time outstanding; (ix) this covenant will not prohibit the Guarantee by
the Company or any of the Subsidiary Guarantors of Indebtedness of the Company
or a Restricted Subsidiary of the Company that was permitted to be incurred by
another provision of this covenant; and (x) the Company or any Subsidiary
Guarantor may incur additional Indebtedness in an aggregate principal amount at
any time outstanding, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any Indebtedness incurred pursuant to this
clause (x), not to exceed $15 million.
(c) Any Indebtedness of a Person existing at the time such Person
becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition
or otherwise) shall be deemed to be incurred by such Restricted Subsidiary at
the time it becomes a Restricted Subsidiary.
For purposes of determining compliance with this Section 4.07, in
the event that any proposed Indebtedness meets the criteria of more than one of
the categories of debt described in paragraph (b) above or is entitled to be
incurred pursuant to paragraph (a) above, the Company will be permitted to
classify such item of Indebtedness on the date of its incurrence in any manner
that complies with this covenant, including applying such Indebtedness to any
one or more categories.
4.08. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly, make any Restricted Payment, unless:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such
Restricted Payment;
(ii) at the time of and immediately after giving effect to
such Restricted Payment, the Company would be able to incur at least
$1.00 of additional Indebtedness pursuant to Section 4.07(a); and
(iii) immediately after giving effect to such Restricted
Payment, the aggregate of all Restricted Payments declared or made after
August 26, 1997 does not exceed the sum of (A) 50% of the Consolidated
Net Income of the Company and its Restricted Subsidiaries (or in the
event such Consolidated Net Income shall be a deficit, minus 100% of such
deficit) during the period (treated as one accounting period)
16
subsequent to September 30, 1997 and ending on the last day of the fiscal
quarter immediately preceding the date of such Restricted Payment; (B) the
aggregate Net Cash Proceeds, and the fair market value of property other
than cash (as determined in good faith by the Company's Board of Directors
and evidenced by a Board Resolution), received by the Company during such
period from any Person other than a Restricted Subsidiary of the Company
as a result of the issuance or sale of Capital Stock of the Company (other
than any Disqualified Stock), other than in connection with the conversion
of Indebtedness or Disqualified Stock; (C) the aggregate Net Cash
Proceeds, and the fair market value of property other than cash (as
determined in good faith by the Company's Board of Directors and evidenced
by a Board Resolution), received by the Company during such period from
any Person other than a Restricted Subsidiary of the Company as a result
of the issuance or sale of any Indebtedness or Disqualified Stock to the
extent that at the time the determination is made such Indebtedness or
Disqualified Stock, as the case may be, has been converted into or
exchanged for Capital Stock of the Company (other than Disqualified
Stock); (D)(1) in case any Unrestricted Subsidiary has been redesignated a
Restricted Subsidiary, an amount equal to the lesser of (x) the book value
(determined in accordance with GAAP) at the date of such redesignation of
the aggregate Investments made by the Company and its Restricted
Subsidiaries in such Unrestricted Subsidiary and (y) the fair market value
of such Investments in such Unrestricted Subsidiary at the time of such
redesignation, as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive and evidenced by a
Board Resolution; or (2) in case any Restricted Subsidiary has been
designated an Unrestricted Subsidiary, minus the greater of (x) the book
value (determined in accordance with GAAP) at the date of designation of
the aggregate Investments made by the Company and its Restricted
Subsidiaries in such Restricted Subsidiary and (y) the fair market value
of such Investments in such Restricted Subsidiary at the time of such
designation, as determined in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board Resolution; (E)
without duplication, with respect to any Investment (other than a
Permitted Investment) of any Person which has previously been made by the
Company or any of its Restricted Subsidiaries, the amount of any such
Investment that has been fully and unconditionally repaid to the Company
or a Restricted Subsidiary, not to exceed the cash amount received by the
Company or such Restricted Subsidiary upon such repayment or with respect
to any Indebtedness of any Person that has previously been guaranteed by
the Company or any of its Restricted Subsidiaries (other than the Notes or
Subsidiary Guarantees), the amount of any such Indebtedness that has been
fully and unconditionally released from any and all further obligation or
liability with respect thereto, provided in each case that such amount
shall not exceed the aggregate amount of Restricted Payments previously
taken into account with respect to such amount for purposes of determining
the aggregate amount of all Restricted Payments declared or made pursuant
to this clause (iii); and (F) $30 million.
Notwithstanding the foregoing, the above limitations will not
prevent (i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration, such payment complied
with the provisions hereof, (ii) the purchase, redemption, acquisition or
retirement of any shares of Capital Stock of the Company or any Subsidiary
Guarantor in exchange for, or out of the net proceeds of the substantially
17
concurrent sale (other than to a Restricted Subsidiary of the Company) of,
other shares of Capital Stock (other than Disqualified Stock) of the
Company; (iii) the defeasance, redemption, repurchase, retirement or other
acquisition of Indebtedness which is subordinate in right of payment to
the Notes or any Guarantee, in exchange for, by conversion into, or out of
the net proceeds of the substantially concurrent issue or sale (other than
to a Restricted Subsidiary of the Company) of Capital Stock (other than
Disqualified Stock) of the Company (iv) the defeasance, redemption,
repurchase, retirement or other acquisition of Indebtedness which is
subordinate in right of payment to the Notes or any Guarantee with the net
cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(v) the payment of any dividend by a Restricted Subsidiary of the Company
to the holders of its common Equity Interests on a pro rata basis; or (vi)
the repurchase of Capital Stock deemed to occur upon the exercise of
options or warrants if such Capital Stock represents all or a portion of
the exercise price thereof; provided that, other than with respect to
clause (i) above, no Default or Event of Default has occurred and is
continuing at the time, or shall occur as a result thereof.
4.09. Limitation on Sale of Assets.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, make any Asset Sales that, in the aggregate, have a fair market
value of $15 million or more in any 12-month period unless:
(i) the Company (or its Restricted Subsidiaries, as the case
may be) receives consideration at the time of such sale or other
disposition at least equal to the fair market value thereof (as
determined in good faith by the Company's Board of Directors and
evidenced by a Board Resolution in the case of any Asset Sales or series
of related Asset Sales having a fair market value of $15 million or more;
(ii) not less than 75% of the proceeds received by the
Company (or its Restricted Subsidiaries, as the case may be) from each
such Asset Sale consists of (A) cash, (B) cash equivalents which would
constitute Permitted Financial Investments, (C) Publicly Traded Stock of
a Person primarily engaged in a Principal Business, (D) other
consideration with an aggregate fair market value, together with all
other consideration of the type specified in this clause (D) received by
the Company and its Restricted Subsidiaries from all Asset Sales after
the Issue Date, not to exceed $5 million; provided that any sale of such
other consideration shall be for cash and shall be considered an Asset
Sale under this Indenture, (E) all or substantially all of the assets of
a Principal Business, the majority of the Voting Stock of another Person
engaged in a Principal Business that thereupon becomes a Restricted
Subsidiary or long-term assets that are used or useful in a Principal
Business, or (F) any combination of the foregoing; provided, however,
that (1) the amount of (x) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet or in the notes
thereto) of the Company or such Restricted Subsidiary (other than
liabilities that are by their terms expressly subordinated to the Notes
or any guarantee thereof) that are assumed by the transferee of any such
assets and (y) any notes or other obligations received by the Company or
any such Restricted Subsidiary from such transferee that, within 90 days
following the closing of such sale or disposition, are converted by the
Company or such
18
Restricted Subsidiary into cash (to the extent of the cash received),
shall be deemed to be cash for purposes of this provision and (2) the
aggregate fair market value (as determined in good faith by the Board of
Directors of the Company, evidenced by a Board Resolution) of all
consideration of the type specified in clause (C) above received by the
Company and its Restricted Subsidiaries from all Asset Sales after the
Issue Date shall not exceed 15% of Consolidated Net Tangible Assets at the
time of such Asset Sale; and
(iii) the Net Available Proceeds received by the Company (or
its Restricted Subsidiaries, as the case may be) from such Asset Sales
are applied in accordance with paragraph (b) or (c) hereof.
(b) The Company may, within 360 days following the receipt of Net
Available Proceeds from any Asset Sale, apply such Net Available Proceeds to:
(i) the repayment of Indebtedness of the Company under a Bank Credit Facility or
other Senior Indebtedness of the Company or Senior Indebtedness of a Subsidiary
Guarantor or Indebtedness of a Restricted Subsidiary that is not a Subsidiary
Guarantor (but only from proceeds of Asset Sales of such Restricted Subsidiary)
that results in a permanent reduction in the principal amount of such Senior
Indebtedness in an amount equal to the principal amount so repaid; or (ii) make
an investment in capital assets used in a Principal Business.
(c) Any Net Available Proceeds from Asset Sales that are not applied
or invested as provided in the preceding paragraph will constitute "Excess
Proceeds." Within 10 days after the aggregate amount of Excess Proceeds exceeds
$10 million, the Company will make an Asset Sale Offer to all holders of Notes
and all holders of other Indebtedness that is pari passu with the Notes or any
Subsidiary Guarantee containing provisions similar to those set forth in the
Indenture with respect to offers to purchase with the proceeds of sales of
assets, to purchase the maximum principal amount of Notes and such other Pari
Passu Indebtedness that may be purchased out of the Excess Proceeds. The offer
price in any Asset Sale Offer will be equal to 100% of the principal amount of
the Notes and such other Pari Passu Indebtedness plus accrued and unpaid
interest to the date of purchase, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
such Excess Proceeds for any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount of Notes and such other Pari Passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Notes and such other Pari Passu Indebtedness shall be purchased on
a pro rata basis based on the principal amount of Notes and such other Pari
Passu Indebtedness tendered. Upon completion of each Asset Sale Offer, the
amount of Excess Proceeds shall be reset at zero.
(d) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of the Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of the Indenture by virtue of such
compliance.
19
(e) During the period between any Asset Sale and the application of
the Net Available Proceeds therefrom in accordance with this covenant, all Net
Available Proceeds shall be invested in Permitted Financial Investments or may
be used to repay indebtedness under a Bank Credit Facility.
4.10. Limitation on Liens Securing Indebtedness.
The Company will not, and will not permit any of Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens (other than
Permitted Liens) upon any of their respective properties securing (a) any
Indebtedness of the Company (other than Senior Indebtedness of the Company),
unless the Notes are equally and ratably secured until such time as such
obligations are no longer secured by a Lien or (b) any Indebtedness of any
Subsidiary Guarantor (other than Senior Indebtedness of such Subsidiary
Guarantor), unless the Guarantees of such Subsidiary Guarantors are equally and
ratably secured until such time as such obligations are no longer secured by a
Lien; provided, however, that if such Indebtedness is expressly subordinated to
the Notes or the Guarantees, the Lien securing such Indebtedness will be
subordinated and junior to the Lien securing the Notes or the Guarantees, with
the same relative priority as such subordinated Indebtedness of the Company or a
Subsidiary Guarantor will have with respect to the Notes or the Guarantees, as
the case may be.
4.11. Limitation on Payment Restrictions Affecting Restricted
Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any Restricted Subsidiary of the Company to (i) pay dividends
or make any other distributions on its Capital Stock, or any other interest or
participation in a Restricted Subsidiary; (ii) pay any Indebtedness owed to the
Company or a Restricted Subsidiary of the Company; (iii) make loans or advances
to the Company or a Restricted Subsidiary of the Company; or (iv) transfer any
of its properties or assets to the Company or a Restricted Subsidiary of the
Company (each, a "Payment Restriction"), except for (A) encumbrances or
restrictions with respect to Senior Indebtedness in effect on the Issue Date;
(B) encumbrances or restrictions under a Bank Credit Facility; (C) consensual
encumbrances or consensual restrictions binding upon any Person at the time such
Person becomes a Restricted Subsidiary of the Company (unless the agreement
creating such consensual encumbrance or consensual restrictions was entered into
in connection with, or in contemplation of, such entity becoming a Restricted
Subsidiary); (D) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of any Restricted Subsidiary; (E)
customary restrictions in security agreements or mortgages securing Indebtedness
of a Restricted Subsidiary to the extent such restrictions restrict the transfer
of the property subject to such security agreements and mortgages; (F) customary
restrictions in purchase money obligations for property acquired in the ordinary
course of business restricting the transfer of the property acquired thereby;
(G) consensual encumbrances or consensual restrictions under any agreement that
refinances or replaces any agreement described in clauses (A), (B), (C), (D),
(E) or (F) above, provided that the terms and conditions of any such
restrictions are no less favorable to the Holders of the Notes than those under
the agreement so refinanced or replaced; and (H) any encumbrance or restriction
due to applicable law.
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Section 4.12 Limitation on Transactions with Affiliates.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) sell, lease, transfer or otherwise
dispose of any of its properties, assets or securities to, (ii) purchase or
lease any property, assets or securities from, (iii) make any Investment in, or
(iv) enter into or amend any contract or agreement with or for the benefit of,
either (A) an Affiliate of any of them, (B) any Person, or Person who is a
member of a group (as such term is used for purposes of Sections 13(d) and 14(d)
of the Exchange Act, whether or not applicable) that, directly or indirectly, is
the beneficial holder of 10% or more of any class of equity securities of the
Company, (C) any Person who is an Affiliate of any such holder, or (D) any
officers, directors, or employees of any of the above (each case under (A), (B),
(C) and (D), an "Affiliate Transaction"), in one or a series of related
transactions (to either party), except for transactions evidenced by an
Officers' Certificate addressed and delivered to the Trustee stating that such
Affiliate Transaction is made in good faith, the terms of which are fair and
reasonable to the Company and such Restricted Subsidiary, as the case may be,
or, with respect to Affiliate Transactions between the Company and any of its
Subsidiaries, to the Company; provided that (v) transactions between or among
the Company and any of its Restricted Subsidiaries shall not be deemed to
constitute Affiliate Transactions, (w) any reasonable employment, compensation,
benefit or indemnification agreement entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business shall not be deemed
to constitute Affiliate Transactions, (x) Restricted Payments that are permitted
by the provisions of this Indenture described in Section 4.08 shall not be
deemed to constitute Affiliate Transactions, (y) any sale of Capital Stock
(other than Disqualified Stock) of the Company shall not be deemed to constitute
Affiliate Transactions, and (z) with respect to any Affiliate Transaction or
series of related transactions with an aggregate value (to either party) in
excess of $2 million (excluding issuances of Qualified Stock of the Company and
any forgiveness of Indebtedness to an Affiliate existing on the Issue Date), the
Company must, prior to the consummation thereof, obtain a written favorable
opinion as to the fairness of such transaction to itself from a financial point
of view from an independent accounting, appraisal or investment banking firm of
national reputation.
Section 4.13 Limitation on Future Senior Subordinated Indebtedness.
The Company shall not incur any Indebtedness that is subordinated in right
of payment to any other Indebtedness of the Company unless such Indebtedness by
its terms, is pari passu with or subordinated to the Notes to the same extent.
No Subsidiary Guarantor shall incur any Indebtedness that is subordinated in
right of payment to any other Indebtedness of such Subsidiary Guarantor unless
such Indebtedness, by its terms, is pari passu with or subordinated to the
Guarantee of such Subsidiary Guarantor to the same extent. For purposes of the
foregoing, no Indebtedness will be deemed to be subordinated in right of payment
to any other Indebtedness of the Company or any Subsidiary Guarantor, as
applicable, solely by virtue of being unsecured or by virtue of the fact that
the holders of any secured Indebtedness have entered into intercreditor
agreements giving one or more of such holders priority over the other holders in
the collateral held by them.
Section 4.14 Line of Business.
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For so long as any Notes are outstanding, the Company shall not, and shall
not permit any of its Restricted Subsidiaries to, engage in any business or
activity other than a Principal Business.
Section 4.15 Change of Control.
(a) Within 30 days following the occurrence of any Change of
Control, the Company shall offer (a "Change of Control Offer") to purchase all
outstanding Notes at a purchase price equal to 101% of the aggregate principal
amount of the Notes, plus accrued and unpaid interest to the date of purchase.
The Change of Control Offer shall include a payment date (the "Change of Control
Payment Date"), which shall be no earlier than 30 days and no later than 60 days
from the date the Change of Control Offer is mailed. If the Change of Control
Payment Date is on or after an interest payment record date and on or before the
related interest payment date, any accrued interest will be paid to the Person
in whose name a Note is registered at the close of business on such record date,
and no additional interest will be payable to Holders who tender Notes pursuant
to the Change of Control Offer.
(b) Within 30 days after any Change of Control, the Company (with
notice to the Trustee), or the Trustee at the Company's request, will mail or
cause to be mailed to all Holders on the date of the Change of Control a notice
(the "Change of Control Notice") of the occurrence of such Change of Control and
of the Holders' rights arising as a result thereof. The Change of Control Notice
will contain all instructions and materials necessary to enable Holders to
tender their Notes to the Company. The Change of Control Notice, which shall
govern the terms of the Change of Control Offer, shall state: (1) that the
Change of Control Offer is being made pursuant to this Section 4.15; (2) the
purchase price and the Change of Control Payment Date; (3) that any Note not
tendered will continue to accrue interest; (4) that any Note accepted for
payment pursuant to the Change of Control Offer shall cease to accrue interest
on the Change of Control Payment Date; (5) that Holders electing to have a Note
purchased pursuant to any Change of Control Offer will be required to surrender
the Note, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Company, a depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice prior to
termination of the Change of Control Offer; (6) that Holders will be entitled to
withdraw their election if the Company, depositary or Paying Agent, as the case
may be, receives, not later than the expiration of the Change of Control Offer,
or such longer period as may be required by law, a facsimile transmission or
letter setting forth the name of the Holder, the certificate or other
identifying number, the principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to have
the Note purchased; and (7) that Holders whose Notes are purchased only in part
will be issued Notes equal in principal amount to the unpurchased portion of the
Notes surrendered.
(c) On the Change of Control Payment Date, the Company shall (i)
accept for payment Notes or portions thereof tendered pursuant to the Change of
Control Notice, (ii) if the Company appoints a depositary or Paying Agent,
deposit with such depositary or Paying Agent money sufficient to pay the
purchase price of all Notes or portions thereof so tendered and (iii) deliver to
the Trustee Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof tendered to the Company.
The depositary, the Company or the Paying Agent, as the case may be, shall
promptly mail to the
22
Holder of Notes so accepted payment in an amount equal to the purchase price,
and the Trustee shall promptly authenticate and mail to such Holders a new Note
equal in principal amount to any unpurchased portion of the Note surrendered.
Prior to complying with the provisions of this Section 4.15, but in any event
within 30 days following a Change of Control, the Company will either repay all
outstanding Senior Indebtedness or obtain the requisite consents, if any, under
all agreements governing Senior Indebtedness to permit the repurchase of the
Notes required by this Section 4.15. The Company will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date. For purposes of this Section 4.15, the Trustee
shall act as the Paying Agent.
(d) The Company, to the extent applicable and if required by law,
will comply with Section 14 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 which may then be
applicable to any offer by the Company to purchase the Notes of the Holders upon
a Change of Control."
(e) The Company will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Company and purchases all of the Notes validly tendered and not
withdrawn under such Change of Control Offer.
Section 2.04. Consolidation, Merger, Sale or Conveyance. Except as may be
provided in a future supplemental indenture, for the benefit of the Holders of
the Notes, Section 5.01 of the Base Indenture is hereby deleted and replaced
with the following new Section 5.01:
"5.01.Company May Consolidate, Merge, Etc. on Certain Terms. The Company
will not, directly or indirectly, consolidate with or merge with or into another
Person or convey, transfer, lease or otherwise dispose of all or substantially
all of the properties and assets of the Company and its Restricted Subsidiaries
taken as a whole, in one or more related transactions, to any Person, unless:
(a) 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 other disposition, 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 of America, any state thereof or the District of Columbia and
expressly assumes, by supplemental indenture, the due and punctual payment of
the principal of, premium, if any, and interest on, all the Notes and the
performance of every other covenant and obligation of the Company under this
Indenture; (b) immediately before and after giving effect to such transaction no
Default or Event of Default exists; (c) immediately after giving effect to such
transaction on a pro forma basis, the Company (or the surviving or transferee
entity) would be able to incur $1.00 of additional Indebtedness under the tests
described in Section 4.07(a) and (d) the Company delivers to the Trustee an
Officers' Certificate (attaching the arithmetic computation to demonstrate
compliance with clause (c) above) and Opinion of Counsel, in each case stating
that such transaction and such agreement complies with this covenant and that
all conditions precedent provided for herein relating to such transaction have
been complied with.
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Upon any such consolidation, merger, lease, conveyance or transfer in
accordance with the foregoing, the successor Person formed by such consolidation
or into which the Company is merged or to which such lease, conveyance 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 therein 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 Notes. Clause
(c) above of this covenant will not apply to any merger, conveyance, transfer or
other disposition of assets between or among the Company and any of its
Restricted Subsidiaries."
Section 2.05. Application of Article III of the Indenture Regarding
Redemption of Notes. Article III of the Base Indenture, as amended hereby, shall
apply to the Notes. Except as may be provided in a future supplemental
indenture, for the benefit of the Holders of the Notes, a new Section 3.04 shall
be added to Article III of the Indenture as follows:
"3.04. Optional Redemption.
(a) At any time on or after ___________, 2009, the Company may, at
its option, redeem all or any portion of the Notes at the redemption prices
(expressed as percentages of the principal amount of the Notes) set forth below,
plus, in each case, accrued interest thereon to the applicable redemption date,
if redeemed during the 12-month period beginning ___________, 2009 of the years
indicated below:
YEAR PERCENTAGE
---- ----------
2009....................
2010....................
2011....................
2012 and thereafter..... 100.0%
(b) In addition, at any time prior to __________, 2009, the Company
may redeem all or part of the Notes upon not less than 30 days nor more than 60
days' notice at a redemption price equal to the sum of (i) the principal amount
thereof, plus (ii) accrued and unpaid interest, if any, to the applicable date
of redemption, plus (iii) the Make-Whole Premium.
(c) At any time on or prior to __________, 2007, the Company may, at
its option, redeem up to 35% of the aggregate principal amount of the Notes
originally issued with the net cash proceeds of one or more Equity Offerings at
a redemption price equal to [ ] % of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date of redemption, provided that at least
65% of the aggregate initial principal amount of the Notes remain outstanding
after giving effect to each such redemption. In order to effect the foregoing
redemption, the Company must mail notice of redemption no later than 60 days
after the related Equity Offering.
(d) If less than all of the Notes are to be redeemed, the Trustee
shall select pro rata or by lot the Notes to be redeemed in multiples of $1,000.
Notes in denominations larger than $1,000 may be redeemed in part."
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Section 2.06. Application of Article X of the Indenture Regarding Sinking
Funds. Except as may be provided in a future supplemental indenture, the Notes
shall not be entitled to the benefit of any sinking fund and the provisions of
the Base Indenture relating to a sinking fund, including Article X, shall not
apply to the Notes.
Section 2.07. Subsidiary Guarantees. Except as may be provided in a future
supplemental indenture, for the benefit of the Holders of the Notes, Article XII
of the Base Indenture is hereby deleted and replaced with the following new
Article XII:
"Section 12.01 Unconditional Guarantee.
Each Subsidiary Guarantor hereby, jointly and severally,
unconditionally guarantees (such guarantee to be referred to herein as the
"Guarantee") to each Holder and to the Trustee the due and punctual payment of
the principal of, premium, if any, and interest on the Notes and all other
amounts due and payable under this Indenture and the Notes by the Company
whether at maturity, by acceleration, redemption, repurchase or otherwise,
including, without limitation, interest on the overdue principal of, premium, if
any, and interest on the Notes, to the extent lawful, all in accordance with the
terms hereof and thereof; subject, however, to the limitations set forth in
Article XII.
Failing payment when due of any amount 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 Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the Notes
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 payments, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that this
Guarantee will not be discharged except by complete performance of the
obligations contained in the Notes, 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 VI 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 VI,
such obligations (whether or not due and payable) shall forthwith become due and
payable by each Subsidiary Guarantor for the purpose of this Guarantee.
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The guarantee of each Subsidiary Guarantor herein shall be, in the
manner and to the extent set forth in Article XII, subordinated in right of
payment to the prior payment when due of the principal of, premium, if any,
accrued and unpaid interest and all other amounts owing on all existing and
future Senior Indebtedness of such Subsidiary Guarantor and of the Company, as
the case may be, and senior to the right of payment of principal of, premium, if
any, and accrued and unpaid interest on all existing and future Subordinated
Indebtedness of such Subsidiary Guarantor.
Section 12.02 Subsidiary Guarantors May Consolidate, Etc., on Certain
Terms.
(a) Nothing contained in this Indenture or in any of the Notes 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 all or substantially all of its assets to the Company or another Subsidiary
Guarantor.
(b) The Company may not sell the Capital Stock of a Subsidiary
Guarantor, and a Subsidiary Guarantor may not consolidate with or merge into or
sell all or substantially all of its assets (in a single transaction or series
of related transactions) to any Person other than the Company or another
Subsidiary Guarantor (whether or not affiliated with the Company or the
Subsidiary Guarantor), unless (i) with respect to a consolidation or merger of
such Subsidiary Guarantor, either (A)(1) the surviving entity is a Restricted
Subsidiary of the Company or, as a result of the transaction, becomes a
Restricted Subsidiary of the Company, (2) the surviving entity remains a
Restricted Subsidiary of the Company or, simultaneously with the consummation of
the transaction, is designated as a Restricted Subsidiary of the Company, (3)
immediately after giving effect to such transaction on a pro forma basis, the
Company would be able to incur $1.00 of additional Indebtedness under the test
described in Section 4.07(a), (4) if the surviving entity is not the Subsidiary
Guarantor, the surviving entity agrees to assume such Subsidiary Guarantor's
Guarantee and all its obligations pursuant to this Indenture in accordance with
the provisions of Section 12.03, and (5) such transaction does not (x) violate
any covenant in the Indenture or (y) result in a Default or an Event of Default
immediately thereafter that is continuing or (B)(1) such transaction is made in
accordance with Section 4.09 and (2) such transaction does not (x) violate any
other covenant in the Indenture or (y) result in a Default or Event of Default
immediately thereafter that is continuing and (ii) with respect to the sale of
the Capital Stock or all or substantially all of the assets of such Subsidiary
Guarantor, (A) such transaction is made in accordance with Section 4.09 and (B)
such transaction does not (x) violate any other covenants in the Indenture or
(y) result in a Default or Event of Default immediately thereafter that is
continuing. In the case of any such consolidation, merger, sale or conveyance
involving the assumption by the successor entity of a Subsidiary Guarantor's
obligations under the Indenture, such successor entity shall assume such
obligations by supplemental indenture executed and delivered to the Trustee in
accordance with the provisions of Section 12.03. Upon execution and delivery of
such supplemental indenture, such successor entity 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 12.03 Addition of Subsidiary Guarantors.
26
(a) The Company agrees to cause each Person that shall become a
Domestic Subsidiary after the Issue Date to execute and deliver a supplemental
indenture pursuant to which such Restricted Subsidiary shall guarantee the
payment of the Notes pursuant to the terms hereof.
(b) Any Person who is not a Subsidiary Guarantor on the Issue Date
may become a Guarantor by executing and delivering to the Trustee (i) a
supplemental indenture in form and substance satisfactory to the Trustee, which
subjects such Person to the provisions (including the representations and
warranties) of this Indenture as a Subsidiary Guarantor and (ii) an Opinion of
Counsel and Officers' Certificate to the effect that such supplemental indenture
has been duly authorized and executed by such Person and constitutes the legal,
valid, binding and enforceable obligation of such Person (subject to such
customary exceptions concerning creditors' rights and equitable principles as
may be acceptable to the Trustee and provided that no opinion need be rendered
concerning the enforceability of the Guarantee).
Section 12.04 Release of a Subsidiary Guarantor.
A Subsidiary Guarantor shall be deemed released from its Guarantee
and all of its obligations in this Indenture upon (i) (A) the sale of all of the
Capital Stock of such Subsidiary Guarantor, the consolidation or merger of such
Subsidiary Guarantor, or in the event of the liquidation and dissolution of such
Subsidiary Guarantor into the Company or any other Subsidiary Guarantor, made in
accordance with the provisions of either Section 12.02(b)(i)(B) or Section
12.02(b)(ii) (other than a sale of substantially all of the assets of the
Subsidiary Guarantor) or (B) the designation of a Restricted Subsidiary as an
Unrestricted Subsidiary, provided that such designation is made in accordance
with the provisions of this Indenture, and (ii) receipt of a request by the
Company accompanied by an Officers' Certificate and an Opinion of Counsel
certifying that all conditions specified in this Indenture for such release have
been satisfied in accordance with the provisions of this Indenture. Upon receipt
of the items specified in clause (ii) of the preceding sentence, the Trustee
shall deliver to the Company an appropriate instrument evidencing such release.
Any Subsidiary Guarantor not so released remains liable for the full amount of
principal of and interest on the Notes as provided in this Article XII.
Section 12.05 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, state or foreign
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 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 12.06, result in the obligations of such Subsidiary Guarantor under
the Guarantee not constituting a fraudulent conveyance or fraudulent transfer
under federal, state or foreign law.
27
Section 12.06 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 for all
payments, damages and expenses incurred by the Funding Guarantor in discharging
the Company's obligations with respect to the Notes or any other Subsidiary
Guarantor's obligations with respect to the Guarantee.
Section 12.07 Execution and Delivery of Guarantee.
To further evidence the Guarantees set forth in Section 12.01, each
Subsidiary Guarantor hereby agrees that a notation relating to such Guarantee
shall be endorsed on each Note authenticated and delivered by the Trustee and
executed by either manual or facsimile signature of two Officers of each
Subsidiary Guarantor.
Each of the Subsidiary Guarantors hereby agrees that its Guarantee
set forth in Section 12.01 shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation relating to such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or
a Note no longer holds that office at the time the Trustee authenticates such
security or at any time thereafter, such Subsidiary Guarantor's Guarantee of
such Note shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of the Subsidiary Guarantor.
Section 12.08 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.
Section 12.09 Consent to Jurisdiction and Service of Process.
Each Subsidiary Guarantor that is not organized under the laws of
the United States or any state thereof (each a "Non-U.S. Subsidiary Guarantor")
hereby appoints the principal office of CT Corporation System in The City of New
York which, on the date hereof, is located at 1633 Broadway, New York, New York
10019, as the authorized agent thereof (the "Authorized Agent") upon whom
process may be served in any action, suit or proceeding arising out of or based
on this Indenture or the Notes which may be instituted in the Supreme Court of
the State of New York or the United States District Court for the Southern
District of New York, in either case in The Borough of Manhattan, The City of
New York, by the Holder of any Note, and each Non-U.S. Subsidiary Guarantor
hereby waives any objection which it may now have to the laying of venue of any
such proceeding and expressly and irrevocably accepts and submits,
28
for the benefit of the Holders from time to time of the Notes, to the
nonexclusive jurisdiction of any such court in respect of any such action, suit
or proceeding, for itself and with respect to its properties, revenues and
assets. Such appointment shall be irrevocable unless and until the appointment
of a successor authorized agent for such purpose, and such successor's
acceptance of such appointment, shall have occurred. Each Non-U.S. Subsidiary
Guarantor agrees to take any and all actions, including the filing of any and
all documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent with respect to any such action shall be deemed, in every
respect, effective service of process upon any such Non-U.S. Subsidiary
Guarantor. Notwithstanding the foregoing, any action against any Non-U.S.
Subsidiary Guarantor arising out of or based on any Note may also be instituted
by the Holder of such Note in any court in the jurisdiction of organization of
such Non-U.S. Subsidiary Guarantor, and such Non-U.S. Subsidiary Guarantor
expressly accepts the jurisdiction of any such court in any such action. The
Company shall require the Authorized Agent to agree in writing to accept the
foregoing appointment as agent for service of process.
Section 12.10 Waiver of Immunity.
To the extent that any Non-U.S. Subsidiary Guarantor or any of its
properties, assets or revenues may have or may hereafter become entitled to, or
have attributed to it, any right of immunity, on the grounds of sovereignty or
otherwise, from any legal action, suit or proceeding, from the giving of any
relief in any thereof, from set-off or counterclaim, from the jurisdiction of
any court, from service of process, from attachment upon or prior to judgment,
from attachment in aid of execution of judgment, or from execution of judgment,
or other legal process or proceeding for the giving of any relief or for the
enforcement of any judgment, in any jurisdiction in which proceedings may at any
time be commenced, with respect to its obligations, liabilities or any other
matter under or arising out of or in connection with this Indenture or the
Notes, such Non-U.S. Subsidiary Guarantor, to the maximum extent permitted by
law, hereby irrevocably and unconditionally waives, and agrees not to plead or
claim, any such immunity and consents to such relief and enforcement.
Section 12.11 Judgment Currency.
Each Non-U.S. Subsidiary Guarantor agrees to indemnify the Trustee
and each Holder against any loss incurred by it as a result of any judgment or
order against such Non-U.S. Subsidiary being given or made and expressed and
paid in a currency (the "Judgment Currency") other than United States dollars
and as a result of any variation as between (i) the rate of exchange at which
the United States dollar amount is converted into the Judgment Currency for the
purpose of such judgment or order and (ii) the spot rate of exchange in The City
of New York at which the Trustee or such Holder on the date of payment of such
judgment or order is able to purchase United States dollars with the amount of
the Judgment Currency actually received by the Trustee or such Holder. The
foregoing indemnity shall constitute a separate and independent obligation of
each Non-U.S. Subsidiary Guarantor and shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "spot rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of, or conversion into, United States dollars.
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Section 12.12 Subordination of Subsidiary Guarantees.
(a) Guarantees Subordinated to Senior Indebtedness. Each Subsidiary
Guarantor, for itself and its successors, and each Holder, by his acceptance of
Notes, agrees that the Guarantees of such Subsidiary Guarantor are subordinated,
to the extent and in the manner provided in this Section 12.12, to the prior
payment in full of all Senior Indebtedness of such Subsidiary Guarantor
(hereinafter in this Section 12.12 referred to as "Senior Indebtedness"). The
Guarantees shall rank pari passu in right of payment with all guarantees by a
Subsidiary Guarantor of Pari Passu Indebtedness of the Company.
This Section 12.12 shall constitute a continuing offer to all
Persons who become holders of, or continue to hold, Senior Indebtedness,
and such provisions are made for the benefit of the holders of Senior
Indebtedness, and such holders are made obligees hereunder and any one or
more of them may enforce such provisions.
(b) No Payment on Guarantees in Certain Circumstances.
Upon the maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, unless and until all principal thereof, premium, if
any, interest thereon and other amounts due thereon shall first be paid in full,
no payment shall be made by or on behalf of any Subsidiary Guarantor pursuant to
the Guarantees with respect to the principal of, premium, if any, interest on or
other amounts owing on the Notes.
Upon the happening of any default in the payment of any principal
of, premium, if any, or interest on or other amounts due on any Senior
Indebtedness (a "Payment Default"), then, unless and until such default shall
have been cured or waived or shall have ceased to exist, no payment shall be
made by or on behalf of any Subsidiary Guarantor pursuant to the Guarantees with
respect to the principal of, premium, if any, interest on or other amounts owing
on the Notes (except that, subject to applicable law, Holders may receive
Subordinated Securities of Subsidiary Guarantors).
Upon the happening of any default or event of default (other than a
Payment Default) (including any event which with the giving of notice or the
lapse of time or both would become an event of default and including any default
or event of default which would result upon any payment pursuant to the
Guarantees) with respect to any Senior Indebtedness of a Subsidiary Guarantor,
as such default or event of default is defined therein or in the instrument or
agreement or other document under which it is outstanding, then upon written
notice thereof given to the Subsidiary Guarantors and the Trustee by a holder or
holders of any Designated Senior Indebtedness or their representative ("Payment
Notice"), no payment shall be made by or on behalf of the Subsidiary Guarantors
pursuant to the Guarantees with respect to the principal of, premium, if any,
interest on or other amounts owing on the Notes during the period (the "Payment
Blockage Period") commencing on the date of such receipt of such Payment Notice
and ending on the earlier of (i) the date, if any, on which such default is
cured or waived or ceases to exist or (ii) the date, if any, on which the
Designated Senior Indebtedness to which such default relates is discharged;
provided, however, that no default or event of default (other than a Payment
Default) shall prevent the making of any payment pursuant to the Guarantees for
more than 179 days after the Payment Notice shall have been given.
Notwithstanding the
30
foregoing, (i) not more than one Payment Notice shall be given within a period
of 360 consecutive days, and (ii) no event of default which existed or was
continuing on the date of any Payment Notice shall be made the basis for the
giving of a subsequent Payment Notice unless all such events of default shall
have been cured or waived for a period of at least 180 consecutive days after
such date, and (iii) if any Subsidiary Guarantor or the Trustee receives any
Payment Notice, a similar notice relating to or arising out of the same default
or facts giving rise to such default (whether or not such default is on the same
issue of Designated Senior Indebtedness) shall not be effective for purposes of
this paragraph.
The Subsidiary Guarantors shall resume payments of principal of,
premium, if any, and interest on the Guarantees (i) in the case of a Payment
Default, upon the date such Payment Default is cured or waived by the holders of
Senior Indebtedness to which such Payment Default relates and (ii) in the case
of a default or event of default (other than a Payment Default) with respect to
Designated Senior Indebtedness, on the earlier of (A) the date such default or
event of default is cured or (B) the expiration of the Payment Blockage Period
with respect thereto if, in the case of this clause (B), this Section 12.12
otherwise does not prohibit such payment.
In furtherance of the provisions of Section 12.12(a), in the event
that, notwithstanding the foregoing provisions of this Section 12.12(b), any
payment (other than a payment in the form of Subordinated Securities of
Subsidiary Guarantors) with respect to the principal of, premium, if any or
interest on the Notes shall be made by or on behalf of any Subsidiary Guarantor,
and received by the Trustee, by any Holder or by any Paying Agent (or, if the
Company is acting as its own Paying Agent, money for any such payment shall be
segregated and held in trust), at a time when such payment was prohibited by the
provisions of this Section 12.02, then, unless and until such payment is no
longer prohibited by this Section 12.12(b), such payment (subject to the
provisions of Sections 12.12(f) and 12.12(g)) shall be received and held in
trust by the Trustee or such Holder or Paying Agent for the benefit of and shall
be immediately paid over to the holders of Senior Indebtedness or their
representative, ratably according to the aggregate amounts remaining unpaid on
account of the principal of, premium, if any, and interest on the Senior
Indebtedness held or represented by each, for application to the payment of all
Senior Indebtedness in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the benefit of the holders of
Senior Indebtedness.
The provisions of this Section 12.12(b) shall not modify or limit in
any way the application of Section 12.12(c).
Each Subsidiary Guarantor shall give prompt written notice to the
Trustee of any default in the payment of any Senior Indebtedness of such
Subsidiary Guarantor or any acceleration under any such Senior Indebtedness or
under any agreement pursuant to which such Senior Indebtedness may have been
issued. Failure to give such notice shall not affect the subordination of the
Guarantees to the Senior Indebtedness or the application of the other provisions
provided in this Section 12.12.
(c) Guarantees Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of a Subsidiary
Guarantor.
31
In the event of any Insolvency or Liquidation Proceeding with
respect to any Subsidiary Guarantor, all amounts payable in respect of any
Senior Indebtedness of such Subsidiary Guarantor shall first be paid in full
before the Holders are entitled to receive any direct or indirect payment or
distribution of any cash, property or securities (other than Subordinated
Securities of Subsidiary Guarantors) pursuant to the Guarantees on account of
principal of, premium, if any, or interest on the Notes or any other payment
with respect to the Notes.
The holders of Senior Indebtedness shall be entitled to receive
directly, for application to the payment of Senior Indebtedness (to the extent
necessary to pay in full all Senior Indebtedness, whether or not due, including
specifically, without limitation, all Post-Commencement Interest, whether or not
allowed as a claim in such insolvency or Liquidation Proceeding, after giving
effect to any substantially concurrent payment or distribution to the holders of
Senior Indebtedness on account of Senior Indebtedness), any payment or
distribution of any kind or character, whether in cash, property or securities
(other than Subordinated Securities of Subsidiary Guarantors), including any
payment or distribution which may be payable or deliverable by reason of the
payment of any other payment of any other indebtedness of such Subsidiary
Guarantor being subordinated to the payment of the Guarantees) which may be
payable or deliverable in respect of the Guarantees in any such Insolvency or
Liquidation Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section 12.12(c), the Trustee or any Paying Agent or the Holder of any Note
shall have received any payment from or distribution of assets of such
Subsidiary Guarantor or the estate created by the commencement of any such
Insolvency or Liquidation Proceeding, of any kind or character in respect of the
Guarantees, whether in cash, property or securities (other than Subordinated
Securities of Subsidiary Guarantors), including any payment or distribution
which may be payable or deliverable by reason of the payment of any other
indebtedness of such Subsidiary Guarantor being subordinated to the payment of
the Guarantees, before all Senior Indebtedness (whether or not due including
specifically, without limitation, all Post-Commencement Interest, whether or not
allowed as a claim in such Insolvency or Liquidation Proceeding) is paid in
full, then and in such event such payment or distribution shall be received and
held in trust by the Trustee, any such Paying Agent or Holder for and shall be
paid over to the holders of Senior Indebtedness (to the extent necessary to pay
in full all such Senior Indebtedness, whether or not due, including
specifically, without limitation, all Post-Commencement Interest thereon,
whether or not allowed as a claim in such Insolvency or Liquidation Proceeding),
after giving effect to any substantially concurrent payment or distribution to
the holders of Senior Indebtedness on account of Senior Indebtedness, for
application to the payment in full of such Senior Indebtedness.
The Company and each Subsidiary Guarantor shall give prompt written
notice to the Trustee of any Insolvency or Liquidation Proceeding with respect
to such Subsidiary Guarantor.
(d) Holders to Be Subrogated to Rights of Holders of Senior
Indebtedness.
32
After all amounts payable under or in respect of Senior Indebtedness
(whether or not due) are paid in full, the Holders shall be subrogated (without
any duty on the part of the holders of Senior Indebtedness to warrant, create,
effectuate, preserve or protect such subrogation), to the extent of the payments
or distributions made to the holders of Senior Indebtedness pursuant to the
provisions of this Section 12.12 (equally and ratably with the holders of all
other indebtedness of any Subsidiary Guarantor which by its express terms is
subordinate and subject in right of payment to Senior Indebtedness to
substantially the same extent as the Guarantees are so subordinated and subject
in right of payment and which is entitled to like rights and subrogation), to
the rights of the holders of Senior Indebtedness to receive payments and
distributions of cash, property and securities applicable to the Senior
Indebtedness, until the principal of and interest on the Notes shall be paid in
full. For the purpose of such subrogation no such payments or distributions to
the holders of Senior Indebtedness by or on behalf of the Company, or by or on
behalf of the Holders by virtue of this Section 12.12, which otherwise would
have been made to the Holders shall, as between any Subsidiary Guarantor and the
Holders, be deemed to be payment by such Subsidiary Guarantor to or on account
of the Senior Indebtedness, it being understood that the provisions of this
Section 12.12 are and are intended solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of Senior
Indebtedness, on the other hand.
(e) Guarantees Unconditional.
Except as otherwise provided herein, nothing contained in this
Indenture or in any Guarantee is intended to or shall impair, as between the
Subsidiary Guarantors and the Holders, the Guarantees, which are absolute and
unconditional, as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Subsidiary Guarantors, other than the holders of
the Senior Indebtedness, nor shall anything herein or therein prevent the
Trustee or any Holder from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Section 12.12, of the holders of Senior Indebtedness in respect of
cash, property or securities of any Subsidiary Guarantor received upon the
exercise of any such remedy. Upon any distribution of assets of any Subsidiary
Guarantor referred to in this Section 12.12, the Trustee, subject to the
provisions of Section 7.01, and the Holders shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
Insolvency or Liquidation Proceedings is pending, or a certificate of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders for the purpose of ascertaining the Persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of such Subsidiary Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Section 12.12.
(f) Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee unless and until the Trustee or any Paying Agent shall have received
written notice at the address specified in Section 13.03 from the Company or a
Subsidiary Guarantor or from one or more holders of
33
Senior Indebtedness or from any representative therefor and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 7.01, shall be entitled in all respects conclusively to assume that no
such fact exits. Nothing in this Section 12.12(f) is intended to or shall
relieve any Holder from the obligations imposed under Sections 12.12(b) and
12.12(c) with respect to money or other distributions received in violation of
the provisions thereof.
(g) Application by Trustee of Assets Deposited With It.
All money and U.S. Government Obligations deposited in trust with
the Trustee pursuant to and in accordance with Section 8.01 shall be for the
sole benefit of the Holder and shall not be subject to this Section 12.12.
Otherwise, any deposit of assets by any Subsidiary Guarantor pursuant to the
Guarantees with the Trustee or any Paying Agent (whether or not in trust) for
the payment of principal of or interest on any Notes shall be subject to the
provisions of this Section 12.12; provided that, if prior to the second Business
Day preceding the date on which by the terms of this Indenture any such assets
may become distributable for any purpose (including without limitation, the
payment of either principal of or interest on any Note) the Trustee or such
Paying Agent shall not have received with respect to such assets the written
notice provided for in Section 12.12(f), then the Trustee or such Paying Agent
shall have full power and authority to receive such assets and to apply the same
to the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such date. The
preceding sentence shall be construed solely for the benefit of the Trustee and
each Paying Agent and shall not otherwise affect the rights of holders of Senior
Indebtedness.
(h) Subordination Rights Not Impaired by Acts or Omissions
of the Subsidiary Guarantors or Holders of Senior Indebtedness.
No right of any present or future holder of any Senior Indebtedness
to enforce the subordination provisions in this Section 12.12 shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
any Subsidiary Guarantor or by any act or failure to act by any such holder, or
by any noncompliance by the Company with the terms of this Indenture, regardless
of any knowledge thereof which any such holder may have or be otherwise charged
with. The holders of Senior Indebtedness may extend, renew, modify or amend the
terms of the Senior Indebtedness or any security therefor and release, sell or
exchange such security and otherwise deal freely with the Subsidiary Guarantors,
all without affecting the liabilities and obligations of the parties to this
Indenture or the Holders.
(i) Holders Authorize Trustee to Effectuate Subordination of
Notes.
Each Holder of Notes by his acceptance thereof (i) 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
Section 12.12 and to protect the rights of the Holders pursuant to this
Indenture, and (ii) appoints the Trustee his attorney-in-fact for such purpose,
including in the event of any Insolvency or Liquidation Proceeding with respect
to any Subsidiary Guarantor, the timely filing of a claim of the unpaid balance
of his Notes pursuant to the Guarantees in the form required in said proceeding
and the causing of such claim to be
34
approved. If the Trustee shall not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Indebtedness
or their representative shall have the right to file an appropriate claim for
and on behalf of the Holders. Nothing herein contained shall be deemed to
authorize the Trustee or any holder of Senior Indebtedness or their
representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes, the Guarantees or the rights of any Holder, or to authorize
the Trustee or any holder of Senior Indebtedness or their representative to vote
in respect of the claim of any Holder in any such proceeding.
(j) Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this
Section 12.12 in respect of any Senior Indebtedness at any time held by it to
the same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee of any of its rights as such
holder.
(k) Payment.
A payment pursuant to the Guarantees with respect to a Note or with
respect to principal of, premium, if any, or interest on a Note shall include,
without limitation, payment of principal of, premium, if any, and interest on
any Note, any depositing of funds under Article IV, any payment on account of
any mandatory or optional repurchase or redemption of any Note (including
payments pursuant to Article III or Section 4.08 or Section 4.15) and any
payment or recovery on any claim (whether for rescission or damages and whether
based on contract, tort, duty imposed by law, or any other theory of liability)
relating to or arising out of the offer, sale or purchase of any Note, provided
that any such payment, deposit, other payment or recovery (i) not prohibited
pursuant to this Section 12.12 at the time actually made shall not be subject to
any recovery by any holder of Senior Indebtedness or representative therefor or
other Person pursuant to this Section 12.12 at any time thereafter and (ii) made
by or from any Persons other than any Subsidiary Guarantor shall not be subject
to any recovery by any holder of Senior Indebtedness or representative therefor
or other Person pursuant to this Section 12.12 at any time thereafter except to
the extent such Person recovers any such amount paid from such Subsidiary
Guarantor, whether pursuant to rights of indemnity, rescission or otherwise.
(l) Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of its
covenants or obligations as are specifically set forth in this Article and no
implied covenants or obligations with respect to holders of Senior Indebtedness
shall be read into this Indenture against the Trustee."
Article III.
MISCELLANEOUS
Section 3.01. Governing Law; Waiver of Jury Trial. This Indenture and the
Notes shall be governed by, and construed in accordance with, the laws of the
State of New York without
35
giving effect to applicable principles of conflicts of law thereof. EACH OF THE
COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE
TRANSACTION CONTEMPLATED HEREBY.
Section 3.02. Separability. In case any provision in the Indenture or in
the Notes is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
Section 3.03. Ratification. The Base Indenture, as supplemented and
amended by this First Supplemental Indenture, is in all respects ratified and
confirmed, and the Base Indenture and this First Supplemental Indenture shall be
read, taken and construed as one and the same instrument. All provisions
included in this First Supplemental Indenture supersede any conflicting
provisions included in the Base Indenture unless not permitted by law.
Section 3.04. Effectiveness. The provisions of this First Supplemental
Indenture shall become effective as of the date hereof.
* * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
36
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused the First
Supplemental Indenture to be duly executed as of the date first written above.
COMPANY:
GIANT INDUSTRIES, INC.
By:
----------------------------------------
Name:
Title:
SUBSIDIARY GUARANTORS:
GIANT INDUSTRIES ARIZONA, INC.
By:
----------------------------------------
Name:
Title:
CINIZA PRODUCTION COMPANY
By:
----------------------------------------
Name:
Title:
GIANT STOP-N-GO OF NEW MEXICO, INC.
By:
----------------------------------------
Name:
Title:
37
GIANT FOUR CORNERS, INC.
By:
----------------------------------------
Name:
Title:
PHOENIX FUEL CO., INC.
By:
----------------------------------------
Name:
Title:
SAN JUAN REFINING COMPANY
By:
----------------------------------------
Name:
Title:
GIANT MID-CONTINENT, INC.
By:
----------------------------------------
Name:
Title:
GIANT PIPELINE COMPANY
By:
----------------------------------------
Name:
Title:
38
GIANT YORKTOWN, INC.
By:
----------------------------------------
Name:
Title:
GIANT YORKTOWN HOLDING COMPANY
By:
----------------------------------------
Name:
Title:
TRUSTEE:
THE BANK OF NEW YORK
By:
----------------------------------------
Name:
Title:
39
EXHIBIT A
[FACE OF NOTE]
GIANT INDUSTRIES, INC.
FORM OF __% SENIOR SUBORDINATED NOTES DUE 2014
For Global Notes only: UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITORY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITORY FOR THE
CERTIFICATES), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY (AND ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), 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.
No. ________ $__________________________________
CUSIP No. _______
Giant Industries, Inc., a Delaware corporation, promises to pay
to___________ or registered assigns the principal sum of ____________________
DOLLARS on _______, 2014.
Interest Payment Dates: ______ and _______, commencing _________,
2004
Record Dates: _____ and ______.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
40
In Witness Whereof, Giant Industries, Inc. has caused this
Note to be signed manually or by facsimile by its duly authorized officers.
GIANT INDUSTRIES, INC.
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
Dated:
-------------------
Certificate of Authentication:
The Bank of New York,
as Trustee, certifies that this is one of
the Notes referred to in the within-
mentioned Indenture.
By:
--------------------------------
Authorized Signatory
41
[REVERSE OF NOTE]
GIANT INDUSTRIES, INC.
___% SENIOR SUBORDINATED NOTES DUE 2014
1. Interest. Giant Industries, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at __%
per annum from [ ], 2004 until maturity. The Company will pay interest
semiannually on [ ] and [ ] of each year (each an "Interest Payment Date"), or
if any such day is not a Business Day, on the next succeeding Business Day.
Interest on the Notes will accrue from the most recent Interest Payment Date on
which interest has been paid or, if no interest has been paid, from [ ], 2004;
provided that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the face hereof
and the next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; provided further that the first Interest
Payment Date shall be [ ], 2004. The Company shall pay interest on overdue
principal and premium, if any, from time to time on demand at a rate equal to
the interest rate then in effect; it shall pay interest on overdue installments
of interest (without regard to any applicable grace periods) from time to time
on demand at the same rate to the extent lawful. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes to
the persons who are registered holders of Notes at the close of business on the
record date immediately preceding the Interest Payment Date, even if such Notes
are cancelled after the record date and on or before the Interest Payment Date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
The Company will pay principal of, premium, if any, and interest on the Notes in
money of the United States of America that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
such amounts by check payable in such money. 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.
4. Indenture. The Company issued the Notes under an Indenture, dated
as of [ ], 2004, as amended by the First Supplemental Indenture, dated as of
[ ], 2004 (together, the "Indenture"), each among the Company, the Subsidiary
Guarantors and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbb) as in effect on
the date of the Indenture. Notwithstanding anything to the contrary herein, the
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and control. The Indenture pursuant to which the
Notes are issued provides that an unlimited aggregate principal amount of Notes
may be issued thereunder.
5. Ranking and Guarantees. The Notes are general senior subordinated
unsecured obligations of the Company. The Company's obligation to pay principal,
premium, if any, and interest with respect to the Notes is unconditionally
guaranteed on a senior subordinated basis, jointly and severally, by the
Subsidiary Guarantors pursuant to Article XII of the Indenture. Certain
limitations to the obligations of the Subsidiary Guarantors are set forth in
further detail in the Indenture.
6. Optional Redemption. At any time on or after [ ], 2009, the
Company may, at its option, redeem all or any portion of the Notes at the
redemption prices (expressed as percentages of the principal amount of the
Notes) set forth below, plus, in each case, accrued interest thereon to the
applicable redemption date, if redeemed during the 12-month period beginning [ ]
of the years indicated below:
Year Percentage
---- ----------
2009 _____%
42
2010 _____%
2011 _____%
2012 and 100.0%
thereafter
In addition, at any time prior to [ ], 2009, the Company may redeem
all or part of the Notes upon not less than 30 days nor more than 60 days'
notice at a redemption price equal to the sum of (i) the principal amount
thereof, (ii) accrued and unpaid interest, if any, to the applicable date of
redemption, and (iii) the Make-Whole Premium.
At any time and from time to time on or prior to [ ], 2007, the
Company may redeem in the aggregate up to 35% of the aggregate principal amount
of the Notes originally issued with the net proceeds of one or more Equity
Offerings, at a redemption price (expressed as a percentage of principal amount)
of [ ]%, plus accrued and unpaid interest, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided, however,
that at least 65% of the aggregate initial principal amount of the Notes must
remain outstanding after each such redemption. In order to effect the foregoing
redemption, the Company must mail notice of redemption in accordance with the
terms of the Indenture no later than 60 days after the related Equity Offering.
7. 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 Notes to be redeemed. If less than all
Notes are to be redeemed, the Trustee shall select pro rata or by lot the Notes
to be redeemed in multiples of $1,000. Notes in denominations larger than $1,000
may be redeemed in part. On and after the redemption date interest ceases to
accrue on Notes or portions of them called for redemption (unless the Company
shall default in the payment of the redemption price or accrued interest).
8. Change of Control. In the event of a Change of Control of the
Company, the Company shall be required to make an offer to purchase each
Holder's Notes, at 101% of the principal amount thereof, plus accrued interest
to the Change of Control Payment Date.
9. Asset Sales Offer. In the event of certain Asset Sales, the
Company may be required to make an Asset Sales Offer to purchase pro rata or by
lot all or any portion of each Holder's Notes, at 100% of the principal amount
of the Notes plus accrued interest to the date of purchase.
10. 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, and the ability of the Company and its Restricted
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 and to enter into
certain transactions with Affiliates, all subject to certain limitations
described in the Indenture.
11. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Notes selected for redemption. Also, it need not transfer or exchange any
Notes for a period of 15 days before the mailing of a notice of redemption of
Notes to be redeemed.
12. Persons Deemed Owners. The registered Holder of a Note
may be treated as the owner of it for all purposes and neither the
Company, any Subsidiary Guarantor, the Trustee nor any Agent shall be
affected by notice to the contrary.
13. 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 written request. After that, all liability
of the Trustee and such Paying Agent with respect to such money shall cease.
43
14. Amendment, Supplement, Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the Notes, 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 Notes. In addition, any
amendment to, or waiver of, the provisions of the Indenture relating to
subordination that adversely affects the right of the Holders of the Notes will
require the consent of the Holders of at least 75% in aggregate principal amount
of Notes then outstanding. Without the consent of any Holder, the Company may
amend or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency or to provide for uncertificated Notes in
addition to certificated Notes or to make any change that does not adversely
affect the rights of any Holder.
15. Successor Corporation. When a successor corporation
assumes all the obligations of its predecessor under the Notes and the
Indenture, the predecessor corporation will be released from those
obligations.
16. Defaults and Remedies. An event of default generally is: default
by the Company or any Subsidiary Guarantor for 30 days in payment of interest on
the Notes; default by the Company or any Subsidiary Guarantor in payment of
principal of or premium, if any, on the Notes; default by the Company or any
Subsidiary Guarantor in the deposit of any optional redemption payment when due
and payable; failure to pay at maturity or defaults resulting in acceleration
prior to maturity of certain other Indebtedness; 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 final judgments against the Company or
Subsidiaries; a failure of any Guarantee of a Subsidiary Guarantor 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 Notes may declare all the Notes 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 Notes shall become due and payable immediately without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may require indemnity and security
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power. The Company must
furnish an annual compliance certificate to the Trustee.
17. Trustee Dealings with Company and Subsidiary Guarantors. The
Bank of New York, the Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledgee of Notes and may otherwise deal
with the Company, the Subsidiary Guarantors or their respective Subsidiaries or
Affiliates with the same rights it would have if it were not Trustee.
18. 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 Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the Notes.
19. Authentication. This Note shall not be valid until the
Trustee or an authenticating agent signs the certificate of authentication
on the other side of this Note.
20. 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).
21. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company will cause
CUSIP numbers to be printed on the Notes as a convenience to Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
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This Note shall be governed by and construed in accordance with the
laws of the State of New York.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to:
Giant Industries, Inc., 23733 North Scottsdale Road, Scottsdale, Arizona
85255, Attention: Treasurer.
45
GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture), jointly and
severally, have unconditionally guaranteed the due and punctual payment of the
principal of, premium, if any, and interest on the Notes, and all other amounts
due and payable under the Indenture and the Notes by the Company, whether at
maturity, acceleration, redemption, repurchase or otherwise, including, without
limitation, the due and punctual payment of interest on the overdue principal
of, premium, if any, and interest on the Notes, to the extent lawful.
The obligations of the Subsidiary Guarantors pursuant to the
Guarantee are subject to the terms and limitations set forth in Article XII of
the Indenture, and reference is made thereto for the precise terms of the
Guarantee.
46
In Witness Whereof, the Subsidiary Guarantors have caused this
Guarantee to be signed manually or by facsimile by its duly authorized officers.
SUBSIDIARY GUARANTORS
Giant Industries Arizona, Inc.,
an Arizona corporation
Attest: By:
------------------------ --------------------------------------
Name:
Title:
Ciniza Production Company,
a New Mexico corporation
Attest: By:
------------------------ --------------------------------------
Name:
Title:
Giant Stop-N-Go of New Mexico, Inc.,
a New Mexico corporation
Attest: By:
------------------------ --------------------------------------
Name:
Title:
Giant Four Corners, Inc.,
an Arizona corporation
Attest: By:
------------------------ --------------------------------------
Name:
Title:
Phoenix Fuel Co., Inc.,
an Arizona corporation
Attest: By:
------------------------ ------------------------------------
Name:
Title:
47
San Juan Refining Company,
a New Mexico corporation
Attest: By:
------------------------ ------------------------------------
Name:
Title:
Giant Mid-Continent, Inc.,
an Arizona corporation
Attest: By:
------------------------ ------------------------------------
Name:
Title:
Giant Pipeline Company,
a New Mexico corporation
Attest: By:
----------------------- ----------------------------------
Name:
Title:
Giant Yorktown, Inc.,
a Delaware corporation
Attest: By:
----------------------- ----------------------------------
Name:
Title:
Giant Yorktown Holding Company,
a Delaware corporation
Attest: By:
----------------------- ----------------------------------
Name:
Title:
48
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint as agent to transfer
----------------------------------
this Note 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 Note)
Your Name:
--------------------------------------------------------------------
Date:
------------------------------------------
Signature Guarantee:
----------------------------------------------------------
49
FORM OF OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.09 or Section 4.15 of the Indenture, check the box: [ ]
If you want to have only part of this Note purchased by the Company
pursuant to Section 4.09 or Section 4.15 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 Note)
Name:
-------------------------------------------------------------------------
Signature Guarantee:
----------------------------------------------------------
50
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
DATE OF EXCHANGE AMOUNT OF AMOUNT OF PRINCIPAL SIGNATURE OF
DECREASE IN INCREASE IN AMOUNT OF THIS AUTHORIZED
PRINCIPAL PRINCIPAL GLOBAL NOTE SIGNATORY OF
AMOUNT OF THIS AMOUNT OF FOLLOWING SUCH TRUSTEE OR
GLOBAL NOTE THIS GLOBAL DECREASE OR NOTES
NOTE INCREASE CUSTODIAN
51