1
- --------------------------------------------------------------------------------
HARCOR ENERGY, INC.
AND
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee
-----------------
INDENTURE
Dated as of July 24, 1995
----------------
$65,000,000
14-7/8% Series A Senior Secured Notes
due July 15, 2002
14-7/8% Series B Senior Secured Notes
due July 15, 2002
- --------------------------------------------------------------------------------
2
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- ---------
310(a)(1).......................................... 7.10
(a)(2).......................................... 7.10
(a)(3).......................................... N.A.
(a)(4).......................................... N.A.
(a)(5).......................................... 7.08; 7.10
(b)............................................. 7.08; 7.10;
13.02
(c)............................................. N.A.
311(a)............................................. 7.11
(b)............................................. 7.11
(c)............................................. N.A.
312(a)............................................. 2.05
(b)............................................. 13.03
(c)............................................. 13.03
313(a)............................................. 7.06
(b)(1).......................................... N.A.
(b)(2).......................................... 7.06
(c)............................................. 7.06; 13.02
(d)............................................. 7.06
314(a)............................................. 4.08; 4.10;
13.02
(b)............................................. 10.02
(c)(1).......................................... 7.02; 13.04
(c)(2).......................................... 7.02; 13.04
(c)(3).......................................... N.A.
(d)............................................. 10.03
(e)............................................. 13.05
(f)............................................. N.A.
315(a)............................................. 7.01(b)
(b)............................................. 7.05; 13.02
(c)............................................. 7.01(a)
(d)............................................. 6.05; 7.01(c)
(e)............................................. 6.11
316(a)(last sentence).............................. 2.09
(a)(1)(A)....................................... 6.05
(a)(1)(B)....................................... 6.04
(a)(2).......................................... N.A.
(b)............................................. 6.07
317(a)(1).......................................... 6.08
(a)(2).......................................... 6.09
(b)............................................. 2.04
318(a)............................................. 13.01
(c)............................................. 13.01
- ----------------------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
3
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions...................................... 1
Section 1.02 Incorporation by Reference of TIA................ 30
Section 1.03 Rules of Construction............................ 31
ARTICLE TWO
THE SECURITIES
Section 2.01 Form and Dating.................................. 31
Section 2.02 Execution and Authentication..................... 32
Section 2.03 Registrar and Paying Agent....................... 33
Section 2.04 Paying Agent To Hold Assets in
Trust......................................... 34
Section 2.05 Securityholder Lists............................. 34
Section 2.06 Transfer and Exchange............................ 34
Section 2.07 Replacement Securities........................... 35
Section 2.08 Outstanding Securities........................... 36
Section 2.09 Treasury Securities.............................. 36
Section 2.10 Temporary Securities............................. 37
Section 2.11 Cancellation..................................... 37
Section 2.12 Defaulted Interest............................... 37
Section 2.13 CUSIP Number..................................... 38
Section 2.14 Deposit of Moneys................................ 38
Section 2.15 Book-Entry Provisions for Global
Securities.................................... 38
Section 2.16 Registration of Transfers and
Exchanges..................................... 39
Section 2.17 Designation...................................... 44
ARTICLE THREE
REDEMPTION
Section 3.01 Notices to Trustee............................... 45
Section 3.02 Selection of Securities To Be
Redeemed...................................... 45
Section 3.03 Notice of Redemption............................. 45
-i-
4
Page
----
Section 3.04 Effect of Notice of Redemption................... 46
Section 3.05 Deposit of Redemption Price...................... 47
Section 3.06 Securities Redeemed in Part...................... 47
Section 3.07 Procedures for Purchase Offers................... 47
ARTICLE FOUR
COVENANTS
Section 4.01 Payment of Securities............................ 49
Section 4.02 Maintenance of Office or Agency.................. 50
Section 4.03 Limitation on Restricted Payments................ 50
Section 4.04 Limitation on Indebtedness....................... 52
Section 4.05 Corporate Existence.............................. 53
Section 4.06 Payment of Taxes and Other Claims................ 53
Section 4.07 Maintenance of Properties and
Insurance..................................... 54
Section 4.08 Compliance Certificate; Notice of
Default; Tax Information...................... 55
Section 4.09 Compliance with Laws............................. 56
Section 4.10 SEC Reports...................................... 56
Section 4.11 Waiver of Stay, Extension or Usury
Laws.......................................... 57
Section 4.12 Limitation on Transactions with
Affiliates.................................... 57
Section 4.13 Limitation on Conduct of Business................ 58
Section 4.14 Limitation on Dividend and Other
Payment Restrictions Affecting
Subsidiaries.................................. 58
Section 4.15 Limitation on Liens.............................. 59
Section 4.16 Change of Control................................ 60
Section 4.17 Limitation on Sale of Assets..................... 62
Section 4.18 Limitation on Preferred Stock of
Subsidiaries.................................. 64
Section 4.19 Impairment of Security Interest.................. 64
Section 4.20 Excess Cash Flow Offer........................... 65
Section 4.21 Equity Proceeds Offer............................ 65
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01 Mergers, Consolidations and Sale
of Assets..................................... 66
Section 5.02 Successor Corporation Substituted................ 68
-ii-
5
Page
----
ARTICLE SIX
DEFAULT AND REMEDIES
Section 6.01 Events of Default................................ 69
Section 6.02 Acceleration..................................... 71
Section 6.03 Other Remedies................................... 72
Section 6.04 Waiver of Past Defaults.......................... 72
Section 6.05 Control by Majority.............................. 73
Section 6.06 Limitation on Suits.............................. 73
Section 6.07 Rights of Holders To Receive
Payment....................................... 74
Section 6.08 Collection Suit by Trustee....................... 74
Section 6.09 Trustee May File Proofs of Claim................. 74
Section 6.10 Priorities....................................... 75
Section 6.11 Undertaking for Costs............................ 75
ARTICLE SEVEN
TRUSTEE
Section 7.01 Duties of Trustee................................ 76
Section 7.02 Rights of Trustee................................ 78
Section 7.03 Individual Rights of Trustee..................... 79
Section 7.04 Trustee's Disclaimer............................. 79
Section 7.05 Notice of Default................................ 80
Section 7.06 Reports by Trustee to Holders.................... 80
Section 7.07 Compensation and Indemnity....................... 81
Section 7.08 Replacement of Trustee........................... 82
Section 7.09 Successor Trustee by Merger, Etc................. 83
Section 7.10 Eligibility; Disqualification.................... 83
Section 7.11 Preferential Collection of Claims
Against Company............................... 84
Section 7.12 Appointment of Co-Trustee........................ 84
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01 Legal Defeasance and Covenant
Defeasance.................................... 85
Section 8.02 Satisfaction and Discharge....................... 89
Section 8.03 Survival of Certain Obligations.................. 89
Section 8.04 Acknowledgment of Discharge by
Trustee....................................... 89
Section 8.05 Application of Trust Assets...................... 90
-iii-
6
Page
----
Section 8.06 Repayment to the Company or
Subsidiary Guarantors; Unclaimed
Money.......................................... 90
Section 8.07 Reinstatement.................................... 91
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01 Without Consent of Holders....................... 91
Section 9.02 With Consent of Holders.......................... 92
Section 9.03 Compliance with TIA.............................. 93
Section 9.04 Revocation and Effect of Consents................ 94
Section 9.05 Notation on or Exchange of
Securities.................................... 95
Section 9.06 Trustee To Sign Amendments, Etc.................. 95
ARTICLE TEN
COLLATERAL AND SECURITY
Section 10.01 Collateral and Security Documents;
Additional Collateral......................... 95
Section 10.02 Recording and Opinions........................... 96
Section 10.03 Release of Collateral............................ 97
Section 10.04 Possession and Use of Collateral................. 98
Section 10.05 Specified Releases of Collateral................. 98
Section 10.06 Disposition of Collateral Without
Release....................................... 101
Section 10.07 Form and Sufficiency of Release.................. 101
Section 10.08 Purchaser Protected.............................. 102
Section 10.09 Authorization of Actions To Be
Taken by the Trustee Under the
Security Documents............................ 102
Section 10.10 Authorization of Receipt of Funds
by the Trustee Under the
Security Documents............................ 103
ARTICLE ELEVEN
APPLICATION OF TRUST MONEYS
Section 11.01 "Trust Moneys" Defined........................... 103
Section 11.02 Withdrawal of Net Cash Proceeds
Following an Asset Sale Offer................. 104
-iv-
7
Page
----
Section 11.03 Withdrawal of Trust Moneys for Oil
and Gas Related Assets........................ 105
Section 11.04 Withdrawal of Trust Moneys on
Basis of Retirement of
Securities.................................... 106
Section 11.05 Investment of Trust Moneys....................... 106
ARTICLE TWELVE
GUARANTEE
Section 12.01 Unconditional Guarantee.......................... 107
Section 12.02 Severability..................................... 108
Section 12.03 Limitation of Subsidiary
Guarantor's Liability......................... 108
Section 12.04 Subsidiary Guarantors May
Consolidate, etc., on Certain
Terms......................................... 109
Section 12.05 Contribution..................................... 110
Section 12.06 Waiver of Subrogation............................ 111
Section 12.07 Execution of Guarantee........................... 112
Section 12.08 Waiver of Stay, Extension or Usury
Laws.......................................... 112
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01 TIA Controls..................................... 113
Section 13.02 Notices.......................................... 113
Section 13.03 Communications by Holders with
Other Holders................................. 114
Section 13.04 Certificate and Opinion as to
Conditions Precedent.......................... 115
Section 13.05 Statements Required in Certificate
or Opinion.................................... 115
Section 13.06 Rules by Trustee, Paying Agent,
Registrar..................................... 116
Section 13.07 Legal Holidays................................... 116
Section 13.08 Governing Law.................................... 116
Section 13.09 No Adverse Interpretation of Other
Agreements.................................... 116
Section 13.10 No Recourse Against Others....................... 116
Section 13.11 Successors....................................... 116
Section 13.12 Duplicate Originals.............................. 117
Section 13.13 Severability..................................... 117
-v-
8
Page
----
Signatures......................................................... 118
Exhibit A-1 - Form of Series A Security
Exhibit A-2 - Form of Series B Security
Exhibit B - Form of Legend for Global
Securities
Exhibit C - Transferee Certificate for Non-QIB
Accredited Investors
Exhibit D - Transferee Certificate for
Transfers Pursuant to Regulation S
Exhibit E - Form of Intercreditor Agreement
Note: This Table of Contents shall not, for any purpose, be deemed to
be part of the Indenture.
-vi-
9
INDENTURE dated as of July 24, 1995, among HARCOR ENERGY, INC., a
Delaware corporation (the "Company"), WARRIOR, INC., a Texas corporation, HTAC
INVESTMENTS, INC., a California corporation, and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association, as Trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's
14-7/8% Senior Secured Notes due 2002:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" of any Person means Indebtedness of another
Person and any of its Subsidiaries existing at the time such other Person
becomes a Subsidiary of such Person or at the time it merges or consolidates
with such Person or any of such Person's Subsidiaries or is assumed by such
Person or any Subsidiary of such Person in connection with the acquisition of
assets from such other Person and in each case not Incurred by such Person or
any Subsidiary of such Person or such other Person in connection with, or in
anticipation or contemplation of, such other Person becoming a Subsidiary of
such Person or such acquisition, merger or consolidation, and which Indebtedness
is without recourse to the Company or any of its Subsidiaries or to any of their
respective properties or assets other than the Person or the assets to which
such Indebtedness related prior to the time such Person becomes a Subsidiary of
the Company or the time of such acquisition, merger or consolidation.
"Adjusted Consolidated Net Tangible Assets" means (without
duplication), as of the date of determination (a) the sum of (i) discounted
future net revenues from proved oil and gas reserves of the Company and its
subsidiaries calculated in accordance with SEC guidelines before any state or
federal income taxes, as estimated by a nationally recognized firm of
independent petroleum engineers in a reserve report prepared as of the end of
the Company's most recently completed fiscal year, as increased by, as of the
date of determination, the estimated discounted future net revenues from (A)
estimated
10
-2-
proved oil and gas reserves acquired since the date of such year-end reserve
report, and (B) estimated oil and gas reserves attributable to upward revisions
of estimates of proved oil and gas reserves since the date of such year-end
reserve report due to exploration, development or exploitation activities, in
each case calculated in accordance with SEC guidelines (utilizing the prices
utilized in such year-end reserve report), and decreased by, as of the date of
determination, the estimated discounted future net revenues from (C) estimated
proved oil and gas reserves produced or disposed of since the date of such
year-end reserve report and (D) estimated oil and gas reserves attributable to
downward revisions of estimates of proved oil and gas reserves since the date of
such year-end reserve report due to changes in geological conditions or other
factors which would, in accordance with standard industry practice, cause such
revisions, in each case calculated in accordance with SEC guidelines (utilizing
the prices utilized in such year-end reserve report); provided that, in the case
of each of the determinations made pursuant to clauses (A) through (D), such
increases and decreases shall be as estimated by the Company's petroleum
engineers, unless in the event that there is a Material Change as a result of
such acquisitions, dispositions or revisions, then the discounted future net
revenues utilized for purposes of this clause (a)(i) shall be confirmed in
writing by a nationally recognized firm of independent petroleum engineers, (ii)
the capitalized costs that are attributable to oil and gas properties of the
Company and its Subsidiaries to which no proved oil and gas reserves are
attributable, based on the Company's books and records as of a date no earlier
than the date of the Company's latest annual or quarterly financial statements,
(iii) the Net Working Capital on a date no earlier than the date of the
Company's latest annual or quarterly financial statements and (iv) the greater
of (I) the net book value on a date no earlier than the date of the Company's
latest annual or quarterly financial statements or (II) the appraised value, as
estimated by independent appraisers, of other tangible assets of the Company and
its Subsidiaries, as of the date no earlier than the date of the Company's
latest audited financial statements, minus (b) the sum of (i) minority
interests, (ii) any gas balancing liabilities of the Company and its
Subsidiaries reflected in the Company's latest audited financial statements,
(iii) to the extent included in (a)(i) above, the discounted future net
revenues, calculated in accordance with SEC guidelines (utilizing the prices
used in the Company's year-end reserve report), attributable to reserves which
are required to be delivered to third parties to fully satisfy the obligations
of the Company and its Subsidiaries
11
-3-
with respect to Volumetric Production Payments on the schedules specified with
respect thereto and (iv) the discounted future net revenues, calculated in
accordance with SEC guidelines, attributable to DollarDenominated Production
Payments which, based on the estimates of (a)(i) above, would be necessary to
fully satisfy the payment obligations of the Company and its Subsidiaries with
respect to Dollar-Denominated Production Payments on the schedules specified
with respect thereto.
"Adjusted Net Assets" shall have the meaning provided in Section
12.06.
"Affiliate" means, when used with reference to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct or cause the direction of management or policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative of the foregoing.
"Affiliate Transaction" shall have the meaning provided in Section
4.12.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Acquisition" means (i) an Investment by the Company or any
Subsidiary of the Company in any other Person pursuant to which such Person
shall become a Subsidiary of the Company or shall be merged with or into the
Company or any Subsidiary of the Company or (ii) the acquisition by the Company
or any Subsidiary of the Company of assets of any Person comprising a division
or line of business of such Person.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease, assignment or other transfer for value by the
Company or by any of its Subsidiaries to any Person other than to the Company or
to a direct or indirect wholly owned Subsidiary of the Company of (i) any
Capital Stock of any Subsidiary of the Company or (ii) any other property or
assets of the Company or of any Subsidiary of the Company, other than with
respect to this clause (ii) any disposition of hydrocarbons or other mineral
products for value in the ordinary course of business.
12
-4-
"Asset Sale Available Proceeds Amount" has the meaning set forth in
Section 4.17.
"Asset Sale Offer" has the meaning set forth in Section 4.17.
"Asset Sale Purchase Date" means the date of purchase pursuant to
the Asset Sale Offer.
"Available Proceeds Amount" means the Asset Sale Available Proceeds
Amount with respect to an Asset Sale Offer; the Excess Cash Flow Available
Proceeds Amount with respect to an Excess Cash Flow Offer or the Equity Offer
Available Proceeds Amount with respect to an Equity Proceeds Offer.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such Person.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in the City of New York or Houston,
Texas are required or authorized by law or other governmental action to be
closed.
"Capital Expenditures" means, with respect to any Person, for any
period, on a consolidated basis for such Person and its Subsidiaries, the
aggregate of all expenditures during such period which, as determined in
accordance with generally accepted accounting principles, are required to be
included in property, plant or equipment or a similar fixed asset account.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or
13
-5-
not voting) of corporate stock, including each class of Common Stock and
Preferred Stock of such Person and (ii) with respect to any Person that is not a
corporation, any and all partnership or other equity interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease that are
required to be classified and accounted for as capital lease obligations under
GAAP and, for purposes of this definition, the amount of such obligations at any
date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP. The stated maturity of such obligations
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"Cash Equivalents" means (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any commercial bank organized under
the laws of the United States of America or any state thereof or the District of
Columbia or any U.S. branch of a foreign bank having at the date of acquisition
thereof combined capital and surplus of not less than $250,000,000; (v)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) above entered into with any bank
meeting the qualifications specified in clause (iv) above; and (vi) for purposes
of Article Eleven only (in addition to items (i) through (v) above), investments
in money market funds which funds (A) are not subject to any sales, load or
other similar charge; and (B) are rated at least AAAm or AAAm-G by S&P or Aaa by
Moody's.
14
-6-
"Change of Control" means the occurrence of one or more of the
following events (whether or not approved by the Board of Directors of the
Company): (i) the Company consolidates with or merges with or into another
Person or any Person consolidates with, or merges with or into, the Company (in
each case, whether or not in compliance with the terms of this Indenture), in
any such event pursuant to a transaction in which immediately after the
consummation thereof Persons owning the Voting Stock of the Company immediately
prior to such consummation shall cease to own a majority of the Voting Stock of
the Company or the surviving entity if other than the Company; or (ii) the
Company or any of its Subsidiaries, directly or indirectly, sells, assigns,
conveys, transfers, leases or otherwise disposes of, in one transaction or a
series of related transactions, all or substantially all of the property or
assets of the Company and its Subsidiaries (determined on a consolidated basis)
to any Person or group of related Persons for purposes of Section 13(d) of the
Exchange Act (a "Group of Persons"); or (iii) the adoption of any plan of
liquidation or dissolution of the Company; or (iv) any Group or Person is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of 40% of the Voting Stock of the Company; or (v)
the first day on which a majority of the members of the Board of Directors of
the Company are not Continuing Directors.
"Change of Control Date" shall have the meaning provided in Section
4.16.
"Change of Control Offer" shall have the meaning provided in
Section 4.16.
"Change of Control Payment Date" shall have the meaning provided in
Section 4.16.
"Collateral" means, collectively, all of the property and assets
(including, without limitation, Trust Moneys) that are from time to time subject
to, or purported to be subject to, the Lien of this Indenture or any of the
Security Documents.
"Collateral Account" means the collateral account established by the
Trustee pursuant to Section 11.01.
"Collateral Proceeds" has the meaning set forth in Section 4.17.
15
-7-
"Commodity Agreement" of any Person means any option or futures
contract or similar agreement or arrangement.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Company Order" means a written order or request signed in the name
of the Company or any applicable Subsidiary Guarantor by its President or Vice
President, and by its Treasurer, Assistant Treasurer, Secretary or any other
officer so authorized and delivered to the Trustee.
"Consolidated EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of (i) Consolidated Net Income plus (ii)
to the extent that any of the following shall have been taken into account in
determining Consolidated Net Income, (A) all income taxes of such Person and its
Subsidiaries paid or accrued in accordance with GAAP for such period (other than
income taxes attributable to extraordinary, unusual or nonrecurring gains or
losses or taxes attributable to sales or dispositions of assets outside the
ordinary course of business), Consolidated Interest Expense, amortization
expense and depreciation expense, and (B) other non-cash items (other than
non-cash interest) reducing Consolidated Net Income, other than any non-cash
item which requires the accrual of or a reserve for cash charges for any future
period and other than any non-cash charge constituting an extraordinary item of
loss, less other non-cash items increasing Consolidated Net Income, all as
determined on a consolidated basis for such Person and its Subsidiaries in
conformity with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to
any Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction or event giving rise to the need to calculate the Consolidated
Fixed Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed
Charges of such Person for the Four Quarter
16
-8-
Period. In addition to and without limitation of the foregoing, for purposes of
this definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to (i) the Incurrence or repayment of any Indebtedness of such
Person or any of its Subsidiaries (and the application of the proceeds thereof)
giving rise to the need to make such calculation and any Incurrence or repayment
of other Indebtedness (and the application of the proceeds thereof), other than
the Incurrence or repayment of Indebtedness in the ordinary course of business
for working capital purposes pursuant to working capital facilities, at any time
subsequent to the first day of the Four Quarter Period and on or prior to the
Transaction Date, as if such Incurrence or repayment, as the case may be (and
the application of the proceeds thereof), occurred on the first day of the Four
Quarter Period, and (ii) any Asset Sales or Asset Acquisitions (including,
without limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Subsidiaries (including any
Person who becomes a Subsidiary as a result of any such Asset Acquisition)
Incurring, assuming or otherwise being liable for Acquired Indebtedness at any
time subsequent to the first day of the Four Quarter Period and on or prior to
the Transaction Date, as if such Asset Sale or Asset Acquisition (including the
Incurrence, assumption or liability for any such Indebtedness or Acquired
Indebtedness) and also including any Consolidated EBITDA associated with such
Asset Acquisition) occurred on the first day of the Four Quarter Period;
provided, that the Consolidated EBITDA of any Person acquired shall be included
only to the extent includable pursuant to the definition of "Consolidated Net
Income." If such Person or any of its Subsidiaries directly or indirectly
guarantees Indebtedness of a third person, the preceding sentence shall give
effect to the Incurrence of such guaranteed Indebtedness as if such Person or
any Subsidiary of such Person had directly Incurred or otherwise assumed such
guaranteed Indebtedness. Furthermore, in calculating "Consolidated Fixed
Charges" for purposes of determining the denominator (but not the numerator) of
this "Consolidated Fixed Charge Coverage Ratio," (1) interest on Indebtedness
determined on a fluctuating basis as of the Transaction Date (including
Indebtedness actually Incurred on the Transaction Date) and which will continue
to be so determined thereafter shall be deemed to have accrued at a fixed rate
per annum equal to the rate of interest on such Indebtedness in effect on the
Transaction Date; and (2) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by agreements
17
-9-
relating to Interest Swap Obligations, shall be deemed to accrue at the rate per
annum resulting after giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for
any period, the sum, without duplication, of (i) Consolidated Interest Expense
(including amortization or write-off of deferred financing costs of such Person
and its consolidated Subsidiaries during such period and any premium or penalty
paid in connection with redeeming or retiring Indebtedness of such Person and
its consolidated Subsidiaries prior to the stated maturity thereof pursuant to
the agreements governing such Indebtedness) and (ii) the product of (x) the
amount of all dividend payments on any series of Preferred Stock of such Person
(other than dividends paid in Common Stock) paid, accrued or scheduled to be
paid or accrued during such period times (y) a fraction, the numerator of which
is one and the denominator of which is one minus the then current effective
consolidated Federal, state and local tax rate of such Person, expressed as a
decimal.
"Consolidated Interest Expense" means, with respect to any Person
for any period, the aggregate of the interest expense (without deduction of
interest income) of such Person and its Subsidiaries for such period, on a
consolidated basis, as determined in accordance with GAAP, and including (a) all
amortization of original issue discount; (b) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by such Person and its Subsidiaries during such period; (c) net cash
costs under all Interest Swap Obligations (including amortization of fees); (d)
all capitalized interest; and (e) the interest portion of any deferred payment
obligations for such period.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
provided, that there shall be excluded therefrom (a) after-tax gains from Asset
Sales or abandonments or reserves relating thereto, (b) after-tax items
classified as extraordinary or nonrecurring gains, (c) the net income of any
Person acquired in a "pooling of interests" transaction accrued prior to the
date it becomes a Subsidiary of the referent Person or is merged or consolidated
with the referent Person or any Subsidiary of the referent Person, (d) the net
income (but not loss) of any Subsidiary of the referent Person to the extent
that the declaration of
18
-10-
dividends or similar distributions by that Subsidiary of that income is
restricted by a contract, operation of law or otherwise, (e) the net income of
any Person, other than a Subsidiary of the referent Person, except to the extent
of cash dividends or distributions paid to the referent Person or to a wholly
owned Subsidiary of the referent Person by such Person, (f) any restoration to
income of any contingency reserve, except to the extent that provision for such
reserve was made out of Consolidated Net Income accrued at any time following
the Issue Date, (g) income or loss attributable to discontinued operations
(including, without limitation, operations disposed of during such period
whether or not such operations were classified as discontinued), and (h) in the
case of a successor to the referent Person by consolidation or merger or as a
transferee of the referent Person's assets, any earnings of the successor
corporation prior to such consolidation, merger or transfer of assets.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Capital Stock of such Person.
"Consolidated Non-cash Charges" means, with respect to any Person
for any period, the aggregate depreciation, amortization and other non-cash
expenses of such Person and its Subsidiaries for such period, on a consolidated
basis, as determined in accordance with generally accepted accounting
principles.
"Continuing Director" means, as of the date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date hereof or (ii) was nominated for election or
elected to such Board of Directors with the affirmative vote of a majority of
the Continuing Directors who were members of such Board at the time of such
election or nomination.
"Corporate Trust Office" means Texas Commerce Bank National
Association, 600 Travis, 8th Floor, Houston, Texas 77002.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
19
-11-
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Depository" means, with respect to the Securities issued in the
form of one or more Global Securities, The Depository Trust Company or another
Person designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"Disqualified Capital Stock" means any Capital Stock 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, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof, in whole or in part, on
or prior to the final maturity date of the Securities.
"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Equity Offer Available Proceeds Amount" shall have the meaning
provided in Section 4.21.
"Equity Offer Purchase Date" shall have the meaning provided in
Section 4.21.
"Equity Offering" means the first offering of Qualified Capital
Stock of the Company for cash having proceeds in excess of $5 million following
the Issue Date.
"Equity Proceeds Offer" shall have the meaning provided in
Section 4.21.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Events of Default" shall have the meaning set forth in
Section 6.01.
"Excess Cash Flow" means, with respect to any Person for any period,
the amount by which (A)(1) the sum of (i) Consolidated Net Income and (ii) other
Consolidated Non-cash Charges reducing Consolidated Net Income, minus (2)
20
-12-
consolidated non-cash items increasing Consolidated Net Income, exceeds (B) the
sum of (1) Capital Expenditures (except that in the case of Capital Expenditures
Incurred pursuant to an acquisition, only those Capital Expenditures which are
not funded by the Incurrence of any Indebtedness) and (2) payments required to
be made (only to the extent that such payments are actually made) by the Company
and its Subsidiaries pursuant to the scheduled maturities of any Indebtedness of
the Company and its Subsidiaries (other than the repayment of any Indebtedness
of the Company with proceeds of Indebtedness incurred pursuant to the New Credit
Facility (or any refinancing thereof)).
"Excess Cash Flow Available Proceeds Amount" shall have the meaning
provided in Section 4.20.
"Excess Cash Flow Offer" shall have the meaning provided in Section
4.20.
"Excess Cash Flow Purchase Date" shall have the meaning provided in
Section 4.20.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"fair market value" or "fair value" means, with respect to any asset
or property, the price which could be negotiated in an arm's-length, free market
transaction, for cash, between an informed and willing seller and an informed
and willing and able buyer, neither of whom is under undue pressure or
compulsion to complete the transaction. Fair market value shall be determined by
the Board of Directors of the Company acting reasonably and in good faith and
shall be evidenced by a Board Resolution delivered to the Trustee; provided,
however, that if the aggregate non-cash consideration to be received by the
Company or any of its Subsidiaries from any Asset Sale could be reasonably
likely to exceed $5,000,000 the fair market value shall be determined by an
Independent Financial Advisor.
"Financial Advisor" means an accounting, appraisal or investment
banking firm of nationally recognized standing that is, in the reasonable and
good faith judgment of the Board of Directors of the Company, qualified to
perform the task for which such firm has been engaged.
21
-13-
"Four Quarter Period" has the meaning set forth in the definition of
"Consolidated Fixed Charge Coverage Ratio" above.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect as of the
Issue Date.
"Global Security" means a Security evidencing all or a part of the
Securities issued to the Depository in accordance with Section 2.01 and bearing
the legend prescribed in Exhibit B.
"Guarantee" shall have the meaning set forth in Section 12.01.
"Guarantor" means (i) each of Warrior, Inc. and HTAC Investments,
Inc. and (ii) each of the Company's Subsidiaries that in the future executes a
supplemental indenture in which such Subsidiary agrees to be bound by the terms
of this Indenture as a Guarantor; provided, that any Person constituting a
Guarantor as described above shall cease to constitute a Guarantor when its
respective Guarantee is released in accordance with the terms of this Indenture.
"Holder" or "Securityholder" means a Person in whose name a Security
is registered on the Registrar's books.
"Incur" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or other obligation on the balance sheet of such Person
(and "Incurrence," "Incurred," "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing); provided, however, that (A) any Indebtedness
assumed in connection with an acquisition of assets and any Indebtedness of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) of the Company or at the time such
Person is merged or consolidated with the Company or any subsidiary of
22
-14-
the Company shall be deemed to be Incurred at the time of the acquisition of
such assets or by such Subsidiary at the time it becomes, or is merged or
consolidated with, a Subsidiary of the Company or by the Company at the time of
such merger or consolidation, as the case may be, and (B) any amendment,
modification or waiver of any document pursuant to which Indebtedness was
previously Incurred shall be deemed to be an Incurrence of Indebtedness unless
such amendment, modification or waiver does not (i) increase the principal or
premium thereof or interest rate thereon (including by way of original issue
discount) or (ii) change to an earlier date the stated maturity thereof or the
date of any scheduled or required principal payment thereon or the time or
circumstances under which such Indebtedness shall be redeemed.
"Indebtedness" means with respect to any Person, without
duplication, (i) all Obligations of such Person for borrowed money, (ii) all
Obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all Capitalized Lease Obligations of such Person,
(iv) all Obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all Obligations under
any title retention agreement (but excluding trade accounts payable and accrued
liabilities arising in the ordinary course of business that are not overdue by
90 days or more or are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted), (v) all Obligations for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction, (vi) all Indebtedness of others (including all
dividends of other Persons for the payment of which is) guaranteed, directly or
indirectly, by such Person or that is otherwise its legal liability or which
such Person has agreed to purchase or repurchase or in respect of which such
Person has agreed contingently to supply or advance funds, (vii) net liabilities
of such Person under Interest Swap Obligations and Commodity Agreements, (viii)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on any asset or property (including, without limitation, leasehold
interests and any other tangible or intangible property) of such Person, whether
or not such Indebtedness is assumed by such Person or is not otherwise such
Person's legal liability; provided that if the Obligations so secured have not
been assumed by such Person or are otherwise not such Person's legal liability,
the amount of such Indebtedness for the purposes of this definition shall be
limited to the lesser of the amount of
23
-15-
such Indebtedness secured by such Lien or the fair market value of the assets or
property securing such Lien, and (ix) all Disqualified Capital Stock issued by
such Person with the amount of Indebtedness represented by such Disqualified
Capital Stock being equal to the greater of its voluntary or involuntary
liquidation preference and its maximum fixed repurchase price, but excluding
accrued dividends if any. The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
as described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at such
date; provided, that the amount outstanding at any time of any Indebtedness
issued with original issue discount is the full amount of such Indebtedness less
the remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with GAAP.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Independent" when used with respect to any specified Person means
such a Person who (a) is in fact independent, (b) does not have any direct
financial interest or any material indirect financial interest in the Company or
any of its Subsidiaries, or in any Affiliate of the Company or any of its
Subsidiaries and (c) is not an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions for the
Company or any of its Subsidiaries. Whenever it is provided in this Indenture
that any Independent Person's opinion or certificate shall be furnished to the
Trustee, such Person shall be appointed by the Company and approved by the
Trustee in the exercise of reasonable care, and such opinion or certificate
shall state that the signer has read this definition and that the signer is
Independent within the meaning thereof.
"Initial Purchasers" means BT Securities Corporation
and Internationale Nederlanden (U.S.) Securities Corporation.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Intercreditor Agreement" means the intercreditor agreement dated as
of the Issue Date by and between
24
-16-
Internationale Nederlanden (U.S.) Capital Corporation, as agent under the New
Credit Facility, and the Trustee, and acknowledged by the Company and Warrior,
as the same may be amended, supplemented or modified from time to time in
accordance with the terms thereof and hereof. A copy of the Intercreditor
Agreement is attached hereto as Exhibit E.
"Interest Payment Date" means the stated maturity of an installment
of interest on the Securities.
"Interest Swap Obligations" means the obligations of any Person
under any interest rate protection agreement, interest rate future, interest
rate option, interest rate swap, interest rate cap or other interest rate hedge
or arrangement.
"Investment" by any Person means any direct or indirect (i) loan,
advance or other extension of credit or capital contribution (by means of
transfers of cash or other property (valued at the fair market value thereof as
of the date of transfer) to others or payments for property or services for the
account or use of others, or otherwise); (ii) purchase or acquisition of Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by any other Person; (iii) guarantee or assumption of any Indebtedness or
any other obligation of any other Person (except for an assumption of
Indebtedness for which the assuming Person receives consideration at the time of
such assumption in the form of property or assets with a fair market value at
least equal to the principal amount of the Indebtedness assumed); and (iv) all
other items that would be classified as investments (including, without
limitation, purchases of assets outside the ordinary course of business) on a
balance sheet of such Person prepared in accordance with GAAP. The amount of any
Investment shall not be adjusted for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment. If the
Company or any Subsidiary of the Company sells or otherwise disposes of any
Common Stock of any direct or indirect Subsidiary of the Company such that,
after giving effect to any such sale or disposition, the Company no longer owns,
directly or indirectly, greater than 50% of the outstanding Common Stock of such
Subsidiary, the Company shall be deemed to have made an Investment on the date
of any such sale or disposition equal to the fair market value of the Common
Stock of such Subsidiary not sold or disposed of.
"Issue Date" means the date of original issuance of
the Securities.
25
-17-
"Legal Holiday" shall have the meaning provided in
Section 13.07.
"Lien" means, with respect to any Person, any mortgage, pledge,
lien, encumbrance, easement, restriction, covenant, right-of-way, charge or
adverse claim affecting title or resulting in an encumbrance against real or
personal property of such Person, or a security interest of any kind (including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option, right of first refusal or other similar agreement to sell,
in each case securing obligations of such Person and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statute or statutes) of any jurisdiction other than to reflect ownership by a
third party of property leased to the referent Person or any of its Subsidiaries
under a lease that is not in the nature of a conditional sale or title retention
agreement).
"Material Change" means an increase or decrease (excluding changes
that result solely from changes in prices) of more than 10% during a fiscal
quarter in the estimated discounted future net cash flows from proved oil and
gas reserves of the Company and its Subsidiaries, calculated in accordance with
clause (a)(i) of the definition of Adjusted Cosolidated Net Tangible Assets;
provided, however, that the following will be excluded from the calculation of
Material Change: (i) any acquisitions during the quarter of oil and gas reserves
that have been estimated by a nationally recognized firm of independent
petroleum engineers and on which a report or reports exist and (ii) any
disposition of properties existing at the beginning of such quarter that have
been disposed of as provided in Section 4.17.
"Maturity Date" means July 15, 2002.
"Mortgage" means a mortgage (or deed of trust) executed on July 20,
1995 granted by the Company or any applicable Subsidiary Guarantor for the
benefit of the Trustee and the Holders, as the same may be amended, supplemented
or modified from time to time in accordance with the terms thereof and hereof.
"Net Award" shall have the meaning provided therefor
in the Mortgages.
26
-18-
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents (including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents) received by the Company or any of its Subsidiaries from such Asset
Sale net of (a) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, brokerage, legal, accounting and
investment banking fees and sales commissions), (b) taxes paid or payable ((1)
including, without limitation, income taxes reasonably estimated to be actually
payable as a result of any disposition of property within two years of the date
of disposition and (2) after taking into account any reduction in tax liability
due to available tax credits or deductions and any tax sharing arrangements),
(c) appropriate amounts to be provided by the Company or any Subsidiary, as the
case may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any Subsidiary,
as the case may be, after such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale and (d) in the case of an Asset Sale involving
Collateral, the amount of Indebtedness outstanding under the New Credit Facility
actually repaid from the proceeds of such Asset Sale.
"Net Equity Proceeds" means (a) in the case of any sale by the
Company of Qualified Capital Stock of the Company, the aggregate net cash
proceeds received by the Company, after payment of expenses, commissions and the
like (including, without limitation, brokerage, legal, accounting and investment
banking fees and commissions) incurred in connection therewith, and (b) in the
case of any exchange, exercise, conversion or surrender of any outstanding
Indebtedness of the Company or any Subsidiary issued after the Issue Date for or
into shares of Qualified Capital Stock of the Company, the amount of such
Indebtedness (or, if such Indebtedness was issued at an amount less than the
stated principal amount thereof, the accrued amount thereof as determined in
accordance with GAAP) as reflected in the consolidated financial statements of
the Company prepared in accordance with GAAP as of the most recent date next
preceding the date of such exchange, exercise, conversion or surrender (plus any
additional amount required to be paid by the holder of such Indebtedness to the
Company or to any wholly owned Subsidiary of the Company upon such exchange,
exercise, conversion or surrender and less any and all payments made to the
holders of such Indebtedness, and all other
27
-19-
expenses incurred by the Company in connection therewith), in each case (a) and
(b) to the extent consummated after the Issue Date.
"Net Working Capital" means (i) all current assets of the Company
and its Subsidiaries, minus (ii) all current liabilities of the Company and its
Subsidiaries, except current liabilities included in Indebtedness, in each case
as set forth in financial statements of the Company prepared in accordance with
GAAP.
"New Credit Facility" means the Amended and Restated Credit
Agreement dated as of July 19, 1995, among the Company, the financial
institutions party thereto in their capacities as lenders thereunder and
Internationale Nederlanden (U.S.) Capital Corporation, as agent, as the same may
be amended from time to time, and any agreement evidencing the refinancing,
modification, replacement, renewal, restatement, refunding, deferral, extension,
substitution, supplement, reissuance or resale thereof.
"Non-Collateral Proceeds" has the meaning set forth in Section 4.17.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Controller, the Secretary or Assistant Secretary of such
Person.
"Officers' Certificate" means a certificate signed by
two Officers of the Company.
"Oil and Gas Business" means (i) the acquisition, exploration,
development, operation and disposition of interests in oil, gas and other
hydrocarbon properties located in North America, and (ii) the gathering,
marketing, treating, processing, storage, selling and transporting of any
production from such interests or properties.
"Oil and Gas Related Assets Investment" means any Investment or
capital expenditure (but not including additions to working capital or
repayments of any revolving credit or
28
-20-
working capital borrowings) by the Company or any Subsidiary of the Company
which is related to the business of the Company and its Subsidiaries as it is
conducted on the date of the Asset Sale giving rise to the Net Cash Proceeds to
be reinvested.
"Opinion of Counsel" means a written opinion from legal counsel
which and who are acceptable to the Trustee.
"Paying Agent" shall have the meaning set forth in Section 2.03.
"payment default" has the meaning set forth in Section 6.01.
"Payment Restriction" has the meaning set forth in Section 4.14.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness under the Securities, this Indenture and the
Guarantees;
(ii) Commodity Agreements of the Company; provided, however, that
such Commodity Agreements are entered into to protect the Company and its
Subsidiaries from fluctuations in the prices of commodities;
(iii) Interest Swap Obligations of the Company; provided, however,
that such Interest Swap Obligations are entered into to protect the
Company and its Subsidiaries from fluctuations in interest rates on
Indebtedness Incurred in accordance with this Indenture to the extent the
notional principal amount of such Interest Swap Obligation does not exceed
the principal amount of the Indebtedness to which such Interest Swap
Obligation relates;
(iv) additional Indebtedness Incurred by the Company not to exceed
$15,000,000 outstanding at any time;
(v) Indebtedness of a direct or indirect Subsidiary of the Company
to the Company or to a direct or indirect wholly owned Subsidiary of the
Company for so long as such Indebtedness is held by the Company or a
direct or indirect wholly owned Subsidiary of the Company in each case
subject to no Lien held by a Person other than the Company or a direct or
indirect wholly owned Subsidiary of the
29
-21-
Company; provided that if as of any date any Person other than the Company
or a direct or indirect wholly owned Subsidiary of the Company owns or
holds any such Indebtedness or holds a Lien in respect of such
Indebtedness, such date shall be deemed the Incurrence of Indebtedness not
constituting Permitted Indebtedness by the issuer of such Indebtedness;
(vi) Indebtedness of the Company to a direct or indirect wholly
owned Subsidiary of the Company for so long as such Indebtedness is held
by a direct or indirect wholly owned Subsidiary of the Company in each
case subject to no Lien; provided, that (a) any Indebtedness of the
Company to any direct or indirect Subsidiary of the Company is unsecured
and subordinated, pursuant to a written agreement, to the Company's
obligations under this Indenture and the Securities, and (b) if as of any
date any Person other than a direct or indirect wholly owned Subsidiary of
the Company owns or holds any such Indebtedness or any person holds a Lien
in respect of such Indebtedness, such date shall be deemed the Incurrence
of Indebtedness not constituting Permitted Indebtedness by the issuer of
such Indebtedness;
(vii) guarantees by Subsidiaries of the Company of Indebtedness of
the Company (other than Permitted Indebtedness) Incurred on or after the
Issue Date; provided, that, such Indebtedness was Incurred in compliance
with Section 4.04; and
(viii) Refinancing Indebtedness.
"Permitted Investments" means (a) Investments in cash and Cash
Equivalents; (b) Investments by the Company or by any Subsidiary of the Company
in any Person that is or will become immediately after such Investment a direct
or indirect Subsidiary of the Company; (c) any Investments in the Company by any
Subsidiary of the Company; provided that any Indebtedness evidencing such
Investment is unsecured and subordinated, pursuant to a written agreement, to
the Company's obligations in respect of the Securities and this Indenture; and
(d) Investments made by the Company or by its Subsidiaries as a result of an
Asset Sale made in compliance with Section 4.17.
"Permitted Liens" means, without duplication, each of the following:
30
-22-
(i) pledges or deposits by such Person under worker's compensation
laws, unemployment insurance laws or similar legislation (other than
ERISA), or good faith deposits in connection with bids, tenders, contracts
(other than for the payment of Indebtedness) or leases to which such
Person is a party, or deposits to secure public statutory obligations of
such Person or deposits to secure surety or appeal bonds to which such
Person is a party, or deposits as security for contested taxes or import
duties or for the payment of rent;
(ii) Liens imposed by law, such as landlords', carriers',
warehousemen's and mechanics' Liens or bankers' Liens incurred in the
ordinary course of business for sums which are not yet due or are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and for which adequate provision has been made;
(iii) Liens for taxes not yet subject to penalties for non-payment or
which are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, if adequate reserve, as may
be required by GAAP, shall have been made therefor;
(iv) Liens in favor of issuers of surety bonds or appeal bonds issued
pursuant to the request of and for the account of such Person in the
ordinary course of its business;
(v) Liens to support trade letters of credit issued
in the ordinary course of business;
(vi) survey exceptions, encumbrances, easements or reservations of,
or rights of others for, rights of way, sewers, electric lines, telegraph
and telephone lines and other similar purposes, or zoning or other
restrictions on the use of real property;
(vii) Liens arising from judgments, decrees or
attachments in circumstances not constituting an Event of
Default;
(viii) Liens in favor of the Company;
(ix) Liens with respect to Acquired Indebtedness Incurred in
accordance with Section 4.04; provided that
31
-23-
(A) such Liens secured such Acquired Indebtedness at the time of and prior
to the Incurrence of such Acquired Indebtedness by the Company or a
Subsidiary of the Company and were not granted in connection with, or in
anticipation of, the Incurrence of such Acquired Indebtedness by the
Company or a Subsidiary of the Company, (B) such Liens do not extend to or
cover any property or assets of the Company or any of its Subsidiaries
other than the property or assets that secured the Acquired Indebtedness
prior to the time such Indebtedness became Acquired Indebtedness of the
Company or a Subsidiary of the Company and are no more favorable to the
lienholders than those securing the Acquired Indebtedness prior to the
Incurrence of such Acquired Indebtedness by the Company or a Subsidiary of
the Company and (C) the amount of Indebtedness so secured by such Liens,
together with all other Indebtedness of the Company and its Subsidiaries
secured by Liens (other than the Securities), does not exceed, at the time
of and after giving effect to the Incurrence of such Acquired
Indebtedness, 40% of the Adjusted Consolidated Net Tangible Assets of the
Company;
(x) Liens granted by the Company to secure Indebtedness Incurred in
accordance with this Indenture representing all or part of the purchase
price of assets or property acquired after the Issue Date from a Person
not an Affiliate of the Company; provided that (A) the aggregate amount of
Indebtedness secured by such Lien shall not exceed the fair market value
(or, if less, the cost) of the assets or property so acquired, (B) such
Liens shall not encumber any other assets or property of the Company or of
any Subsidiary of the Company and shall attach to such assets or property
within 60 days of the acquisition of such assets or property, and (C) the
amount of Indebtedness so secured by such Liens, together with all other
Indebtedness of the Company and its Subsidiaries secured by Liens (other
than the Securities), does not exceed, at the time of and after giving
effect to the Incurrence of such Indebtedness, 40% of the Adjusted
Consolidated Net Tangible Assets of the Company;
(xi) Liens on the property or assets of a Person that becomes a
Subsidiary after the Issue Date to the extent that such Liens are existing
at the time such Person became a Subsidiary of the Company and such liens
were not granted as a result of, in connection with or in anticipation of
such Person becoming a Subsidiary of the Company;
32
-24-
provided that (A) the Indebtedness (if any) secured thereby is Acquisition
Indebtedness Incurred in accordance with the Indenture and (B) such Liens
do not extend to or cover any property or assets of the Company or of any
of its Subsidiaries other than the property or assets so acquired;
(xii) Liens to secure Indebtedness Incurred in accordance with this
Indenture under the New Credit Facility; provided, that the amount of
Indebtedness so secured by such Liens, together with all other
Indebtedness of the Company and its Subsidiaries secured by Liens (other
than the Securities), does not exceed, at the time of and after giving
effect to the Incurrence of such Indebtedness, 40% of the Adjusted
Consolidated Net Tangible Assets of the Company;
(xiii) Liens to secure Capitalized Lease Obligations; provided, that
(A) such Liens do not extend to any property or assets which is not leased
property subject to such Capitalized Lease Obligation and (B) the amount
of Indebtedness so secured by such Liens, together with all other
Indebtedness of the Company and its Subsidiaries secured by Liens (other
than the Securities), does not exceed, at the time of and after giving
effect to the incurrence of such Capitalized Lease Obligation, 40% of the
Adjusted Consolidated Net Tangible Assets of the Company;
(xiv) Liens in respect of Refinancing Indebtedness incurred to
Refinance any of the Indebtedness set forth in clauses (ix), (x) and
(xiii) above; provided that such Liens in respect of such Refinancing
Indebtedness (I) are no less favorable to the Holders and are not more
favorable to the lienholders with respect to such Liens than the Liens in
respect of the Indebtedness being Refinanced and (II) do not extend to or
cover any properties or assets of the Company or of any of the Company's
Subsidiaries, other than the property or assets that secured the
Indebtedness being Refinanced;
(xv) Liens on, or related to, properties or assets to secure all or a
part of the costs incurred in the ordinary course of the Oil and Gas
Business for the exploration, drilling, development or operation thereof;
33
-25-
(xvi) Liens on pipeline or pipeline facilities which
arise out of operation of law;
(xvii) Liens arising under operating agreements, joint venture
agreements, partnership agreements, oil and gas leases, farm-out
agreements, division orders, contracts for the sale, transportation or
exchange of oil and natural gas, unitization and pooling declarations and
agreements, areas of mutual interest agreements and other agreements which
are customary in the Oil and Gas Business; and
(xviii) Liens reserved in oil and gas mineral leases for bonus or rental
payments and for compliance with the terms of such leases.
"Person" means an individual, partnership, corporation,
unincorporated organization, trust or joint venture, or a governmental agency or
political subdivision thereof.
"Physical Securities" has the meaning set forth in Section 2.01.
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"principal" of any Indebtedness (including the Securities) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Private Placement Legend" means the legend initially set forth on
the Securities in the form set forth on Exhibit A-1.
"pro forma" means, with respect to any calculation made or required
to be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act as interpreted by the
Company's Board of Directors in consultation with its independent certified
public accountants.
"Property" has the meaning assigned to such term in
the Mortgages.
34
-26-
"Purchase Agreement" means the purchase agreement dated as of July
17, 1995 by and among the Company and the Initial Purchasers of the Securities.
"Purchase Date" means the Asset Sale Purchase Date with respect to
an Asset Sale Offer, the Excess Cash Flow Purchase Date with respect to an
Excess Cash Flow Offer, or the Equity Offer Purchase Date with respect to an
Equity Proceeds Offer.
"Purchase Offer" means an Asset Sale Offer, Excess Cash Flow Offer
or Equity Proceeds Offer.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Record Date" means the Record Dates specified in the Securities.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and Paragraph 5 in the form of Security annexed hereto as Exhibit A.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and Paragraph 5 in the form of Security annexed hereto as Exhibit A.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company of
Indebtedness Incurred in accordance with Section 4.04 hereof (other than
pursuant to clause (iv), (v), (vi) or (viii) of the definition of Permitted
Indebtedness), in each case that does not (1) result in an increase in the
aggregate principal amount of Indebtedness of such Person as of the date of such
proposed Refinancing (plus the amount of any premium required to be paid under
the terms of the instrument governing
35
-27-
such Indebtedness and plus the amount of reasonable expenses incurred by the
Company in connection with such Refinancing) or (2) create Indebtedness with (A)
a Weighted Average Life to Maturity that is less than the Weighted Average Life
to Maturity of the Indebtedness being Refinanced or (B) a final maturity earlier
than the final maturity of the Indebtedness being Refinanced; provided that (x)
if such Indebtedness being Refinanced is Indebtedness of the Company, then such
Refinancing Indebtedness shall be Indebtedness solely of the Company, and (y) if
such Indebtedness being Refinanced is subordinate or junior to the Securities,
then such Refinancing Indebtedness shall be subordinate to the Securities at
least to the same extent and in the same manner as the Indebtedness being
Refinanced.
"Registered Exchange Offer" means the offer to exchange the Series B
Securities for all of the outstanding Series A Securities in accordance with the
Registration Rights Agreement.
"Registrar" shall have the meaning set forth in Section 2.03.
"Registration Rights Agreement" means the Registration Rights
Agreement by and among the Company and the Initial Purchaser, relating to the
Securities and dated as of the Issue Date, as the same may be amended,
supplemented or modified from time to time in accordance with the terms thereof.
"Regulation S" means Regulation S under the Securities Act.
"Released Interests" has the meaning provided in Section 10.05.
"Released Trust Moneys" has the meaning set forth in Section 11.03.
"Resale Restriction Termination Date" shall have the meaning
provided in Section 2.16.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Group (or any successor group) of the
Trustee, including without limitation any Vice President, any Assistant Vice
President, any Assistant Secretary or any other officer of the Trustee
customarily performing functions similar to those performed by any of
36
-28-
the above designated officers, who shall, in any case, be responsible for the
administration of this document or have familiarity with it, and also means,
with respect to particular corporate trust matters, any other officer to whom
such matter is referred because of his or her knowledge of and familiarity with
the particular subject.
"Restricted Payment" shall have the meaning provided in Section
4.03.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
under the Securities Act; provided that the Trustee shall be entitled to request
and conclusively rely upon an Opinion of Counsel with respect to whether any
Security is a Restricted Security.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Series A Securities and Series B Securities
as amended or supplemented from time to time in accordance with the terms hereof
that are issued pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Security Documents" means, collectively, the Mortgages and the
Intercreditor Agreement and all security agreements, mortgages, deeds of trust,
collateral assignments or other instruments evidencing or creating any security
interests in favor of the Trustee in all or any portion of the Collateral, in
each case as amended, supplemented or modified from time to time in accordance
with the terms thereof and hereof.
"Series A Securities" means the 14-7/8% Senior Secured Notes due
July 15, 2002, being issued and sold pursuant to the Purchase Agreement and this
Indenture.
"Series B Securities" means the 14-7/8% Senior Secured Notes due
July 15, 2002 (the terms of which are identical to the Series A Securities
except that the Series B Securities shall be registered under the Securities
Act, and shall not contain the restrictive legend on the face of the form of the
Series A Securities), to be issued in exchange for the
37
-29-
Series A Securities pursuant to the Registered Exchange Offer and this
Indenture.
"Subsidiary", with respect to any Person, means (i) any corporation
of which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb), as amended, as in effect on the date of the execution of this
Indenture until such time as this Indenture is qualified under the TIA, and
thereafter as in effect on the date on which this Indenture is qualified under
the TIA, except as otherwise provided in Section 9.03.
"Trust Moneys" shall have the meaning set forth in Section 11.01.
"Trust Officer" means any officer within the corporate trust
administration department (or any successor group of the Trustee), including any
vice president, assistant vice president, assistant secretary or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the persons who at that time shall be such
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"U.S. Government Obligations" shall have the meaning provided in
Section 8.01.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"U.S. Physical Securities" shall have the meaning set forth in
Section 2.01.
38
-30-
"Volumetric Production Payments" means production payment
obligations recorded as deferred revenue in accordance with GAAP, together with
all undertakings and obligations in connection therewith.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"wholly owned Subsidiary" of any Person means any Subsidiary of such
Person of which all the outstanding voting securities which normally have the
right to vote in the election of directors are owned by such Person or any
wholly owned Subsidiary of such Person.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
39
-31-
"obligor" on the indenture securities means the Company, any
Subsidiary Guarantor or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and
words in the plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Series A Securities and Series B Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibits A-1
and A-2, respectively. The Securities may have notations, legends or
endorsements (including notations relating to the Guarantee) required by law,
stock exchange rule or usage. The Company and the Trustee shall approve the form
of the Securities and any notation, legend or endorsement (including notations
relating to the Guarantee) on
40
-32-
them. Each Security shall be dated the date of its issuance and shall show the
date of its authentication.
The terms and provisions contained in the Securities and the
Guarantee shall constitute, and are hereby expressly made, a part of this
Indenture.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent Global Securities in registered
form, substantially in the form set forth in Exhibit A-1 ("Global Securities"),
deposited with the Trustee, as custodian for the Depository, and shall bear the
legend set forth on Exhibit B. The aggregate principal amount of any Global
Security may from time to time be increased or decreased by adjustments made on
the records of the Trustee, as custodian for the Depository, as hereinafter
provided.
Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of certificated Securities in
registered form set forth in Exhibit A-1 (the "Offshore Physical Securities").
Securities offered and sold in reliance on any other exemption from registration
under the Securities Act other than as described in the preceding paragraph
shall be issued, and Securities offered and sold in reliance on Rule 144A may be
issued, in the form of certificated Securities in registered form in
substantially the form set forth in Exhibit A-1 (the "U.S. Physical
Securities"). The Offshore Physical Securities and the U.S. Physical Securities
are sometimes collectively herein referred to as the "Physical Securities."
SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, shall sign,
or one Officer shall sign and one Officer or an Assistant Secretary (each of
whom shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Securities for the Company by manual or facsimile
signature. The Company's seal shall also be reproduced on the Securities.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless. Each
Subsidiary
41
-33-
Guarantor shall execute the Guarantee in the manner set forth in Section 12.07.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Series A Securities for original
issue in the aggregate principal amount of $65,000,000 and (ii) Series B
Securities from time to time for issue only in exchange for a like principal
amount of Series A Securities, in each case upon receipt of a written order of
the Company in the form of an Officers' Certificate. The Officers' Certificate
shall specify the amount of Securities to be authenticated, the series and type
of Securities and the date on which the Securities are to be authenticated. The
aggregate principal amount of Securities outstanding at any time may not exceed
$65,000,000, except as provided in Section 2.07. Upon receipt of a written order
of the Company in the form of an Officers' Certificate, the Trustee shall
authenticate Securities in substitution of Securities originally issued to
reflect any name change of the Company.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company and Affiliates of the Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("Registrar"), (b)
Securities may be presented or surrendered for payment ("Paying Agent") and (c)
notices and demands in respect of the Securities and this Indenture may be
served. The Registrar shall keep a register
42
-34-
of the Securities and of their transfer and exchange. The Company, upon notice
to the Trustee, may have one or more co-Registrars and one or more additional
Paying Agents reasonably acceptable to the Trustee. The term "Paying Agent"
includes any additional Paying Agent. The Company initially appoints the Trustee
as Registrar and Paying Agent until such time as the Trustee has resigned or a
successor has been appointed. Except as set forth in Section 2.14, neither the
Company nor any Affiliate of the Company may act as Paying Agent.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Securities, and shall notify the Trustee of
any Default by the Company in making any such payment. The Company at any time
may require a Paying Agent to distribute all assets held by it to the Trustee
and account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee and
to account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Company to the Paying Agent, the
Paying Agent shall have no further liability for such assets.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee before each Record Date and at such other times as the Trustee may
request in writing a list as of such date and in such form as the Trustee may
reasonably require of the names and addresses of Holders, which list may be
conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when Securities
are presented to the Registrar or a co-Registrar with a request to register the
transfer of such Securities or to exchange such Securities for an equal
43
-35-
principal amount of Securities of other authorized denominations, the Registrar
or co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; provided, however, that the
Securities surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing. To permit registrations of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's or co-Registrar's written request. No service
charge shall be made for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
transfer taxes or other governmental charge payable upon exchanges or transfers
pursuant to Section 2.02, 2.10, 3.06, 3.07, 4.16, or 9.05). The Registrar or
co-Registrar shall not be required to register the transfer of or exchange of
any Security (i) during a period beginning at the opening of business 15 days
before the mailing of a notice of redemption of Securities and ending at the
close of business on the day of such mailing and (ii) selected for redemption in
whole or in part pursuant to Article Three, except the unredeemed portion of any
Security being redeemed in part.
Any Holder of the Global Security shall, by acceptance of such
Global Security, agree that transfers of beneficial interests in such Global
Security may be effected only through a book-entry system maintained by the
Depository (or its agent), and that ownership of a beneficial interest in the
Global Security shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements are met. If required by the
Trustee or the Company, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both the Company and the Trustee, to
protect the Company, the Trustee and any Agent from any loss which any of them
may suffer if a Security is replaced. The Company may charge such Holder for
44
-36-
its reasonable, out-of-pocket expenses in replacing a Security, including
reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those cancelled by it, those delivered
to it for cancellation and those described in this Section as not outstanding.
Subject to Section 2.09, a Security does not cease to be outstanding because the
Company or any of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date or the Maturity Date the Paying Agent holds
U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Securities payable on that date, then on and
after that date such Securities cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, waiver or consent, Securities
owned by the Company or any of its Affiliates shall be disregarded, except that,
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities that the
Trustee knows are so owned shall be disregarded.
The Trustee may require an Officers' Certificate listing Securities
owned by the Company, a Subsidiary of the Company or an Affiliate of the
Company.
45
-37-
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon receipt of
a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate upon receipt of a written order
of the Company pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel and, at the written direction of the Company,
shall dispose of all Securities surrendered for transfer, exchange, payment or
cancellation. Subject to Section 2.07, the Company may not issue new Securities
to replace Securities that it has paid or delivered to the Trustee for
cancellation. If the Company or any Subsidiary Guarantor shall acquire any of
the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and until
the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities,
it shall pay interest on overdue principal and on overdue installments of
interest (without regard to any applicable grace periods) from time to time on
demand at the rate of 2% per annum in excess of the rate shown on the Security.
46
-38-
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use a "CUSIP" number, and
if so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Securities, and that reliance may be
placed only on the other identification numbers printed on the Securities.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest Payment Date
and Maturity Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or Maturity Date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Holders on such
Interest Payment Date or Maturity Date, as the case may be. Alternatively, the
Company may make payments on the Series A Securities by wire transfer, in same
day funds, or check delivered to the Holders thereof at their registered
addresses. To the extent the Company makes such payments directly to the
Holders, the Company shall simultaneously notify the Trustee thereof in writing.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit B.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of the
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the
47
-39-
operation of customary practices governing the exercise of the rights of a
Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16. In
addition, Physical Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor depositary is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to issue Physical Securities.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b), the Global Securities
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in the Global Securities, an equal aggregate principal amount of
Physical Securities of authorized denominations.
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(b) or (d) of Section 2.16 shall, except as otherwise provided by Section 2.16,
bear the legend regarding transfer restrictions applicable to the Physical
Securities set forth in Exhibit A-1.
(e) The Holder of any Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When Physical
Securities are presented to the Registrar with a request:
48
-40-
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal
number of Physical Securities of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
the requirements under this Section 2.16 for such transactions are met;
provided, however, that the Physical Securities presented or surrendered for
registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing; and
(II) in the case of Physical Securities the offer and sale of which have
not been registered under the Securities Act and are presented for
transfer or exchange prior to (x) the date which is three years
after the later of the date of original issue and the last date on
which the Company or any affiliate of the Company was the owner of
such Security, or any predecessor thereto and (y) such later date,
if any, as may be required by any subsequent change in applicable
law (the "Resale Restriction Termination Date"), such Physical
Securities shall be accompanied, in the sole discretion of the
Company, by the following additional information and documents, as
applicable:
(A) if such Physical Security is being delivered to the Registrar
by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that
effect (in substantially the form of Exhibit C hereto); or
(B) if such Physical Security is being transferred to a qualified
institutional buyer (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the
Securities Act or pursuant to an exemption from registration
in accordance with Rule 144 or Regulation S under the
Securities Act, a certification to that
49
-41-
effect (in substantially the form of Exhibit C hereto); or
(C) if such Physical Security is being transferred to an
institutional "accredited investor" within the meaning of
subparagraph (a)(1), (a)(2), (a)(3) or (a)(7) of Rule 501
under the Securities Act, delivery of a Certificate of
Transfer in the form of Exhibit D hereto and an opinion of
counsel and/or other information satisfactory to the Company
to the effect that such transfer is in compliance with the
Securities Act; or
(D) if such Physical Security is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (in
substantially the form of Exhibit C hereto) and an opinion of
counsel reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act.
(b) Restrictions on Transfer of a Physical Security for a Beneficial
Interest in a Global Security. A Physical Security may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar of a Physical
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Registrar, together with:
(A) certification, substantially in the form of Exhibit C hereto,
that such Security is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the
Securities Act; and
(B) written instructions directing the Registrar to make, or to
direct the Depositary to make, an endorsement on the Global
Security to reflect an increase in the aggregate amount of the
Securities represented by the Global Security,
then the Registrar shall cancel such Physical Security and cause, or direct the
Depositary to cause, in accordance with the standing instructions and procedures
existing between the
50
-42-
Depositary and the Registrar, the number of Securities represented by the Global
Security to be increased accordingly. If no Global Security is then outstanding,
the Company shall issue and the Registrar shall authenticate a new Global
Security in the appropriate amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor.
(d) Transfer of a Beneficial Interest in a Global
Security for a Physical Security.
(i) Any person having a beneficial interest in a Global Security may
upon request exchange such beneficial interest for a Physical
Security. Upon receipt by the Registrar of written instructions or
such other form of instructions as is customary for the Depositary
from the Depositary or its nominee on behalf of any person having a
beneficial interest in a Global Security and upon receipt by the
Registrar of a written order or such other form of instructions as
is customary for the Depositary or the person designated by the
Depositary as having such a beneficial interest containing
registration instructions and, in the case of any such transfer or
exchange prior to the Resale Restriction Termination Date, the
following additional information and documents:
(A) if such beneficial interest is being transferred to the person
designated by the Depositary as being the beneficial owner, a
certification from such person to that effect (in
substantially the form of Exhibit C hereto); or
(B) if such beneficial interest is being transferred to a
qualified institutional buyer (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A under the
Securities Act or pursuant to an exemption from registration
in accordance with Rule 144 or Regulation S under the
Securities Act, a certification to that effect from the
transferee or transferor (in substantially the form of Exhibit
C hereto); or
51
-43-
(C) if such beneficial interest is being transferred to an
institutional "accredited investor" within the meaning of
subparagraph (a)(1), (a)(2), (a)(3) or (a)(7) of Rule 501
under the Securities Act, delivery of a Certificate of
Transfer in the form of Exhibit D hereto and an opinion of
counsel and/or other information satisfactory to the Company
to the effect that such transfer is in compliance with the
Securities Act; or
(D) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act, a certification to that effect (in
substantially the form of Exhibit C hereto) and an opinion of
counsel reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act,
then the Registrar will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Registrar, the aggregate amount of the Global Security to be reduced
and, following such reduction, the Company will execute and, upon
receipt of an authentication order in the form of an Officers'
Certificate, the Registrar will authenticate and deliver to the
transferee a Physical Security.
(ii) Physical Securities issued in exchange for a beneficial interest in
a Global Security pursuant to this Section 2.16(d) shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Registrar in writing.
The Registrar shall deliver such Physical Securities to the persons
in whose names such Physical Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.16), a Global Security
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or
52
-44-
any such nominee to a successor Depositary or a nominee of such successor
Depositary.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless, and the Trustee is hereby authorized to
deliver Securities without the Private Placement Legend if, (i) the
circumstances contemplated by paragraph (a)(ii)(II) of this Section 2.16 exist,
(ii) there is delivered to the Registrar an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act or (iii) such
Security has been sold pursuant to an effective registration statement under the
Securities Act.
(g) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
SECTION 2.17. Designation.
The Indebtedness evidenced by the Securities is hereby irrevocably
designated as "senior indebtedness" or such other term denoting seniority for
the purposes of any future Indebtedness of the Company which the Company makes
subordinate to any senior indebtedness or such other term denoting seniority.
53
-45-
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to Paragraph 5
of the Securities, it shall notify the Trustee in writing of the Redemption Date
and the principal amount of Securities to be redeemed. The Company shall give
notice of redemption to the Paying Agent and Trustee at least 30 days but not
more than 60 days before the Redemption Date (unless a shorter notice shall be
agreed to by the Trustee in writing), together with an Officers' Certificate
stating that such redemption will comply with the conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed at any time,
selection of such Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which such Securities are listed or, if such Securities are not then
listed on a national securities exchange, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
in writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of $1,000 may be redeemed only in whole.
The Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Securities that have denominations larger
than $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first class mail, postage
prepaid, to each Holder whose Securities are to be redeemed. At the Company's
request made
54
-46-
at least 45 days before the Redemption Date, the Trustee shall give the notice
of redemption in the Company's name and at the Company's expense. Each notice
for redemption shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if
any;
(5) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date, and the only remaining right of the Holders
of such Securities is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed portion
thereof will be issued;
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption; and
(8) the subparagraph of the Securities pursuant to which the
Securities are to be redeemed.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee
55
-47-
or Paying Agent, such Securities called for redemption shall be paid at the
Redemption Price (which shall include accrued interest thereon to the Redemption
Date), but installments of interest, the maturity of which is on or prior to the
Redemption Date, shall be payable to Holders of record at the close of business
on the relevant Record Dates.
SECTION 3.05. Deposit of Redemption Price.
On or before 10:00 a.m. New York Time on the Redemption Date, the
Company shall deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Redemption Price plus accrued interest, if any, of all Securities to be
redeemed on that date. The Paying Agent shall promptly return to the Company any
U.S. Legal Tender so deposited which is not required for that purpose upon the
written request of the Company, except with respect to monies owed as
obligations to the Trustee pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment of such Redemption Price plus accrued
interest, if any, interest on the Securities to be redeemed will cease to accrue
on and after the applicable Redemption Date, whether or not such Securities are
presented for payment.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the
Trustee shall authenticate for the Holder a new Security or Securities equal in
principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.07. Procedures for Purchase Offers.
Notice of a Purchase Offer pursuant to this Section 3.07 shall be
mailed or caused to be mailed, by first class mail, by the Company not less than
30 nor more than 60 days before the Purchase Date to all Holders at their last
registered addresses, with a copy to the Trustee. The notice shall contain all
instructions and materials necessary to enable such Holders to tender Securities
pursuant to the Purchase Offer and shall state the following terms:
(1) the section of the Indenture pursuant to which the Purchase Offer is
being made and that all Securities tendered will be accepted for
payment; provided,
56
-48-
however, that if the aggregate principal amount of Securities
tendered in a Purchase Offer plus accrued interest at the expiration
of such offer exceeds the Available Proceeds Amount, the Company
shall select the Securities to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Company
so that only Securities in denominations of $1,000 or multiples
thereof shall be purchased);
(2) the purchase price (including the amount of accrued interest) and
the Purchase Date and that the Purchase Offer will remain open for
at least 20 Business Days and until the close of business on the
Purchase Date;
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any
Security accepted for payment pursuant to the Purchase Offer shall
cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Security purchased pursuant to a
Purchase Offer will be required to surrender the Security, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of
the Security completed, to the Paying Agent at the address specified
in the notice prior to the close of business on the Business Day
prior to the Purchase Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to
the Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
the Securities the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Security
purchased; and
(7) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased
portion of the Securities surrendered; provided that each Security
purchased and each new Security issued shall be in an
57
-49-
original principal amount of $1,000 or integral multiples thereof.
On or before 10:00 a.m. New York Time on the Purchase Date, the
Company shall (i) accept for payment Securities or portions thereof tendered
pursuant to the Purchase Offer which are to be purchased in accordance with item
(1) above, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to
pay the purchase price plus accrued interest, if any, of all Securities to be
purchased and (iii) deliver to the Trustee Securities so accepted together with
an Officers' Certificate stating the Securities or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail to the Holders of
Securities so accepted payment in an amount equal to the purchase price plus
accrued interest, if any. For purposes of any Purchase Offer, the Trustee shall
act as the Paying Agent.
Any amounts remaining after the purchase of Securities pursuant to a
Purchase Offer shall be returned by the Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the purchase
of Securities pursuant to a Purchase Offer. To the extent the provisions of any
such rule conflict with the provisions of this Indenture relating to a Purchase
Offer, the Company shall comply with the provisions of such rule and be deemed
not to have breached its obligations relating to such Purchase Offer by virtue
thereof.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities in the manner provided in the Securities. An installment of principal
of or interest on the Securities shall be considered paid on the date it is due
if the Trustee or Paying Agent holds on that date U.S. Legal Tender designated
for and sufficient to pay the installment.
58
-50-
The Company shall pay, to the extent such payments are lawful,
interest on overdue principal and it shall pay interest on overdue installments
of interest (without regard to any applicable grace periods) from time to time
on demand at the rate borne by the Securities plus 2% per annum. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, the office or agency required under Section 2.03. The Company shall
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 13.02.
The Company hereby initially designates the office of Texas Commerce Trust
Company of New York, as agent for Texas Commerce Bank National Association
located at 80 Broad Street, 4th Floor, NY, NY 10004, as its office or agency in
the Borough of Manhattan, The City of New York.
SECTION 4.03. Limitation on Restricted Payments.
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, (a) declare or pay any dividend or make
any distribution (other than dividends or distributions payable solely in
Qualified Capital Stock of the Company) on shares of the Company's Capital Stock
to holders of such Capital Stock, (b) purchase, redeem or otherwise acquire or
retire for value any Capital Stock of the Company, or any warrants, rights or
options to acquire shares of any class of such Capital Stock, other than through
the exchange therefor solely of Qualified Capital Stock of the Company or
warrants, rights or options to acquire Qualified Capital Stock of the Company,
(c) make any principal payment on, purchase, defease, redeem, prepay, decrease
or otherwise acquire or retire for value, prior to any scheduled final maturity,
scheduled repayment or scheduled sinking fund payment, any Indebtedness of the
Company that is subordinate or junior in right of payment to the Securities or
(d) make any Investment (other than Permitted Investments) in any Person (each
of the foregoing prohibited actions set forth in clauses (a), (b), (c) and (d)
being referred to as a "Restricted
59
-51-
Payment"), if at the time of such proposed Restricted Payment or immediately
after giving effect thereto, (i) a Default or an Event of Default has occurred
and is continuing or would result therefrom, or (ii) the Company is not able to
Incur at least $1.00 of additional Indebtedness in accordance with paragraph (b)
of Section 4.04 (as if such Restricted Payment had been made as of the last day
of the Four Quarter Period), or (iii) the aggregate amount of Restricted
Payments (including such proposed Restricted Payment) made subsequent to the
Issue Date (the amount expended for such purposes, if other than in cash, being
the fair market value of such property as determined reasonably and in good
faith by the Board of Directors of the Company) exceeds or would exceed the sum
of: (x) 50% of the cumulative Consolidated Net Income (or if cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company
during the period (treating such period as a single accounting period)
subsequent to the Issue Date and prior to the date of the making of such
Restricted Payment; (y) 100% of the aggregate Net Equity Proceeds received by
the Company from any Person (other than from a Subsidiary of the Company) from
the issuance and sale subsequent to the Issue Date of Qualified Capital Stock of
the Company (excluding (A) any Qualified Capital Stock of the Company paid as a
dividend on any Capital Stock of the Company and (B) any Qualified Capital Stock
of the Company with respect to which the purchase price thereof has been
financed directly or indirectly using funds (i) borrowed from the Company or
from any of its Subsidiaries, unless and until and to the extent such borrowing
is repaid, or (ii) contributed, extended, guaranteed or advanced by the Company
or by any of its Subsidiaries (including, without limitation, in respect of any
employee stock ownership or benefit plan)) and (z) $500,000.
Notwithstanding the foregoing, these provisions do not prohibit: (1)
the payment of any dividend or making of any distribution within 60 days after
the date of its declaration if the dividend or distribution would have been
permitted on the date of declaration; (2) the acquisition of Capital Stock of
the Company or warrants, rights or options to acquire Capital Stock of the
Company either (i) solely in exchange for shares of Qualified Capital Stock of
the Company or warrants, rights or options to acquire Qualified Capital Stock of
the Company, or (ii) through the application of net proceeds of a substantially
concurrent sale for cash (other than to a Subsidiary of the Company) of shares
of Qualified Capital Stock of the Company or warrants, rights or options to
acquire Qualified Capital Stock of the Company; (3) the acquisition of any
60
-52-
Indebtedness of the Company that is subordinate or junior in right of payment to
the Securities either (i) solely in exchange for shares of Qualified Capital
Stock of the Company, or (ii) through the application of net proceeds of a
substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of (A) shares of Qualified Capital Stock of the Company or warrants,
rights or options to acquire Qualified Capital Stock of the Company or (B)
Refinancing Indebtedness; (4) the payment of regularly scheduled dividends on
shares of the Company's Preferred Stock outstanding on the Issue Date; and (5)
loans by the Company to officers and directors of the Company for the purpose of
enabling such persons to purchase Capital Stock of the Company, provided that
the aggregate amount of such loans at any time outstanding shall not exceed
$500,000; provided, however, that in the case of clauses (2), (3), (4) and (5)
of this paragraph, no Default or Event of Default shall have occurred and be
continuing at the time of such payment or as a result thereof. In determining
the aggregate amount of Restricted Payments made subsequent to the Issue Date,
amounts expended pursuant to clauses (1), (2) and (4) or loaned pursuant to
clause (5) shall, in each case, be included in such calculation.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment complies with this Indenture and setting forth in reasonable
detail the basis upon which the required calculations were computed, which
calculations may be based upon the Company's latest available internal quarterly
financial statements.
Notwithstanding anything contained in this Section 4.03, the Company
shall be permitted to redeem the Series D Preferred Stock in the manner and at
the price set forth in the Offering Memorandum, dated July 17, 1995 relating to,
among other things, the Securities.
SECTION 4.04. Limitation on Indebtedness.
(a) The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, Incur any Indebtedness, including,
without limitation, any Acquired Indebtedness (other than Permitted
Indebtedness).
(b) Notwithstanding the foregoing limitations, the Company may Incur
Indebtedness (including, without limitation, Acquired Indebtedness) and
Subsidiaries of the Company may
61
-53-
Incur Acquired Indebtedness in each case, if (i) no Default or Event of Default
shall have occurred and be continuing on the date of the proposed Incurrence
thereof or would result as a consequence of such proposed Incurrence and (ii)
immediately after giving effect to such proposed Incurrence, (x) the
Consolidated Fixed Charge Coverage Ratio of the Company is at least equal to 2.5
to 1.0 if such proposed Incurrence is on or prior to July 15, 1997 and at least
equal to 3.0 to 1.0 if such proposed Incurrence is thereafter and (y) the
Adjusted Consolidated Net Tangible Assets of the Company is at least equal to
175% of the aggregate consolidated Indebtedness of the Company and its
Subsidiaries.
(c) The Company will not, directly or indirectly, in any event Incur
any Indebtedness which by its terms (or by the terms of any agreement governing
such Indebtedness) is subordinated to any other Indebtedness of the Company
unless such Indebtedness is also by its terms (or by the terms of any agreement
governing such Indebtedness) made expressly subordinate to the Securities to the
same extent and in the same manner as such Indebtedness is subordinated pursuant
to subordination provisions that are most favorable to the holders of any other
Indebtedness of the Company.
SECTION 4.05. Corporate Existence.
Except as otherwise permitted by Article Five, the Company shall do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or other existence
of each of its Subsidiaries in accordance with the respective organizational
documents of each Subsidiary and the rights (charter and statutory) and material
franchises of the Company and each of its Subsidiaries; provided, however, that
the Company shall not be required to preserve any such right or franchise, or
the corporate existence of any Subsidiary, if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and each of its Subsidiaries, taken
as a whole, and that the loss thereof is not, and will not be, adverse in any
material respect to the Holders.
SECTION 4.06. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges
62
-54-
levied or imposed upon it or any of its Subsidiaries or upon the income, profits
or property of it or any of its Subsidiaries and (ii) all lawful claims for
labor, materials and supplies which, in each case, if unpaid, might by law
become a material liability or Lien upon the property of it or any of its
Subsidiaries; provided, however, that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings and for which appropriate provision has been
made.
SECTION 4.07. Maintenance of Properties and Insurance.
(a) The Company shall cause all material properties owned by or
leased by it or any of its Subsidiaries used or useful to the conduct of its
business or the business of any of its Subsidiaries to be improved or maintained
and kept in normal condition, repair and working order and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in its judgment may
be necessary, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section 4.07 shall prevent the Company or any of its
Subsidiaries from discontinuing the use, operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is,
in the judgment of the Board of Directors or of the board of directors of any
Subsidiary of the Company concerned, or of an officer (or other agent employed
by the Company or of any of its Subsidiaries) of the Company or any of its
Subsidiaries having managerial responsibility for any such property, desirable
in the conduct of the business of the Company or any Subsidiary of the Company,
and if such discontinuance or disposal is not adverse in any material respect to
the Holders.
(b) The Company shall maintain, and shall cause its Subsidiaries to
maintain, insurance with responsible carriers against such risks and in such
amounts, and with such deductibles, retentions, self-insured amounts and
co-insurance provisions, as are customarily carried by similar businesses of
similar size, including property and casualty loss, workers' compensation and
interruption of business insurance. The Company shall provide, and shall cause
its Subsidiaries to provide, an Officers' Certificate as to compliance with the
foregoing requirements to the Trustee prior to the anniversary or
63
-55-
renewal date of each such policy, together with satisfactory evidence of such
insurance, which certificate shall expressly state such expiration date for each
policy listed.
SECTION 4.08. Compliance Certificate; Notice of Default; Tax Information.
(a) The Company shall deliver to the Trustee, within 100 days after
the close of each fiscal year an Officers' Certificate stating that a review of
the activities of the Company has been made under the supervision of the signing
officers with a view to determining whether it has kept, observed, performed and
fulfilled its obligations under this Indenture and further stating, as to each
such Officer signing such certificate, that to the best of his knowledge the
Company during such preceding fiscal year has kept, observed, performed and
fulfilled each and every such covenant and no Default or Event of Default
occurred during such year and at the date of such certificate there is no
Default or Event of Default has occurred and is continuing or, if such signers
do know of such Default or Event of Default, the certificate shall describe its
status with particularity. The Officers' Certificate shall also notify the
Trustee should the Company elect to change the manner in which it fixes its
fiscal year end.
(b) The annual financial statements delivered pursuant to Section
4.10 shall be accompanied by a written report of the Company's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit of such financial statements nothing has come to their
attention that would lead them to believe that the Company has violated any
provisions of Article 4, 5 or 6 of this Indenture insofar as they relate to
accounting matters or, if any such violation has occurred, specifying the nature
and period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) The Company shall deliver to the Trustee, forthwith upon
becoming aware of any Default or Event of Default in the performance of any
covenant, agreement or condition contained in this Indenture, an Officers'
Certificate specifying the Default or Event of Default and describing its status
with particularity.
64
-56-
(d) The Company shall calculate and deliver to the Trustee all
original issue discount information to be reported by the Trustee to Holders as
required by law.
SECTION 4.09. Compliance with Laws.
The Company shall comply, and shall cause each of its Subsidiaries
to comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as would not in the aggregate have a
material adverse effect on the financial condition or results of operations of
the Company and its Subsidiaries taken as a whole.
SECTION 4.10. SEC Reports.
(a) The Company will file with the SEC all information, documents
and reports required to be filed with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act, whether or not the Company is subject to such filing
requirements so long as the SEC will accept such filings. The Company will file
with the Trustee within 15 days after it files them with the SEC, copies of the
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company files with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act. Upon qualification of this Indenture under the TIA, the
Company shall also comply with the provisions of TIA section 314(a).
(b) Regardless of whether the Company is required to furnish such
reports to its stockholders pursuant to the Exchange Act, the Company shall
cause its consolidated financial statements, comparable to that which would have
been required to appear in annual or quarterly reports, to be delivered to the
Trustee and the Holders. The Company will also make such reports available to
prospective purchasers of the Securities, securities analysts and broker-dealers
upon their request.
(c) For so long as any of the Securities remain outstanding the
Company will make available to any prospective purchaser of the Securities or
beneficial owner of the
65
-57-
Securities in connection with any sale thereof the information required by
Rule 144A(d)(4) under the Securities Act, until such time as the Company has
either exchanged the Series A Securities for Series B Securities identical in
all material respects which have been registered under the Securities Act or
until such time as the holders thereof have disposed of such Securities pursuant
to an effective registration statement filed by the Company.
SECTION 4.11. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Company from paying
all or any portion of the principal of and/or interest on the Securities as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture, and (to the
extent that it may lawfully do so) the Company hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.12. Limitation on Transactions with Affiliates.
(a) The Company shall not, and shall not cause or permit any of its
Subsidiaries to, conduct any business or enter into any transaction or series of
transactions with or for the benefit of any of their Affiliates (each an
"Affiliate Transaction"), except in good faith and on terms that are no less
favorable to the Company or such Subsidiary, as the case may be, than those that
could have been obtained in a comparable transaction on an arm's-length basis
from a Person not an Affiliate of the Company or such Subsidiary. All Affiliate
Transactions (and each series of related Affiliate Transactions which are
similar or part of a common plan) involving aggregate payments or other property
with a fair market value in excess of $250,000 shall be approved by the Board of
Directors of the Company, such approval to be evidenced by a Board Resolution
stating that such Board of Directors has determined that such transaction
complies with the foregoing provisions. If the Company or any Subsidiary of the
Company enters into an Affiliate Transaction (or a series of related Affiliate
Transactions
66
-58-
related to a common plan) that involves an aggregate fair market value of more
than $3,000,000, the Company or such Subsidiary shall, prior to the consummation
thereof, obtain a favorable opinion as to the fairness of such transaction or
series of related transactions to the Company or the relevant Subsidiary, as the
case may be, from a financial point of view, from an Independent Financial
Advisor and file the same with the Trustee. Notwithstanding the foregoing, the
restrictions set forth in this Section 4.12 shall not apply to customary
directors' fees, indemnification and similar arrangements.
SECTION 4.13. Limitation on Conduct of Business.
The Company shall not, and shall not permit any of its Subsidiaries
to, engage in the conduct of any business other than the Oil and Gas Business on
a basis consistent with the conduct of such business as it is conducted on the
Issue Date.
SECTION 4.14. Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries.
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or permit or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to (a) pay dividends or make any other distributions
on its Capital Stock; (b) make loans or advances or pay any Indebtedness or
other obligation owed to the Company or to any Subsidiary of the Company; or (c)
transfer any of its property or assets to the Company or to any Subsidiary of
the Company (each such encumbrance or restriction in clause (a), (b), or (c) a
"Payment Restriction"), except for such encumbrances or restrictions existing
under or by reason of: (1) applicable law; (2) this Indenture and the Security
Documents; (3) customary non-assignment provisions of any lease governing a
leasehold interest of any Subsidiary of the Company; (4) any instrument
governing Acquired Indebtedness Incurred in accordance with paragraph (b) of
Section 4.04; provided, that such encumbrance or restriction is not, and will
not be, applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or asset of the Person, becoming a
Subsidiary of the Company; (5) agreements existing on the Issue Date to the
extent and in the manner such agreements are in effect on the Issue Date; (6)
restrictions imposed by Liens granted pursuant to clauses (ix)-(xiv) of the
definition of Permitted Liens solely to the extent such Liens encumber the
67
-59-
transfer or other disposition of the assets subject to such Liens; (7) any
restriction or encumbrance contained in contracts for the sale of assets to be
consummated in accordance with this Indenture solely in respect of the assets to
be sold pursuant to such contract; or (8) any encumbrance or restriction
contained in Refinancing Indebtedness Incurred to Refinance the Indebtedness
issued, assumed or Incurred pursuant to an agreement referred to in clauses (2),
(4) or (5) above; provided that the provisions relating to such encumbrance or
restriction contained in any such Refinancing Indebtedness are no less favorable
to the Company or to the Holders in any material respect in the reasonable and
good faith judgment of the Board of Directors of the Company than the provisions
relating to such encumbrance or restriction contained in agreements referred to
in such clause (2), (4) or (5).
SECTION 4.15. Limitation on Liens.
(a) The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit or
suffer to exist or remain in effect any Liens (i) upon any item of Collateral
other than the Liens created by the Securities, this Indenture and the Security
Documents and the Liens expressly permitted by the applicable Security Documents
and (ii) upon any other properties or assets of the Company or of any of its
Subsidiaries whether owned on the Issue Date or acquired after the Issue Date,
or on any income or profits therefrom, or assign or otherwise convey any right
to receive income or profits thereon other than, with respect to this clause
(ii), (A) Liens existing on the Issue Date to the extent and in the manner such
Liens are in effect on the Issue Date and (B) Permitted Liens.
(b) To the extent the Company or any of its Subsidiaries grants any
additional security interest in, or lien upon, any property or assets that at
the time of the granting thereof does not constitute Collateral to secure any
obligations of the Company or its Subsidiaries under the New Credit Facility,
the Company or such Subsidiary shall simultaneously grant a second priority
security interest in such property or assets upon terms which would provide the
Trustee or, if necessary, a Co-trustee, as collateral agent, substantially
similar interests in such property or assets vis-a-vis the agent under the New
Credit Facility as such parties have interests in the Collateral. The Company
shall execute, and the Trustee is hereby authorized to execute, such agreements
and other
68
-60-
instruments as are necessary to grant and perfect the additional security
interests contemplated hereby.
SECTION 4.16. Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall
make an offer to repurchase all outstanding Securities pursuant to the offer
described in paragraph (b) below (the "Change of Control Offer") at a purchase
price equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase.
(b) Within 30 days following the date upon which a Change of Control
occurs (the "Change of Control Date"), the Company shall send, by first class
mail, a notice to each Holder, with a copy to the Trustee, which notice shall
govern the terms of the Change of Control Offer. The notice to the Holders shall
contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Change of Control Offer. Such notice shall
state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.16 and that all Securities tendered and not withdrawn will be
accepted for payment;
(2) the purchase price (including the amount of accrued interest)
and the purchase date (which shall be no earlier than 30 days nor later
than 60 days from the date such notice is mailed, other than as may be
required by law) (the "Change of Control Payment Date") and that the
Change of Control Offer will remain open for at least 20 Business Days and
until the close of business on the Change of Control Payment Date;
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor,
any Security accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Security purchased pursuant to a
Change of Control Offer will be required to surrender the Security, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Security completed, to the Paying Agent at the address
69
-61-
specified in the notice prior to the close of business on the Business Day
prior to the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the
Change of Control Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
the Securities the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Security purchased;
(7) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased
portion of the Securities surrendered; provided that each Security
purchased and each new Security issued shall be in an original principal
amount of $1,000 or integral multiples thereof; and
(8) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall
(i) accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all
Securities so tendered and (iii) deliver to the Trustee Securities so accepted
together with an Officers' Certificate stating the Securities or portions
thereof being purchased by the Company. The Paying Agent shall promptly mail to
the Holders of Securities so accepted payment in an amount equal to the purchase
price plus accrued interest, if any, and the Trustee shall promptly authenticate
and mail to such Holders new Securities equal in principal amount to any
unpurchased portion of the Securities surrendered. Any Securities not so
accepted shall be promptly mailed by the Company to the Holder thereof. For
purposes of this Section 4.16, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Securities pursuant to a
Change of Control Offer shall be returned by the Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws
70
-62-
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Securities pursuant to a Change
of Control Offer. To the extent the provisions of any securities laws or
regulations conflict with the provisions under this Section 4.16, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 4.16 by virtue
thereof.
SECTION 4.17. Limitation on Sale of Assets.
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, consummate any Asset Sale unless (i) such Asset Sale is for at
least fair market value, (ii) at least 85% of the consideration therefrom
received by the Company or such Subsidiary is in the form of cash or Cash
Equivalents, (iii) if such Asset Sale involves Collateral, (x) such Asset Sale
is not between the Company and any of its Subsidiaries and (y) the Company or
Subsidiary effecting the Asset Sale shall, to the extent required by the lenders
thereunder, immediately repay Indebtedness outstanding under the New Credit
Facility, if any (and permanently reduce the amounts that may be reborrowed
thereunder by an equivalent amount), with the cash consideration received in
respect thereof and shall deposit in the Collateral Account any amounts received
by the Company or such Subsidiary in excess of the amounts so repaid and shall
otherwise be in compliance with the provisions of Article Ten and (iv) the
Company or such Subsidiary shall apply the Net Cash Proceeds of such Asset Sale
within 180 days of receipt thereof, as follows:
(a) to the extent such Net Cash Proceeds are received from an Asset
Sale not involving the sale, transfer or disposition of Collateral
("Non-Collateral Proceeds"), to repay any Indebtedness secured by the
assets involved in such Asset Sale together with a concomitant permanent
reduction in the amount of such Indebtedness (including a permanent
reduction in committed amounts therefor in the case of any revolving
credit facility so repaid); and
(b) with respect to any Non-Collateral Proceeds remaining after
application pursuant to the preceding paragraph (a) and any Net Cash
Proceeds received from an Asset Sale involving Collateral ("Collateral
Proceeds") and any Net Awards (together with such remaining Non-Collateral
Proceeds and the Net Cash Proceeds from an Asset
71
-63-
Sale involving Collateral, the "Asset Sale Available Proceeds Amounts"),
the Company shall make an offer to purchase (the "Asset Sale Offer") from
all Holders up to a maximum principal amount (expressed as an integral
multiple of $1,000) of Securities equal to the Asset Sale Available
Proceeds Amount at a purchase price equal to 100% of the principal amount
thereof plus accrued and unpaid interest thereon, if any, to the date of
purchase; provided that the Company will not be required to apply pursuant
to this paragraph (b) Net Cash Proceeds received from any Asset Sale or
Net Awards if, and only to the extent that, such Net Cash Proceeds or Net
Awards are applied to or invested in Oil and Gas Related Assets, within
180 days of such Asset Sale and, if the Net Cash Proceeds or Net Awards so
invested included Collateral Proceeds, the property and assets
constituting such Oil and Gas Related Assets and any non-cash
consideration received are made subject to the Lien of the Security
Documents in the manner contemplated hereby. If at any time any non-cash
consideration received by the Company or any Subsidiary of the Company, as
the case may be, in connection with any Asset Sale is converted into or
sold or otherwise disposed of for cash, then such conversion or
disposition shall be deemed to constitute an Asset Sale hereunder and the
Net Cash Proceeds thereof shall be applied in accordance with this Section
4.17. The Company may defer the Asset Sale Offer until there is an
aggregate unutilized Asset Sale Available Proceeds Amount equal to or in
excess of $5,000,000 resulting from one or more Asset Sales (at which
time, the entire unutilized Asset Sale Available Proceeds Amount, and not
just the amount in excess of $5,000,000, shall be applied as required
pursuant to this paragraph). To the extent the Asset Sale Offer is not
fully subscribed to by Holders, the Company may obtain a release of the
unutilized portion of the Asset Sale Available Proceeds Amount from the
Lien of the Security Documents.
All Collateral Proceeds shall constitute Trust Moneys and shall be
delivered by the Company to the Trustee and shall be deposited in the
Collateral Account in accordance with the Indenture. Collateral Proceeds
so deposited may be withdrawn from the Collateral Account pursuant to the
Indenture as set forth in Article Eleven.
(c) In the event of the transfer of substantially all (but not all)
of the property and assets of the
72
-64-
Company and its Subsidiaries as an entirety to a Person in a transaction
permitted under Section 5.01 hereof, the successor corporation shall be
deemed to have sold the properties and assets of the Company and its
Subsidiaries not so transferred for purposes of this Section 4.17, and
shall comply with the provisions of this covenant with respect to such
deemed sale as if it were an Asset Sale. In addition, the fair market
value of such properties and assets of the Company or its Subsidiaries
deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of
this Section 4.17.
(d) In the event of such an Asset Sale Offer, the Company shall
follow the procedures (including the notice requirements set forth in
Section 3.07).
Any amounts remaining after the purchase of Securities pursuant to
an Asset Sale Offer shall be returned by the Trustee to the Company.
SECTION 4.18. Limitation on Preferred Stock of Subsidiaries.
The Company shall not cause or permit any of its Subsidiaries to
issue any Preferred Stock (other than to the Company or to a wholly owned
Subsidiary of the Company) or permit any Person (other than the Company or a
wholly owned Subsidiary of the Company) to own or hold any Preferred Stock of
any Subsidiary of the Company or any Lien or security interest therein.
SECTION 4.19. Impairment of Security Interest.
Neither the Company nor any of its Subsidiaries will take or omit to
take any action which action or omission would have the result of adversely
affecting or impairing the security interest in favor of the Trustee, on behalf
of itself and the Holders, with respect to the Collateral, and neither the
Company nor any of its Subsidiaries shall grant to any Person, or suffer any
Person (other than the Company) to have (other than to the Trustee on behalf of
the Trustee and the Holders) any interest whatsoever in the Collateral other
than Liens securing the New Credit Facility and Liens permitted by the Security
Documents. Neither the Company nor any of its Subsidiaries will enter into any
agreement or instrument that by its terms requires the proceeds received from
any sale of Collateral to be applied to repay, redeem, defease or otherwise
acquire or retire any Indebtedness of any Person, other than
73
-65-
pursuant to this Indenture, the Securities and the Security Documents.
SECTION 4.20. Excess Cash Flow Offer
In the event that the Company has Excess Cash Flow in excess of
$2,000,000 in any fiscal year, beginning with the fiscal year ending December
31, 1996, the Company will be required to make an offer to purchase (the "Excess
Cash Flow Offer") Notes from all Holders in an amount equal to 50% of all Excess
Cash Flow for such fiscal year (not just the amount in excess of $2,000,000) at
a purchase price equal to 101% of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, (the "Excess Cash Flow Available Proceeds
Amount") to the purchase date, which must be no later than 120 days from the end
of the fiscal year referred to above, other than as may be required by law (the
"Excess Cash Flow Purchase Date").
In the event of such an Excess Cash Flow Offer, the Company shall
follow the procedures (including the notice requirements) set forth in Section
3.07 of this Indenture. To the extent that an Excess Cash Flow Offer is not
fully subscribed, the Company may retain such unutilized portion of the Excess
Cash Flow for general corporate purposes.
SECTION 4.21. Equity Proceeds Offer
In the event the Company consummates on or prior to July 15, 1997 an
Equity Offering, then following such Equity Offering the Company shall promptly
make an offer to purchase from all Holders (an "Equity Proceeds Offer") on a
date (the "Equity Offer Purchase Date") not later than the 90th day after the
date of the consummation of such Equity Offering (such consummation date to be
determined without regard to the date of the consummation of any over-allotment
option granted by the Company to the underwriters, if any) at a purchase price
equal to 110% of the aggregate principal amount of Securities to be repurchased,
plus accrued and unpaid interest thereon, if any, to the Equity Offer Purchase
Date, an aggregate principal amount of Securities equal to the lesser of (i) the
maximum principal amount of Securities such that 60% of the aggregate principal
amount of Securities originally issued remains outstanding after completion of
the offer and (ii) the maximum principal amount of the Securities which could be
purchased with 50% of the amount of net proceeds received or receivable
74
-66-
by the Company from such Equity Offering (the "Equity Offer Available Proceeds
Amount").
In the event of such an Equity Proceeds Offer, the Company shall
follow the procedures (including the notice requirements) set forth in Section
3.07 of this Indenture. To the extent that an Equity Proceeds Offer is not fully
subscribed, the Company may retain such unutilized portion of the proceeds for
the Equity Offering for general corporate purposes.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Consolidations and Sale of Assets.
(a) The Company shall not, in a single transaction or series of
related transactions, consolidate or merge with or into any Person, or sell,
assign, transfer, lease, convey or otherwise dispose of (or cause or permit any
Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise
dispose of) all or substantially all of the Company's assets (determined on a
consolidated basis for the Company and the Company's Subsidiaries) whether as an
entirety or substantially as an entirety to any Person unless: (i) either (1)
the Company shall be the surviving or continuing corporation or (2) the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged or the Person which acquires by sale, assignment, transfer,
lease, conveyance or other disposition the properties and assets of the Company
and of the Company's Subsidiaries substantially as an entirety (the "Surviving
Entity") (x) shall be a corporation organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia and
(y) shall expressly assume, by supplemental indenture (in form and substance
satisfactory to the Trustee), executed and delivered to the Trustee, the due and
punctual payment of the principal of, and premium, if any, and interest on all
of the Securities and the performance of every covenant of the Securities, this
Indenture, the Security Documents and the Registration Rights Agreement on the
part of the Company to be performed or observed and the Company shall have taken
all steps necessary or reasonably requested by the Trustee to protect and
perfect the security interests granted or purported to be granted to
75
-67-
the Holders under the Security Documents; (ii) immediately after giving effect
to such transaction and the assumption contemplated by clause (i)(2)(y) above
(including giving effect to any Indebtedness and Acquired Indebtedness Incurred
or anticipated to be Incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may be, (1)
shall have a Consolidated Net Worth equal to or greater than the Consolidated
Net Worth of the Company immediately prior to such transaction and (2) shall be
able to Incur at least $1.00 of additional Indebtedness pursuant to paragraph
(b) of Section 4.04 hereof; provided that in determining the Consolidated Fixed
Charge Coverage Ratio of the Company or such Surviving Entity, as the case may
be, such ratio shall be calculated as if the transaction (including the
Incurrence of any Indebtedness or Acquired Indebtedness) took place on the first
day of the Four Quarter Period; (iii) immediately before and immediately after
giving effect to such transaction and the assumption contemplated by clause
(i)(2)(y) above (including, without limitation, giving effect to any
Indebtedness and Acquired Indebtedness Incurred or anticipated to be Incurred
and any Lien granted in connection with or in respect of the transaction) no
Default and no Event of Default shall have occurred or be continuing; and (iv)
the Company or the Surviving Entity shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, assignment, transfer, lease, conveyance or other
disposition and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with the applicable provisions
of this Indenture and that all conditions precedent in this Indenture relating
to such transaction have been satisfied.
(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties and assets of one or
more Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
(c) Upon any such consolidation, merger, conveyance, lease 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 conveyance,
lease or transfer is made will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture
76
-68-
with the same effect as if such successor had been named as the Company therein,
and thereafter (except in the case of a sale, assignment, transfer, lease,
conveyance or other disposition) the predecessor corporation will be relieved of
all further obligations and covenants under this Indenture and the Securities.
(d) Each Subsidiary Guarantor (other than any Subsidiary Guarantor
whose Guarantee is to be released in accordance with the terms of the Guarantee
and this Indenture in connection with any transaction complying with the
provisions of Section 4.17) will not, and the Company will not cause or permit
any Subsidiary Guarantor to, consolidate with or merge with or into any Person
other than the Company or any other Subsidiary Guarantors unless: (i) the entity
formed by or surviving any such consolidation or merger (if other than the
Subsidiary Guarantor), or to which sale, lease, conveyance or other disposition
shall have been made, is a corporation organized and existing under the laws of
the United States, any state thereof or the District of Columbia; (ii) such
entity assumes by supplemental indenture all of the obligations of the
Subsidiary Guarantor on the Guarantee; (iii) immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; and (iv) immediately after giving effect to such transaction and the
use of any net proceeds therefrom on a pro forma basis, the Company could
satisfy the provisions of clause (a)(ii) of this Section 5.01. Any merger or
consolidation of a Subsidiary Guarantor with and into the Company (with the
Company being the surviving entity) or another Subsidiary Guarantor that is a
wholly-owned Subsidiary of the Company need only comply with clause (a)(iv) of
this Section 5.01.
SECTION 5.02. Successor Corporation Substituted.
Upon any such consolidation, merger, conveyance, lease 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 conveyance,
lease or transfer is made will 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 sale, assignment, transfer, lease,
conveyance or other disposition) the predecessor corporation will be relieved of
all further obligations and covenants under this Indenture, the Securities, the
Security Documents and the Registration Rights Agreement.
77
-69-
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company fails to pay interest on any Security when the same
becomes due and payable and such failure continues for a period of 30
days; or
(2) the Company fails to pay the principal of or premium on any
Security, when such principal or premium becomes due and payable, whether
at maturity, upon redemption or otherwise (including the failure to make a
payment to purchase securities tendered pursuant to a Change of Control
Offer or an Asset Sale Offer); or
(3) the Company defaults in the observance or performance of any
other covenant or agreement contained in this Indenture or any Security
Document which default continues for a period of 30 days after the Company
receives written notice specifying the default from the Trustee or from
Holders of at least 25% in principal amount of outstanding Securities
(except in the case of a default with respect to Section 5.01 hereof,
which will constitute Events of Default with notice but without passage of
time); or
(4) the Company defaults under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness of the Company or of any Subsidiary of the
Company (or the payment of which is guaranteed by the Company or any
Subsidiary of the Company) which default (a) is caused by a failure to pay
principal of or premium, if any, on such Indebtedness after any applicable
grace period provided in such Indebtedness on the date of such default (a
"payment default"), or (b) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a payment
default or the maturity of which has been so accelerated, aggregates
$2,500,000; or
78
-70-
(5) one or more judgments in an aggregate amount in excess of
$2,500,000 (which are not covered by third-party insurance as to which a
financially sound insurer has not disclaimed coverage) being rendered
against the Company or any of its Subsidiaries and such judgments remain
undischarged, or unstayed or unsatisfied for a period of 60 days after
such judgment or judgments become final and non-appealable; or
(6) the Company or any of its Subsidiaries (A) admits in writing its
inability to pay its debts generally as they become due, (B) commences a
voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (C) consents to the entry of a judgment, decree or order for
relief against it in an involuntary case or proceeding under any
Bankruptcy Law, (D) consents to the appointment of a Custodian of it or
for substantially all of its property, (E) consents to or acquiesces in
the institution of a bankruptcy or an insolvency proceeding against it,
(F) makes a general assignment for the benefit of its creditors, or (G)
takes any corporate action to authorize or effect any of the foregoing;
(7) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any of its Subsidiaries in
an involuntary case or proceeding under any Bankruptcy Law, which shall
(A) approve as properly filed a petition seeking reorganization,
arrangement, adjustment or composition in respect of the Company or any of
its Subsidiaries, (B) appoint a Custodian of the Company or any of its
Subsidiaries or for substantially all of its property or (C) order the
winding-up or liquidation of its affairs; and such judgment, decree or
order shall remain unstayed and in effect for a period of 60 consecutive
days;
(8) any of the Security Documents cease to be in full force and
effect (other than in accordance with their respective terms), or any of
the Security Documents cease to give the Trustee the Liens, rights, powers
and privileges purported to be created thereby, or any Security Document
is declared null and void, or the Company or any of its applicable
Subsidiary Guarantors denies any of its obligations under any Security
Document or any Collateral becomes subject to any Lien other than the
Liens created or permitted by the Security Documents or this Indenture; or
79
-71-
(9) any of the Guarantees cease to be in full force and effect, or
any of the Guarantees are declared to be null and void and unenforceable
or any of the Guarantees are found to be invalid or any of the Subsidiary
Guarantors denies its liability under its Guarantee (other than by reason
of release of a Subsidiary Guarantor in accordance with the terms of this
Indenture).
The Trustee shall, within 90 days after the occurrence of any
Default known to it, give to the holders of Securities notice of such Default;
provided that, except in the case of a Default in the payment of principal of or
interest on any of the Securities, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee,
or a trust committee of directors and/or Responsible Officers, of the Trustee in
good faith determines that the withholding of such notice is in the interest of
the Holders of Securities.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
clauses (6) or (7) above with respect to the Company) occurs and is continuing,
then and in every such case the Trustee or the Holders of not less than 25% in
aggregate principal amount of the then outstanding Securities may declare the
unpaid principal of, premium, if any, and accrued and unpaid interest on, all
the Securities then outstanding to be due and payable, by a notice in writing to
the Company (and to the Trustee, if given by Holders) and upon such declaration
such principal amount, premium, if any, and accrued and unpaid interest will
become immediately due and payable. If an Event of Default with respect to the
Company specified in clauses (6) or (7) above occurs, all unpaid principal of,
and premium, if any, and accrued and unpaid interest on, the Securities then
outstanding will ipso facto become due and payable without any declaration or
other act on the part of the Trustee or any Holder. The Holders of a majority in
principal amount of the Securities then outstanding by notice to the Trustee may
rescind an acceleration and its consequences if (i) all existing Events of
Default, other than the non-payment of the principal of the Securities which has
become due solely by such declaration of acceleration, have been cured or
waived, (ii) to the extent the payment of such interest is lawful, interest on
overdue installments of interest and overdue principal, which has become due
otherwise than by such declaration of acceleration, has been paid, and (iii) the
rescission would not
80
-72-
conflict with any judgment or decree of a court of competent jurisdiction.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities, this Indenture or, subject to
the Intercreditor Agreement, the Security Documents.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Each Securityholder, by accepting a Security, (a) acknowledges that
the exercise of remedies by the Trustee with respect to the Collateral is
subject to the terms and conditions of the Security Documents (including without
limitation the Intercreditor Agreement) and the proceeds received upon
realization of the Collateral shall be applied by the Trustee in accordance with
Section 6.10 hereof, (b) acknowledges and consents to the terms of the Security
Documents (including the Intercreditor Agreement) and to the Trustee's
performance of its agreements thereunder and (c) acknowledges and consents to
the restrictions and obligations imposed by the Intercreditor Agreement on the
Trustee.
SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 2.09, 6.07 and 9.02, the Holders of not less
than a majority in principal amount of the outstanding Securities by notice to
the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on any
Security as specified in clauses (1) and (2) of Section 6.01. The Company shall
deliver to the Trustee an Officers' Certificate stating that the requisite
percentage of Holders have consented to such waiver and attaching copies of such
81
-73-
consents. When a Default or Event of Default is waived, it is cured and ceases.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of not less than a majority in
principal amount of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. Subject to Section 7.01, however,
the Trustee may refuse to follow any direction that conflicts with any law or
this Indenture or any Security Document, that the Trustee determines may be
unduly prejudicial to the rights of another Securityholder, or that may involve
the Trustee in personal liability; provided that the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction.
In the event the Trustee takes any action or follows any direction
pursuant to this Indenture or any Security Document, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
any loss or expense caused by taking such action or following such direction.
SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holder or Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(5) during such 60-day period the Holder or Holders of a majority in
principal amount of the outstanding
82
-74-
Securities do not give the Trustee a direction which, in the opinion of
the Trustee, is inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Security, on or
after the respective due dates expressed in such Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of the Holder except to the extent
that the institution or prosecution of such suit or entry of judgment therein
would, under applicable law, result in the surrender, impairment or waiver of
the Lien of this Indenture and the Security Documents upon the Collateral.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified
in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Securities for the whole amount of principal
and accrued interest and fees remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per annum
borne by the Securities and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
including, without limitation, as set forth in Sections 2.3, 3.5, 4.3 and 5.14
of the Mortgage.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders
83
-75-
allowed in any judicial proceedings relating to the Company, its creditors or
its property and shall be entitled and empowered to collect and receive any
monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Securityholder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel, and any other amounts due the Trustee under
Section 7.07. Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order,
subject to the Intercreditor Agreement:
First: to the Trustee for amounts due under Section 7.07 and for
amounts due under the Security Documents (other than payments of interest
and principal described in the next subclause);
Second: to Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
Third: to the Company or the Subsidiary Guarantors, as their
respective interests may appear.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Securityholders pursuant to this Section
6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for
84
-76-
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by a Holder or
Holders of more than 10% in principal amount of the outstanding Securities.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default actually known to the Trustee has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs. The Trustee will be
under no obligation to exercise any of its rights or powers under this Indenture
at the request of any of the holders of Securities, unless they shall have
offered to the Trustee security and indemnity satisfactory to it.
(b) Except during the continuance of an Event of Default actually
known to the Trustee:
(1) The Trustee need perform only those duties as are specifically
set forth herein and no others and no implied covenants or obligations
shall be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions and such
other documents delivered to it pursuant to Section 13.04 hereof furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall
85
-77-
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive an indemnity satisfactory to it in
its sole discretion against such risk, liability, loss, fee or expense which
might be incurred by it in compliance with such request or direction. Without
limiting the foregoing and notwithstanding any other provision of this Indenture
or of the Security Documents, the Trustee shall not be obligated to foreclose
upon any Collateral or otherwise commence any Enforcement (as defined in the
Intercreditor Agreement) unless and until the Trustee (i) receives (if requested
by, but at no cost to, the Trustee) new environmental reports pertaining to the
Collateral that is the subject of such foreclosure or Enforcement action and
(ii) is satisfied with scope and the results of any such environmental reports.
The Company shall pay for any such environmental reports. In the event the
Company is unable or refuses to pay for such new environmental reports, the
Trustee shall promptly notify the Holders, who may (but who shall not be
obligated to) deposit with the Trustee sufficient funds to pay for the new
environmental reports.
86
-78-
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to this Section 7.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and an Opinion of Counsel, which shall conform to
the provisions of Section 11.05. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent (other
than an agent who is an employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel and the advice or opinion
of such counsel as to matters of law shall be full and complete
authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee
87
-79-
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby.
(g) Subject to Section 9.02 hereof, the Trustee may (but shall not
be obligated to), without the consent of the Holders, give any consent,
waiver or approval required under the Security Documents or by the terms
hereof with respect to the Collateral, but shall not without the consent
of the Holders of not less than a majority in aggregate principal amount
of the Securities at the time outstanding (i) give any consent, waiver or
approval or (ii) agree to any amendment or modification of the Security
Documents, in each case, that shall have a material adverse effect on the
interests of any Holder. The Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any
consent, waiver, approval, amendment or modification shall have a material
adverse effect on the interests of any Holder.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, its
Subsidiaries, or their respective Affiliates with the same rights it would have
if it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the value or condition of the Collateral or any part thereof, or as to the
title of the Company thereto, or as to the security afforded thereby or hereby,
or as to the validity or genuineness of any Collateral pledged and deposited
with the Trustee, or the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company in this Indenture or any document issued in connection with the sale of
Securities or any statement in the Securities other than the Trustee's
certificate of authentication. The Trustee makes no representations with respect
to the effectiveness or adequacy of this Indenture or any Security Document or
the validity or perfection, if any, of Liens granted under this Indenture or the
Security Documents. The Trustee shall not be responsible
88
-80-
for independently ascertaining or maintaining such validity or perfection, if
any, and shall be fully protected in relying upon certificates and opinions
delivered to it in accordance with the terms of this Indenture or the Security
Documents.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and the
Trustee receives actual notice of such event, the Trustee shall mail to each
Securityholder, as their names and addresses appear on the Securityholder list
described in Section 2.05, notice of the uncured Default or Event of Default
within 90 days after the Trustee receives such notice. Except in the case of a
Default or an Event of Default in payment of principal of, or interest on, any
Security, including the failure to make payment on (i) the Change of Control
Payment Date pursuant to a Change of Control Offer or (ii) the Purchase Date
pursuant to a Purchase Offer, or the Trustee may withhold the notice if and so
long as the board of directors, the executive committee, or a trust committee of
directors and/or Responsible Officers, of the Trustee in good faith determines
that withholding the notice is in the interest of the Securityholders.
SECTION 7.06. Reports by Trustee to Holders.
This Section 7.06 shall not be operative as a part of this Indenture
until this Indenture is qualified under the TIA, and, until such qualification,
this Indenture shall be construed as if this Section 7.06 were not contained
herein.
Within 60 days after each May 15 beginning with May 15, 1996, the
Trustee shall, to the extent that any of the events described in TIA section
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Securityholder a brief report dated as of such May 15 that complies with
TIA section 313(a). The Trustee also shall comply with TIA sections 313(b)
313(c) and 313(d).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each securities
exchange, if any, on which the Securities are listed.
The Company shall notify the Trustee if the Securities become listed
on any securities exchange or of any delisting thereof.
89
-81-
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee and Co-trustees from time to
time reasonable compensation for its services hereunder and under the Security
Documents (which shall be agreed to from time to time by the Company and the
Trustee or Co-trustee). The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (including reasonable fees and expenses of counsel) incurred or
made by it in addition to the compensation for its services, except any such
disbursements, expenses and advances as may be attributable to the Trustee's
negligence or bad faith. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents, accountants,
experts and counsel and any taxes or other expenses incurred by a trust created
pursuant to Section 8.01 hereof.
The Company shall indemnify the Trustee and each predecessor trustee
for, and hold it harmless against, any loss, liability, claim, damage or expense
incurred by the Trustee without negligence or willful misconduct on its part
arising out of or in connection with the administration of this trust and its
duties under this Indenture and the Security Documents, including the reasonable
expenses and attorneys' fees of defending itself against any claim of liability
arising hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. However, the
failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
shall cooperate in the defense (and may employ its own counsel) at the Company's
expense. The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee as a result of the violation of this
Indenture by the Trustee if such violation arose from the Trustee's negligence
or bad faith.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a senior claim prior to the Securities against all money
or property held or collected by the Trustee, in its capacity as Trustee.
When the Trustee incurs expenses or renders services after an Event
of Default specified in clause (6) or (7) of Section 6.01 occurs, the expenses
(including the reasonable
90
-82-
fees and expenses of its agents and counsel) and the compensation for the
services shall be preferred over the status of the Holders in a proceeding under
any Bankruptcy Law and are intended to constitute expenses of administration
under any Bankruptcy Law. The Company's obligations under this Section 7.07 and
any claim arising hereunder shall survive the resignation or removal of any
Trustee, the discharge of the Company's obligations pursuant to Article Eight
and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee in
writing and may appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.07, all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under
91
-83-
this Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Any resignation or removal of the Trustee pursuant to this Indenture
shall be deemed to be a resignation or removal of the Trustee (including Steven
R. Patterson with respect to the assets and property in California and Texas) in
its capacity as Trustee under the Security Documents and any appointment of a
successor Trustee pursuant to this Indenture shall be deemed to be an
appointment of a successor Trustee under the Security Documents and such
successor shall assume all of the obligations of the Trustee in its capacity as
Trustee under the Security Documents.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee (and successor Trustee
under the Security Documents).
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA sections 310(a)(1) and 310(a)(5). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
92
-84-
section 310(b); provided, however, that there shall be excluded from the
operation of TIA section 310(b)(1) any indenture or indentures under which other
securities, or certificates of interest or participation in other securities, of
the Company are outstanding, if the requirements for such exclusion set forth in
TIA section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee, in its capacity as Trustee hereunder and under the
Security Documents shall comply with TIA section 311(a), excluding any creditor
relationship listed in TIA section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA section 311(a) to the extent indicated.
SECTION 7.12. Appointment of Co-Trustee.
If the Trustee deems it necessary or desirable in connection with
the Collateral and/or the enforcement of the Security Documents, the Trustee may
appoint a co-Trustee with such powers of the Trustee as may be designated by the
Trustee at the time of such appointment (including acting as separate trustee of
any Collateral), and the Company shall, on request, execute and deliver to such
co-Trustee any deeds, conveyances or other instruments required by such
co-Trustee so appointed by the Trustee to more fully and certainly vest in and
confirm to such co-Trustee its rights, powers, trusts, duties and obligations
hereunder.
All rights (including rights to indemnification hereunder), powers,
duties and obligations conferred or imposed upon the Trustee shall be conferred
or imposed upon and exercised or performed by the Trustee or jointly by the
Trustee and such co-Trustees, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-Trustees. No Trustee or co-Trustee shall be personally liable by reason
of any act or omission of any other Trustee or co-Trustee hereunder. Steven R.
Patterson is hereby appointed as co-Trustee for the limited purposes of acting
as trustee under the Mortgages pertaining to Collateral located in the states of
California and Texas. Any co-Trustee appointed pursuant to this Section 7.12 may
be removed by the Trustee pursuant to the terms of this Agreement and may be
removed and may
93
-85-
resign pursuant to the provisions of the applicable Security Document and of
this Indenture.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution, at any time,
with respect to the Securities, elect to have either paragraph (b) or paragraph
(c) below be applied to the outstanding Securities upon compliance with the
conditions set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company and the Subsidiary Guarantors
shall be deemed to have been released and discharged from its obligations with
respect to the outstanding Securities on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the outstanding Securities, which shall
thereafter be deemed to be "outstanding" only for the purposes of the Sections
and matters under this Indenture referred to in (i) and (ii) below, and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned, except for the following which shall
survive until otherwise terminated or discharged hereunder: (i) the rights of
Holders of outstanding Securities to receive solely from the trust fund
described in paragraph (d) below and as more fully set forth in such paragraph,
payments in respect of the principal of and interest on such Securities when
such payments are due and any Subsidiary Guarantor's obligations in respect
thereof, and (ii) obligations listed in Section 8.03, subject to compliance with
this Section 8.01. The Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) below with
respect to the Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from its obligations under any covenant contained in Article 5 and in Sections
4.03 through
94
-86-
4.18 with respect to the outstanding Securities on and after the date the
conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"),
and the Securities shall thereafter be deemed to be not "outstanding" for the
purpose of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder. For this
purpose, such Covenant Defeasance means that, with respect to the outstanding
Securities, the Company and any Subsidiary Guarantor may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01(3), nor shall any event referred to in Section 6.01(4), (5)
or (8) thereafter constitute a Default or an Event of Default thereunder but,
except as specified above, the remainder of this Indenture and such Securities
shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities:
(1) The Company shall have irrevocably deposited in trust with the
Trustee, pursuant to an irrevocable trust and security agreement in form
and substance satisfactory to the Trustee, U.S. Legal Tender or direct
non-callable obligations of, or non-callable obligations guaranteed by,
the United States of America for the payment of which obligation or
guarantee the full faith and credit of the United States of America is
pledged ("U.S. Government Obligations") maturing as to principal and
interest in such amounts and at such times as are sufficient, without
consideration of the reinvestment of such interest and after payment of
all Federal, state and local taxes or other charges or assessments in
respect thereof payable by the Trustee, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof (in form and substance reasonably satisfactory to
the Trustee) delivered to the Trustee, to pay the principal of, premium,
if any, and interest on all the outstanding Securities on the dates on
which any such payments are due and payable in accordance with the terms
of this Indenture and of the Securities;
95
-87-
(2) Such deposits shall not cause the Trustee to have a conflicting
interest as defined in and for purposes of the TIA;
(3) The Trustee shall have received Officers' Certificates stating
that no Default or Event of Default or event which with notice or lapse of
time or both would become a Default or an Event of Default with respect to
the Securities shall have occurred and be continuing on the date of such
deposit or, insofar as Section 6.01(6) or (7) is concerned, at any time
during the period ending on the 91st day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until the expiration of such period);
(4) The Trustee shall have received Officers' Certificates stating
that such deposit will not result in a Default under this Indenture or a
breach or violation of, or constitute a default under, any other material
instrument or agreement to which the Company or any of its Subsidiaries is
a party or by which it or its property is bound;
(5) (i) In the event the Company elects paragraph (b) hereof, the
Company shall deliver to the Trustee an Opinion of Counsel in the United
States, in form and substance reasonably satisfactory to the Trustee to
the effect that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the Issue
Date, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel
shall state that Holders of the Securities will not recognize income gain
or loss for Federal income tax purposes as a result of such deposit and
the defeasance contemplated hereby and will be subject to Federal income
taxes in the same manner and at the same times as would have been the case
if such deposit and defeasance had not occurred, or (ii) in the event the
Company elects paragraph (c) hereof, the Company shall deliver to the
Trustee an Opinion of Counsel in the United States, in form and substance
reasonably satisfactory to the Trustee, to the effect that Holders of the
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and the defeasance contemplated
hereby and will be subject to Federal income tax in the same amounts and
in the same manner and at the same
96
-88-
times as would have been the case if such deposit and defeasance had not
occurred;
(6) The deposit shall not result in the Company, the Trustee or the
trust becoming or being deemed to be an "investment company" under the
Investment Company Act of 1940;
(7) The Company shall have delivered to the Trustee an Officer's
Certificate, in form and substance reasonably satisfactory to the Trustee,
stating that the deposit under clause (1) was not made by the Company or
any Subsidiary with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or any Subsidiary or others;
(8) The Company shall have delivered to the Trustee an Opinion of
Counsel, in form and substance reasonably satisfactory to the Trustee, to
the effect that, (A) the trust funds will not be subject to the rights of
holders of Indebtedness of the Company or any Subsidiary Guarantor other
than the Securities and (B) assuming no intervening bankruptcy of the
Company between the date of deposit and the 91st day following the deposit
and that no Holder of Securities is an insider of the Company, after the
passage of 90 days following the deposit, the trust funds will not be
subject to any applicable bankruptcy, insolvency, reorganization or
similar law affecting creditors' rights generally; and
(9) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent specified herein relating to the defeasance contemplated by this
Section 8.01 have been complied with; provided, however, that no deposit
under clause (1) above shall be effective to terminate the obligations of
the Company under the Securities, the Security Documents or this Indenture
prior to 90 days following any such deposit.
In the event all or any portion of the Securities are to be redeemed
through such irrevocable trust, the Company must make arrangements satisfactory
to the Trustee, at the time of such deposit, for the giving of the notice of
such redemption or redemptions by the Trustee in the name and at the expense of
the Company.
97
-89-
SECTION 8.02. Satisfaction and Discharge.
In addition to the Company's rights under Section 8.01, the Company
may terminate all of its obligations under this Indenture (subject to Section
8.03) when:
(1) all Securities theretofore authenticated and delivered (other
than Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.07) have been delivered to
the Trustee for cancellation;
(2) the Company has paid or caused to be paid all other sums payable
hereunder and under the Securities by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent specified herein relating to the satisfaction and discharge of
this Indenture have been complied with.
SECTION 8.03. Survival of Certain Obligations.
Notwithstanding the satisfaction and discharge of this Indenture and
of the Securities referred to in Section 8.01 or 8.02, the respective
obligations of the Company and the Trustee under Sections 2.02, 2.03, 2.04,
2.05, 2.06, 2.07, 2.10, 2.12, 2.13, 4.01, 4.02, 6.07, Article Seven, Sections
8.05, 8.06 and 8.07 shall survive until the Securities are no longer
outstanding, and thereafter the obligations of the Company and the Trustee under
Sections 7.07, 8.05, 8.06 and 8.07 shall survive. Nothing contained in this
Article Eight shall abrogate any of the obligations or duties of the Trustee
under this Indenture.
SECTION 8.04. Acknowledgment of Discharge by Trustee.
Subject to Section 8.07, after (i) the conditions of Section 8.01 or
8.02 have been satisfied, (ii) the Company has paid or caused to be paid all
other sums payable hereunder by the Company and (iii) the Company has delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent referred to in clause (i) above relating to the
satisfaction and discharge of this Indenture have been complied with, the
Trustee upon written request shall acknowledge in writing the discharge of the
Company's
98
-90-
obligations under this Indenture except for those surviving obligations
specified in Section 8.03.
SECTION 8.05. Application of Trust Assets.
The Trustee shall hold any U.S. Legal Tender or U.S. Government
Obligations deposited with it pursuant to this Article Eight in the irrevocable
trust established pursuant to Section 8.01. The Trustee shall apply the
deposited U.S. Legal Tender or the U.S. Government Obligations, together with
earnings thereon, through the Paying Agent, in accordance with this Indenture
and the terms of the irrevocable trust agreement established pursuant to Section
8.01, to the payment of principal of and interest on the Securities. The U.S.
Legal Tender or U.S. Government Obligations so held in trust and deposited with
the Trustee in compliance with Section 8.01 shall not be part of the trust
estate under this Indenture, but shall constitute a separate trust fund for the
benefit of all Holders entitled thereto.
SECTION 8.06. Repayment to the Company or Subsidiary Guarantors; Unclaimed
Money.
Subject to Sections 7.07 and 8.01, the Trustee shall promptly pay to
the Company, or if deposited with the Trustee by any Subsidiary Guarantor, to
such Subsidiary Guarantor, upon receipt by the Trustee of an Officers'
Certificate, any excess money, determined in accordance with Section 8.01, held
by it at any time. The Trustee and the Paying Agent shall pay to the Company or
any Subsidiary Guarantor, as the case may be, upon receipt by the Trustee or the
Paying Agent, as the case may be, of an Officers' Certificate, any money held by
it for the payment of principal, premium, if any, or interest that remains
unclaimed for one year after payment to the Holders is required; provided,
however, that the Trustee and the Paying Agent before being required to make any
payment may, but need not, at the expense of the Company cause to be published
once in a newspaper of general circulation in the City of New York or mail to
each Holder entitled to such money notice that such money remains unclaimed and
that after a date specified therein, which shall be at least 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company of any
Subsidiary Guarantor, as the case may be, Security holders entitled to money
must look solely to the Company for payment as general creditors unless an
applicable abandoned property law designates another person, and all
99
-91-
liability of the Trustee or Paying Agent with respect to such money shall
thereupon cease.
SECTION 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Indenture by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
and only then the Company's and each Subsidiary Guarantor's, if any, obligations
under this Indenture and the Securities shall be revived and reinstated as
though no deposit had been made pursuant to this Indenture until such time as
the Trustee is permitted to apply all such money or U.S. Government Obligations
in accordance with this Indenture; provided, however, that if the Company or the
Subsidiary Guarantors, as the case may be, have made any payment of principal
of, premium, if any, or interest on any Securities because of the reinstatement
of its obligations, the Company or the Subsidiary Guarantors, as the case may
be, shall be, subrogated to the rights of the holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture, the Security Documents or the
Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to evidence the succession in accordance with Article V hereof
of another Person to the Company and the assumption by any such successor
of the covenants of the Company herein and in the Securities;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
100
-92-
(4) to make any other change that does not materially adversely
affect the rights of any Securityholders hereunder or under the Security
Documents; or
(5) to comply with any requirements of the SEC in connection with
the qualification of this Indenture under the TIA; or
(6) to add or release any Subsidiary Guarantor pursuant to the terms
of this Indenture.
provided that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.01.
SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of the outstanding
Securities, may amend or supplement this Indenture, the Security Documents or
the Securities, without notice to any other Securityholders. Subject to Section
6.07, the Holder or Holders of a majority in aggregate principal amount of the
outstanding Securities may waive compliance by the Company with any provision of
this Indenture, the Security Documents or the Securities without notice to any
other Securityholder. Without the consent of each Securityholder affected,
however, no amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, may:
(1) change the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver of any provision of this
Indenture, the Security Documents, the Securities or the Guarantees;
(2) reduce the rate or change the time for payment of interest,
including default interest, on any Security;
(3) reduce the principal amount of any Security;
(4) change the Maturity Date of any Security, or alter the
redemption or repurchase provisions contained in this Indenture or the
Securities in a manner adverse to any Holder;
101
-93-
(5) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Security on or after the due date thereof or to bring suit to enforce
such payment, or permitting Holders of a majority in principal amount of
the Securities to waive Defaults or Events of Default;
(6) make any changes in Section 6.04, 6.07 or this Section 9.02;
(7) make the principal of, or the interest on any Security payable
in money other than as provided for in this Indenture, the Security
Documents, the Securities and the Guarantees as in effect on the date
hereof;
(8) affect the ranking, or with respect to Collateral, the priority,
of the Securities or the Guarantees, in each case in a manner adverse to
the Holders;
(9) amend, modify or change the obligation of the Company to make or
consummate a Change of Control Offer, a Purchase Offer or waive any
default in the performance thereof or modify any of the provisions or
definitions with respect to any such offers; or
(10) release any Guarantor from any of its obligations under its
Guarantee or the Indenture otherwise than in accordance with the terms of
the Indenture.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Compliance with TIA.
From the date on which this Indenture is qualified under the TIA,
every amendment, waiver or supplement of this
102
-94-
Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Securities have consented (and not theretofore revoked such consent)
to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
persons who were Holders at such record date (or their duly designated proxies),
and only those persons, shall be entitled to revoke any consent previously
given, whether or not such persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (10) of Section 9.02, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; provided that any such waiver
shall not impair or affect the right of any Holder to receive payment of
principal of and interest on a Security, on or after the respective due dates
expressed in such Security, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.
103
-95-
SECTION 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms.
SECTION 9.06. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture and the Security Documents and constituted the legal, valid and
binding obligations of the Company enforceable in accordance with its terms.
Such Opinion of Counsel shall be at the expense of the Company, and the Trustee
shall have a lien under Section 7.07 for any such expense.
ARTICLE TEN
COLLATERAL AND SECURITY
SECTION 10.01. Collateral and Security Documents; Additional Collateral.
(a) In order to secure the due and punctual payment of the principal
of and interest on the Securities when and as the same shall be due and payable,
whether on an Interest Payment Date, at maturity, by acceleration, purchase,
repurchase, redemption or otherwise, and interest on the overdue principal of
and interest (to the extent permitted by law), if any, on the Securities and the
performance of all other obligations of the Company to the Holders or the
Trustee under this Indenture and the Securities, the Company, certain of its
Subsidiary
104
-96-
Guarantors and the Trustee have simultaneously with the execution of this
Indenture entered into the Security Documents pursuant to which the Company and
its applicable Subsidiary Guarantors have granted to the Trustee or Co-Trustee
for the benefit of the Securityholders a second priority Lien on and security
interest in the Collateral. The Trustee, the Company and its applicable
Subsidiary Guarantors hereby agree that the Trustee holds the Collateral in
trust for the benefit of the Securityholders pursuant to the terms of this
Indenture and the Security Documents. The Trustee is also authorized and
directed to enter into the Intercreditor Agreement.
(b) Each Securityholder, by accepting a Security, agrees to all of
the terms and provisions of the Security Documents, as the same may be amended
from time to time pursuant to the provisions of the Security Documents and this
Indenture.
SECTION 10.02. Recording and Opinions.
(a) The Company shall, and shall cause its applicable Subsidiary
Guarantors to, take or cause to be taken all action required to perfect,
maintain, preserve and protect the Lien on and security interest in the
Collateral granted by the Security Documents, including, without limitation, the
filing of financing statements, continuation statements and any instruments of
further assurance, in such manner and in such places as may be required by law
fully to preserve and protect the rights of the Holders and the Trustee under
this Indenture and the Security Documents to all property comprising the
Collateral. The Company shall from time to time promptly pay all financing and
continuation statement recording and/or filing fees, charges and taxes relating
to this Indenture and the Security Documents, any amendments thereto and any
other instruments of further assurance required pursuant to the Security
Documents.
(b) The Company shall furnish to the Trustee, at such time as
required by Section 314(b) of the TIA, Opinion(s) of Counsel either (a)
substantially to the effect that, in the opinion of such counsel, this Indenture
and the grant of a security interest in the Collateral intended to be made by
the Security Documents and all other instruments of further assurance,
including, without limitation, financing statements, have been properly recorded
and filed to the extent necessary to perfect the security interests in the
Collateral created by the Security Documents and reciting the details of such
action, and stating that as to the security interests created pursuant to
105
-97-
the Security Documents, such recordings and filings are the only recordings and
filings necessary to give notice thereof and that no re-recordings or refilings
are necessary to maintain such notice (other than as stated in such opinion), or
(b) to the effect that, in the opinion of such counsel, no such action is
necessary to perfect such security interests.
(c) To the extent required by the TIA, the Company shall furnish to
the Trustee on July 15 in each year, beginning with July 15, 1996, an Opinion of
Counsel, dated as of such date, either (i)(A) stating that, in the opinion of
such counsel, action has been taken with respect to the recording, filing,
re-recording and refiling of all supplemental indentures, financing statements,
continuation statements and other documents as is necessary to maintain the Lien
of the Security Documents and reciting with respect to the security interests in
the Collateral the details of such action or referring to prior Opinions of
Counsel in which such details are given, and (B) stating that, based on relevant
laws as in effect on the date of such Opinion of Counsel, all financing
statements, continuation statements and other documents have been executed and
filed that are necessary as of such date and during the succeeding 24 months
fully to maintain the security interest of the Securityholders and the Trustee
hereunder and under the Security Documents with respect to the Collateral, or
(ii) stating that, in the opinion of such counsel, no such action is necessary
to maintain such Lien.
SECTION 10.03. Release of Collateral.
(a) The Trustee, in its capacity as Trustee under the Security
Documents, shall not at any time release Collateral from the security interest
created by this Indenture and the Security Documents unless such release is in
accordance with the provisions of this Indenture and the Security Documents.
(b) At any time when an Event of Default shall have occurred and be
continuing, no release of Collateral pursuant to the provisions of this
Indenture and the Security Documents shall be effective as against the Holders
of the Securities.
(c) The release of any Collateral from the terms of the Security
Documents shall not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Collateral is
released pursuant to this Indenture and the Security Documents. To the extent
106
-98-
applicable, the Company shall, and shall cause its applicable Subsidiary
Guarantors to, cause TIA Section 314(d) relating to the release of property from
the Lien of the Security Documents and relating to the substitution therefor of
any property to be subjected to the Lien of the Security Documents to be
complied with. Any certificate or opinion required by TIA Section 314(d) may be
made by an Officer of the Company or any applicable Subsidiary Guarantor, except
in cases where TIA Section 314(d) requires that such certificate or opinion be
made by an independent Person, which Person shall be an independent engineer,
appraiser or other expert selected or approved by the Trustee in the exercise of
reasonable care. A Person is "independent" if such Person (a) is in fact
independent, (b) does not have any direct financial interest or any material
indirect financial interest in the Company or any Subsidiary Guarantor or in any
Affiliate of the Company or of any Subsidiary Guarantor and (c) is not an
officer, employee, promoter, underwriter, trustee, partner or director or person
performing similar functions to any of the foregoing for the Company or any
Subsidiary Guarantor. The Trustee shall be entitled to receive and rely upon a
certificate provided by any such Person confirming that such Person is
independent within the foregoing definition.
SECTION 10.04. Possession and Use of Collateral.
Subject to and in accordance with the provisions of this Indenture
and the Security Documents, so long as no Event of Default shall have occurred
and be continuing, the Company and its applicable Subsidiary Guarantors shall
have the right to remain in possession and retain exclusive control of the
Collateral (other than Trust Moneys held by the Trustee), to operate, manage,
develop, lease, use, consume and enjoy the Collateral (other than Trust Moneys
held by the Trustee), to alter or repair any Collateral consisting of machinery
or equipment so long as such alterations and repairs do not diminish the value
thereof or impair the Lien of the Security Documents thereon and to collect,
receive, use, invest and dispose of the reversions, remainders, interest, rents,
lease payments, issues, profits, revenues, proceeds and other income thereof.
SECTION 10.05. Specified Releases of Collateral.
(a) Satisfaction and Discharge; Defeasance. The Company and its
applicable Subsidiary Guarantors shall be entitled to obtain a full release of
all of the Collateral from the Liens of this Indenture and of the Security
Documents upon
107
-99-
compliance with the conditions precedent set forth in Section 8.02 for
satisfaction and discharge of this Indenture or for defeasance pursuant to
Section 8.01(d). Upon delivery by the Company and its applicable Subsidiary
Guarantors to the Trustee of an Officers' Certificate and an Opinion of Counsel,
each to the effect that such conditions precedent have been complied with (and
which may be the same Officers' Certificate and Opinion of Counsel required by
Article Eight), the Trustee shall forthwith take all necessary action (at the
request of and the expense of the Company) to release and reconvey to the
Company all of the Collateral, and shall deliver such Collateral in its
possession to the Company and its applicable Subsidiary Guarantors including,
without limitation, the execution and delivery of releases and satisfactions
wherever required.
(b) Dispositions of Collateral Permitted by Section 4.17. The
Company and its applicable Subsidiary Guarantors shall be entitled to obtain a
release of, and the Trustee shall release, items of Collateral (the "Released
Interests") subject to an Asset Sale upon compliance with the condition
precedent that the Company and its applicable Subsidiary Guarantors shall have
delivered to the Trustee the following:
(i) Company Order. A Company Order requesting release of Released
Interests, such Company Order (A) specifically describing the proposed
Released Interests, (B) specifying the value of such Released Interests on
a date within 60 days of the Company Order (the "Valuation Date"), (C)
stating that the purchase price to be received is at least equal to the
fair market value of the Released Interests, (D) stating that the release
of such Released Interests will not interfere with or impede the Trustee's
ability to realize the value of the remaining Collateral and will not
impair the maintenance and operation of the remaining Collateral, (E)
confirming the sale of, or an agreement to sell, such Released Interests
in a bona fide sale to a Person that is not an Affiliate of the Company
or, in the event that such sale is to a Person that is such an Affiliate,
confirming that such sale is being made in accordance with Section 4.12,
(F) certifying that such Asset Sale complies with the terms and conditions
of Section 4.17 hereof and (G) in the event that there is to be a
substitution of property for the Collateral subject to the Asset Sale,
specifying the property intended to be substituted for the Collateral to
be disposed of;
108
-100-
(ii) Officers' Certificate. An Officers' Certificate certifying that
(A) such Asset Sale covers only the Released Interests and complies with
the terms and conditions of an Asset Sale pursuant to Section 4.17, (B)
all Net Cash Proceeds from the sale of any of the Released Interests will
be applied pursuant to Section 4.17, (C) there is no Default or Event of
Default in effect or continuing on the date thereof, the Valuation Date or
the date of such Asset Sale, (D) the release of the Collateral will not
result in a Default or Event of Default hereunder and (E) all conditions
precedent to such release have been complied with; and
(iii) Compliance with TIA and Other Documentation. All certificates,
opinions and other documentation required by the TIA or Section 10.03 of
this Indenture, if any, and, in the event there is to be a substitution of
property for the Collateral subject to the Asset Sale, all documentation
necessary to effect the substitution of such new Collateral.
Upon compliance by the Company or any applicable Subsidiary
Guarantor with the condition precedent set forth above, the Trustee shall cause
to be released and reconveyed to the Company or such applicable Subsidiary
Guarantor, the Released Interests.
(c) Eminent Domain and Other Governmental Takings. The Company and
its applicable Subsidiary Guarantors shall be entitled to obtain a release of,
and the Trustee shall release, items of Collateral taken by eminent domain or
sold pursuant to the exercise by the United States of America or any State,
municipality or other governmental authority of any right which it may then have
to purchase, or to designate a purchaser or to order a sale of, all of any part
of the Collateral, upon compliance with the condition precedent that the Company
and its applicable Subsidiary Guarantors shall have delivered to the Trustee the
following:
(i) Officers' Certificate. An Officers' Certificate certifying that
(A) such Collateral has been taken by eminent domain and the amount of the
award therefor, or that such property has been sold pursuant to a right
vested in the United States of America, or a State, municipality or other
governmental authority to purchase, or to designate a purchaser, or order
a sale of such Collateral and the
109
-101-
amount of the proceeds of such sale, and (B) all conditions precedent to
such release have been complied with;
(ii) Eminent Domain Award. Cash equal to the amount of the award for
such property or the proceeds of such sale, to be held as Trust Moneys
subject to the disposition thereof pursuant to Article Eleven hereof; and
(iii) Compliance with TIA. All opinions, certificates and other
documentation required by the TIA or Section 10.03 of this Indenture, if
any.
Upon compliance by the Company or any applicable Subsidiary
Guarantor with the condition precedent set forth above, the Trustee shall cause
to be released and reconveyed to the Company or such applicable Subsidiary
Guarantor, the aforementioned items of Collateral.
SECTION 10.06. Disposition of Collateral Without Release.
So long as no Event of Default shall have occurred and be continuing
and subject to the requirements of Section 314 of the TIA, the Company and any
applicable Subsidiary Guarantor may, without any release or consent by the
Trustee, sell or otherwise dispose of any machinery, equipment, furniture,
apparatus, tools or implements or other similar property subject to the Lien of
the Security Documents, which (i) in any single transaction has a fair market
value of $25,000 (or if such $25,000 amount referred to in TIA Section 314(d)(1)
increases then to such increased amount) or less or (ii) shall have become worn
out, obsolete or otherwise in need of replacement or repair; provided that, in
the case of this clause (ii) such sale or other disposition is in conjunction
with a substantially concurrent transaction whereby additional personal property
is made subject to the Lien of the Security Documents.
SECTION 10.07. Form and Sufficiency of Release.
In the event that the Company or any applicable Subsidiary Guarantor
has sold, exchanged, or otherwise disposed of or proposes to sell, exchange or
otherwise dispose of any portion of the Collateral that under the provisions of
Section 10.05 or 10.06 may be sold, exchanged or otherwise disposed of by the
Company or any applicable Subsidiary Guarantor, and the Company or such
applicable Subsidiary Guarantor requests the Trustee to furnish a written
disclaimer, release or quit-claim of any interest in such property under this
110
-102-
Indenture and the Security Documents, the Trustee, in its capacity as Trustee
under the Security Documents, shall execute, acknowledge and deliver to the
Company (in proper and recordable form) such an instrument promptly after
satisfaction of the conditions set forth herein for delivery of any such
release. Notwithstanding the preceding sentence, all purchasers and grantees of
any property or rights purporting to be released herefrom shall be entitled to
rely upon any release executed by the Trustee hereunder as sufficient for the
purpose of this Indenture and as constituting a good and valid release of the
property therein described from the Lien of this Indenture or of the Security
Documents.
SECTION 10.08. Purchaser Protected.
No purchaser or grantee of any property or rights purporting to be
released herefrom shall be bound to ascertain the authority of the Trustee to
execute the release or to inquire as to the existence of any conditions herein
prescribed for the exercise of such authority; nor shall any purchaser or
grantee or any property or rights permitted by this Indenture to be sold or
otherwise disposed of by the Company or any applicable Subsidiary Guarantor be
under any obligation to ascertain or inquire into the authority of the Company
or such applicable Subsidiary Guarantor to make such sale or other disposition.
SECTION 10.09. Authorization of Actions To Be Taken by the Trustee Under the
Security Documents.
Subject to the provisions of the Security Documents, (a) the Trustee
may, in its sole discretion and without the consent of the Securityholders, take
all actions it deems necessary or appropriate in order to (i) enforce any of the
terms of the Security Documents and (ii) collect and receive any and all amounts
payable in respect of the obligations of the Company hereunder and (b) the
Trustee shall have power to institute and to maintain such suits and proceedings
as it may deem expedient to prevent any impairment of the Collateral by any act
that may be unlawful or in violation of the Security Documents or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Securityholders in
the Collateral (including the power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement
111
-103-
of, or compliance with, such enactment, rule or order would impair the security
interest thereunder or be prejudicial to the interests of the Securityholders or
of the Trustee.)
SECTION 10.10. Authorization of Receipt of Funds by the Trustee Under the
Security Documents.
The Trustee is authorized to receive any funds for the benefit of
the Securityholders distributed under the Security Documents, and to make
further distributions of such funds to the Holders in accordance with the
provisions of Article Eleven and the other provisions of this Indenture.
ARTICLE ELEVEN
APPLICATION OF TRUST MONEYS
SECTION 11.01. "Trust Moneys" Defined.
All cash or Cash Equivalents received by the Trustee:
a. upon the release of Collateral from the Lien of this Indenture
and/or the Security Documents, including investment earnings thereon; or
b. pursuant to the provisions of any Mortgage; or
c. as proceeds of any other sale or other disposition of all or any
part of the Collateral by or on behalf of the Trustee or any collection,
recovery, receipt, appropriation or other realization of or from all or
any part of the Collateral pursuant to this Indenture or any of the
Security Documents or otherwise; or
d. for application under this Article Eleven as elsewhere provided
in this Indenture (including without limitation, and subject to, Section
4.17(c)) or the Security Documents, or whose disposition is not elsewhere
otherwise specifically provided for herein or in the Security Documents;
(all such moneys being herein sometimes called "Trust Moneys"; provided,
however, that Trust Moneys shall not include any property deposited with the
Trustee in violation of the Intercreditor Agreement or pursuant to Section 3.05,
4.16, 4.20
112
-104-
and 4.21 or Article Eight or delivered to or received by the Trustee for
application in accordance with Section 6.10 hereof) shall be held by the Trustee
for the benefit of the Holders as a part of the Collateral and, upon any entry
upon or sale or other disposition of the Collateral or any part thereof pursuant
to enforcement of the Security Documents, said Trust Moneys shall be applied in
accordance with Section 6.10; but, prior to any such entry, sale or other
disposition, all or any part of the Trust Moneys may be withdrawn, and shall be
released, paid or applied by the Trustee, from time to time as provided in this
Article Eleven.
On the Issue Date there shall be established and, at all times
hereafter until this Indenture shall have terminated, there shall be maintained
with the Trustee an account which shall be entitled the "Collateral Account"
(the "Collateral Account"). The Collateral Account shall be established and
maintained by the Trustee at the Corporate Trust Office of the Trustee. All
Trust Moneys which are received by the Trustee shall be deposited in the
Collateral Account and thereafter shall be held, applied and/or disbursed by the
Trustee in accordance with the terms of this Article Eleven.
SECTION 11.02. Withdrawal of Net Cash Proceeds Following an Asset Sale Offer.
To the extent that any Trust Moneys consist of Net Cash Proceeds
received by the Trustee pursuant to the provisions of Section 4.17 hereof and an
Asset Sale Offer has been made and completed in accordance therewith, such Trust
Moneys may be withdrawn by the Company or any applicable Subsidiary Guarantor
and shall be paid by the Trustee to the Company or such applicable Subsidiary
Guarantor (or as otherwise directed by the Company or such applicable Subsidiary
Guarantor) upon a Company Order to the Trustee and upon receipt by the Trustee
of the following:
a. Officers' Certificate. An Officers' Certificate, dated not more
than five days prior to the Purchase Date certifying:
(i) that no Event of Default exists; (ii) (A) that such Trust
Moneys constitute Net Cash Proceeds, (B) that pursuant to and in
accordance with Section 4.17, the Company or such applicable
Subsidiary Guarantor has made an Asset Sale Offer, (C) the amount of
money to be applied to the repurchase of the
113
-105-
Securities pursuant to the Asset Sale Offer, (D) the amount of money
to be retained by the Company, and (E) the Purchase Date; and (iii)
that all conditions precedent and covenants herein provided for
relating to such application of Trust Moneys have been complied with
and such application will not violate the Intercreditor Agreement;
and
b. Compliance with TIA. All opinions, certificates and other
documentation required under the TIA, if any.
Upon compliance with the foregoing provisions of this Section 11.02,
the Trustee shall apply the Trust Moneys as directed and specified by such
Company Order.
SECTION 11.03. Withdrawal of Trust Moneys for Oil and Gas Related Assets.
To the extent that any Trust Moneys consist of Net Cash Proceeds
received by the Trustee pursuant to the provisions of Section 4.17 and the
Company or any applicable Subsidiary Guarantor intends to invest such Net Cash
Proceeds in a Oil and Gas Related Assets consistent with the requirements of
clause (b) of such Section 4.17 (the "Released Trust Moneys"), such Trust Moneys
may be withdrawn by the Company or such applicable Subsidiary Guarantor and
shall be paid by the Trustee to the Company or such applicable Subsidiary
Guarantor (or as otherwise directed by the Company or such applicable Subsidiary
Guarantor) upon a Company Order to the Trustee and upon receipt by the Trustee
of the following:
a. Officers' Certificate. An Officers' Certificate certifying that
(i) the release of the Released Trust Moneys complies with the terms and
conditions of Section 4.17 of this Indenture, (ii) there is no Default or
Event of Default in effect or continuing on the date thereof, (iii) the
release of the Released Trust Moneys will not result in a Default or Event
of Default hereunder and (iv) all conditions precedent to such release
have been complied with and such release will not violate the
Intercreditor Agreement;
b. Compliance with TIA and Other Documentation. All certificates,
opinions and other documentation required under the TIA, if any, and all
documentation necessary to subject such property to a valid first priority
Lien and security interest in favor of the Trustee for the
114
-106-
benefit of the Securityholders pursuant to the Security Documents.
Upon compliance with the foregoing provisions of this Indenture, the
Trustee shall apply the Released Trust Moneys as directed and specified by such
Company Order.
SECTION 11.04. Withdrawal of Trust Moneys on Basis of Retirement of Securities.
Trust Moneys may be withdrawn by the Company to be applied to the
redemption and retirement of the Securities and shall be paid by the Trustee to
the Company (or as otherwise directed by the Company) upon a Company Order to
the Trustee and upon receipt by the Trustee of an Officers' Certificate, dated
not more than 30 days prior to the date of the application for the withdrawal
and payment of such Trust Moneys, certifying that (i) there is no Default or
Event of Default in effect or continuing on the date thereof and (ii) all
conditions precedent herein provided relating to such withdrawal and application
have been complied with and such withdrawal will not violate the Intercreditor
Agreement.
Upon compliance with the foregoing provisions of this Indenture, the
Trustee shall apply the Trust Moneys as directed and specified by such Company
Order.
SECTION 11.05. Investment of Trust Moneys.
All or any part of any Trust Moneys held by the Trustee shall from
time to time be invested or reinvested by the Trustee in any Cash Equivalents
pursuant to the written direction of the Company, which shall specify the Cash
Equivalents in which such Trust Moneys shall be invested. Unless an Event of
Default occurs and is continuing, any interest on such Cash Equivalents (in
excess of any accrued interest paid at the time of purchase) that may be
received by the Trustee shall be forthwith paid to the Company. Such Cash
Equivalents shall be held by the Trustee as a part of the Collateral, subject to
the same provisions hereof as the cash used by it to purchase such Cash
Equivalents.
The Trustee shall not be liable or responsible for any loss
resulting from such investments or sales except only for its own negligent
action, its own negligent failure to act or its own willful misconduct in
complying with this Section 11.05.
115
-107-
ARTICLE TWELVE
GUARANTEE
SECTION 12.01. Unconditional Guarantee.
Each Subsidiary Guarantor hereby unconditionally, jointly and
severally, guarantees (such guarantee to be referred to herein as the
"Guarantee") to each Holder of a Security authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, the Securities or the
Obligations of the Company hereunder or thereunder, that: (i) the principal of
and interest on the Securities will be promptly paid in full when due, subject
to any applicable grace period, whether at maturity, by acceleration or
otherwise and interest on the overdue principal, if any, and interest on any
interest, to the extent lawful, of the Securities and all other Obligations of
the Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the terms hereof and
thereof; and (ii) in case of any extension of time of payment or renewal of any
Securities or of any such other obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, subject to any applicable grace period, whether at stated maturity, by
acceleration or otherwise, subject, however, in the case of clauses (i) and (ii)
above, to the limitations set forth in Section 12.03. Each Subsidiary Guarantor
hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities or
this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, and action to enforce
the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. Each Subsidiary Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities, this Indenture and
in this Guarantee. If any Securityholder or the Trustee is required by any court
or otherwise to return to the Company, any Subsidiary Guarantor, or any
custodian, trustee, liquidator
116
-108-
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 Securityholder, this Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Subsidiary
Guarantor further agrees that, as between each Subsidiary Guarantor, on the one
hand, and the Holders and the Trustee, on the other hand, (x) the maturity of
the obligations guaranteed hereby may be accelerated as provided in Article Six
for the purposes of this Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article Six, such obligations (whether or not due and payable)
shall forthwith become due and payable by each Subsidiary Guarantor for the
purpose of this Guarantee.
SECTION 12.02. Severability.
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 12.03. 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 the Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law. To effectuate the foregoing intention, the Holders
and such Subsidiary Guarantor hereby irrevocably agree that the obligations of
such 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 12.05, result in the obligations of such
Subsidiary Guarantor under the Guarantee not constituting such fraudulent
transfer or conveyance.
117
-109-
SECTION 12.04. Subsidiary Guarantors May Consolidate, etc., on Certain Terms.
(a) Nothing contained in this Indenture or in any of the Securities
shall prevent any consolidation or merger of a Subsidiary Guarantor with or into
the Company or another Subsidiary Guarantor or shall prevent any sale of assets
or conveyance of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety, to the Company or another Subsidiary Guarantor.
Upon any such consolidation, merger, sale or conveyance, the Guarantee given by
such Subsidiary Guarantor shall no longer have any force or effect.
(b) Except as set forth in Article Four and Article Five hereof,
nothing contained in this Indenture or in any of the Securities shall prevent
any consolidation or merger of a Subsidiary Guarantor with or into a corporation
or corporations other than the Company or another Subsidiary Guarantor (whether
or not affiliated with the Subsidiary Guarantor) or shall prevent any sale of
assets, or conveyance of the property, of a Subsidiary Guarantor as an entirety
or substantially as an entirety, to a corporation or corporations other than the
Company or another Subsidiary Guarantor (whether or not affiliated with the
Subsidiary Guarantor); provided, however, that, (i) immediately after such
transaction, and giving effect thereto such transaction does not (a) violate any
covenants set forth herein or (b) result in a Default or Event of Default under
this Indenture that is continuing, and (ii) upon any such consolidation, merger,
sale or conveyance, the Subsidiary Guarantee set forth in this Article Twelve,
and the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by such Subsidiary Guarantor, shall
be expressly assumed (in the event that the Subsidiary Guarantor is not the
surviving corporation in the merger), by supplemental indenture satisfactory in
form to the Trustee, executed and delivered to the Trustee, by the corporation
formed by such consolidation, or into which the Subsidiary Guarantor shall have
merged, or by the corporation that shall have acquired such assets or property.
In the case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor corporation, by supplemental indenture executed and
delivered to the Trustee and satisfactory in form to the Trustee of the due and
punctual performance of all of the convenants and conditions of this Indenture
to be performed by the Subsidiary Guarantor, such successor corporation shall
succeed to and be substituted for the Subsidiary Guarantor with the same effect
as if it had been named herein as a Subsidiary
118
-110-
Guarantor; provided, however, that solely for purposes of computing amounts
described in subclause (iii) of the first paragraph of Section 4.03 any such
successor corporation shall only be deemed to have succeeded to and be
substituted for any Subsidiary Guarantor with respect to periods subsequent to
the effective time of such merger, consolidation or transfer of assets.
(c) Upon the sale or disposition (whether by merger, stock purchase,
asset sale or otherwise) of a Subsidiary Guarantor (or all or substantially all
its assets) to an entity which is not a Subsidiary of the Company and which sale
or disposition is otherwise in compliance with the terms of this Indenture
(including, without limitation, Sections 4.17, 4.20 and 4.21), such Subsidiary
Guarantor shall be deemed released from all obligations under this Article
Twelve without any further action required on the part of the Trustee or any
Holder; provided, however, that any such termination shall occur only to the
extent that all obligations of such Subsidiary Guarantor under all of its
guarantees of, and under all of its pledges of assets or other security
interests which secure, any other Indebtedness of the Company shall also
terminate upon such release, sale or transfer.
The Trustee shall deliver an appropriate instrument evidencing such
release upon receipt of a request by the Company accompanied by an Officers'
Certificate and Opinion of Counsel certifying as to the compliance with this
Section 12.04. Any Subsidiary Guarantor not so released remains liable for the
full amount of principal of and interest on the Securities as provided in this
Article Twelve.
SECTION 12.05. 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 all other Subsidiary Guarantors in a pro rata
amount based on the Adjusted Net Assets of each Subsidiary Guarantor (including
the Funding Guarantor) for all payments, damages and expenses incurred by that
Funding Guarantor in discharging the Company's obligations with respect to the
Securities or any other Subsidiary Guarantor's obligations with respect to the
Guarantee. "Adjusted Net Assets" of such Subsidiary Guarantor at any date shall
mean the lesser of the
119
-111-
amount by which (x) the fair value of the property of such Subsidiary Guarantor
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date (other than liabilities of such
Subsidiary Guarantor under Indebtedness Subordinated to such Subsidiary
Guarantor's Guarantee)), but excluding liabilities under the Guarantee, of such
Subsidiary Guarantor at such date and (y) the present fair salable value of the
assets of such Subsidiary Guarantor at such date exceeds the amount that will be
required to pay the probable liability of such Subsidiary Guarantor on its debts
(after giving effect to all other fixed and contingent liabilities incurred or
assumed on such date and after giving effect to any collection from any
Subsidiary of such Subsidiary Guarantor in respect of the obligations of such
Subsidiary under the Guarantee), excluding debt in respect of the Guarantee of
such Subsidiary Guarantor, as they become absolute and matured.
SECTION 12.06. Waiver of Subrogation.
Until all Guarantee Obligations are paid in full each Subsidiary
Guarantor hereby irreovcably waives any claims or other rights which it may now
or hereafter acquire against the Company that arise from the existence, payment,
performance or enforcement of such Subsidiary Guarantor's obligations under the
Guarantee and this Indenture, including, without limitation, any right of
subrogation, reimbursement, exoneration, indemnification, and any right to
participate in any claim or remedy of any Holder of Securities against the
Company, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including, without limitation, the right to
take or receive from the Company, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim or other rights. If any amount shall be paid to any Subsidiary
Guarantor in violation of the preceding sentence and the Securities shall not
have been paid in full, such amount shall have been deemed to have been paid to
such Subsidiary Guarantor for the benefit of, and held in trust for the benefit
of, the Holders of the Securities, and shall, forthwith be paid to the Trustee
for the benefit of such Holders to be credited and applied upon the Securities,
whether matured or unmatured, in accordance with the terms of this Indenture.
Each Subsidiary Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this
120
-112-
Indenture and that the waiver set forth in this Section 12.06 is knowingly made
in contemplation of such benefits.
SECTION 12.07. Execution of Guarantee.
To evidence their guarantee to the Securityholders set forth in this
Article Twelve, the Subsidiary Guarantors hereby agree to execute the Guarantee
in substantially the form included in Exhibit A-1 and A-2, which shall be
endorsed on each Security ordered to be authenticated and delivered by the
Trustee. Each Subsidiary Guarantor hereby agrees that its Guarantee set forth in
this Article Twelve shall remain in full force and effect notwithstanding any
failure to endorse on each Security a notation of such Guarantee. Each such
Guarantee shall be signed on behalf of each Subsidiary Guarantor by two
Officers, or an Officer and an Assistant Secretary or one Officer shall sign and
one Officer or an Assistant Secretary (each of whom shall, in each case, have
been duly authorized by all requisite corporate actions) shall attest to such
Guarantee prior to the authentication of the Security on which it is endorsed,
and the delivery of such Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of such Guarantee on behalf of
such Subsidiary Guarantor. Such signatures upon the Guarantee may be by manual
or facsimile signature of such officers and may be imprinted or otherwise
reproduced on the Guarantee, and in case any such officer who shall have signed
the Guarantee shall cease to be such officer before the Security on which such
Guarantee is endorsed shall have been authenticated and delivered by the Trustee
or disposed of by the Company, such Security nevertheless may be authenticated
and delivered or disposed of as though the person who signed the Guarantee had
not ceased to be such officer of the Subsidiary Guarantor.
SECTION 12.08. Waiver of Stay, Extension or Usury Laws.
Each Subsidiary Guarantor convenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive each
such Subsidiary Guarantor from performing its Guarantee as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) each such Subsidiary Guarantor hereby expressly waives all
benefit or advantage of any such law, and covenants that it
121
-113-
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of Section 318(c) of the TIA, the imposed
duties shall control.
SECTION 13.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Company:
HarCor Energy, Inc.
Five Post Oak Park
Suite 2220
4400 Post Oak Park
Houston, Texas 77027-3413
Attention: President
with copies to:
Vinson & Elkins L.L.P.
1001 Fannin, Suite 2300
Houston, Texas 77002-6760
Attention: John S. Watson
Facsimile: (713) 758-2346
Telephone: (713) 758-2222
122
-114-
if to the Trustee:
Texas Commerce Bank National Association
600 Travis, 8th Floor
Houston, Texas 77002
Attention: Vice President of Corporate Trust
Facsimile: (713) 216-4880
Telephone: (713) 216-4181
Each of the Company and the Trustee by written notice to each other
such person may designate additional or different addresses for notices to such
person. Any notice or communication to the Company and the Trustee, shall be
deemed to have been given or made as of the date so delivered if personally
delivered; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and five (5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be
mailed to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA section 312(b) with
other Securityholders with respect to their rights under this Indenture, the
Security Documents, the Securities or the Guarantees. The Company, the Trustee,
the Registrar and any other person shall have the protection of TIA section
312(c).
123
-115-
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee
at the request of the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.08, shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
124
-116-
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee, Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 13.07. Legal Holidays.
If a payment date is not a Business Day, payment may be made on the
next succeeding day that is a Business Day.
SECTION 13.08. Governing Law.
THIS INDENTURE, THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Each of the parties hereto agrees to
submit to the jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or relating to this Indenture.
SECTION 13.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of any of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 13.10. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such,
of the Company shall not have any liability for any obligations of the Company
under the Securities, this Indenture, the Security Documents or the Guarantees
or for any claim based on, in respect of or by reason of such obligations or
their creation. Each Securityholder by accepting a Security waives and releases
all such liability. Such waiver and release are part of the consideration for
the issuance of the Securities.
SECTION 13.11. Successors.
All agreements of the Company in this Indenture, the Securities and
the Guarantees shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successor.
125
-117-
SECTION 13.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy or counterpart shall be an original, but all of them together shall
represent the same agreement.
SECTION 13.13. Severability.
In case any one or more of the provisions in this Indenture, in the
Securities or in the Guarantees shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
126
-118-
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the date first written above.
HARCOR ENERGY, INC.
By:
---------------------------
Name: Mark G. Harrington
Title: Chairman of the Board
and Chief Executive
Officer
Attest:
----------------------
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Trustee
By:
---------------------------
Name: Steven Horowitz
Title: Corporate Trust Officer
------------------------------
Steven R. Patterson, as Co-
Trustee pursuant to Section 7.12
127
-119-
THE SUBSIDIARY GUARANTORS:
WARRIOR, INC.
By:
---------------------------
Name: Mark G. Harrington
Title: President
Attest:
----------------------
HTAC INVESTMENTS, INC.
By:
---------------------------
Name: Mark G. Harrington
Title: President
Attest:
----------------------
128
EXHIBIT A-1
[FORM OF SERIES A SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1993, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
PROMULGATED UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501 (A)(1), (2), (3) OR (7) PROMULGATED UNDER THE
SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER THEREOF OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A PROMULGATED UNDER THE SECURITIES ACT, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHED (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY, (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 PROMULGATED
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 PROMULGATED UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3)
AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY, IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER
SUCH CERTIFICATIONS, WRITTEN LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF
THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT WITHIN THE MEANING OF
SECTION 1273(a) OF THE INTERNAL REVENUE CODE OF 1986. THE ISSUE PRICE IS $969.06
FOR EACH $1,000 OF STATED PRINCIPAL AMOUNT. THE ORIGINAL ISSUE DISCOUNT IS
$30.94 FOR EACH $1,000.00 OF STATED PRINCIPAL AMOUNT. THE ISSUE DATE IS
129
JULY 24, 1995. THE YIELD TO MATURITY IS APPROXIMATELY 15.62% COMPOUNDED
SEMIANNUALLY. ORIGINAL ISSUE DISCOUNT WILL BE ALLOCATED BASED ON ACCRUAL PERIODS
ENDING ON EACH DATE ON WHICH AN INTEREST PAYMENT IS DUE AND THE 360 DAYS PER
YEAR CONVENTION.
-2-
130
HARCOR ENERGY, INC.
14 7/8% Senior Secured Note
due July 15, 2002
No. $
HARCOR ENERGY, INC., a Delaware corporation (the "Company", which
term includes any successor corporation), for value received promises to pay to
or registered assigns, the principal sum of Dollars, on July 15, 2002.
Interest Payment Dates: January 15 and July 15 commencing January
15, 1996
Record Dates: January 1 and July 1
To the extent set forth in the Security Documents (as defined in the
Indenture), payment hereon is secured by a valid, perfected security interest in
the Collateral (as defined in the below-mentioned Indenture), the terms of which
security interests are more fully set forth in the Security Documents.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
Attest: HARCOR ENERGY, INC.
By:
- ------------------------------------- -----------------------------------
Name: Name:
Title: Title:
-3-
131
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
Dated:
as Trustee
By
------------------------------------
Authorized Signatory
-4-
132
HARCOR ENERGY, INC.
14 7/8% Senior Secured Note
due July 15, 2002
1. Interest.
HARCOR ENERGY, INC., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest semi-annually on January 15
and July 15 of each year (the "Interest Payment Date"), commencing January 15,
1996. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from July 24, 1995.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate of 2% per annum
in excess of the rate shown on the Securities and on overdue installments of
interest (without regard to any applicable grace periods) to the extent lawful.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of Federal funds, or interest by
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address. Notwithstanding the foregoing, the Company shall pay or cause to be
paid all amounts payable with respect to Restricted Securities or non-DTC
eligible Securities by wire transfer of Federal funds to the account of the
Holders of such Securities.
-5-
133
3. Paying Agent and Registrar.
Initially, Texas Commerce Bank National Association will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders. The Company or any of its
Subsidiaries may act as Registrar or co-Registrar.
4. Indenture and Guarantees.
The Company issued the Securities under an Indenture, dated as of
July 24, 1995 (the "Indenture"), 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 Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S.C. {{ 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and said Act for a statement of them. The
Securities are secured obligations of the Company limited in aggregate principal
amount to $65,000,000. Payment on each Security is guaranteed on a senior basis,
jointly and severally, by the Sudsidiary Guarantors pursuant to Article Twelve
of the Indenture.
5. Optional Redemption.
The Securities will be redeemable, at the Company's option, in whole
at any time or in part from time to time, on and after July 15, 1999 at the
following redemption prices (expressed as percentages of the principal amount)
if redeemed during the twelve-month period commencing on July 15 of the year set
forth below, plus, in each case, accrued interest thereon to the date of
redemption:
Year Percentage
---- ----------
1999............................. 110.00%
2000............................. 107.00%
2001 and thereafter.............. 100.00%
On or prior to July 15, 1997, the Company may, at its option, redeem
Securities with the net proceeds remaining following an Equity Proceeds Offer at
a price equal to 110% of their aggregate principal amount plus accrued and
unpaid
-6-
134
interest thereon, if any, to the date of redemption provided, however, that at
least 60% of the aggregate principle amount of securities originally issued must
remain outstanding after any such redemption.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. Securities in denominations of
$1,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the redemption
date, interest will cease to accrue on Securities or portions thereof called for
redemption.
7. Change of Control Offer.
Upon the occurrence of a Change of Control, the Company will be
required to offer to purchase all of the outstanding Securities at a purchase
price equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of repurchase.
8. Limitation on Disposition of Assets.
The Company is subject to certain conditions, obligated to make an
offer to purchase Securities at 100% of their principal amount plus accrued and
unpaid interest to the date of repurchase with certain net cash proceeds of
certain sales or other dispositions of assets in accordance with the Indenture.
9. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection
-7-
135
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange any Securities or portions thereof selected for
redemption, except the unredeemed portion of any security being redeemed in
part.
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
11. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for one year, the Trustee and the Paying Agents will repay the funds to the
Company at its request subject to terms of the Indenture. After that, all
liability of the Trustee and such Paying Agents with respect to such funds shall
cease.
12. Legal Defeasance and Covenant Defeasance.
The Company may be discharged from its obligations under the
Indenture, the Security Documents and the Securities except for certain
provisions thereof ("Legal Defeasance"), and may be discharged from its
obligations to comply with certain covenants contained in the Indenture, the
Security Documents and the Securities ("Covenant Defeasance"), in each case upon
satisfaction of certain conditions specified in the Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Security Documents
or the Securities may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without notice
to or consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Securities to, among other things, cure any ambiguity, defect
or inconsistency, provide for uncertificated Securities in addition to or in
place of certificated Securities or comply with any requirements of the SEC in
connection with the qualification of the Indenture under the TIA, or make any
other change that does not materially adversely affect the rights of any Holder
of a Security.
-8-
136
14. Restrictive Covenants.
The Indenture will contain certain covenants that, among other
things, limit the ability of the Company and its subsidiaries to make restricted
payments, to incur indebtedness, to create liens, to issue preferred or other
capital stock of subsidiaries, to sell assets, to permit restrictions on
dividends and other payments by subsidiaries to the Company, to consolidate,
merge or sell all or substantially all of its assets, to engage in transactions
with affiliates or to engage in certain businesses. The limitations are subject
to a number of important qualifications and exceptions. The Company must
annually report to the Trustee on compliance with such limitations.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest, including an accelerated
payment) if it determines that withholding notice is in their interest.
16. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
17. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such
-9-
137
liability. The waiver and release are part of the consideration for the
issuance of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
HarCor Energy, Inc., Five Post Oak Park, Suite 2220, 4400 Oak Park, Houston,
Texas 77027-3413, Attn: Chief Financial Officer.
-10-
138
[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]
GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture (the
"Indenture") referred to in the Security upon which this notation is endorsed
and each hereinafter referred to as a "Subsidiary Guarantor," which term
includes any successor person under the Indenture) have unconditionally
guaranteed on a senior basis (such guarantee by each Subsidiary Guarantor being
referred to herein as the "Guarantee") (i) the due and punctual payment of the
principal of and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and interest, if any, on the Securities, to the extent lawful,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms set forth in Article
Twelve of the Indenture and (ii) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, that the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise.
No stockholder, officer, director or incorporator, as such, past,
present or future, of any Subsidiary Guarantor shall have any liability under
the Guarantee by reason of his or its status as such stockholder, officer,
director or incorporator.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Securities upon which the Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
SUBSIDIARY GUARANTORS:
WARRIOR
By:
-----------------------------------
Name:
Title:
Attest:
------------------------------
139
HTAC INVESTMENTS, INC.
By:
-----------------------------------
Name:
Title
Attest:
-------------------------------
-2-
140
ASSIGNMENT FORM
I or we assign and transfer this Security to
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee)
_______________________________________________________________________________
(Insert Social Security or other identifying number of assignee)
and irrevocably appoint _______________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the SEC of
the effectiveness of a registration statement under the Securities Act of 1933,
as amended (the "Securities Act") covering resales of this Security (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) July 24, 1998, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that:
[Check One]
/ / (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act provided by Rule 144A
thereunder.
or
/ / (b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
141
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Security in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
Dated: ________________________ Signed: _______________________________
(Sign exactly as
name appears on the
other side of this
Security)
Signature Guarantee: _____________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: __________________ _______________________________________
NOTICE: To be executed by
an executive officer
-2-
142
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Sections 4.16, 4.17, 4.20 or 4.21 of the Indenture, check the
appropriate box:
Section 4.16 / / Section 4.17 / /
Section 4.20 / / Section 4.21 / /
If you want to elect to have only part of this Security purchased by
the Company pursuant to Sections 4.16, 4.17, 4.20 or 4.21 of the Indenture,
state the amount:
$
Date:________________________________ Your Signature:________________________
(Sign exactly as
your name appears
on the other side
of this Security)
Signature Guarantee: _________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
143
EXHIBIT A-2
[FORM OF SERIES B SECURITY]
THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT WITHIN THE MEANING OF
SECTION 1273(a) OF THE INTERNAL REVENUE CODE OF 1986. THE ISSUE PRICE IS $969.06
FOR EACH $1,000 OF STATED PRINCIPAL AMOUNT. THE ORIGINAL ISSUE DISCOUNT IS
$30.94 FOR EACH $1,000.00 OF STATED PRINCIPAL AMOUNT. THE ISSUE DATE IS JULY 24,
1995. THE YIELD TO MATURITY IS APPROXIMATELY 15.62% COMPOUNDED SEMIANNUALLY.
ORIGINAL ISSUE DISCOUNT WILL BE ALLOCATED BASED ON ACCRUAL PERIODS ENDING ON
EACH DATE ON WHICH AN INTEREST PAYMENT IS DUE AND THE 360 DAYS PER YEAR
CONVENTION.
HARCOR ENERGY, INC.
14 7/8% Senior Secured Note
due July 15, 2002
No. $
HARCOR ENERGY, INC., a Delaware corporation (the "Company", which
term includes any successor corporation), for value received promises to pay to
or registered assigns, the principal sum of
Dollars, on July 15, 2002.
Interest Payment Dates: January 15 and July 15 commencing
January 15, 1996
Record Dates: January 1 and July 1
To the extent set forth in the Security Documents (as defined in the
Indenture), payment hereon is secured, on an equal and ratable basis with all
other Securities by a valid, perfected security interest in the Collateral (as
defined in the below-mentioned Indenture), the terms of which security interests
are more fully set forth in the Security Documents.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
144
Attest: HARCOR ENERGY, INC.
By:
- ------------------------------------- -----------------------------------
Name: Name:
Title: Title:
-2-
145
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
Dated:
as Trustee
By
------------------------------------
Authorized Signatory
-3-
146
HARCOR ENERGY, INC.
14 7/8% Senior Secured Note
due July 15, 2002
1. Interest.
HARCOR ENERGY, INC., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest semi-annually on January 15
and July 15 of each year (the "Interest Payment Date"), commencing January 15,
1996. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from July 24, 1995.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate of 2% per annum
in excess of the rate shown on the Securities and on overdue installments of
interest (without regard to any applicable grace periods) to the extent lawful.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of Federal funds, or interest by
check payable in such U.S. Legal Tender. The Company shall deliver any such
interest payment to the Paying Agent.
3. Paying Agent and Registrar.
Initially, Texas Commerce Bank National Association will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders. The Company or any of its
Subsidiaries may, subject to certain exceptions, act as Registrar or
co-Registrar.
-4-
147
4. Indenture and Guarantees.
The Company issued the Securities under an Indenture, dated as of
July 24, 1995 (the "Indenture"), 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 Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S.C. {{ 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and said Act for a statement of them. The
Securities are secured obligations of the Company limited in aggregate principal
amount to $65,000,000. Payment on each Security is guaranteed on a senior basis,
jointly and severally, by the Sudsidiary Guarantors pursuant to Article Twelve
of the Indenture.
5. Optional Redemption.
The Securities will be redeemable, at the Company's option, in whole
at any time or in part from time to time, on and after July 15, 1999 at the
following redemption prices (expressed as percentages of the principal amount)
if redeemed during the twelve-month period commencing on July 15 of the year set
forth below, plus, in each case, accrued interest thereon to the date of
redemption:
Year Percentage
---- ----------
1999............................. 110.00%
2000............................. 107.00%
2001 and thereafter.............. 100.00%
On or prior to July 15, 1997, the Company may, at its option, redeem
Securities with the net proceeds remaining following an Equity Proceeds Offer at
a price equal to 110% of their aggregate principal amount plus accrued and
unpaid interest thereon, if any, to the date of redemption; provided, however,
that at least 60% of the aggregate principle amount of securities originally
issued must remain outstanding after any such redemption.
-5-
148
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. Securities in denominations of
$1,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the redemption
date, interest will cease to accrue on Securities or portions thereof called for
redemption.
7. Change of Control Offer.
Upon the occurrence of a Change of Control, the Company will be
required to offer to purchase all of the outstanding Securities at a purchase
price equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of repurchase.
8. Limitation on Disposition of Assets.
The Company is subject to certain conditions, obligated to make an
offer to purchase Securities at 100% of their principal amount plus accrued and
unpaid interest to the date of repurchase with certain net cash proceeds of
certain sales or other dispositions of assets in accordance with the Indenture.
9. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
-6-
149
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
11. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for one year, the Trustee and the Paying Agents will repay the funds to the
Company at its request. After that, all liability of the Trustee and such Paying
Agents with respect to such funds shall cease.
12. Legal Defeasance and Covenant Defeasance.
The Company may be discharged from its obligations under the
Indenture, the Security Documents and the Securities except for certain
provisions thereof ("Legal Defeasance"), and may be discharged from its
obligations to comply with certain covenants contained in the Indenture, the
Security Documents and the Securities ("Covenant Defeasance"), in each case upon
satisfaction of certain conditions specified in the Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Security Documents
or the Securities may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without notice
to or consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Securities to, among other things, cure any ambiguity, defect
or inconsistency, provide for uncertificated Securities in addition to or in
place of certificated Securities or comply with any requirements of the SEC in
connection with the qualification of the Indenture under the TIA, or make any
other change that does not materially adversely affect the rights of any Holder
of a Security.
14. Restrictive Covenants.
The Indenture will contain certain covenants that, among other
things, limit the ability of the Company and its subsidiaries to make restricted
payments, to incur indebtedness, to create liens, to issue preferred or other
capital stock of subsidiaries, to sell assets, to permit restrictions on
dividends and other payments by subsidiaries to the Company,
-7-
150
to consolidate, merge or sell all or substantially all of its assets, to engage
in transactions with affiliates or to engage in certain businesses. The
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest, including an accelerated
payment) if it determines that withholding notice is in their interest.
16. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
17. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
-8-
151
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
HarCor Energy, Inc., Five Post Oak Park, Suite 2220, 4400 Oak Park, Houston,
Texas 77027-3413, Attn: Chief Financial Officer.
-9-
152
[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]
GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture (the
"Indenture") referred to in the Security upon which this notation is endorsed
and each hereinafter referred to as a "Subsidiary Guarantor," which term
includes any successor person under the Indenture) have unconditionally
guaranteed on a senior basis (such guarantee by each Subsidiary Guarantor being
referred to herein as the "Guarantee") (i) the due and punctual payment of the
principal of and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and interest, if any, on the Securities, to the extent lawful,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms set forth in Article
Twelve of the Indenture and (ii) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, that the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise.
No stockholder, officer, director or incorporator, as such, past,
present or future, of any Subsidiary Guarantor shall have any liability under
the Guarantee by reason of his or its status as such stockholder, officer,
director or incorporator.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Securities upon which the Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
SUBSIDIARY GUARANTORS:
WARRIOR, INC.
By:
-----------------------------------
Name:
Title:
Attest:
-----------------------------
153
HTAC INVESTMENTS, INC.
By:
-----------------------------------
Name:
Title
Attest:
-------------------------------
-2-
154
ASSIGNMENT FORM
I or we assign and transfer this Security to
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee)
_______________________________________________________________________________
(Insert Social Security or other identifying number of assignee)
and irrevocably appoint _______________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: __________________ Signed: ____________________
(Sign exactly as
name appears on the
other side of this
Security)
Signature Guarantee: _________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
155
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Sections 4.16, 4.17, 4.20 or 4.21 of the Indenture, check the
appropriate box:
Section 4.16 / / Section 4.17 / /
Section 4.20 / / Section 4.21 / /
If you want to elect to have only part of this Security purchased by
the Company pursuant to Sections 4.16, 4.17, 4.20 or 4.21 of the Indenture,
state the amount: $
Date: _____________________________ Your Signature: ___________________________
(Sign exactly as
your name appears
on the other side
of this Security)
Signature Guarantee: _________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
156
EXHIBIT B
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Security authenticated and delivered hereunder shall bear
a legend (which would be in addition to any other legends required in the case
of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE
DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
157
EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 14 7/8% Senior Secured Notes due 2002, (the "Securities") of Harcor
Energy, Inc.
This Certificate relates to ____ Securities held in* ___ book-entry
or* _______ certificated form by ______ (the "Transferor").
The Transferor:*
/ / has requested that the Registrar by written order to deliver in
exchange for its beneficial interest in the Global Security held by the
Depositary a Security or Securities in definitive, registered form of authorized
denominations and an aggregate number equal to its beneficial interest in such
Global Security (or the portion thereof indicated above); or
/ / has requested that the Registrar by written order to exchange or
register the transfer of a Security or Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.16 of such Indenture,
and that the transfer of this Securities does not require registration under the
Securities Act of 1933, as amended (the "Act") because[*]:
/ / Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16(a)(y)(A) or Section
2.16(d)(i)(A) of the
Indenture).
/ / Such Security is being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Act), in reliance on Rule 144A or in
accordance with Regulation S under the Act.
/ / Such Security is being transferred in accordance with Rule 144
under the Act.
158
-2-
/ / Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act, other than Rule
144A or Rule 144 or Regulation S under the Act. An opinion of counsel to the
effect that such transfer does not require registration under the Act
accompanies this Certificate.
--------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
-----------------------------------
Date:
--------------
*Check applicable box.
159
EXHIBIT D
Transferee Letter of Representation
Harcor Energy, Inc.
Five Post Oak Park
4400 Post Oak Parkway
Suite 2220
Houston, Texas 77027-3413
Ladies and Gentlemen:
In connection with our proposed purchase of 14 7/8% Senior Secured
Notes due 2002, (the "Securities") of Harcor Energy, Inc. (the "Company") we
confirm that:
1. We understand that the Securities have not been registered under
the Securities Act of 1933, as amended (the "Securities Act") and, unless
so registered, may not be sold except as permitted in the following
sentence. We agree on our own behalf and on behalf of any investor account
for which we are purchasing Securities to offer, sell or otherwise
transfer such Securities prior to the date which is three years after the
later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Securities, or any
predecessor thereto (the "Resale Restriction Termination Date") only (a)
to the Company, (b) pursuant to a registration statement which has been
declared effective under the Securities Act, (c) so long as the Securities
are eligible for resale pursuant to Rule 144A, under the Securities Act,
to a person we reasonably believe is a qualified institutional buyer under
Rule 144A (a "QIB") that purchases for its own account or for the account
of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) pursuant to offers and sales that occur outside
the United States within the meaning of Regulation S under the Securities
Act, (e) to an institutional "accredited investor" within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act
that is purchasing for his own account or for the account of such an
institutional "accredited investor," or (f) pursuant to any other
available exemption from the registration requirements of the Securities
Act, subject in each of the foregoing cases to any requirement of law that
the disposition of our property or the property of such investor account
or accounts be at all times within our or their control and to compliance
160
-2-
with any applicable state securities laws. The foregoing restrictions on
resale will not apply subsequent to the Resale Restriction Termination
Date. If any resale or other transfer of the Securities is proposed to be
made pursuant to clause (e) above prior to the Resale Restriction
Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the registrar under
the Indenture pursuant to which the Securities were issued (the
"Registrar") which shall provide, among other things, that the transferee
is an institutional "accredited investor" within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act
and that it is acquiring such Securities for investment purposes and not
for distribution in violation of the Securities Act. The Registrar and the
Company reserve the right prior to any offer, sale or other transfer prior
to the Resale Restriction Termination Date of the Securities pursuant to
clause (e) or (f) above to require the delivery of a written opinion of
counsel, certifications, and or other information satisfactory to the
Company and the Registrar.
2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
purchasing for our own account or for the account of such an institutional
"accredited investor," and we are acquiring the Securities for investment
purposes and not with a view to, or for offer or sale in connection with,
any distribution in violation of the Securities Act and we have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able
to bear the economic risk of our or its investment for an indefinite
period.
3. We are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each of which we exercise sole
investment discretion.
4. You and your counsel are entitled to rely upon this letter and
you are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
161
-3-
Very truly yours,
--------------------------------------
(Name of Purchaser)
By:
-----------------------------------
Date:
---------------------------------
Upon transfer the Securities would be registered in the name of the
new beneficial owner as follows:
Name:
------------------------------
Address:
---------------------------
Taxpayer ID Number:
----------------
162
EXHIBIT E
CUSIP NO. _____
HarCor Energy, Inc.
65,000 Units
consisting of
14 7/8% Senior Secured Notes due 2002
and
Warrants to Purchase Shares of Common Stock
THIS GLOBAL UNIT IS COMPRISED OF THE ATTACHED GLOBAL NOTE AND GLOBAL WARRANT.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501 (A)(1), (2), (3) OR (7) PROMULGATED UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO HARCOR ENERGY, INC. (THE "COMPANY") OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A PROMULGATED UNDER THE SECURITIES ACT, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHED (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO
THE TRUSTEE AND THE WARRANT AGENT A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 PROMULGATED UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 PROMULGATED
163
-2-
UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE, THE WARRANT AGENT AND THE COMPANY SUCH
CERTIFICATIONS, WRITTEN LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE AND
WARRANT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY
IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE AND THE WARRANT AGREEMENT, AND NO TRANSFER OF THIS SECURITY (OTHER
THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF
THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE AND THE WARRANT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.