1
EXECUTION COPY
================================================================================
MESA OPERATING CO.
As Issuer
MESA INC.
As a Guarantor
11 5/8% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2006
__________________
INDENTURE
Dated as of July 2, 1996
__________________
__________________
HARRIS TRUST AND SAVINGS BANK
As Trustee
__________________
================================================================================
2
CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.3
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6; 12.2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3; 12.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3-10.5
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.5
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5; 12.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316 (a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.12
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1
3
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1
- ---------------------
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
4
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 1.3. Incorporation By Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . 23
Section 1.4. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 2
THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.1. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.2. Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.3. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.4. Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.5. Holder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.6. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.7. Replacement Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.8. Outstanding Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.9. Treasury Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.10. CUSIP Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.13. Book-Entry Provisions for Global Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 3
REDEMPTION AND PREPAYMENT . . . . . . . . . . . . . . . . . . . . . 31
Section 3.1. Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.2. Selection of Notes to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.3. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 3.4. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 3.5. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 3.6. Notes Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 3.7. Optional Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 3.8. Mandatory Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
i
5
Page
Section 3.9. Offer to Purchase By Application of Excess Proceeds . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 4
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.1. Payment of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.2. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.3. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.4. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.5. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.6. Stay, Extension and Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 4.7. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 4.8. Dividend and Other Payment Restrictions Affecting Subsidiaries . . . . . . . . . . . . . . 43
Section 4.9. Incurrence of Indebtedness and Issuance of Disqualified Stock . . . . . . . . . . . . . . . 44
Section 4.10. Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 4.11. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 4.12. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 4.13. Offer to Repurchase Upon Change of Control . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 4.14. Additional Subsidiary Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 4.15. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.16. No Senior Subordinated Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.17. Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 5
SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.1. Merger, Consolidation, or Sale of Substantially All Assets . . . . . . . . . . . . . . . . 53
Section 5.2. Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 6
DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.2. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.3. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.4. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 6.5. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 6.6. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ii
6
Page
Section 6.7. Rights of Holders of Notes to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . 59
Section 6.8. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 6.9. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE 7
TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 7.1. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 7.2. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 7.3. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.4. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.5. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.6. Reports by Trustee to Holders of the Notes . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.7. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.8. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 7.9. Successor Trustee by Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.11. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE . . . . . . . . . . . . . . . . . . 67
Section 8.1. Option to Effect Legal Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . 67
Section 8.2. Legal Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 8.3. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 8.4. Conditions to Legal or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 8.5. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.6. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.7. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . 72
Section 9.1. Without Consent of Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
iii
7
Page
Section 9.2. With Consent of Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 9.3. Compliance with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 9.4. Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 9.5. Notation on or Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 9.6. Trustee to Sign Amendment, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE 10
SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 10.1. Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 10.2. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 10.3. Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 10.4. Default on Designated Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 10.5. Acceleration of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 10.6. When Distribution Must Be Paid Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 10.7. Notice by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 10.8. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 10.9. Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 10.10. Subordination May Not Be Impaired by Company . . . . . . . . . . . . . . . . . . . . . . . 83
Section 10.11. Payment, Distribution or Notice to Representative . . . . . . . . . . . . . . . . . . . . . 84
Section 10.12. Rights of Trustee and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 10.13. Authorization to Effect Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 10.14. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 10.15. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
ARTICLE 11
THE GUARANTEES . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 11.1. The Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 11.2. Execution and Delivery Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 11.3. Parent and Subsidiary Guarantors May Consolidate, etc., on Certain Terms . . . . . . . . . 87
Section 11.4. Releases of Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 11.5. Limitation on Subsidiary Guarantor Liability . . . . . . . . . . . . . . . . . . . . . . . 89
Section 11.6. "Trustee" to Include Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 11.7. Subordination of Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
ARTICLE 12
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 90
iv
8
Page
Section 12.1. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 12.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 12.3. Communication by Holders of Notes with Other Holders of Notes . . . . . . . . . . . . . . . 92
Section 12.4. Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . . . 92
Section 12.5. Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . . 92
Section 12.6. Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 12.7. No Personal Liability of Directors, Officers, Employees and Stockholders . . . . . . . . . 93
Section 12.8. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 12.9. No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . . . . . . . . . 93
Section 12.10. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 12.11. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Section 12.12. Counterpart Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Section 12.13. Table of Contents, Headings, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF LEGEND FOR GLOBAL NOTE
Exhibit C FORM OF GUARANTEE
v
9
INDENTURE dated as of July 2, 1996 among Mesa Operating Co., a
Delaware corporation (the "Company"), as issuer, MESA INC., a Texas Corporation
(the "Parent"), as a guarantor and Harris Trust and Savings Bank, as trustee
(the "Trustee").
The Company, the Parent and the Trustee agree as follows for
the benefit of each other and for the equal and ratable benefit of the Holders
of the 11 5/8% Senior Subordinated Discount Notes due 2006 of the Company (the
"Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1. Definitions.
"Accreted Value" with respect to any Note means, as of the
date of issuance of the Notes, 56.855% of the offering price of the stated
principal amount of such Note, and as of any date after such date of issuance
and prior to July 1, 2001 as of which the Accreted Value is being calculated
(the "Accreted Value Calculation Date") (a) if the Accreted Value Calculation
Date is a January 1 or July 1 interest payment date, the percentage of the
stated principal amount of such Note as of such date as shown in the table
below or (b) if the Accreted Value Calculation Date is not a January 1 or July
1, an amount equal to the sum of (i) the Accreted Value of such Note as of the
January 1 or July 1, as the case may be, immediately preceding the Accreted
Value Calculation Date, plus (ii) the accrued amortization of the original
issue discount from (but excluding) such immediately preceding January 1 or
July 1 to (and including) the Accreted Value Calculation Date, calculated as
the product of (x) 5.8125% of annual coupon rate of the Accreted Value of such
Note as of such immediately proceeding January 1 or July 1 and (y) a fraction,
the numerator of which is the number of days from (but excluding) such
immediately preceding January 1 or July 1 to (and including) the Accreted Value
Calculation Date (assuming a 360-day year of twelve 30-day months), and the
denominator of which is 180. The Accreted Value of each Note as of each
January 1 and July 1 prior to July 1, 2001 shall be an amount in dollars equal
to a percentage of the stated principal amount of such Note as set forth below:
January 1 July 1
Payment Date Payment Date
------------ ------------
1997 60.141% 63.636%
1998 67.335% 71.249%
1999 75.390% 79.772%
2000 84.409% 89.315%
2001 94.507% 100.000%
On and after July 1, 2001, the Accreted Value of each Note
shall be equal to 100% of the stated principal amount thereof.
10
2
"Acquired Debt" means, with respect to any specified Person or
any Subsidiary of such Person (i) Indebtedness of any other Person existing at
the time such other Person is merged with or into or became a Subsidiary of
such specified Person, including, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other Person merging with or into
or becoming a Subsidiary of such specified Person, and (ii) Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the voting securities of a
Person shall be deemed to be control; further provided, however, that in no
event shall any limited partner of DNR that is a beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of less than 10% of the aggregate
voting power of the Capital Stock of the Company or the Parent be deemed to be
an Affiliate of the Company or the Parent.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition (but excluding the creation of a Lien) by the Company or any of its
Restricted Subsidiaries of any assets including, without limitation, by way of
a sale and leaseback; provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole shall be governed by Sections 4.13 and/or 5.1
hereof and not by Section 4.10 hereof), and (ii) the issue or sale by the
Company or any of its Restricted Subsidiaries of Equity Interests of any of the
Company's Subsidiaries (including the sale by a Restricted Subsidiary of Equity
Interests in an Unrestricted Subsidiary), in the case of either clause (i) or
(ii), whether in a single transaction or a series of related transactions (a)
that have a fair market value in excess of $5.0 million or (b) for net proceeds
in excess of $5.0 million. Notwithstanding the foregoing, the following shall
not be deemed to be Asset Sales: (1) a transfer of assets by the Company to a
Restricted Subsidiary of the Company or by a Restricted Subsidiary of the
Company to the Company or to another Restricted Subsidiary of the Company (in
the case of a transfer to a Subsidiary that is not a Wholly Owned Restricted
Subsidiary, transfers will be excluded from this definition only to the extent
of the Company's or the Restricted Subsidiary's interest in such Subsidiary
after giving effect to such transfer), (2) an issuance of Equity Interests by a
Restricted Subsidiary of the Company to the Company or to another Restricted
Subsidiary of the Company (in the case of an issuance of Equity Interests to a
Subsidiary that is not a Wholly Owned Restricted Subsidiary, issuances will be
excluded from this definition only to the extent of the Company's or the
Restricted Subsidiary's interest in such Subsidiary after giving effect to such
issuance), (3) a Permitted Investment or a Restricted Payment that is permitted
by Section 4.7, (4) the abandonment, farm-out, lease or sublease of undeveloped
oil and gas properties in the ordinary course of business, (5) the trade or
exchange by the Company or any Restricted Subsidiary of the Company of any oil
and gas property owned
11
3
or held by the Company or such Restricted Subsidiary for any oil and gas
property owned or held by another Person, which the Board of Directors of the
Company determines in good faith to be of approximately equivalent value, (6)
the sale or transfer of hydrocarbons or other mineral products or other
inventory or surplus or obsolete equipment in the ordinary course of business
or (7) sale of hydrocarbons pursuant to Permitted Marketing Obligations.
"Attributable Debt" in respect of a sale and leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
(including any period for which such lease has been extended to the extent the
lease payments during such extension period are required to be capitalized on a
balance sheet in accordance with GAAP).
"Bankruptcy Code" means Title 11 of the United States Code,
as amended.
"Board of Directors" means the Board of Directors of the
Company or the Parent, as applicable, or any authorized committee of such Board
of Directors.
"Borrowing Base" means, as of any date, the aggregate amount
of borrowing availability as of such date under all Credit Facilities that
determine availability on the basis of a borrowing base or other asset-based
calculation, provided that in no event shall the Borrowing Base exceed $600.0
million.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of
a capital lease that would at such time be required to be capitalized on a
balance sheet in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii)
securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof having maturities of
not more than six months from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any lender party to the
Credit Agreement or with any domestic commercial bank having capital and
surplus in excess of $500 million and a Thompson Bank Watch Rating of "B" or
better, (iv) repurchase obligations with a term of not more than seven days for
12
4
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications
specified in clause (iii) above, (v) commercial paper having a rating of at
least P1 from Moody's or a rating of at least A1 from S&P and (vi) money market
mutual or similar funds having assets in excess of $100,000,000.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole or the Parent and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act) other than a Permitted Investor, (ii) the adoption by the shareholders of
the Company or the Parent of a plan relating to the liquidation or dissolution
of the Company or the Parent, (iii) after no shares of the Series B Preferred
Stock remain outstanding (a) Continuing Directors cease for any reason to
constitute a majority of the members of the Board of Directors of the Company
or the Parent for a period of two consecutive years or (b) an event or series
of events by which any person or other entity, other than a Permitted Investor,
or any group of Persons or other entities acting in concert as a partnership or
other group, other than a group of Permitted Investors, shall, as a result of a
tender or exchange offer, open market purchases, privately negotiated
purchases, merger, consolidation or otherwise, have become the beneficial owner
(within the meaning of rule 13d-3 under the Exchange Act) of 35% or more of the
aggregate voting power of the then outstanding Capital Stock of the Parent
having the right to elect directors under ordinary circumstances.
"Closing Date" the date of the closing of the sale of the
Notes offered pursuant to the Offering.
"Commission" means the Securities and Exchange Commission.
"Consolidated Cash Flow" means, with respect to any Person for
any period, the Consolidated Net Income of such Person and its Restricted
Subsidiaries for such period plus (i) an amount equal to any extraordinary loss
plus any net loss realized in connection with an Asset Sale (together with any
related provision for taxes), to the extent such losses were included in
computing such Consolidated Net Income, plus (ii) provision for taxes based on
income or profits of such Person and its Restricted Subsidiaries for such
period, to the extent that such provision for taxes was included in computing
such Consolidated Net Income, plus (iii) consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation, amortization of original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Interest Rate Hedging Agreements), to the extent that any such expense was
included in computing such Consolidated Net Income, plus (iv) depreciation,
13
5
depletion and amortization expenses (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period) for such Person and its Restricted Subsidiaries for
such period to the extent that such depreciation, depletion and amortization
expenses were included in computing such Consolidated Net Income, plus (v)
exploration expenses for such Person and its Restricted Subsidiaries for such
period to the extent such exploration expenses were included in computing such
Consolidated Net Income, plus (vi) other non-cash charges (excluding any such
non-cash charge to the extent that it represents an accrual of or reserve for
cash charges in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its Restricted Subsidiaries
for such period to the extent that such other noncash charges were included in
computing such Consolidated Net Income, in each case, on a consolidated basis
and determined in accordance with GAAP. Notwithstanding the foregoing, the
provision for taxes on the income or profits of, and the depreciation,
depletion and amortization, exploration and other non-cash charges and expenses
of, a Restricted Subsidiary of the referent Person shall be added to
Consolidated Net Income to compute Consolidated Cash Flow only to the extent
(and in same proportion) that the Net Income of such Restricted Subsidiary was
included in calculating the Consolidated Net Income of such Person and only if
a corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Restricted Subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that
is not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof, (ii) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded and (iv) the cumulative effect of a change in accounting
principles shall be excluded. Notwithstanding the foregoing, for the purpose
of Section 4.8 only, there shall be excluded from Consolidated Net Income any
dividends or other distributions paid in cash by Unrestricted Subsidiaries to
the referent Person or a Restricted Subsidiary thereof to the extent such
dividend or other distributions increase the amount of Restricted Payments
pursuant to Subsection 4.8(c)(iv)(A).
"Consolidated Net Worth" means the total of the amounts shown
on the balance sheet of the Company and its consolidated Restricted
Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of
the end of the most recent fiscal quarter of the Company ending prior to the
taking of any action for the purpose of which the determination is being made
and for which financial statements are available (but in no event ending more
than 135 days prior to the taking of such action), as (i) the par or stated
value of all outstanding Capital Stock of the Company, plus (ii)
14
6
paid-in capital or capital surplus relating to such Capital Stock, plus (iii)
any retained earnings or earned surplus, less (a) any accumulated deficit and
(b) any amounts attributable to Disqualified Stock.
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of the Company or the Parent, as the case
may be, who (i) was a member of such Board of Directors immediately after the
first date on which no shares of Series B Preferred Stock were outstanding or
(ii) was nominated for election or elected to such Board of Directors with the
approval of (a) a majority of the Continuing Directors who were members of such
Board at the time of such nomination or election or (b) a majority of those
directors who were previously approved by Continuing Directors.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 12.2 hereof or such other
address as to which the Trustee may give notice to the Company.
"Credit Agreement" means that certain Credit Agreement, dated
as of July 2, 1996, by and among the Company, the Parent, The Chase Manhattan
Bank, N.A. as administrative agent and as a lender, Bankers Trust Company, as
syndication agent and as a lender, Societe Generale, Southwest Agency, as
documentation agent and as a lender, and certain other banks, financial
institutions and other entities, as lenders, providing for up to $525.0 million
of Indebtedness, including any related notes, letters of credit issued
thereunder, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, restated,
modified, renewed, refunded, increased, replaced or refinanced, in whole or in
part, from time to time, whether or not with the same lenders or agents.
"Credit Facilities" means one or more debt facilities
(including, without limitation, the Credit Agreement) or commercial paper
facilities with banks or other lenders providing for revolving credit loans,
term loans, production payment financing, receivables financing (including
through the sale of receivables to such lenders or to special purpose entities
formed to borrow from such lenders against such receivables) or letters of
credit, in each case, as amended, restated, modified, renewed, refunded,
increased, replaced or refinanced in whole or in part from time to time.
"Default" means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
"Depository" means, with respect to the Notes issued in the
form of one or more Global Notes, The Depository Trust Company or another
Person designated as Depository by the Company, which must be a clearing
agency registered under the Exchange Act.
"Designated Senior Debt" means (i) the Credit Agreement and
(ii) any other Senior Debt of the Company and its Subsidiaries permitted under
this Indenture the principal amount of
15
7
which is $25 million or more and that has been designated by the Company as
"Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, 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, (i) matures or
is mandatorily redeemable for cash, pursuant to a sinking fund obligation or
otherwise, or redeemable for cash at the option of the Holder thereof, in whole
or in part, on or prior to the date that is 91 days after the date on which the
Notes mature, or (ii) requires the payment of cash dividends or other cash
distributions on or prior to the date that is 91 days after the date on which
the Notes mature.
"DNR" means DNR-MESA Holdings, L.P., a Delaware limited
partnership.
"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 Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock) and,
with respect to any employee benefit plans, stock appreciation rights.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Debt" means Indebtedness of the Parent and its
Subsidiaries in existence after giving effect to the application of the
proceeds of the Recapitalization on the Closing Date, in an aggregate principal
amount not to exceed $12,900,000, together with all accrued and unpaid interest
thereon and all premiums payable with respect thereto until such amounts are
repaid.
"Fixed Charge Coverage Ratio" means with respect to any Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the Company or any of its Restricted Subsidiaries incurs, assumes, guarantees,
redeems or pays any Indebtedness (other than revolving credit borrowings) or
issues or redeems Disqualified Stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated but prior
to the date on which the calculation of the Fixed Charge Coverage Ratio is made
(the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption, guarantee or
redemption or payment of Indebtedness, or such issuance or redemption of
Disqualified Stock, as if the same had occurred at the beginning of the
applicable four-quarter reference period. In addition, for purposes of making
the computation referred to above, (i) acquisitions that have been made by the
Company or any of its Restricted Subsidiaries, including through mergers or
consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date (including, without limitation, any acquisition
to occur on the Calculation Date) shall be deemed to have occurred on the first
day of the four-quarter reference period and Consolidated Cash Flow for such
16
8
reference period shall be calculated without giving effect to clause (iii) of
the proviso set forth in the definition of Consolidated Net Income, (ii) the
net proceeds of Indebtedness incurred or Disqualified Stock issued by the
Company or any of its Restricted Subsidiaries pursuant to the first paragraph
of Section 4.9 hereof during the four-quarter reference period or subsequent to
such reference period and on or prior to the Calculation Date shall be deemed
to have been received by the Company or any such Restricted Subsidiary on the
first day of the four-quarter reference period and applied to its intended use
on such date, (iii) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded and (iv) the Fixed
Charges attributable to discontinued operations, as determined in accordance
with GAAP, and operations or businesses disposed of prior to the Calculation
Date, shall be excluded, but only to the extent that the obligations giving
rise to such Fixed Charges shall not be obligations of the referent Person or
any of its Restricted Subsidiaries following the Calculation Date.
"Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees incurred in respect of letter of credit
or bankers' acceptance financings; (ii) the consolidated interest expense of
such Person and its Restricted Subsidiaries that was capitalized during such
period, (iii) any interest expense on Indebtedness of another Person that is
guaranteed by such Person or any of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or any of its Restricted Subsidiaries (whether or
not such guarantee or Lien is called upon) and (iv) all cash dividend payments
(and non-cash dividend payments (unless paid in Equity Interests which are not
Disqualified Stock) in the case of a Person that is a Restricted Subsidiary) on
any series of preferred stock of such Person or any of its Restricted
Subsidiaries owned by Persons other than the Company or a Restricted
Subsidiary. For purposes of the definition of Fixed Charges, (i) interest on a
Capital Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by the Board of Directors of such Person (as evidenced by
a resolution of the Board of Directors of the Company) to be the rate of
interest implicit in such Capital Lease Obligation in accordance with GAAP,
(ii) interest on Indebtedness that is determined on a fluctuating basis shall
be deemed to have accrued at a fixed rate per annum equal to the rate of
interest of such Indebtedness in effect on the date Fixed Charges are being
calculated, subject to the proviso in clause (iii), (iii) interest on
Indebtedness that may optionally be determined at an interest rate based upon a
factor of a prime or similar rate, a eurocurrency interbank offered rate, or
other rate, shall be deemed to have been based upon the rate actually chosen,
or, if none, then based upon such optional rate chosen as the Company may
designate, (provided, that for the period following the date on which the rate
actually chosen ceases to be in effect, the Company may designate an optional
rate other than that actually chosen, which optional rate shall be deemed to
accrue at a fixed per annum equal to the rate of interest on such optional rate
in effect on the date Fixed Charges are being calculated) and (iv) Fixed
Charges shall be increased or reduced by the net cost (including amortization
of discount) or benefit associated with obligations under Interest Rate Hedging
Agreements attributable to such period.
17
9
"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 have been approved by a significant segment
of the accounting profession, which are in effect from time to time.
"Government Securities" means securities that are (a) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such
Government Security or a specific payment of principal of or interest on any
such Government Security held by such custodian for the account of the holder
of such depository receipt; provided, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian
in respect of the Government Security or the specific payment of principal of
or interest on the Government Security evidenced by such depository receipt.
"guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Guarantee" means each of the Guarantees of the Notes by the
Parent and Subsidiary Guarantors hereunder.
"Guarantors" means each of (i) the Parent, and (ii) any
Restricted Subsidiary of the Company that executes a Guarantee in accordance
with the provisions of this Indenture, and, in each case, their respective
successors and assigns.
"Holder" means a Person in whose name a Note is registered on
the Registrar's books.
"Indebtedness" means, with respect to any Person, without
duplication, (a) any indebtedness of such Person, whether or not contingent,
(i) in respect of borrowed money, (ii) evidenced by bonds, notes, debentures or
similar instruments, (iii) evidenced by letters of credit (or reimbursement
agreements in respect thereof) or banker's acceptances, (iv) representing
Capital Lease Obligations, (v) representing the balance deferred and unpaid of
the purchase price of any property, except any such balance that constitutes an
accrued expense or trade payable, (vi) representing any obligations in respect
of Interest Rate Hedging Agreements or Oil and Gas Hedging Contracts, and (vii)
in respect of any Production Payment, (b) all indebtedness of others of the
type referred to in clauses (a), (c), (d) or (e) secured by a Lien on any asset
of such Person (whether or not such indebtedness is assumed by such Person,
except that the amount of such indebtedness not
18
10
assumed shall be deemed to be the lesser of the value of such asset and the
amount of such indebtedness so secured), (c) obligations of such Person in
respect of production imbalances and (d) Attributable Debt of such Person, (e)
Acquired Debt of such Person and (f) to the extent not otherwise included in
the foregoing, the guarantee by such Person of any indebtedness of any other
Person, of the type referred to in the preceding clauses (a), (c), (d) or (e).
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Interest Rate Hedging Agreements" means, with respect to any
Person, the obligations of such Person under (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Investments" means, with respect to any Person, all
investments by such Person (including investments by such Person in Affiliates)
in the form of direct or indirect loans (including guarantees of Indebtedness
or other obligations, but excluding trade credit and other ordinary course
advances customarily made in the Oil and Gas Business), advances or capital
contributions (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP; provided that
the following shall not constitute Investments: (i) an acquisition of assets,
Equity Interests or other securities by the Company for consideration
consisting of Equity Interests (other than Disqualified Stock) in the Company,
(ii) Interest Rate Hedging Agreements entered into in accordance with the
limitations set forth in clause (h) of the definition of "Permitted
Indebtedness" set forth in Section 4.9 hereof and (iii) Oil and Gas Hedging
Contracts entered into in accordance with the limitations set forth in clause
(i) of the definition of "Permitted Indebtedness" set forth in Section 4.9
hereof and (iv) Permitted Marketing Transactions. If the Company or any
Restricted Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary of the Company (other
than MEV) such that, after giving effect to any such sale or disposition, such
Person is no longer a Subsidiary of the Company, 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 Equity Interests of such Subsidiary not sold or
disposed of.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York, the City of Chicago or at a place
of payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security
19
11
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Liquid Securities" means securities (i) of an issuer that is
not an Affiliate of the Company and (ii) that are publicly traded on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market;
provided, that securities meeting the requirements of clauses (i) and (ii)
above shall be treated as Liquid Securities from the date of receipt thereof
until the earlier of (x) the date on which such securities are sold or
exchanged for cash or cash equivalents and (y) 180 days following the date of
the closing of the Asset Sale in connection with which such Liquid Securities
were received. In the event such securities are not sold or exchanged for cash
or cash equivalents within such 180-day period, for purposes of determining
whether the transaction pursuant to which the Company or a Restricted
Subsidiary received the securities was in compliance with the provisions of
Section 4.10 hereof, such securities shall be deemed not to have been Liquid
Securities at any time.
"Material Restricted Subsidiary" means any Restricted
Subsidiary of the Company, which, as of the relevant date of determination,
would be a "significant subsidiary" as defined in Reg. Section 230.405
promulgated pursuant to the Securities Act as in effect on the date of issuance
of the Notes, assuming the Company is the "registrant" referred to in such
definition, except that the 10% amounts referred to in such definition shall be
deemed to be 5%.
"MEV" means Mesa Environmental Ventures Co. and its
Subsidiaries
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain or loss, together with any related provision for taxes on such gain or
loss, realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b)
the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain or
loss, together with any related provision for taxes on such extraordinary or
nonrecurring gain or loss.
"Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of Liquid Securities or any other any non-cash consideration
received in any Asset Sale, but excluding cash amounts placed in escrow, until
such amounts are released to the Company), net of the direct costs relating to
such Asset Sale (including, without limitation, legal, accounting and
investment banking fees and expenses, and sales commissions) and any relocation
expenses incurred as a result thereof, taxes paid or payable as a result
thereof (after taking into account any available tax credits or deductions and
any tax sharing arrangements), amounts paid to minority interest holders,
amounts required to be applied to the repayment of Indebtedness (other than
Indebtedness under any Credit Facility) secured by a Lien on
20
12
the asset or assets that were the subject of such Asset Sale and any reserve
for adjustment in respect of the sale price of such asset or assets established
in accordance with GAAP and any reserve established for future liabilities.
"Non-Recourse Debt" means Indebtedness (i) as to which neither
the Company nor any of its Restricted Subsidiaries (a) provides any guarantee
or credit support of any kind (including any undertaking, guarantee, indemnity
or agreement or instrument that would constitute Indebtedness) or (b) is
directly or indirectly liable (as a guarantor or otherwise); (ii) no default
with respect to which (including any rights that the holders thereof may have
to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of
the Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and (iii) the explicit terms of which provide
that there is no recourse against any of the assets of the Company or its
Restricted Subsidiaries.
"Note Custodian" means the Trustee or the Registrar, as
custodian with respect to the Notes in global form, or any successor entity
thereto or any entity acting as custodian with respect to Notes in global form.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness and with respect to Obligations
under the Credit Agreement, includes "Obligations" as defined therein.
"Offering" means the offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary, the Assistant Secretary or any Vice-President of
such Person.
"Officers' Certificate" means a certificate signed on behalf
of the Company, by two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Company, that meets the requirements of
Section 12.5 hereof.
"Oil and Gas Business" means (i) the acquisition, exploration,
exploitation, development, operation and disposition of interests in oil, gas
and other hydrocarbon properties, (ii) the gathering, marketing, treating,
processing, storage, selling and transporting of any production from such
interests or properties, (iii) any business relating to or arising from
exploration for or development, production, treatment, processing, storage,
transportation or marketing of oil, gas and other minerals and products
produced in association therewith and (iv) any activity that is ancillary or
necessary or desirable to facilitate the activities described in clauses (i)
through (iii) of this definition.
21
13
"Oil and Gas Hedging Contracts" means any oil and gas purchase
or hedging agreement, and other agreement or arrangement, in each case, that is
designed to provide protection against oil and gas price fluctuations.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of Section
12.5 hereof. The counsel may be an employee of or counsel to the Company, the
Parent, any Subsidiary Guarantor or the Trustee.
"Pari Passu Indebtedness" means indebtedness which ranks pari
passu in right of payment to the Notes, including the Senior Subordinated
Notes.
"Permitted Business Investments" means investments made in the
ordinary course of, and of a nature that is or shall have become customary in,
the Oil and Gas Business as a means of actively exploiting, exploring for,
acquiring, developing, processing, gathering, marketing or transporting oil and
gas through agreements, transactions, interests or arrangements which permit
one to share risks or costs, comply with regulatory requirements regarding
local ownership or satisfy other objectives customarily achieved through the
conduct of Oil and Gas Business jointly with third parties, including, without
limitation, (i) ownership interests in oil and gas properties, processing
facilities, gathering systems or ancillary real property interests and (ii)
Investments in the form of or pursuant to operating agreements, processing
agreements, farm-in agreements, farm-out agreements, development agreements,
area of mutual interest agreements, unitization agreements, pooling agreements,
joint bidding agreements, service contracts, joint venture agreements,
partnership agreements (whether general or limited), limited liability company
agreements, subscription agreements, stock purchase agreements and other
similar agreements with third parties.
"Permitted Investments" means (a) any Investment in the
Company or in a Restricted Subsidiary of the Company; (b) any Investment in
Cash Equivalents or securities issued or directly and fully guaranteed or
insured by the United States government or any agency or instrumentality
thereof having maturities of not more than one year from the date of
acquisition; (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person if, as a result of such Investment and any related
transactions that at the time of such Investment are contractually mandated to
occur, (i) such Person becomes a Restricted Subsidiary of the Company or (ii)
such Person is merged, consolidated or amalgamated with or into, or transfers
or conveys all or substantially all of its assets to, or is liquidated into,
the Company or a Restricted Subsidiary of the Company; (d) any Investment made
as a result of the receipt of non-cash consideration from an Asset Sale that
was made pursuant to and in compliance with Section 4.10 hereof; (e) other
Investments having an aggregate fair market value (measured on the date each
such Investment was made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to this
clause (e) that are at the time outstanding (net of repayments, dividends and
distributions received with respect to such Investments), not to exceed $37.5
million; (f) Permitted Business Investments; (g) any Investment acquired by the
Company in exchange for Equity Interests in the Company or the Parent (other
than Disqualified Stock); (h) Investments in Unrestricted Subsidiaries with net
cash proceeds contributed to the common equity capital of the Company or a
Restricted Subsidiary since the date of this Indenture, provided that the
amount of any
22
14
such net cash proceeds that are used for any such Investment shall be excluded
from clause (c)(ii) of the first paragraph of Section 4.7 hereof and (i)
Investments received in connection with any good faith settlement of a
bankruptcy proceeding.
"Permitted Investor" means any Person who is or was (i) a
holder of Shares of the Series B Preferred Stock or (ii) an Affiliate of a
Person described in the immediately preceding clause (i).
"Permitted Liens" means (i) Liens securing Senior Debt under
the Credit Agreement, (ii) Liens securing Indebtedness of a Subsidiary and
Liens securing Senior Debt, in each case, that is outstanding on the date of
issuance of the Notes (after giving effect to the Recapitalization and the use
of the proceeds therefrom) and Liens securing Senior Debt that is permitted by
the terms of the Indentures to be incurred, (iii) Liens in favor of the Company
or any Restricted Subsidiary, (iv) Liens on property or assets existing at the
time of acquisition thereof by the Company or any Subsidiary of the Company and
Liens on property or assets of a Subsidiary existing at the time it became a
Subsidiary; provided, that such Liens were in existence prior to the
contemplation of the acquisition and do not extend to any property or assets
other than the acquired property or assets or the property or assets of the
acquired Subsidiary, (v) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment insurance or
other kinds of social security, or to secure the payment or performance of
tenders, statutory or regulatory obligations, surety or appeal bonds, bids,
leases, government contracts and other contracts (other than for borrowed
money), performance and return-of-money bonds or other obligations of a like
nature incurred in the ordinary course of business (including, without
limitation, lessee or operator obligations under statutes, governmental
regulations or instruments related to the ownership, exploration and production
of oil, gas and minerals on state or federal lands or waters), (vi) Liens
existing on the date of the Indentures (after giving effect to the
Recapitalization and the use of proceeds therefrom), (vii) Liens for taxes,
assessments and governmental charges and claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided, that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor, (viii) statutory liens of landlords, mechanics, suppliers,
vendors, warehousemen, carriers and other like Liens arising in the ordinary
course of business, (ix) pre-judgment Liens and judgment Liens not giving rise
to an Event of Default so long as any appropriate legal proceeding that may
have been duly initiated for the review of such judgment shall not have been
finally terminated or the period within which such proceeding may be initiated
shall not have expired, (x) Liens on, or related to, properties or assets to
secure all or part of the costs incurred in the ordinary course of the Oil and
Gas Business for the exploration, drilling, development, production,
processing, transportation, marketing or storage or operation thereof and to
support trade letters of credit and bankers' acceptances issued or created in
the ordinary course of business, (xi) Liens encumbering pipelines or pipeline
facilities that arise under operation of law, (xii) 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 or natural gas, unitization and pooling
declarations and agreements, area of mutual interest agreements and other
agreements that are customary in the Oil and Gas Business, (xiii) Liens
reserved in oil and gas mineral leases for bonus and rental payments
23
15
and for compliance with the terms of such leases, (xiv) Liens constituting
survey exceptions, encumbrances, easements, and reservations of, and rights to
others for, rights-of-way, zoning and other restrictions as to the use of real
properties, and minor defects of title which, in the case of any of the
foregoing, do not secure the payment of borrowed money, and in the aggregate do
not materially adversely affect the value of the assets of the Company and its
Restricted Subsidiaries, taken as a whole, or materially impair the use of such
properties for the purposes for which such properties are held by the Company
or such Subsidiaries, (xv) Liens not otherwise permitted by clauses (i) through
(xiv) that are incurred in the ordinary course of business of the Company or
any Subsidiary of the Company with respect to obligations that do not exceed
$5.0 million at any one time outstanding, (xvi) Liens on assets of Unrestricted
Subsidiaries that secure Non-Recourse Debt of Unrestricted Subsidiaries, (xvii)
any interest or title of a lessor under any Capital Lease Obligation and
(xviii) purchase money Liens; provided, however, that (a) the related purchase
money Indebtedness shall not be secured by any property or assets of the
Company or any Restricted Subsidiary other than the property and assets so
acquired and the proceeds thereof and (b) the Lien securing such Indebtedness
shall be created no later than 10 days after such acquisition.
"Permitted Marketing Transaction" means (i) a transaction in
which the Company or any Subsidiary of the Parent either (a) establishes a
position using New York Mercantile Exchange Crude Oil or Natural Gas Futures
contracts to purchase hydrocarbons for future delivery to it or (b) purchases
or commits to purchase hydrocarbons for future delivery to it, and
contemporaneous with such purchase transaction either (1) establishes one or
more positions using New York Mercantile Exchange Crude Oil or Natural Gas
Futures contracts to resell at a date subsequent to such delivery date or (2)
enters into a contract with a Person to resell at a date subsequent to such
delivery date, a similar aggregate quantity and quality of hydrocarbons as so
purchased by the Company or such Subsidiary, as applicable, at an aggregate
price greater than the Indebtedness incurred for the hydrocarbons so purchased
by the Company or such Subsidiary or (ii) any other purchase by the Company or
any Subsidiary of the Parent of hydrocarbons for which the Company or such
Subsidiary has contracts to sell.
"Permitted Refinancing Debt" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness (other than Indebtedness incurred under a Credit
Facility) of the Company or any of its Restricted Subsidiaries; provided that:
(i) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Debt does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded, plus the amount of premiums and prepayment penalties and
other amounts required to be paid to the holders of such Indebtedness in
connection therewith and reasonable fees and expenses incurred in connection
therewith; (ii) such Permitted Refinancing Debt has a final maturity date on or
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Notes, such Permitted Refinancing Debt has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the Notes
at least to the same
24
16
extent as the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by the
Company or by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock" means the collective reference to the Series
A Preferred Stock and the Series B Preferred Stock.
"Production Payments" means Dollar-Denominated Production
Payments and Volumetric Production Payments, collectively.
"Recapitalization" means the use of the net proceeds by the
Parent and the Company from (i) the sale of the Notes and the Senior
Subordinated Notes, (ii) the credit facility pursuant to the Credit Agreement,
(iii) the sale of the Series B Preferred Stock pursuant to the Stock Purchase
Agreement and (iv) the sale of the Series A Preferred Stock pursuant to the
Rights Offering along with cash and investment balances of the Parent and the
Company to repay and/or refinance substantially all of the Parent's, the
Company's and their respective Subsidiaries' outstanding Indebtedness.
"Repurchase Offer" means an offer made by the Company to
purchase all or any portion of a Holder's Notes pursuant to Section 4.10 or
4.13 hereof.
"Responsible Officer" when used with respect to the Trustee,
means any officer within the Corporate Trust Department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Subsidiary" means any direct or indirect
Subsidiary of the Company that is not an Unrestricted Subsidiary.
"Rights Offering" means the rights offering by the Parent
whereby it will distribute to holders of its common stock transferrable rights
to purchase a pro rata portion of approximately 58,400,000 shares of Series A
Preferred Stock.
"S&P" means Standard & Poor's Ratings Group and its
successors.
"Securities Act" means the Securities Act of 1933, as amended.
25
17
"Senior Subordinated Notes" means the 10 5/8% Senior
Subordinated Notes issued by the Company due July 1, 2006.
"Senior Subordinated Notes Indenture" means the Indenture
dated as of July 2, 1996 among the Company, the Parent and Harris Trust and
Savings Banks, as trustee, pursuant to which the Senior Subordinated Notes were
issued, as the same may be amended, supplemented or otherwise modified from
time to time.
"Series A Preferred Stock" means the Series A 8% Cumulative
Convertible Preferred Stock of the Parent.
"Series B Preferred Stock" means the Series B 8% Cumulative
Convertible Preferred Stock of the Parent.
"Standby Commitment" means the standby commitment provided by
DNR pursuant to which it will purchase additional shares of Series B Preferred
Stock equal to the number of shares of Series A Preferred Stock, if any, not
purchased in the Rights Offering.
"Stated Price" means, with respect to any Note as of any date
of determination, (i) the Accreted Value thereof on the date of determination,
if such date is on or prior to July 1, 2001 or (ii) 100% of the principal
amount thereof plus accrued but unpaid interest thereon to the date of
determination, if such date is after July 1, 2001, and in the cases, and only
the cases, of an optional redemption effected pursuant to the provisions of
Sections 3.7 and 4.13, the premium (if any) payable pursuant to such Sections,
as applicable.
"Stock Purchase Agreement" means the Stock Purchase Agreement
dated April 26, 1996 between the Parent and DNR, as the same may be amended,
supplemented, or otherwise modified from time to time.
"Subordinated Indebtedness" means any Indebtedness of the
Company or any Restricted Subsidiary (whether outstanding on the date of the
issuance of the Notes or thereafter incurred) which is subordinate or junior in
right of payment to the Notes pursuant to a written agreement.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).
26
18
"Subsidiary Guarantors" means any Restricted Subsidiary of the
Company that executes a Guarantee in accordance with the provisions of this
Indenture and any successor or assign of such Subsidiary that becomes obligated
under any Guarantee pursuant to this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.
"Total Assets" means, with respect to the Company, the total
consolidated assets of the Company and its Restricted Subsidiaries, as shown on
the most recent balance sheet of the Company.
"Trustee" means the party named as such in the preamble to
this Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company which at the time of determination shall be an Unrestricted Subsidiary
(as designated by the Board of Directors of the Company, as provided below) and
(ii) any subsidiary of an Unrestricted Subsidiary. The Board of Directors of
the Company may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary or a Person becoming a Subsidiary through
merger or consolidation or Investment therein) to be an Unrestricted Subsidiary
only if: (a) such Subsidiary does not own any Capital Stock of, or own or hold
any Lien on any property of, any other Subsidiary of the Company which is not a
Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted
Subsidiary; (b) all the Indebtedness of such Subsidiary shall at the date of
designation, and will at all times thereafter consist of, Non-Recourse Debt;
(c) the Company certifies that such designation was permitted by Section 4.7;
(d) such Subsidiary, either alone or in the aggregate with all other
Unrestricted Subsidiaries, does not operate, directly or indirectly, all or
substantially all of the business of the Company and the Subsidiaries; (e) such
Subsidiary does not, directly or indirectly, own any Indebtedness of or Equity
Interest in, and has no Investments in, the Company or any Restricted
Subsidiary; (f) such Subsidiary is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (1) to subscribe for additional Equity Interests or (2) to maintain
or preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results; and (g) on the date such
Subsidiary is designated an Unrestricted Subsidiary, such Subsidiary is not a
party to any agreement, contract, arrangement or understanding with the Company
or any Restricted Subsidiary with terms substantially less favorable to the
Company than those that might have been obtained from Persons who are not
Affiliates of the Company and (h) the Board of Directors of the Company shall
have made a determination (as set forth in the resolution approving such
designation, creation or purchase) that the designation, creation and operation
of the Unrestricted Subsidiary is not reasonably expected to materially and
adversely affect the financial condition, business, or operations of the
Company and its Restricted Subsidiaries taken together as a whole (which
resolution shall be conclusive evidence of compliance with this provision).
Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a resolution of the Board
of Directors of the Company giving effect to such designation and an Officer's
Certificate certifying
27
19
that such designation complied with the foregoing conditions. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred as of such date. The Board of
Directors of the Company may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, that immediately after giving effect to such
designation, no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof and the Company could incur
at least $1.00 of additional Indebtedness (excluding Permitted Indebtedness)
pursuant to Section 4.9 on a pro forma basis taking into account such
designation.
"Volumetric Production Payments" means production payment
obligations recorded as deferred revenue in accordance with GAAP, together with
all undertakings and obligations in connection therewith.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means, with respect to
any Person, a Restricted Subsidiary of such Person, all of the outstanding
Capital Stock or other ownership interests of which (other than directors'
qualifying shares) are owned, directly or indirectly, by such Person or by one
or more Wholly Owned Restricted Subsidiaries of such Person.
Section 1.2. Other Definitions.
Defined in
Term Section
"Affiliate Transaction" . . . . . . . . . . . . . . . . . . . 4.11
"Asset Sale Offer" . . . . . . . . . . . . . . . . . . . . . . 3.9
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . . . . 10.2
"Change of Control Offer" . . . . . . . . . . . . . . . . . . 4.13
"Change of Control Payment" . . . . . . . . . . . . . . . . . 4.13
"Change of Control Payment Date" . . . . . . . . . . . . . . . 4.13
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Covenant Defeasance" . . . . . . . . . . . . . . . . . . . . 8.3
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
"DTC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . 6.1
"Excess Proceeds" . . . . . . . . . . . . . . . . . . . . . . 4.10
"Global Note Holder" . . . . . . . . . . . . . . . . . . . . . 2.1
28
20
"incur" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9
"Legal Defeasance" . . . . . . . . . . . . . . . . . . . . . . 8.2
"Notice of Default" . . . . . . . . . . . . . . . . . . . . . 6.1
"Offer Amount" . . . . . . . . . . . . . . . . . . . . . . . . 3.9
"Offer Period" . . . . . . . . . . . . . . . . . . . . . . . . 3.9
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Payment Blockage Notice" . . . . . . . . . . . . . . . . . . 10.4
"Payment Default" . . . . . . . . . . . . . . . . . . . . . . 6.1
"Permitted Indebtedness" . . . . . . . . . . . . . . . . . . . 4.9
"Purchase Date" . . . . . . . . . . . . . . . . . . . . . . . 3.9
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Restricted Payments" . . . . . . . . . . . . . . . . . . . . 4.7
"Senior Debt" . . . . . . . . . . . . . . . . . . . . . . . . 10.2
Section 1.3. Incorporation By Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee;
"obligor" with respect to the Notes means the Company and with
respect to the Guarantees means the Parent and any Subsidiary
Guarantor and any successor obligor upon the Notes and the Guarantees,
respectively.
All other terms used in this indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by rule enacted by
the Commission under the TIA have the meanings so assigned to them.
Section 1.4. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
29
21
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) references to sections of or rules under the
Securities Act shall be deemed to include substitute, replacement of
successor sections or rules adopted by the Commission from time to
time.
ARTICLE 2
THE NOTES
Section 2.1. Form and Dating.
The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Guarantees of the
Parent and the Subsidiary Guarantors, if any, shall be substantially in the
form of Exhibit C hereto, the terms of which are incorporated in and made part
of this indenture. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or usage. Each Note shall be dated the
date of its issuance and shall show the date of its authentication. The Notes
will be fully registered and only in denominations of $1,000 principal amount
(at maturity) and integral multiples of $1,000 in excess thereof.
The Notes offered and sold may be issued initially in the form
of one or more fully registered Global Notes, with, or on behalf of, The
Depository Trust Company and registered in the name of Cede & Co., as nominee
of the Depository (such nominee being referred to herein as the "Global Note
Holder"), or will remain in the custody of the Registrar pursuant to the Fast
Balance Certificate Agreement between the Depository and the Registrar and
shall bear the legend set forth as Exhibit B. Except as set forth in Section
2.6, the Global Notes may be transferred, in whole and not in part, only to
another nominee of the Depository or to a successor of the Depository or its
nominee.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company, Parent, any Subsidiary Guarantor and the Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms and provisions
and (as to the Trustee, to the extent such terms and provisions pertain to the
Trustee) to be bound thereby.
Notes issued in global form shall be substantially in the form
of Exhibit A attached hereto (including the legend on Exhibit B). Notes issued
in certificated form shall be substantially in the form of Exhibit A attached
hereto (but without including the legend on Exhibit B). Each Global Note shall
represent such of the outstanding Notes as shall be specified therein and each
shall provide that it shall represent the aggregate amount of outstanding Notes
from time to time endorsed
30
22
thereon and that the aggregate amount of outstanding Notes represented thereby
may from time to time be reduced or increased, as appropriate, to reflect
exchanges and redemptions. Any endorsement of a Global Note to reflect the
amount of any increase or decrease in the amount of outstanding Notes
represented thereby shall be made by the Trustee or the Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.6 hereof.
Section 2.2. Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes and
may be in facsimile form.
If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed
by two Officers, authenticate Notes for original issue up to the aggregate
principal amount (at maturity) of $264,000,000. The aggregate principal amount
(at maturity) of Notes outstanding at any time may not exceed $264,000,000,
except as provided in Section 2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes 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
or an Affiliate of the Company.
Section 2.3. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough
of Manhattan, The City of New York where (i) Notes may be presented for
registration of transfer or for exchange ("Registrar") and (ii) Notes may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Notes and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company shall notify the Trustee in writing
of the name and address of any Agent not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries
may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC")to act as Depository with respect to the Global Notes.
31
23
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.
Section 2.4. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent, including the
Trustee (who shall be deemed to have agreed by its execution of this
Indenture), to agree in writing that the Paying Agent shall hold in trust for
the benefit of Holders or the Trustee (unless the Paying Agent is the Trustee,
in which case it shall hold in trust for the Holders) all money held by the
Paying Agent for the payment of the Stated Price of or interest on the Notes,
and shall notify the Trustee of any default by the Company, the Parent or any
Subsidiary Guarantor in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it
to the Trustee. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent (if other than the Company, the Parent or a Subsidiary) shall have no
further liability for the money. If the Company, the Parent or a Subsidiary
acts as Paying Agent, it shall segregate and hold in a separate trust fund for
the benefit of the Holders all money held by it as Paying Agent. Upon any
bankruptcy or reorganization proceedings relating to the Company, the Parent or
a Subsidiary Guarantor, the Trustee shall serve as sole Paying Agent for the
Notes.
Section 2.5. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a).
If the Trustee is not the Registrar, the Company, the Parent and/or the
Subsidiary Guarantors shall furnish to the Trustee at least seven Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of Notes and the
Company, the Parent and the Subsidiary Guarantors shall otherwise comply with
TIA Section
312(a).
Section 2.6. Transfer and Exchange.
Subject to the provisions of Section 2.13, when Notes are
presented to the Registrar with a request to register the transfer of such
Notes or to exchange such Notes for an equal principal amount of Notes of other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transaction are met;
provided, however, that the Notes surrendered for transfer or exchange shall be
duly endorsed or accompanied by a written instrument of transfer duly executed
by the Holder thereof (or his attorney duly authorized in writing) in form
satisfactory to the Company and to the Registrar. In order to permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Notes at the Registrar's written request. No
service charge shall be made for any registration of transfer or exchange or of
redemption, but the Company may, by notice to the Trustee, 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
32
24
or transfers pursuant to Sections 2.2, 2.3, 3.6, 3.7(b) or 3.9). The Registrar
shall not be required to register the transfer of or exchange of any Note (i)
during a period beginning at the opening of business 15 days before the mailing
of a notice of redemption of Notes 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 Note being
redeemed in part.
Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and interest on such Notes, and
neither the Trustee, any Agent nor the Company shall be affected by notice to
the contrary.
Section 2.7. Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the
Trustee, upon the receipt of a written authentication order of the Company
signed by two Officers of the Company, shall authenticate a replacement Note if
the Trustee's requirements are met. If required by the Trustee or the Company,
an indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may
suffer if a Note is replaced. The Company and the Trustee may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
Section 2.8. Outstanding Notes.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.9 hereof, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.1 hereof, it ceases to be outstanding and interest on it ceases to
accrue. Notes will also cease to be outstanding for certain purposes hereunder
as provided in Article 8 hereof.
If the Paying Agent (other than the Company, the Parent, a
Subsidiary or an Affiliate of any thereof) holds, on a redemption date or
maturity date, money sufficient to pay the Stated Price
33
25
of Notes payable on that date, then on and after that date such Notes shall be
deemed to be no longer outstanding and shall cease to accrue interest.
Section 2.9. Treasury Notes.
In determining whether the Holders of the required principal
amount (at maturity) of Notes have concurred in any direction, waiver or
consent, Notes owned by the Company, the Parent, any Subsidiary Guarantor, or
by any Affiliate of the Company, the Parent or any Subsidiary Guarantor, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Trustee actually knows are
registered in the names of the Company, the Parent, any Subsidiary Guarantor or
any of their Affiliates or are certified as such by the Company in an Officer's
Certificate delivered to the Trustee shall be so disregarded.
When the Company, the Parent, any Subsidiary Guarantor or any
of their Affiliates repurchases or otherwise acquires Notes, the Company shall
notify the Trustee, in writing, of the aggregate principal amount of such Notes
so repurchased or otherwise acquired. The Trustee may require an Officer's
Certificate listing Notes owned by the Company, the Parent, any Subsidiary
Guarantor or any of their Affiliates.
Section 2.10. CUSIP Number.
The Company in issuing the Notes may 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 Notes and that reliance may be placed
only on the other identification numbers printed on the Notes.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be
delivered to the Company. The Company may not issue new Notes to replace Notes
that it has paid or that have been delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate
34
26
provided in the Notes and in Section 4.1 hereof. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Note and the date of the proposed payment. The Company shall fix or cause
to be fixed each such special record date and payment date, provided that no
such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. At least 15 days before the special
record date, the Company (or, upon the written request of the Company, the
Trustee in the name and at the expense of the Company) shall mail or cause to
be mailed to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid.
Section 2.13. Book-Entry Provisions for Global Notes.
(a) The Global Notes initially shall (i) be registered in the
name of Cede & Co., as the nominee of The Depository Trust Company, (ii) be
delivered to the Registrar as custodian for such Depository and (iii) bear
legends as set forth in Exhibit B.
(b) Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Note held on their behalf by the Depository, or the Registrar or the Trustee as
its custodian, or under the Global Note, 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 Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Note.
(c) Transfers of Global Notes 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 Notes may be
transferred or exchanged for Certificated Notes in accordance with the rules
and procedures of the Depository. In addition, Certificated Notes shall be
transferred to all beneficial owners in exchange for their beneficial interests
in Global Notes if (i) the Company notifies the Registrar that the Depository
is unwilling or unable to continue as Depository for any Global Note and a
successor Depository is not appointed by the Company within 90 days of such
notice or (ii) the Company, at its option, notifies the Registrar in writing
that it elects to cause the issuance of Notes in definitive form under the
Indenture or (iii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue Certificated
Notes.
(d) In connection with any transfer or exchange of a portion
of the beneficial interest in any Global Note to beneficial owners pursuant to
paragraph (c), the Registrar shall (if one or more Certificated Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the
Company shall execute, and the Trustee shall authenticate and deliver, one or
more Certificated Notes of like tenor and amount.
35
27
(e) In connection with the transfer of Global Notes as an
entirety to beneficial owners pursuant to the second sentence of paragraph (c),
the Global Notes 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 Notes, an equal aggregate principal
amount of Certificated Notes of authorized denominations.
(f) The Holder of any Global Note 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 Notes.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.1. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof, then it shall furnish to the
Trustee, at least 30 days but not more than 60 days before a redemption date,
an Officers' Certificate setting forth (i) the paragraph of the Notes and/or
Section of this Indenture pursuant to which the redemption shall occur, (ii)
the redemption date, (iii) the principal amount of Notes to be redeemed and
(iv) the redemption price.
Section 3.2. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed at any time,
selection of Notes for redemption shall be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which the Notes are listed, or, if the Notes are not so listed, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate;
provided that no Notes of $1,000 or less shall be redeemed in part. In the
event of partial redemption by lot, the particular Notes to be redeemed shall
be selected, unless otherwise provided herein, not less than 30 nor more than
60 days prior to the redemption date by the Trustee from the outstanding Notes
not previously called for redemption.
The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount (at maturity) thereof to be redeemed.
Notes and portions of Notes selected shall be in amounts of $1,000 principal
amount (at maturity) or whole multiples of $1,000; except that if all of the
Notes of a Holder are to be redeemed, the entire outstanding amount of Notes
held by such Holder, even if not a multiple of $1,000, shall be redeemed. A
new Note in principal amount (at maturity) equal to the unredeemed portion
thereof shall be issued in the name of the Holder thereof upon cancellation of
the original Note. On and after the redemption date, unless the Company
defaults in payment of the redemption price, interest ceases to accrete or
accrue, as the case may be, on Notes or portions of them called for redemption.
Except as provided in this Section 3.2, provisions of this
36
28
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption.
Section 3.3. Notice of Redemption.
Subject to the provisions of Section 3.9 hereof, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder of Notes to be redeemed at such Holder's registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of
the principal amount (at maturity) of such Note to be redeemed and
that, after the redemption date upon surrender of such Note, a new
Note or Notes having an Accreted Value (as of a specified date) and
principal amount (at maturity) equal to the unredeemed portion of the
Accreted Value (as of such specified date) and principal amount (at
maturity) thereof, respectively, shall be issued upon cancellation of
the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption cease to
accrete or accrue, as the case may be, on and after the redemption
date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(h) that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Notes.
At the Company's request and expense, the Trustee shall give
the notice of redemption in the Company's name; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.
37
29
Section 3.4. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.3 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.5. Deposit of Redemption Price.
On or prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest, if any, on all Notes to be redeemed
on that date. The Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the Company
in excess of the amounts necessary to pay the redemption price of and accrued
interest, if any, on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrete or
accrue, as the case may be, on the Notes or the portions of Notes called for
redemption. If a Note is redeemed on or after an interest record date but on
or prior to the related interest payment date, then any accrued and unpaid
interest shall be paid to the Person in whose name such Note was registered at
the close of business on such record date. If any Note called for redemption
shall not be so paid upon surrender for redemption because of the failure of
the Company to comply with the preceding paragraph, interest shall accrete or
be paid on the unpaid principal, from the redemption date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.1
hereof.
Section 3.6. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the receipt of a written authentication order of the
Company signed by two Officers of the Company, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note having an Accreted
Value (as of the redemption date) and principal amount (at maturity) equal to
the unredeemed portion of the Note surrendered.
Section 3.7. Optional Redemption.
(a) Except as set forth in clause (b) of this Section
3.7, the Company shall not have the option to redeem the Notes pursuant to this
Section 3.7 prior to July 1, 2001. From and after July 1, 2001, the Company
shall have the option to redeem the Notes, in whole or in part, at the
redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest thereon from July 1, 2001 to the
applicable redemption date, if redeemed during the twelve-month period
beginning on July 1 of each of the years indicated below:
38
30
Percentage of
Year Principal Amount
---- ----------------
2001 . . . . . . . . . . . . . . . . . . . . . . . . 105.813%
2002 . . . . . . . . . . . . . . . . . . . . . . . . . 103.875%
2003 . . . . . . . . . . . . . . . . . . . . . . . . 101.938%
2004 and thereafter . . . . . . . . . . . . . . . . . 100.000%
(b) Notwithstanding the provisions of clause (a) of this
Section 3.7, at any time prior to July 1, 1999, the Company may, at its option,
on any one or more occasions, redeem up to $88 million of the aggregate
principal amount (at maturity) of Notes at a redemption price of 110% of the
Accreted Value (at the redemption date) thereof, with the net proceeds of sales
of Equity Interests (other than Disqualified Stock) in the Company or Parent;
provided that at least $176 million of the aggregate principal amount (at
maturity) of Notes remains outstanding immediately after the occurrence of such
redemption; and provided, further, that such redemption shall occur within 60
days of the date after the closing of the related sale of such Equity
Interests.
(c) Any redemption pursuant to this Section 3.7 shall be
made pursuant to the provisions of Sections 3.1 through 3.6 hereof.
Section 3.8. Mandatory Redemption.
Except as set forth under Sections 4.10 and 4.13 hereof, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.
Section 3.9. Offer to Purchase By Application of Excess
Proceeds.
In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an offer to all Holders of Notes and, to
the extent required by the terms thereof, to all holders or lenders of other
Pari Passu Indebtedness, to purchase Notes and any such Pari Passu Indebtedness
(an "Asset Sale Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof, giving effect to any
related offer for Pari Passu Indebtedness pursuant to Section 4.10, (the "Offer
Amount") or, if less than the Offer Amount has been tendered, all Notes
tendered in response to the Asset Sale Offer. Payment for any Notes so
purchased shall be made in the same manner as interest payments are made.
39
31
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the
Holders. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
Asset Sale Offer shall be made to all Holders. The notice, which shall govern
the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to
this Section 3.9 and Section 4.10 hereof and the length of time the
Asset Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment
shall continue to accrue interest;
(d) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrete or accrue interest, as the case may be,
after the Purchase Date;
(e) that Holders electing to have a Note purchased
pursuant to an Asset Sale Offer may only elect to have all of such
Note purchased and may not elect to have only a portion of such Note
purchased;
(f) that Holders electing to have a Note purchased
pursuant to any Asset Sale Offer shall be required to surrender the
Note, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Note completed, or transfer by book-entry transfer,
to the Company, a Depository, if appointed by the Company, or a Paying
Agent at the address specified in the notice at least three Business
Days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their
election if the Company, the Depository or the Paying Agent, as the
case may be, receives, not later than the expiration of the Offer
Period, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Note the
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(h) that, if the aggregate Accreted Value or principal
amount, as the case may be, of Notes surrendered by Holders exceeds
the Offer Amount, the Company shall select the Notes to be purchased
on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of
$1,000 in principal
40
32
amount at maturity, or integral multiples thereof, shall be purchased)
in the manner provided in Section 4.10; and
(i) that Holders whose Notes were purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating
that such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.9. The Company, the Depository or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering
Holder an amount equal to the purchase price of the Notes tendered by such
Holder and accepted by the Company for purchase, and the Company shall promptly
issue a new Note, and the Trustee, upon receipt of a written authentication
order of the Company signed by two Officers of the Company shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal
to any unpurchased portion of the Note surrendered. Any Note not so accepted
shall be promptly mailed or delivered by the Company to the Holder thereof.
The Company shall publicly announce the results of the Asset Sale Offer on the
Purchase Date.
Other than as specifically provided in this Section 3.9, any
purchase pursuant to this Section 3.9 shall be made pursuant to the provisions
of Sections 3.1 through 3.6 hereof.
ARTICLE 4
COVENANTS
Section 4.1. Payment of Notes.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Parent,
the Company or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the
due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all such amounts then due.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at
the rate equal to 1% per annum in excess of the then applicable interest rate
on the Notes to the extent lawful; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
same rate to the extent lawful.
41
33
Section 4.2. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where principal,
premium, if any, and interest on the Notes will be paid and where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served. 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 Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the following office of an
Affiliate of the Trustee as one such office or agency of the Company in
accordance with Section 2.3: Harris Trust Company of New York, 77 Water
Street, New York, New York 10005.
Section 4.3. Reports.
(a) To the extent permitted by the Exchange Act, the
Company shall file with the Commission and provide, within 15 days after such
filing, the Trustee and Holders and prospective Holders (upon request) with the
annual reports and the information, documents and other reports that are
specified in Sections 13 and 15(d) of the Exchange Act. In the event that the
Company is not permitted to file such reports, documents and information with
the Commission, the Company will provide substantially similar information to
the Trustees, the Holders and prospective Holders (upon request) as if the
Company were subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act. The Company shall at all times comply with TIA Section
314(a)
(b) The Company shall be deemed to have satisfied the
provisions of Section 4.3(a) if the Parent files and provides reports,
documents and information of the types otherwise so required, in each case
within the applicable time periods, and the Company is not required to file
such reports, documents and information separately under the applicable rules
and regulations of the Commission (after giving effect to any exemptive relief)
because of the filings by the Parent.
42
34
Section 4.4. Compliance Certificate.
(a) Each of the Parent and the Company shall deliver to
the Trustee, within 90 days after the end of each fiscal year, an Officers'
Certificate stating that a review of the activities of the Parent and its
Subsidiaries and the Company and its Subsidiaries, as the case may be, during
the preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Parent or the Company, as the
case may be, 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 or her knowledge the Parent or the
Company, as the case may be, has kept, observed, performed and fulfilled each
and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of
this Indenture (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action the Parent or the Company, as the case may be, is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of, premium, if any, or interest on the
Notes is prohibited or if such event has occurred, a description of the event
and what action the Parent or the Company, as the case may be, is taking or
proposes to take with respect thereto. As of the date hereof, each of the
Parent's and the Company's fiscal year ends on December 31 of each calendar
year. In the event the Company changes its fiscal year, it shall promptly
notify the Trustee of such change.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
fiscal year-end financial statements delivered pursuant to Section 4.3(a) above
shall be accompanied by a written statement of the Parent's or the Company's,
as the case may be, independent public accountants (who shall be a firm of
established national reputation) that in making the examination necessary for
certification 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 or Article 5 hereof 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, so long as any of the Notes are
outstanding, deliver to the Trustee, within five Business Days of any Officer
becoming aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
Section 4.5. Taxes.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
43
35
Section 4.6. Stay, Extension and Usury Laws.
Each of the Company, the Parent and the Subsidiary Guarantors
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, extension or usury law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance
of this Indenture; and each of the Company, the Parent and the Subsidiary
Guarantors (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not, by
resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law has been enacted.
Section 4.7. Restricted Payments.
The Company shall not and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other payment or distribution on account of the Company's
Equity Interests (including, without limitation, any payment to holders of the
Company's Equity Interests in connection with any merger or consolidation
involving the Company) or to the direct or indirect holders of the Company's
Equity Interests in their capacity as such (other than dividends or
distributions (a) payable in Equity Interests (other than Disqualified Stock)
of the Company, (b) to the extent necessary to permit the Parent to pay
overhead, tax liabilities, legal, accounting or other professional fees and
expenses and any fees and expenses associated with registration statements
filed with the Commission and subsequent ongoing public reporting requirements,
in each case to the extent actually incurred by the Parent in connection with
acting as a holding company for the Company and its Subsidiaries or (c) to the
extent necessary to permit the Parent to perform its obligations to pay fees,
expenses and indemnification under Sections 5.4, 5.5, 5.15, 8.3, 9.2 and 9.3 of
the Stock Purchase Agreement; (ii) purchase, redeem, defease or otherwise
acquire or retire for value any Equity Interests of the Company or any direct
or indirect parent or other Affiliate of the Company that is not a Wholly Owned
Restricted Subsidiary of the Company; (iii) make any principal payment on, or
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes, except any scheduled principal
payment or sinking fund payment or at final maturity; or (iv) make any
Restricted Investment (all such payments and other actions set forth in clauses
(i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph of Section 4.9 hereof; and
44
36
(c) such Restricted Payment, together with the aggregate
of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by clauses (2), (3), (5) and (6) of the
next succeeding paragraph), is less than the sum of (i) 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from the beginning of the first month after the
date of this Indenture to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are available
at the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds received by the Company
since the date of this Indenture (A) as capital contributions to the
Company (other than from a Subsidiary of the Company or from the
Rights Offering or the Standby Commitment) and (B) from the issue,
sale or exercise since the date of this Indenture of Equity Interests
in the Company or the Parent or of debt securities of the Company or
the Parent that have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or convertible debt
securities) sold to a Subsidiary of the Company and other than
Disqualified Stock or debt securities that have been converted into
Disqualified Stock), plus (iii) to the extent that any Restricted
Investment that was made after the date of this Indenture is sold for
cash or otherwise liquidated or repaid for cash, the lesser of (A) the
net proceeds of such sale, liquidation or repayment and (B) the
initial amount of such Restricted Investment, plus (iv) the amount
equal to the net reduction in Investments in Unrestricted Subsidiaries
resulting from (A) payments of dividends or interest or other
transfers of assets to the Company or any Restricted Subsidiary from
Unrestricted Subsidiaries, (B) the redesignation of Unrestricted
Subsidiaries as Restricted Subsidiaries or (C) the receipt of proceeds
by the Company or any Restricted Subsidiary from the sale or other
disposition of any portion of any Investment in an Unrestricted
Subsidiary not to exceed the amount of Investments previously made by
the Company or any Restricted Subsidiary in such Unrestricted
Subsidiary, which amount was included in the calculation of the amount
of Restricted Payments.
The foregoing provisions shall not prohibit (1) the payment of
any dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the provisions of
this Indenture and such dividend (a) shall be deemed paid on the date of such
date of declaration for purposes of clauses (a) and (b) in the next preceding
paragraph and (b) shall be included in the determination of Restricted Payments
pursuant to clause (c) of the preceding paragraph only when declared and not
when paid; (2) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company in exchange for, or out of the proceeds of,
the substantially concurrent sale (other than to a Subsidiary of the Company)
of other Equity Interests of the Company (other than any Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for
any
45
37
such redemption, repurchase, retirement or other acquisition shall be excluded
from clause (c)(ii) of the preceding paragraph; (3) the defeasance, redemption
or repurchase of Subordinated Indebtedness with the net cash proceeds from an
incurrence of subordinated Permitted Refinancing Debt or the substantially
concurrent sale (other than to a Subsidiary of the Company) of Equity Interests
of the Company or the Parent (other than Disqualified Stock); provided that the
amount of any such net cash proceeds that are utilized for any such redemption,
repurchase, retirement or other acquisition shall be excluded from clause
(c)(ii) of the preceding paragraph; (4) the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Company, the
Parent or any Subsidiary of the Company (x) held by any of the Company's (or
any of its Subsidiaries') employees pursuant to any management equity
subscription agreement, stock option agreement or any other agreement with such
employee, or (y) in connection with a tender offer to eliminate odd lots of
such Equity Interests; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not exceed
$2.0 million in any fiscal year (plus the aggregate cash proceeds received by
the Company during such fiscal year from any issuance of Equity Interests by
the Company or the Parent to any Permitted Investors or employee of the Company
or any of its Subsidiaries); and provided further that no Default or Event of
Default shall have occurred and be continuing immediately after such
transaction; (5) repurchases of Equity Interests deemed to occur upon exercise
of stock options if such Equity Interests represent a portion of the exercise
price of such options; (6) the defeasance, redemption, repurchase or repayment
of the Existing Debt if any of the Existing Debt is subordinated to the Notes.
The amount of all Restricted Payments (other than cash) shall
be the fair market value (as determined in good faith by a resolution of the
Board of Directors of the Company set forth in an Officers' Certificate
delivered to the Trustee, which determination shall be conclusive evidence of
compliance with this provision) on the date of the Restricted Payment of the
asset(s) proposed to be transferred by the Company or the applicable Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. Not later
than ten days after the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.7 were computed.
In computing Consolidated Net Income for purposes of this
Section 4.7, (i) the Company shall use audited financial statements for the
portion of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based on the books and records of the Company for
the remaining portion of such period and (ii) the Company shall be permitted to
rely in good faith on the financial statements and other financial data derived
from the books and records of the Company that are available on the date of
determination. If the Company makes a Restricted Payment which, at the time of
the making of such Restricted Payment, would on the good faith determination of
the Company be permitted under the requirements of this Indenture, such
Restricted Payment shall be deemed to have been made in compliance with this
Indenture notwithstanding any subsequent adjustments made in good faith to the
Company's financial statements affecting Consolidated Net Income of the Company
for any period.
The Board of Directors may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if such designation would not cause a Default.
For purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash)
in the Subsidiary so designated shall be deemed to be Restricted Payments at
the time of such designation and shall reduce the amount available for
Restricted
46
38
Payments under clause (c) of the first paragraph of this covenant and/or the
applicable provisions of the second paragraph of this covenant, as appropriate.
All such outstanding Investments shall be deemed to constitute Investments in
an amount equal to the fair market value of such Investments at the time of
such designation. Such designation shall only be permitted if such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary.
Section 4.8. Dividend and Other Payment Restrictions
Affecting Subsidiaries.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (i)(x) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (y) pay any indebtedness owed by it to the Company
or any of its Restricted Subsidiaries, (ii) make loans or advances to the
Company or any of its Restricted Subsidiaries or (iii) transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of (a)
the Credit Agreement as in effect as of the date of this Indenture, and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof or any other Credit Facility,
provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements, refinancings or other Credit
Facilities are no more restrictive with respect to such dividend and other
payment restrictions than those contained in the Credit Agreement as in effect
on the date of this Indenture, (b) this Indenture and the Senior Subordinated
Notes Indenture and the Notes and the Senior Subordinated Notes, (c) applicable
law, (d) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except, in the case of Indebtedness, to the
extent such Indebtedness was incurred in connection with or in contemplation of
such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person and
its Subsidiaries, or the property or assets of the Person and its Subsidiaries,
so acquired, provided that, in the case of Indebtedness, such Indebtedness was
permitted by the terms of this Indenture to be incurred, (e) by reason of
customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices, (f) capital leases and
purchase money obligations for property leased or acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so leased or acquired, (g) restrictions in the form
of Liens which are not prohibited pursuant to Section 4.12 and which are
customary limitations on the transfer of collateral and customary restrictions
contained in stock purchase agreements or asset sales agreements limiting the
transfer of assets pending the closing of the sale or (h) Permitted Refinancing
Debt, provided that the restrictions contained in the agreements governing such
Permitted Refinancing Debt are no more restrictive than those contained in the
agreements governing the Indebtedness being refinanced.
47
39
Section 4.9. Incurrence of Indebtedness and Issuance of
Disqualified Stock.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt) and the Company shall not and shall not
permit any of its Restricted Subsidiaries to, issue any Disqualified Stock;
provided, however, subject to the limitations set forth below, the Company and
the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or
issue shares of Disqualified Stock if:
(i) the Fixed Charge Coverage Ratio for the Company's
most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified
Stock is issued would have been at least 2.5 to 1, determined on a pro
forma basis as set forth in the definition of Fixed Charge Coverage
Ratio; and
(ii) no Default or Event of Default shall have occurred
and be continuing at the time such additional Indebtedness is incurred
or such Disqualified Stock is issued or would occur as a consequence
of the incurrence of the additional Indebtedness or the issuance of
the Disqualified Stock.
Notwithstanding the foregoing, this Indenture shall not
prohibit any of the following (collectively, "Permitted Indebtedness"): (a)
the Indebtedness evidenced by the Notes and the Senior Subordinated Notes; (b)
the incurrence by the Company of Indebtedness pursuant to Credit Facilities, so
long as the aggregate principal amount of all Indebtedness outstanding under
all Credit Facilities does not, at any one time, exceed the greater of (1) $525
million or (2) the Borrowing Base; (c) the guarantee by any Restricted
Subsidiary (including any Subsidiary Guarantor) of any Indebtedness that is
permitted by this Indenture to be incurred by the Company; provided that such
Subsidiary, if not a Subsidiary Guarantor, becomes a Subsidiary Guarantor
hereunder; (d) all Indebtedness of the Company and its Restricted Subsidiaries
in existence as of the date of the Indenture after giving effect to the
Recapitalization and the application of the proceeds thereof; (e) intercompany
Indebtedness between or among the Company, the Parent and any of the Company's
Restricted Subsidiaries; provided, however, that (i) if the Company is the
obligor on such Indebtedness, such Indebtedness is expressly subordinate to the
payment in full of all Obligations with respect to the Notes and (ii)(A) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company, the Parent or a
Restricted Subsidiary and (B) any sale or other transfer of any such
Indebtedness to a Person that is not the Company, the Parent or a Restricted
Subsidiary shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the case may be;
(f) Indebtedness of the Company or any Restricted Subsidiary related to any
Permitted Marketing Transaction including, without limitation, under letters of
credit or guarantees of Indebtedness or other obligations of a party to a
Permitted Marketing Transaction, provided, that in the event that the Company
or any Restricted Subsidiary guarantees such Indebtedness or other obligations
of another party, then either (1) the Person who is obligated to purchase
hydrocarbons from such party
48
40
has an investment grade credit rating from S&P or Moody's, or in lieu thereof,
a Person guaranteeing the payment of such obligated Person has an investment
grade credit rating from S&P or Moody's or (2) such Person posts, or has posted
for it, a letter of credit in favor of the Company or such Subsidiary Guarantor
with respect to all of such Person's obligations under such contracts, (g) in
addition to Indebtedness under any Credit Facility, Indebtedness in connection
with one or more standby letters of credit, guarantees, performance bonds or
other reimbursement obligations, in each case, issued in the ordinary course of
business and not in connection with the borrowing of money or the obtaining of
advances or credit (other than advances or credit on open account, includible
in current liabilities, for goods and services in the ordinary course of
business and on terms and conditions which are customary in the Oil and Gas
Business, and other than the extension of credit represented by such letter of
credit guarantee or performance bond itself), not to exceed in the aggregate at
any given time outstanding 5.0% of Total Assets; (h) Indebtedness under
Interest Rate Hedging Agreements entered into for the purpose of limiting
interest rate risks, provided that the obligations under such agreements are
related to payment obligations on Indebtedness otherwise permitted by the terms
of this covenant and that the aggregate notional principal amount of such
agreements does not exceed 105% of the principal amount of the Indebtedness to
which such agreements relate; (i) Indebtedness under Oil and Gas Hedging
Contracts, provided that such contracts were entered into in the ordinary
course of business for the purpose of limiting risks that arise in the ordinary
course of business of the Company and its Subsidiaries; (j) the incurrence by
the Company and Subsidiary Guarantors of Indebtedness not otherwise permitted
to be incurred pursuant to this paragraph, provided that the aggregate
principal amount (or accreted value, as applicable) of all Indebtedness
incurred pursuant to this clause (j), together with all Permitted Refinancing
Debt incurred pursuant to clause (k) of this paragraph in respect of
Indebtedness previously incurred pursuant to this clause (j), does not exceed
$25.0 million at any one time outstanding; (k) Permitted Refinancing Debt
incurred in exchange for, or the net proceeds of which are used to refinance,
extend, renew, replace, defease or refund, Indebtedness that was permitted by
this Indenture to be incurred (including Indebtedness previously incurred
pursuant to this clause (k)); or (l) production imbalances arising in the
ordinary course of business and consistent with past practices.
Section 4.10. Asset Sales.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries (other than MEV) to, engage in an Asset Sale unless (i)
the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (as determined in good faith by a resolution of the Board of Directors of
the Company set forth in an Officers' Certificate delivered to the Trustee,
which determination shall be conclusive evidence of compliance with this
provision) of the assets or Equity Interests issued or sold or otherwise
disposed of and (ii) at least 80% of the consideration therefor received by the
Company or such Restricted Subsidiary (after deducting expenses associated with
such asset sale) is in the form of cash, Cash Equivalents, oil and gas
properties owned or held by another Person which are to be used in the Oil and
Gas Business of the Company or its Restricted Subsidiaries or any combination
thereof; provided that the amount of (x) any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet or, with
respect to plugging and abandonment
49
41
obligations and other similar liabilities, in the notes thereto), of the
Company or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any guarantee
thereof) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Restricted
Subsidiary from further liability and (y) any Liquid Securities received by the
Company or any such Restricted Subsidiary from such transferee that are
converted by the Company or such Restricted Subsidiary into cash within 180
days after closing such Asset Sale, shall be deemed to be cash for purposes of
this provision to the extent of the liabilities assumed or cash received.
Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company may apply such Net Proceeds, at its option, for one or
more of the following purposes: (a) to reduce Senior Debt of the Company and
its Subsidiaries, (b) to make Permitted Business Investments, (c) to acquire
controlling interests in other Oil and Gas Businesses to the extent such
Investments are not Permitted Business Investments, (d) to make capital
expenditures in respect of the Company's or its Restricted Subsidiaries' Oil
and Gas Business, and (e) to purchase assets that are used or useful in the Oil
and Gas Business. Pending the final application of any such Net Proceeds, the
Company may temporarily reduce Senior Debt of the Company and its Subsidiaries
that is revolving debt or otherwise invest such Net Proceeds in any manner that
is not prohibited by this Indenture. Any Net Proceeds from Asset Sales that
are not applied or invested as provided in the first sentence of this paragraph
shall (after the expiration of the periods specified in this paragraph) be
deemed to constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $10.0
million, the Company shall make an Asset Sale Offer to purchase the maximum
principal amount of Notes and any other Pari Passu Indebtedness to which the
Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at
an offer price in cash in an amount equal to, in the case of any such Pari
Passu Indebtedness, 100% of the principal amount thereof, plus accrued and
unpaid interest thereon to the date of purchase or, in the case of the Notes,
prior to July 1, 2001, 100% of the Accreted Value thereof on the date of
purchase and thereafter, 100% of the principal amount of the Notes, plus after
July 1, 2001, accrued but unpaid interest thereon, if any, to the date of
purchase, or, in the case of any other discount Pari Passu Indebtedness, 100%
of the accreted value thereof on the date of purchase, in each case, in
accordance with the procedures set forth in Section 3.9 hereof or the
agreements governing the Pari Passu Indebtedness, as applicable. To the extent
that the aggregate amount (or accreted value, as the case may be) of Notes and
Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes and such proceeds will no longer be considered
"Excess Proceeds" for the purposes of this Section 4.10. If the sum of (i) the
aggregate Accreted Value (or, if after July 1, 2001, the principal amount) of
the Notes surrendered by the Holders thereof, and (ii) the aggregate principal
amount or accreted value, as the case may be, of other Pari Passu Indebtedness
surrendered by holders or lenders thereof, exceeds the amount of Excess
Proceeds, the Trustee and the trustee or other lender representatives for the
Pari Passu Indebtedness shall select the Notes and other Pari Passu
Indebtedness to be purchased on a pro rata basis, based on the aggregate
principal amount (or accreted value, as applicable) thereof surrendered in such
Asset Sale Offer.
50
42
Section 4.11. Transactions with Affiliates.
The Company shall not, and shall not permit any of its
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any of
its Affiliates (each of the foregoing, an "Affiliate Transaction"), unless (i)
such Affiliate Transaction is on terms that are no less favorable to the
Company or such Subsidiary, as the case may be, than would be available in a
comparable transaction by the Company or such Subsidiary in arm's length
dealings with an unrelated third party or, in the event no comparable
transaction with an unaffiliated Person is available, on terms that are fair
from a financial point of view to the Company or such Subsidiary, as the case
may be, (ii) with respect to an Affiliate Transaction or series of related
Affiliate Transactions involving payments in excess of $1,000,000 in the
aggregate, the Company delivers an Officers' Certificate to the Trustee
certifying that such Affiliate Transaction complies with clause (i) above,
(iii) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving payments in excess of $5,000,000 but less than
$15,000,000 in the aggregate, the Company delivers an Officer's Certificate to
the Trustee certifying that (a) such Affiliate Transaction or series of related
Affiliate Transactions complies with clause (i) above and (b) such Affiliate
Transaction or series of related Affiliate Transactions has been approved by a
resolution adopted by a majority of the members of the Board of Directors of
the Company who are disinterested with respect to such Affiliate Transaction or
series of related Affiliate Transactions (which resolution shall be conclusive
evidence of compliance with this provision) and (iv) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
payments of $15,000,000 or more in the aggregate, (A) the Company delivers an
Officer's Certificate certifying that (a) such Affiliate Transaction or series
of related Affiliate Transactions complies with clause (i) above and (b) such
Affiliate Transaction has been approved by a resolution adopted by a majority
of the members of the Board of Directors of the Company who are disinterested
with respect to such Affiliate Transaction and (B) the Company shall have
received a written opinion of a firm of investment bankers nationally
recognized in the United States that such Affiliate Transaction or series of
related Affiliate Transactions is fair from a financial point of view to the
Company or such Subsidiary (which resolution and fairness opinion shall be
conclusive evidence of compliance with this provision), provided, however, that
the foregoing shall not apply to (1) the Recapitalization, the payment of fees,
expenses and indemnifications under Sections 5.4, 5.5, 5.15, 8.3, 9.2 and 9.3
of the Stock Purchase Agreement or any transaction effected pursuant to the
terms of the Series A Preferred Stock or Series B Preferred Stock as in effect
on the date of this Indenture, (2) Permitted Investments and Restricted
Payments that are permitted by Section 4.7 hereof, (3) loans or advances to
officers, directors and employees of the Company or any Subsidiary made in the
ordinary course of business and consistent with past practices of the Company
and its Subsidiaries not to exceed in the aggregate at any one time outstanding
$2.5 million, (4) the payment of reasonable and customary regular fees to
directors of the Company or any of its Subsidiaries who are not employees of
the Company or any Subsidiary, (5) any indemnification or similar payment made
to any director or officer (A) in accordance with the corporate charter or by-
laws of the Company or any Subsidiary, (B) under any agreement or (C) under
applicable law, (6) obligations of the Company or any Subsidiary under employee
compensation and other benefit arrangements entered into or provided for in the
ordinary course of
51
43
business, (7) any transaction relating to the disposition of the Company's
Investment in MEV or (8) any transaction between or among the Company, the
Parent and its Restricted Subsidiaries.
Section 4.12. Liens.
The Company shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien (other than Permitted Liens) upon any of its property
or assets, now owned or hereafter acquired securing Indebtedness (other than
Senior Debt), unless prior to or contemporaneously therewith the Notes are
directly secured equally and ratably, provided that (i) if such secured
Indebtedness is Pari Passu Indebtedness, the Lien securing such Pari Passu
Indebtedness shall be subordinate and junior to, or pari passu with, the Lien
securing the Notes and (ii) if such secured Indebtedness is Subordinated
Indebtedness, the Lien securing such Subordinated Indebtedness shall be
subordinate and junior to the Lien securing the Notes at least to the same
extent as such Subordinated Indebtedness is subordinated to the Notes.
Section 4.13. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, each
Holder of Notes shall have the right to require the Company to repurchase all
or any part (equal to $1,000 or an integral multiple thereof) of such Holder's
Notes pursuant to the offer described below (the "Change of Control Offer") at
an offer price in cash equal to prior to July 1, 2001, 101% of the Accreted
Value of the Notes on the date of purchase and, on July 1, 2001 and thereafter,
101% of the aggregate principal amount thereof plus accrued and unpaid interest
if any, thereon to the date of purchase (the "Change of Control Payment").
Within 30 days following any Change of Control, the Company shall mail a notice
to each Holder stating: (1) and describing the transaction or transactions
that constitute the Change of Control; (2) that the Change of Control Offer is
being made pursuant to this Section 4.13 and that all Notes tendered shall be
accepted for payment; (3) the purchase price and the purchase date described
below (the "Change of Control Payment Date"); (4) that any Note not tendered
shall continue to accrete or accrue interest, as the case may be, if any; (5)
that, unless the Company defaults in the payment of the Change of Control
Payment, all Notes accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest, if any, after the Change of Control Payment
Date; (6) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer shall be required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Payment Date; (7) that Holders shall be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Notes delivered for purchase, and a statement that such
Holder is withdrawing his election to have the Notes purchased; and (8) that
Holders whose Notes are being purchased only in part shall be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered,
which unpurchased portion must be equal to $1,000 in principal amount at
maturity or an integral multiple thereof. The Company, the Parent and each
52
44
Subsidiary Guarantor 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 to such party in connection
with the repurchase of the Notes as a result of a Change of Control.
(b) On a Business Day that is no earlier than 30 days nor
later than 60 days from the date that the Company mails or causes to be mailed
notice of the Change of Control to the Holders (the "Change of Control Payment
Date"), the Company shall, to the extent lawful, (i) accept for payment all
Notes or portions thereof properly tendered pursuant to the Change of Control
Offer, (ii) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions thereof so tendered and
(iii) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officers' Certificate stating the aggregate principal amount
(or Accreted Value, if applicable) of Notes or portions thereof being purchased
by the Company. The Paying Agent shall promptly mail to each Holder of Notes
so tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Change of Control provisions described above shall be
applicable whether or not any other provisions of this Indenture are
applicable.
The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.13 and purchases all Notes (or
portions thereof) validly tendered and not withdrawn under such Change of
Control Offer.
Section 4.14. Additional Subsidiary Guarantees.
In the event that the Company or any of its Restricted
Subsidiaries shall acquire or create a Material Restricted Subsidiary after the
date of this Indenture, such newly acquired or created Material Restricted
Subsidiary shall be deemed to make the guarantee set forth in Section 11.1 and
the Company shall cause such Material Restricted Subsidiary to evidence such
guarantee in the manner set forth in Section 11.2. Notwithstanding the
foregoing, this Section 4.14 shall not apply to any newly acquired or created
Subsidiary that has been properly designated as an Unrestricted Subsidiary in
accordance with this Indenture for so long as it continues to constitute an
Unrestricted Subsidiary.
Section 4.15. Corporate Existence.
Subject to Article 5 hereof, the Company, the Parent and the
Restricted Subsidiaries shall do or cause to be done all things necessary to
preserve and keep in full force and effect (i) its
53
45
corporate existence, and the corporate, partnership or other existence of each
of the Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Restricted Subsidiary and (ii) the rights (charter,
partnership agreement and statutory), licenses and franchises of the Company,
the Parent and the Restricted Subsidiaries; provided, however, that the
Company, the Parent and the Restricted Subsidiaries shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of the Restricted Subsidiaries, if the Board of
Directors of the relevant Person shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and the
Restricted Subsidiaries, taken as a whole, and that the loss thereof is not
adverse in any material respect to the Holders of the Notes.
Section 4.16. No Senior Subordinated Debt.
Notwithstanding the provisions of Section 4.9 hereof, (i) the
Company shall not incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is subordinate or junior in right of payment
to any Senior Debt of the Company and senior in any respect in right of payment
to the Notes and (ii) the Parent and the Subsidiary Guarantors shall not
directly or indirectly incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any guarantees issued in respect of Senior Debt of the Company and
senior in any respect in right of payment to the Guarantees; provided, however,
that the foregoing limitations shall not apply to distinctions between
categories of Indebtedness that exist by reason of any Liens arising or created
in respect of some but not all such Indebtedness.
Section 4.17. Business Activities.
The Company and the Parent shall not, and shall not permit any
Subsidiary to, engage in any material respect in any business other than the
Oil and Gas Business.
ARTICLE 5
SUCCESSORS
Section 5.1. Merger, Consolidation, or Sale of
Substantially All Assets.
The Company shall not consolidate or merge with or into
(whether or not the Company is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets, in one or more related transactions, to another Person,
and the Company may not permit any of its Restricted Subsidiaries to enter into
any such transaction or series of transactions if such transaction or series of
transactions would, in the aggregate, result in a sale, assignment, transfer,
lease, conveyance, or other disposition of all or substantially all of the
properties or assets of the Company to another Person, unless (i) the Company
is the surviving corporation of any such consolidation or merger or (a) the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made (the "Surviving
54
46
Entity") is a corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia and (b) such Surviving
Entity assumes all the obligations of the Company under the Notes and the
Indenture pursuant to a supplemented indenture in a form reasonably
satisfactory to the Trustee; (ii) immediately before and after giving effect to
such transaction no Default or Event of Default exists; (iii) immediately after
giving effect to such transaction on a pro forma basis (and treating any
Indebtedness not previously an obligation of the Company or any Subsidiary
Guarantor which becomes the obligation of the Company or any Subsidiary
Guarantor as a result of such transaction as having been incurred at the time
of such transaction), the Consolidated Net Worth of the Company or the
Surviving Entity (if the Company is not the continuing obligor under this
Indenture) is equal to or greater than the Consolidated Net Worth of the
Company immediately prior to such transaction and (iv) except in the case of a
merger of the Company with or into a Wholly Owned Restricted Subsidiary of the
Company, the Company or Surviving Entity (if the Company is not the continuing
obligor under the Indenture) will, at the time of such transaction and after
giving pro forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the test set forth in the first
paragraph of Section 4.9 hereof. Notwithstanding the foregoing clauses (iii)
and (iv), (a) any Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to the Company and (b) the
Company may merge with an Affiliate incorporated solely for the purpose of
reincorporating in another jurisdiction.
Section 5.2. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.1 hereof, the Surviving
Entity shall succeed to, and be substituted for (so that from and after the
date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the Surviving Entity and not to the Company), and may exercise
every right and power of the Company under this Indenture with the same effect
as if such successor Person had been named as the Company herein; provided,
however, that the predecessor Company shall not be relieved from the obligation
to pay the principal of and interest on the Notes except in the case of a sale
of all of the Company's assets that meets the requirements of Section 5.1
hereof.
55
47
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest, if
any, on the Notes when the same becomes due and payable and the
Default continues for a period of 30 days, whether or not such payment
is prohibited by the provisions of Article 10 hereof;
(2) the Company defaults in the payment of the Stated
Price of or premium, if any, on the Notes when the same become due and
payable at maturity, upon redemption or otherwise, whether or not such
payment is prohibited by the provisions of Article 10 hereof or of
Article 10 of the Senior Subordinated Note Indenture, as the case may
be;
(3) the Company fails to observe or perform any covenant,
condition or agreement on the part of the Company to be observed or
performed pursuant to Article 5 hereof;
(4) the Company fails to observe or perform any covenant,
condition or agreement on the part of the Company to be observed or
performed pursuant to Sections 4.3, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12,
4.13, 4.14, 4.16 and 4.17 hereof and the Default continues for the
period and after the notice specified below;
(5) the Company fails to comply with any of its other
agreements or covenants in, or provisions of, the Notes or this
Indenture and the Default continues for consecutive days after the
notice specified below;
(6) except as permitted herein, any Guarantee shall be held
in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or the Parent or a
Subsidiary Guarantor, or any Person acting on behalf of the Parent or
a Subsidiary Guarantor, shall deny or disaffirm the Parent's or such
Subsidiary Guarantor's obligation under its Guarantee;
(7) the Parent fails to issue Preferred Stock for gross
proceeds in the amount of $132 million pursuant to the Rights Offering
and Standby Commitment or either thereof within 90 days following the
original date of issuance of the Notes;
(8) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the
Company or any Subsidiary Guarantor, whether such Indebtedness now
exists or shall be created hereafter, which default (a) is caused by a
failure to pay such Indebtedness prior to the expiration of the grace
period after final maturity (a "Payment Default") or (b) results in
the acceleration of such Indebtedness prior to its final maturity and,
56
48
in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which
there is then existing a Payment Default or the maturity of which has
been so accelerated, aggregates $10.0 million or more; provided, that
if any such default is cured or waived or any such acceleration
rescinded, or such Indebtedness is repaid, within a period of 10 days
from the continuation of such default beyond the applicable grace
period or the occurrence of such acceleration, as the case may be,
such Event of Default under the Indenture and any consequential
acceleration of the Notes shall be automatically rescinded;
(9) a final judgment or order or final judgments or
orders are rendered against the Company or any Restricted Subsidiary
that are unsatisfied and that require the payment of money, either
individually or in an aggregate amount, that is more than $10.0
million over the coverage under applicable insurance policies and
either (a) a creditor has commenced an enforcement proceeding upon
such judgement (other than a judgment that is stayed by reason of
pending appeal or otherwise) or (b) a 60-day period transpired during
which a stay of such judgment, order, judgments or orders (by reason
of pending appeal or otherwise) was not in effect;
(10) the Company, the Parent or any Subsidiary Guarantor
pursuant to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case or proceeding,
(b) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(c) consents to the appointment of a Custodian of
it or for all or substantially all of its property, or
(d) makes a general assignment for the benefit of
its creditors;
(11) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Company, the Parent
or any Subsidiary Guarantor, in an involuntary case or
proceeding,
(b) appoints a Custodian of the Company, the
Parent or any Subsidiary Guarantor, or for all or
substantially all of the property of the Company, the Parent
or any Subsidiary Guarantor, or
(c) orders the liquidation of the Company, the
Parent or any Subsidiary Guarantor,
57
49
and in each case the order or decree remains unstayed and in effect
for 60 consecutive days.
The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
A Default under clause (4) is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in aggregate
principal amount at stated maturity of the then outstanding Notes notify the
Company and the Trustee, of the Default and the Company does not cure the
Default within 30 consecutive days after receipt of the notice. A Default
under clause (5) is not an Event of Default until the Trustee notifies the
Company, or the Holders of at least 25% in aggregate principal amount at stated
maturity of the then outstanding Notes notify the Company and the Trustee, of
the Default and the Company does not cure the Default within 60 days after
receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default."
Section 6.2. Acceleration.
If an Event of Default (other than an Event of Default
specified in clauses (10) and (11) of Section 6.1 hereof) relating to the
Company, the Parent or any Subsidiary Guarantor occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the then outstanding Notes by written notice to the Company and the
Trustee, may declare the unpaid principal amount of and any accrued and unpaid
interest on all the Notes, or if such an Event of Default shall occur prior to
July 1, 2001, the Accreted Value of the Notes, to be due and payable
immediately. If payment of the Notes is accelerated because of an Event of
Default, the Company or the Trustee shall notify the holders of Designated
Senior Debt of such acceleration. Upon such declaration such principal (or, if
prior to July 1, 2001, Accreted Value) and interest shall be due and payable
immediately; provided, however, that so long as any Designated Senior Debt or
any commitment therefor is outstanding, any such notice or declaration shall
not become effective until the earlier of (a) five Business Days after such
notice is delivered to the representative for the Designated Senior Debt or (b)
the acceleration of any Designated Senior Debt and thereafter, payments on the
Notes pursuant to this Article 6 shall be made only to the extent permitted
pursuant to Article 10 herein. Notwithstanding the foregoing, if any Event of
Default specified in clause (10) or (11) of Section 6.1 hereof relating to the
Company, the Parent, or any Subsidiary Guarantor occurs, such an amount shall
ipso facto become and be immediately due and payable without any declaration or
other act or notice on the part of the Trustee or any Holder.
After a declaration of acceleration under this Indenture, but
before a judgment or decree for payment of the money due on the Notes under
this Article 6 has been obtained by the Trustee, Holders of a majority in
aggregate principal amount or Accreted Value, as the case may be, of the then
outstanding Notes by written notice to the Company and the Trustee may rescind
an acceleration and its consequences if (i) the Company, the Parent or any
Subsidiary Guarantor has paid or deposited with the Trustee a sum sufficient to
pay (a) all sums paid or advanced by the Trustee under this Indenture and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and (b) all overdue interest on the Notes, if any, (ii)
58
50
the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and (iii) all existing Events of Default (except
nonpayment of principal, premium, if any, or interest that has become due
solely because of the acceleration) have been cured or waived.
Section 6.3. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium,
if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note 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. All
remedies are cumulative to the extent permitted by law.
Section 6.4. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal
amount of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of principal of, premium and Liquidated Damages, if any, or
interest on, the Notes (including in connection with an offer to purchase)
(provided, however, that the Holders of a majority in aggregate principal
amount of the then outstanding Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
Section 6.5. Control by Majority.
Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability, it being understood that (subject to
Section 7.1) the Trustee shall have no duty to ascertain whether or not such
actions or forebearances are unduly prejudicial to such holders.
Section 6.6. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
59
51
(a) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of
the then outstanding Notes make a written request to the Trustee to
pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and,
if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(d) 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
(e) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Notes do not give the
Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.7. Rights of Holders of Notes to Receive
Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal, premium, if any,
and interest on the Note, on or after the respective due dates expressed in the
Note (including in connection with an offer to purchase), or to bring suit for
the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
Section 6.8. Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(1) or (2)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company, the Parent or
any Subsidiary Guarantor for the whole amount of principal of, premium, if any,
and interest remaining unpaid on the Notes and interest on overdue principal
and, to the extent lawful, interest 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.
Section 6.9. Trustee May File Proofs of Claim.
The Trustee is authorized to 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 Holders of the Notes allowed in any judicial proceedings relative to
the Company, the Parent or any of the Subsidiary Guarantors (or any other
obligor upon the Notes), its creditors or its property and shall be entitled
and empowered to collect, receive and distribute any money or
60
52
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.7 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment
of the same shall be secured by a Lien on, and shall be paid out of, any and
all distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Holder, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding; provided, however, that the Trustee may, on
behalf of the Holders, vote for the election of a trustee in bankruptcy or
similar official and may be a member of the creditors' committee.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it
shall, subject to the provisions of Article 10, pay out the money in the
following order:
First: to the Trustee, its agents and attorneys for amounts
due under Sections 6.8 and 7.7 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made,
by the Trustee and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, and accrued interest, ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium, if any, and
accrued interest, as the case may be, respectively; and
Third: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes 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 any action taken or
omitted by it as a 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,
61
53
against any party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party litigant. This Section
does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant
to Section 6.7 hereof, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.1. Duties of Trustee.
(a) If an Event of Default 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 its
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined
solely by the express provisions of this Indenture and the Trustee
need perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any notices,
requests, statements, certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liabilities for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5 hereof.
62
54
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject
to paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or incur any liability. The Trustee
shall be under no obligation to exercise any of its rights and powers under
this Indenture at the request of any Holders, unless such Holder shall have
furnished to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
Section 7.2. Rights of Trustee.
(a) The Trustee may conclusively rely upon 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 or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith that it believes to be authorized or
within the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the Company, the
Parent or any Subsidiary Guarantor shall be sufficient if signed by an Officer
of the Company, the Parent or such Subsidiary Guarantor.
(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 or
direction of any of the Holders unless such Holders shall have furnished to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
63
55
(g) Except with respect to Sections 4.1 and 4.4 hereof,
the Trustee shall have no duty to inquire as to the performance of the
Company's and the Parent's covenants in Article 4 hereof. In addition, the
Trustee shall not be deemed to have knowledge of any Default or Event of
Default except (i) any Event of Default occurring pursuant to Sections 4.1, 4.4
and 6.1(1) or (2) hereof or (ii) any Default or Event of Default of which the
Trustee shall have received written notification or obtained actual knowledge.
For the purposes of this clause (g) only, "actual knowledge" shall mean the
actual fact or statement of knowing, without any duty to make investigation
with regard thereto.
(h) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties hereunder.
(i) the Trustee shall not be bound to ascertain or inquire as
to the performance or observance of any covenants, conditions, or agreements on
the part of the Company, except as otherwise set forth herein, but the Trustee
may require of the Company full information and advice as to the performance of
the covenants, conditions and agreements contained herein and shall be entitled
in connection herewith to examine the books, records and premises of the
Company.
(j) The permissive rights of the Trustee to perform the acts
enumerated in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for other than its negligence or willful misconduct.
Section 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company, the
Parent, the Subsidiary Guarantors or any Affiliate of the Company or the Parent
with the same rights it would have if it were not Trustee. However, in the
event that the Trustee acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the Commission for permission to continue as
trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.4. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, the Notes, or
the Guarantees, it shall not be accountable for the Company's use of the
proceeds from the Notes or any money paid to the Company or upon the Company's
direction under any provision of this Indenture, it shall not be responsible
for the use or application of any money received by any Paying Agent other than
the Trustee, and it shall not be responsible for any statement or recital
herein or in any certificate delivered pursuant hereto or any statement in the
Notes or any other document in connection with the sale of the Notes or
pursuant to this Indenture other than its certificate of authentication.
64
56
Section 7.5. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and
if it is actually known to the Trustee, the Trustee shall mail to Holders of
Notes a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on, any Note, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers
in good faith determines that withholding the notice is in the interests of the
Holders of the Notes.
Section 7.6. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15,
1997 following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if
no event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2) and transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Parent and the Company and filed with
the Commission and each stock exchange on which the Notes are listed in
accordance with TIA Section 313(d). The Company shall promptly notify the
Trustee when the Notes are listed on any stock exchange.
Section 7.7. Compensation and Indemnity.
The Company, the Parent and the Subsidiary Guarantors shall
pay to the Trustee from time to time reasonable compensation for its acceptance
of this Indenture and services hereunder, including, without limitation,
extraordinary services such as default administration. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company, the Parent and the Subsidiary Guarantors shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation
for its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company, the Parent and the Subsidiary Guarantors shall
indemnify the Trustee against any and all losses, liabilities or expenses
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company, the Parent and the
Subsidiary Guarantors (including this Section 7.7) and investigating or
defending itself against any claim (whether asserted by the Company, the
Parent, the Subsidiary Guarantors or any Holder or any other person) or
liability in connection with the exercise or performance of any of its powers
or duties hereunder, except to the extent any such loss, liability or expense
may be attributable to its negligence or bad faith. The Trustee shall notify
the Company, the
65
57
Parent and the Subsidiary Guarantors promptly of any claim for which it may
seek indemnity. Failure by the Trustee to so notify the Company, the Parent
and the Subsidiary Guarantors shall not relieve the Company, the Parent and the
Subsidiary Guarantors of their obligations hereunder. The Company, the Parent
and the Subsidiary Guarantors shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the
Company, the Parent and the Subsidiary Guarantors shall pay the reasonable fees
and expenses of such counsel. The Company, the Parent and the Subsidiary
Guarantors need not pay for any settlement made without their consent, which
consent shall not be unreasonably withheld.
The obligations of the Company, the Parent and the Subsidiary
Guarantors under this Section 7.7 are joint and several and shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's, the Parent's and the Subsidiary
Guarantors' payment obligations in this Section, the Trustee shall have a Lien
prior to the Notes on all money or property held or collected by the Trustee,
except that held in trust to pay principal and interest on particular Notes.
Such Lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(10) or (11) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.8. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of Notes of a majority in principal amount, of the then outstanding
Notes may remove the Trustee by so notifying the Trustee and the Company in
writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
66
58
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Notes of at least 10% in principal amount of the
then outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, provided
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.7 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.8, the Company's obligations under Section 7.7
hereof shall continue for the benefit of the retiring Trustee.
Section 7.9. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $50 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
67
59
Section 7.11. Preferential Collection of Claims Against
Company.
The Trustee is subject to 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 therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1. Option to Effect Legal Defeasance or Covenant
Defeasance.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.2 or 8.3 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8.
Section 8.2. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.2, the Company and the Parent and the
Subsidiary Guarantors shall, subject to the satisfaction of the conditions set
forth in Section 8.4 hereof, be deemed to have been discharged from their
obligations with respect to all outstanding Notes and the Guarantees thereof on
the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall
be deemed to have paid and discharged the entire Indebtedness represented by
the outstanding Notes, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.5 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of outstanding Notes to receive payments in respect of the principal
of, premium, if any, and interest on such Notes when such payments are due from
the trust fund described in Section 8.4 hereof, and as more fully set forth in
such Section, (b) the Company's obligations with respect to such Notes under
Article 2 and Section 4.2 hereof, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company's obligations in connection
therewith and (d) this Article 8. Subject to compliance with this Article 8,
the Company may exercise its option under this Section 8.2 notwithstanding the
prior exercise of its option under Section 8.3 hereof.
Section 8.3. Covenant Defeasance.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.3, the Company, the Parent and the
Subsidiary Guarantors shall, subject to the satisfaction of the conditions set
forth in Section 8.4 hereof, be released from their obligations under the
68
60
covenants contained in Sections 4.3, 4.5, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12,
4.13, 4.14, 4.16 and 4.17 hereof and in clause (iv) of Section 5.1 and the
covenants contained in the Guarantees with respect to the outstanding Notes on
and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any compliance certificate, 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 (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company 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 6.1 hereof, but,
except as specified above, the remainder of this Indenture, such Notes and such
Guarantees shall be unaffected thereby. In addition, upon the Company's
exercise under Section 8.1 hereof of the option applicable to this Section 8.3
hereof, subject to the satisfaction of the conditions set forth in Section 8.4
hereof, Sections 6.1 (3) (but only with respect to the Company's failure to
observe or perform the covenants, conditions and agreements of the Company
under clause (iv) of Section 5.1), 6.1 (4), 6.1 (8) and 6.1 (9) hereof shall
not constitute Events of Default.
Section 8.4. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.2 or 8.3 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company or the Parent must irrevocably deposit
with the Trustee, in trust, for the benefit of the Holders of the
Notes, cash in United States dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if
any, and interest, on the outstanding Notes on the stated maturity or
on the applicable redemption date, as the case may be, and the Company
must specify whether the Notes are being defeased to maturity or to a
particular redemption date;
(b) in the case of an election under Section 8.2 hereof,
the Company or the Parent shall have delivered to the Trustee an
Opinion of Counsel in the United States reasonably acceptable to the
Trustee confirming that (A) the Company or the Parent has received
from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax
69
61
on the same amounts, in the same manner and at the same times as would
have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.3 hereof,
the Company or the Parent shall have delivered to the Trustee an
Opinion of Counsel in the United States reasonably acceptable to the
Trustee confirming that the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;
(d) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied
to such deposit) or insofar as Section 6.1(10) or 6.1(11) hereof is
concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a default under,
any material agreement or instrument (other than this Indenture) to
which the Company, the Parent or any of their respective Subsidiaries
is a party or by which the Company, the Parent or any of their
respective Subsidiaries is bound; and
(f) the Company and the Parent shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for or relating to the
Legal Defeasance or the Covenant Defeasance have been complied with.
Section 8.5. Deposited Money and Government Securities to
be Held in Trust; Other Miscellaneous Provisions.
Subject to Section 8.6 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.5, the "Trustee") pursuant to Section 8.4 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
The Company, the Parent and the Subsidiary Guarantors shall
pay and indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against the cash or non-callable Government Securities deposited
pursuant to Section 8.4 hereof or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the outstanding Notes.
70
62
Anything in this Article 8 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities held by
it as provided in Section 8.4 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
Section 8.6. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of,
premium, if any, or interest on any Note and remaining unclaimed for two years
after such principal, premium, if any, or interest has become due and payable
shall be paid to the Company on its request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Note shall
thereafter, as a general creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining shall be repaid to the Company.
Section 8.7. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.2 or 8.3 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the obligations of the Company, the Parent
and the Subsidiary Guarantors under this Indenture, the Notes and the
Guarantees shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.2 or 8.3 hereof, as the case may be; provided, however,
that if the Company, the Parent or any Subsidiary Guarantor makes any payment
of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company, the Parent or such Subsidiary
Guarantor shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
71
63
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.1. Without Consent of Holders of Notes.
Notwithstanding Section 9.2 of this Indenture, the Company,
the Parent, the Subsidiary Guarantors and the Trustee may amend or supplement
this Indenture, the Notes or the Guarantees without the consent of any Holder
of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
(c) to provide for the assumption of the Company's
obligations to the Holders of the Notes in the case of a merger or
consolidation pursuant to Article 5 hereof;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of the Note;
or
(e) to comply with requirements of the Commission in
order to effect or maintain the qualification of this Indenture under
the TIA.
Upon the request of the Company accompanied by a resolution of
the Board of Directors of the Company, the Parent and each of the Subsidiary
Guarantors, as the case may be, authorizing the execution of any such amended
or supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 7.2 hereof, the Trustee shall join with the Company, the
Parent and the Subsidiary Guarantors in the execution of any amended or
supplemental indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.2. With Consent of Holders of Notes.
Except as provided below in this Section 9.2, the Company, the
Parent, the Subsidiary Guarantors and the Trustee may amend or supplement this
Indenture, the Notes and the Guarantees with the consent of the Holders of at
least a majority in aggregate principal amount (at maturity) of the Notes then
outstanding (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for the Notes), and,
subject to Sections 6.4 and 6.7 hereof, any existing Default or Event of
Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of this
72
64
Indenture, the Notes or the Guarantees may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for the Notes).
Notwithstanding the foregoing, without the consent of at least
66 2/3% in aggregate principal amount of the Notes then outstanding (including
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes), no waiver or amendment to this Indenture may make any change
in the provisions of Sections 3.9, 4.10 and 4.13 hereof that adversely affect
the rights of any Holder of Notes. In addition, any amendment to the
provisions of Article 10 of this Indenture shall require the consent of the
Holders of at least 66 2/3% in aggregate principal amount of the Notes then
outstanding if such amendment would adversely affect the rights of Holders of
Notes; provided that, no amendment may be made to the provisions of Article 10
of this Indenture that adversely affects the rights of any holder of Senior
Debt then outstanding unless the holders of such Senior Debt (or any group or
representative thereof authorized to consent) consent to such change.
Subject to Sections 6.4 and 6.7 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company, the Parent or any
Subsidiary Guarantor with any provision of this Indenture, the Notes or the
Guarantees. However, without the consent of each Holder affected, an amendment
or waiver may not (with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity
of any Note or alter the provisions with respect to the redemption of
the Notes (except as provided above with respect to Sections 3.9, 4.10
and 4.13 hereof);
(c) reduce the rate of or change the time for payment of
interest on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the Notes and a waiver of
the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated
in the Notes;
(f) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes
to receive payments of principal of premium if any, or interest on the
Notes; or
(g) make any change in the foregoing amendment and waiver
provisions.
73
65
Upon the request of the Company accompanied by a resolution of
the Board of Directors of the Company and each of the Subsidiary Guarantors, as
the case may be, authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt
by the Trustee of the documents described in Section 7.2 hereof, the Trustee
shall join with the Company, the Parent and the Subsidiary Guarantors in the
execution of such amended or supplemental indenture unless such amended or
supplemental indenture affects the Trustee's own rights, duties or immunities
under this indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.2 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes 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 amended or
supplemental indenture or waiver.
Section 9.3. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or supplemental Indenture that complies with
the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent
Holder of a Note may revoke the consent as to its Note if the Trustee receives
written notice of revocation before the date the waiver, supplement or
amendment becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
Section 9.5. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall authenticate
new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
74
66
Section 9.6. Trustee to Sign Amendment, etc.
The Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
None of the Company, the Parent or any Subsidiary Guarantor may sign an
amendment or supplemental Indenture until its respective Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.1) shall be fully
protected in relying upon, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture and that there has been compliance
with all conditions precedent.
ARTICLE 10
SUBORDINATION
Section 10.1. Agreement to Subordinate.
The Company, the Parent, and each Subsidiary Guarantor agree,
and each Holder by accepting a Note and the related Guarantee agrees, that (i)
the Indebtedness evidenced by (a) the Notes, including, but not limited to, the
payment of principal of, premium, if any, and interest on the Notes, and any
other payment Obligation of the Company in respect of the Notes is subordinated
in right of payment, to the extent and in the manner provided in this Article,
to the prior payment in full in cash of all Senior Debt of the Company (whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed) and (b) the Guarantees and other payment Obligations in respect of
the Guarantees are subordinated in right of payment, to the extent and in the
manner provided in this Article, to the prior payment in full in cash of all
Senior Debt of, (x) in the case of a Guarantee made by the Parent, the Parent
and (y) in the case of a Guarantee made by a Subsidiary Guarantor, such
Subsidiary Guarantor and (ii) the subordination is for the benefit of the
Holders of Senior Debt.
Section 10.2. Certain Definitions.
"Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or state law for the relief of debtors.
"Representative" means the indenture trustee or other trustee,
agent or representative for any Senior Debt.
"Senior Debt" means (i) Indebtedness and other payment
Obligations of the Company or any Subsidiary of the Company under or in respect
of any Credit Facility or Indebtedness and other payment Obligations of the
Parent under any guarantee thereof, whether for principal, interest (including
interest accruing after the filing of a petition initiating any proceeding
pursuant to any
75
67
Bankruptcy Law, whether or not the claim for such interest is allowed as a
claim in such proceeding), reimbursement obligations, fees, commissions,
expenses, indemnities or other amounts and (ii) any other Indebtedness of the
Company or any Subsidiary of the Company permitted under the terms of this
Indenture, unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to the Notes. Notwithstanding anything to the contrary in the
foregoing sentence, Senior Debt will not include (w) any Indebtedness of the
Company to any of its Subsidiaries or other Affiliates, or (x) any Indebtedness
that is incurred in violation of this Indenture (other than Indebtedness under
any Credit Agreement or any other Credit Facility that is incurred on the basis
of a representation by the Company to the applicable lenders that it is
permitted to incur such Indebtedness under this Indenture).
A "distribution" may consist of cash, securities or other
property, by set-off or otherwise.
All Designated Senior Debt now or hereafter existing and all
other Obligations relating thereto shall not be deemed to have been paid in
full unless the holders or owners thereof shall have received payment in full
in cash (or other form of payment consented to by the holders of such
Designated Senior Debt) with respect to such Designated Senior Debt and all
other Obligations with respect thereto.
Section 10.3. Liquidation; Dissolution; Bankruptcy.
(a) Upon any payment or distribution of cash, property or
securities to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property, or in an assignment for the
benefit of creditors or any marshalling of the Company's assets and
liabilities:
(1) the holders of Senior Debt of the Company shall be
entitled to receive payment in full in cash of all Obligations in
respect of such Senior Debt (including interest after the commencement
of any such proceeding at the rate specified in the applicable Senior
Debt, whether or not a claim for such interest would be allowed in
such proceeding) before the Holders of Notes shall be entitled to
receive any payment or distribution with respect to the Notes and
related Obligations (except that Holders of Notes may receive payments
made from any defeasance trust created pursuant to Section 8.1 hereof
provided that the applicable deposit does not violate Article 8 or 10
of this Indenture); and
(2) until all Obligations with respect to Senior Debt of
the Company (as provided in subsection (1) above) are paid in full in
cash, any payment or distribution to which the Holders of Notes and
the related Guarantees would be entitled shall be made to holders of
Senior Debt of the Company (except that Holders of Notes and the
related Guarantees may receive payments made from any defeasance trust
created pursuant to Section 8.1 hereof provided that the applicable
deposit does not violate Article 8 or 10 of this Indenture).
76
68
(b) Upon any payment or distribution of cash, property or
securities to creditors of the Parent in a liquidation or dissolution of the
Parent or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Parent or its property, or in an assignment for the
benefit of creditors or any marshalling of the Parent's assets and liabilities:
(1) the holders of Senior Debt of the Parent shall be
entitled to receive payment in full in cash of all Obligations in
respect of such Senior Debt (including interest after the commencement
of any such proceeding at the rate specified in the applicable Senior
Debt, whether or not a claim for such interest would be allowed in
such proceeding) before the Holders of Notes and the related
Guarantees shall be entitled to receive any payment or distribution
with respect to the Guarantee made by the Parent (except that Holders
of Notes and the related Guarantees may receive payments made from any
defeasance trust created pursuant to Section 8.1 hereof provided that
the applicable deposit does not violate Article 8 or 10 of this
Indenture); and
(2) until all Obligations with respect to Senior Debt of
the Parent (as provided in subsection (1) above) are paid in full in
cash, any payment or distribution to which the Holders of Notes and
the related Guarantees would be entitled shall be made to holders of
Senior Debt of the Parent (except that Holders of Notes and the
related Guarantees may receive payments made from any defeasance trust
created pursuant to Section 8.1 hereof provided that the applicable
deposit does not violate Article 8 or 10 hereof).
(c) Upon any payment or distribution of cash, property or
securities to creditors of a Subsidiary Guarantor in a liquidation or
dissolution of such Subsidiary Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to such Subsidiary
Guarantor or its property, or in an assignment for the benefit of creditors or
any marshalling of such Subsidiary Guarantor's assets and liabilities:
(1) the holders of Senior Debt of such Subsidiary
Guarantor shall be entitled to receive payment in full in cash of all
Obligations in respect of such Senior Debt (including interest after
the commencement of any such proceeding at the rate specified in the
applicable Senior Debt, whether or not a claim for such interest would
be allowed in such proceeding) before the Holders of Notes and the
related Guarantees shall be entitled to receive any payment or
distribution with respect to the Guarantee made by such Subsidiary
Guarantor (except that Holders of Notes and the related Guarantees may
receive payments made from any defeasance trust created pursuant to
Section 8.1 hereof provided that the applicable deposit does not
violate Article 8 or 10 of this Indenture); and
(2) until all Obligations with respect to Senior Debt of
such Subsidiary Guarantor (as provided in subsection (1) above) are
paid in full in cash, any payment or distribution to which the Holders
of Notes and the related Guarantees would be entitled shall be made to
holders of Senior Debt of such Subsidiary Guarantor (except that
Holders of Notes and the related Guarantees may receive payments made
from any defeasance trust created pursuant
77
69
to Section 8.1 hereof provided that the applicable deposit does not
violate Article 8 or 10 of this Indenture).
Under the circumstances described in this Section 10.3, the
Company, the Parent, any Subsidiary Guarantor or any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar person making any
payment or distribution of cash or other property or securities is authorized
or instructed to make any payment or distribution to which the Holders of the
Notes and the related Guarantees would otherwise be entitled (other than
payments made from any defeasance trust referred to in the second parenthetical
clause of each of clauses (a)(1), (b)(1), (c)(1), (a)(2), (b)(2) and (c)(2)
above, which shall be delivered or paid to the Holders of Notes as set forth in
such clauses) directly to the holders of the Senior Debt of the Company, the
Parent and any Subsidiary Guarantor, as applicable, (pro rata to such holders
on the basis of the respective amounts of Senior Debt of the Company, the
Parent and any Subsidiary Guarantor, as applicable, held by such holders) or
their Representatives, or to any trustee or trustees under any other indenture
pursuant to which any such Senior Debt may have been issued, as their
respective interests appear, to the extent necessary to pay all such Senior
Debt in full, in cash or cash equivalents after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of such
Senior Debt.
To the extent any payment of or distribution in respect of
Senior Debt (whether by or on behalf of the Company, the Parent or any
Subsidiary Guarantor, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then if such payment or
distribution is recovered by, or paid over to, such receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person, the Senior Debt
or part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred. To the extent
the obligation to repay any Senior Debt is declared to be fraudulent, invalid
or otherwise set aside under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then the obligation so declared
fraudulent, invalid or otherwise set aside (and all other amounts that would
come due with respect thereto had such obligation not been so affected) shall
be deemed to be reinstated and outstanding as Senior Debt for all purposes
hereof as if such declaration, invalidity or setting aside had not occurred.
Section 10.4. Default on Designated Senior Debt.
The Company, the Parent and the Subsidiary Guarantors may not make
any payment (whether by redemption, purchase, retirement, defeasance or
otherwise) to the Trustee or any Holder in respect of Obligations with respect
to the Notes and the related Guarantees and may not acquire from the Trustee or
any Holder any Notes (other than payments and other distributions made from any
defeasance trust created pursuant to Section 8.1 hereof if the applicable
deposit does not violate Article 8 or 10 of this Indenture) until all principal
and other Obligations with respect to the Senior Debt of the Company have been
paid in full if:
78
70
(i) a default in the payment of any principal of,
premium, if any, or interest on Designated Senior Debt occurs; or
(ii) a default, other than a payment default, on
Designated Senior Debt occurs and is continuing that then permits, or
with the giving of notice or passage of time or both (unless cured or
waived) would permit, holders of the Designated Senior Debt as to
which such default relates to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a
Person who is a Representative of the holders of such Designated
Senior Debt. If the Trustee receives any such Payment Blockage
Notice, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until 360 days shall have elapsed
since the date of commencement of the payment blockage period
resulting from the immediately prior Payment Blockage Notice. No
nonpayment default in respect of any Designated Senior Debt that
existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
The Company shall resume payments on and distributions in
respect of the Notes and may acquire them and the Parent and any Subsidiary
Guarantor shall resume making payments and distributions pursuant to the
Guarantees upon:
(1) in the case of a default referred to in Section
10.4(i) hereof the date upon which the default is cured or waived, or
(2) in the case of a default referred to in Section
10.4(ii) hereof, the earliest of (1) the date on which such nonpayment
default is cured or waived, (2) the date the applicable Payment
Blockage Notice is retracted by written notice to the Trustee from the
Person who is a Representative of the holders of the relevant
Designated Senior Debt and (3) 179 days after the date on which the
applicable Payment Blockage Notice is received unless (A) any of the
events described in Section 10.4(i) hereof has occurred and is
continuing or (B) a Default or Event of Default under Section 6.1(10)
or (11) has occurred,
if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
Section 10.5. Acceleration of Notes.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the
acceleration.
Section 10.6. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any
payment or distribution of or in respect of any Obligations with respect to the
Notes or the Guarantees at a time when such
79
71
payment or distribution is prohibited by Section 10.3 or Section 10.4 hereof,
such payment or distribution shall be held by the Trustee (if the Trustee has
actual knowledge that such payment or distribution is prohibited by Section
10.3 or 10.4) or such Holder, in trust for the benefit of, and shall be paid
forthwith over and delivered to, the holders of Senior Debt as their interests
may appear or their Representative under the indenture or other agreement (if
any) pursuant to which such Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders
of Senior Debt.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and, except as provided in
Section 10.12, shall not be liable to any such holders if the Trustee shall pay
over or distribute to or on behalf of Holders of Notes or the Company, the
Parent, the Subsidiary Guarantors or any other Person money or assets to which
any holders of Senior Debt shall be entitled by virtue of this Article 10,
except if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.
Section 10.7. Notice by Company.
The Company, the Parent and the Subsidiary Guarantors shall
promptly notify the Trustee and the Paying Agent of any facts known to the
Company, the Parent or any Subsidiary Guarantor that would cause a payment of
any Obligations with respect to the Notes or the related Guarantees to violate
this Article, but failure to give such notice shall not affect the
subordination of the Notes and the related Guarantees to the Senior Debt as
provided in this Article.
Section 10.8. Subrogation.
After all Senior Debt is paid in full and until the Notes are
paid in full, Holders of Notes and the related Guarantees shall be subrogated
(equally and ratably with all other Indebtedness pari passu with the Notes and
the Guarantees including, but not limited to, the Senior Subordinated Notes) to
the rights of holders of Senior Debt to receive distributions and payments
applicable to Senior Debt to the extent that distributions and payments
otherwise payable to the Holders of Notes and the related Guarantees have been
applied to the payment of Senior Debt. A payment or distribution made under
this Article to holders of Senior Debt that otherwise would have been made to
Holders of Notes and related Guarantees is not, as between the Company and
Holders of Notes, a payment by the Company on the Notes.
Section 10.9. Relative Rights.
This Article defines the relative rights of Holders of Notes
and the related Guarantees and holders of Senior Debt. Nothing in this
Indenture shall:
80
72
(1) impair, as between the Company and Holders of Notes,
the obligation of the Company, which is absolute and unconditional, to
pay the Stated Price of and interest on the Notes in accordance with
their terms;
(2) affect the relative rights of Holders of Notes and
the related Guarantees and creditors of the Company other than their
rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions
and payments otherwise payable to Holders of Notes and the related
Guarantees.
If the Company fails because of this Article to pay the Stated
Price of or interest on a Note on the due date, the failure is still a Default
or Event of Default.
Section 10.10. Subordination May Not Be Impaired by Company,
the Parent or the Subsidiary Guarantors.
No right of any present or future holders of any Senior Debt
to enforce subordination as provided in this Article Ten will at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company, the Parent or any Subsidiary Guarantor or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company,
the Parent or any Subsidiary Guarantor with the terms of this Indenture,
regardless of any knowledge thereof that any such holder of Senior Debt may
have or otherwise be charged with. The provisions of this Article Ten are
intended to be for the benefit of, and shall be enforceable directly by, the
holders of Senior Debt.
Section 10.11. Payment, Distribution or Notice to
Representative.
Whenever a payment or distribution is to be made or a notice
given to holders of Senior Debt, the distribution may be made and the notice
given to their Representative.
Upon any payment or distribution of assets or securities of
the Company, the Parent or any Subsidiary Guarantor referred to in this Article
10, the Trustee and the Holders of Notes and the related Guarantees shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any payment or distribution
to the Trustee or to the Holders of Notes and the related Guarantees for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the Parent or any Subsidiary Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 10.
81
73
Section 10.12. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes and the Guarantees, unless the Trustee shall have
received at its Corporate Trust Office at least one Business Day prior to the
date of such payment written notice of facts that would cause the payment of
any Obligations with respect to the Notes or Guarantees to violate this
Article, which notice shall specifically refer to Section 10.3 or 10.4 hereof.
Only the Company or a Representative may give the notice. Nothing in this
Article 10 shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.7 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 10.13. Authorization to Effect Subordination.
Each Holder by the Holder's acceptance thereof
82
74
authorizes and directs the Trustee on the Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article 10, and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.9 hereof at least 30 days before the expiration of the
time to file such claim, each lender under the Credit Agreement is hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes and the related Guarantees.
Section 10.14. Amendments.
No amendment may be made to the provisions of or the
definitions of any terms appearing in this Article 10, or to the provisions of
Section 6.2 relating to the Designated Senior Debt, that adversely affects the
rights of any holder of Senior Debt then outstanding unless the holders of such
Senior Debt (or any group or Representative authorized to give a consent)
consent to such change.
Section 10.15. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 10.9 of
this Indenture, the holders of Senior Debt may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Holders and without impairing or releasing the
subordination provided in this Article Ten or the obligations hereunder of the
Holders to the holders of Senior Debt, do any one or more of the following:
(a) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, Senior Debt or any instrument evidencing the same or any
agreement under which Senior Debt is outstanding or secured; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Debt; (c) release any Person liable in any manner for
the collection of Senior Debt; and (d) exercise or refrain from exercising any
rights against the Company, the Parent and each Subsidiary Guarantor and any
other Person.
ARTICLE 11
THE GUARANTEES
Section 11.1. The Guarantees.
Each of the Parent and the Subsidiary Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes or the obligations of the Company hereunder or thereunder,
that:
83
75
(a) the Stated Price of and premium and interest, on the Notes shall be
promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest
on premium and interest, on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or
thereunder shall be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that the same
shall 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. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Parent and the Subsidiary
Guarantors shall be jointly and severally obligated to pay the same
immediately. The Parent and the Subsidiary Guarantors hereby agree that their
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder with respect to
any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each of the Parent and the Subsidiary Guarantors 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
covenant that this Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture. If
any Holder or the Trustee is required by any court or otherwise to return to
the Company, the Parent or the Subsidiary Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to either the
Company, the Parent or the Subsidiary Guarantors, any amount paid by either to
the Trustee or such Holder, this Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each of the Parent
and the Subsidiary Guarantors agrees that it shall not be entitled to any right
of subrogation in relation to the Holders of Notes in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each of the Parent and the Subsidiary Guarantors further
agrees that, as between the Guarantors, on the one hand, and the Holders and
the Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 for the purposes of 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
84
76
declaration of acceleration of such obligations as provided in Article 6, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Parent and the Subsidiary Guarantors for the purpose of this
Guarantee. The Parent and the Subsidiary Guarantors shall have the right to
seek contribution from any Guarantor not paying so long as the exercise of such
right does not impair the rights of the Holders under the Guarantees.
Section 11.2. Execution and Delivery of Guarantees.
(i) To evidence its Guarantee set forth in Section 11.1, each
of the Parent and the Subsidiary Guarantors hereby agrees that a notation of
such Guarantee substantially in the form of Exhibit C shall be endorsed by an
officer of the Parent or such Subsidiary Guarantor on each Note authenticated
and delivered by the Trustee, that this Indenture shall be executed on behalf
of the Parent or such Subsidiary Guarantor by its President or one of its Vice
Presidents and attested to by an Officer and that the Parent or such Subsidiary
Guarantor shall deliver to the Trustee an Opinion of Counsel that the foregoing
have been duly authorized, executed and delivered by the Parent or such
Subsidiary Guarantor and that such Guarantee is a valid and legally binding
obligation of Parent or such Subsidiary Guarantor, enforceable against such
Guarantor in accordance with its terms.
Each of the Parent and each Subsidiary Guarantor hereby agrees
that its Guarantee set forth in Section 11.1 shall remain in full force and
effect notwithstanding any failure to endorse on each Note a notation of such
Guarantee.
If an Officer whose signature is on this Indenture or on the
applicable Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which such Guarantee is endorsed, such Guarantee
shall be valid nevertheless.
The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Guarantees set forth in this Indenture on behalf of the Parent and the
Subsidiary Guarantors.
Section 11.3. Parent and Subsidiary Guarantors May
Consolidate, etc., on Certain Terms.
Neither the Parent nor any Subsidiary Guarantor may
consolidate with or merge with or into, another corporation or Person other
than the Parent, the Company, or another Subsidiary Guarantor, unless:
85
77
(a) subject to the provisions of Section 11.4 hereof, the
Person formed by or surviving any such consolidation or merger assumes
all the obligations of the Parent or such Subsidiary Guarantor, as the
case may be, pursuant to a supplemental indenture in form reasonably
satisfactory to the Trustee in respect of the Notes, this Indenture
and the Parent's or such Subsidiary Guarantor's Guarantee;
(b) immediately after giving effect to such transaction,
no Default or Event of Default exists; and
(c) such transaction does not violate any of Sections
4.3, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16 and 4.17.
Notwithstanding the foregoing, none of the Parent or the Subsidiary Guarantors
shall be permitted to consolidate with or merge with or into (whether or not
such Guarantor is the surviving Person), another corporation, Person or entity
pursuant to the preceding sentence if such consolidation or merger would not be
permitted by Section 5.1 hereof.
In case of any such consolidation or merger 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
Guarantee endorsed upon the Notes and the due and punctual performance of all
of the covenants and conditions of this Indenture to be performed by the Parent
or such Subsidiary Guarantor, such successor corporation shall succeed to and
be substituted for the Parent or such Subsidiary Guarantor with the same effect
as if it had been named herein as a Parent or a Subsidiary Guarantor. Such
successor corporation thereupon may cause to be signed any or all of the
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Guarantees so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Guarantees theretofore and
thereafter issued in accordance with the terms of this Indenture as though all
of such Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, nothing
contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of the Parent or any Subsidiary Guarantor with or into
the Company, the Parent or another Subsidiary Guarantor, or shall prevent any
sale or conveyance of the property of the Parent or any Subsidiary Guarantor as
an
86
78
entirety or substantially as an entirety to the Company, the Parent or any
Subsidiary Guarantor.
Section 11.4. Releases of Guarantees.
In the event of a sale or other disposition of all or
substantially all of the assets of any Subsidiary Guarantor or a sale or other
disposition (including, without limitation, by foreclosure) of all of the
capital stock of any Subsidiary Guarantor, to any corporation or other Person
(including a Subsidiary that is not a Subsidiary Guarantor) by way of merger,
consolidation, or otherwise, in a transaction that does not violate any of the
covenants of this Indenture, then such Subsidiary Guarantor shall be released
and relieved of any obligations under its Guarantee and such acquiring
corporation or other Person, if other than the Parent or a Subsidiary Guarantor
shall have no obligation to assume or otherwise become liable under such
Guarantee; provided, if such acquiring corporation or other Person is other
than the Company or a Wholly Owned Restricted Subsidiary, that the Net Proceeds
of such sale or other disposition are applied in accordance with Section 4.10
hereof. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.10, the Trustee shall execute
any documents reasonably required in order to evidence the release of any
Subsidiary Guarantor from its obligations under its Guarantee.
Any Subsidiary Guarantor not released from its obligations
under its Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of such Subsidiary
Guarantor under this Indenture as provided in this Article 11.
Any Subsidiary Guarantor that is designated an Unrestricted
Subsidiary in accordance with the terms of this Indenture shall be released
from and relieved of its obligations under its Guarantee and any Restricted
Subsidiary that becomes a Material Restricted Subsidiary and any Unrestricted
Subsidiary that ceases to be an Unrestricted Subsidiary and, thereafter,
becomes a Material Restricted Subsidiary shall be required to execute a
Guarantee in accordance with the terms of this Indenture.
87
79
Section 11.5. Limitation on Subsidiary Guarantor Liability.
For purposes hereof, each Subsidiary Guarantor's liability
shall be that amount from time to time equal to the aggregate liability of such
Subsidiary Guarantor thereunder, but shall be limited to the lesser of (i) the
aggregate amount of the Obligations of the Company under the Notes and this
Indenture and (ii) the amount, if any, which would not have (A) rendered such
Subsidiary Guarantor "insolvent" (as such term is defined in the federal
Bankruptcy Law and in the Debtor and Creditor Law of the State of New York) or
(B) left it with unreasonably small capital at the time its Guarantee of the
Notes was entered into, after giving effect to the incurrence of existing
Indebtedness immediately prior to such time; provided that, it shall be a
presumption in any lawsuit or other proceeding in which such Subsidiary
Guarantor is a party that the amount guaranteed pursuant to its Guarantee is
the amount set forth in clause (i) above unless any creditor, or representative
of creditors of such Subsidiary Guarantor, or debtor in possession or trustee
in bankruptcy of such Subsidiary Guarantor, otherwise proves in such a lawsuit
that the aggregate liability of such Subsidiary Guarantor is limited to the
amount set forth in clause (ii). In making any determination as to the
solvency or sufficiency of capital of a Subsidiary Guarantor in accordance with
the previous sentence, the right of such Subsidiary Guarantor to contribution
from other Subsidiary Guarantors and the Parent and any other rights such
Subsidiary Guarantor may have, contractual or otherwise, shall be taken into
account.
Section 11.6. "Trustee" to Include Paying Agent.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in Article 10 and this Article 11 shall in such case (unless
the context shall otherwise require) be construed as extending to and including
such Paying Agent within its meaning as fully and for all intents and purposes
as if such Paying Agent were named in Article 10 and this Article 11 in place
of the Trustee.
Section 11.7. Subordination of Guarantees.
The obligations of each of the Parent and the Subsidiary
Guarantors under its Guarantee pursuant to this Article 11 shall be junior and
subordinated to Senior Debt of the
88
80
Parent or the Subsidiary Guarantor, as the case may be pursuant to Article 10
hereof. For the purposes of the foregoing sentence, the Trustee and the
Holders shall have the right to receive and/or retain payments or distributions
by or on behalf of any of the Guarantors only at such times as they may receive
and/or retain payments in respect of the Notes pursuant to this Indenture,
including Article 10 hereof.
ARTICLE 12
MISCELLANEOUS
Section 12.1. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed duties
shall control. If any provisions of this Indenture modifies or excludes any
provision of the TIA that may be so modified or excluded, the letter provision
shall be deemed to apply to this Indenture as so modified or excluded, as the
case may be.
Section 12.2. Notices.
Any notice or communication by the Company, the Parent or the
Subsidiary Guarantors or the Trustee to the others is duly given if in writing
and delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telecopier or overnight air courier guaranteeing
next day delivery, to the others' address:
If to the Company, the Parent or any Subsidiary Guarantor:
Mesa Operating Co.
1400 Williams Square West
5205 North O'Connor Boulevard
Irving, Texas 75039
Telecopier No.: (214) 444-9001
Attention: Chief Financial Officer
With a copy to:
Baker & Botts, LLP
2001 Ross Avenue
700 Trammell Crow Center
Dallas, Texas 75201-2980
Telecopier No.: 914-953-6503
Attention: Carlos A. Fierro
89
81
If to the Trustee:
Harris Trust and Savings Bank
311 West Monroe Street
12th Floor
Chicago, Illinois 60606
Telecopier No.: (312) 461-3525
Attention: Indenture Trust Administration
Division
The Company, the Parent or any Subsidiary Guarantor or the
Trustee, by notice to the others may designate additional or different
addresses for subsequent notices or communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; five Business Days after being deposited in the
mail, postage prepaid, if mailed; when receipt acknowledged, if by telecopy;
and the next Business Day after timely delivery to the courier, if sent by
overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on
the register kept by the Registrar. Any notice or communication shall also be
so mailed to any Person described in TIA Section 313(c), to the extent
required by the TIA. Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other
Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the
addressee receives it.
If the Company, the Parent or any Subsidiary Guarantor mails a
notice or communication to Holders, it shall mail a copy to the Trustee and
each Agent at the same time.
Section 12.3. Communication by Holders of Notes with Other
Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Parent, the Subsidiary Guarantors, the Trustee, the Registrar
and anyone else shall have the protection of TIA Section 312(c).
Section 12.4. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company, the Parent or
any Subsidiary Guarantor to the Trustee to take any action under this
Indenture, the Company, the Parent or such Subsidiary Guarantor, as the case
may be, shall furnish to the Trustee:
90
82
(a) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 12.5 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if
any, provided for in this Indenture relating to the proposed action
have been complied with; and
(b) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 12.5 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants
have been complied with.
Section 12.5. Statements Required in Certificate or
Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions
of TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he
or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been complied with.
Section 12.6. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules
and set reasonable requirements for its functions.
Section 12.7. No Personal Liability of Directors, Officers,
Employees and Stockholders.
No director, officer, employee, incorporator or stockholder of
the Company, as such, shall have any liability for any obligations of the
Company under the Notes or this Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of Notes,
by accepting a Note, waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver
may not be effective to waive liabilities
91
83
under the federal securities laws and it is the view of the Commission that
such a waiver is against public policy.
Section 12.8. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTEES.
Section 12.9. No Adverse Interpretation of Other
Agreements.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company, the Parent or their
respective Subsidiaries or of any other Person. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture and the Guarantees.
Section 12.10. Successors.
All agreements of the Company, the Parent and each Subsidiary
Guarantor in this Indenture, the Notes and the Guarantees shall bind its
respective successors. All agreements of the Trustee in this Indenture shall
bind its successors.
Section 12.11. Severability.
In case any provision in this Indenture or in the Notes 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 12.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
Section 12.13. Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
92
84
SIGNATURES
Dated as of
July 2, 1996
MESA Inc.
Attest: By
---------------------------------
Name:
------------------------------
Title:
- -------------------------- ------------------------------
Mesa Operating Co.
Attest: By
---------------------------------
Name:
------------------------------
Title:
- ------------------------------ ------------------------------
Harris Trust and Savings Bank, as
Trustee
Attest: By
---------------------------------
Name:
------------------------------
Title:
- ------------------------------ ------------------------------
93
================================================================================
EXHIBIT A
(Face of Note)
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTIONS
1271-1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE ISSUE PRICE,
AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY OF THE
NOTES MAY BE OBTAINED BY CONTACTING THE ISSUER'S INVESTORS RELATIONS DEPT.,
TELEPHONE NO. (214) 402-7000.
11 5/8% Senior Subordinated Discount Notes due 2006
No. $
Cusip Number: ---------
MESA OPERATING CO.
promises to pay to
or registered assigns,
the principal sum of
Dollars on July 1, 2006.
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
This Note shall not bear interest prior to July 1, 2001. From
July 2, 1996 through June 30, 2001, the Accreted Value of this Note will
increase as specified on the reverse side hereof.
Dated: ,
------------- -------
MESA OPERATING CO.
By
---------------------------------
Name:
Title:
A-1
94
By
---------------------------------
Name:
Title:
This is one of the Notes referred
to in the within-mentioned (SEAL)
Indenture:
HARRIS TRUST AND SAVINGS BANK,
as Trustee
By
---------------------------------
Authorized Signatory
================================================================================
A-2
95
(Back of Note)
11 5/8% Senior Subordinated Discount Note due 2006
Capitalized terms used herein shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
1. Interest. This Note shall not bear interest prior to
July 1, 2001; however, the Accreted Value of the Note will increase from July
2, 1996 through June 30, 2001 at a rate of 11 5/8% per annum, compounded semi-
annually on January 1 and July 1 of each year. From and after July 1, 2001,
Mesa Operating Co., a Delaware corporation (the "Company"), promises to pay
interest on the stated principal amount of this Note at the rate of 11 5/8% per
annum, which interest shall be payable in cash semiannually in arrears on
January 1 and July 1, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"); provided that the
first Interest Payment Date shall be January 1, 2002. Interest on the Notes
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from July 1, 2001. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months.
2. Method of Payment. On each Interest Payment Date the
Company will pay interest to the Person who is the Holder of record of this
Note as of the close of business on the December 15 or June 15 immediately
preceding such Interest Payment Date, even if this Note is cancelled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. Principal,
premium if any and interest on this Note will be payable at the office or
agency of the Company maintained for such purpose within the City and State of
New York or, at the option of the Company, payment of interest, may be made by
check mailed to the Holder of this Note at its address set forth in the
register of Holders of Notes; provided that all payments with respect to the
Global Notes and definitive Notes having an aggregate principal amount of $5.0
million or more the Holders of which have given wire transfer instructions to
the Company at least 10 Business Days prior to the applicable payment date will
be required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Such payment shall be in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, Harris Trust
and Savings Bank, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company, MESA Inc. (the "Parent") or any Subsidiary
Guarantor or any other of the Company's or Parent's Subsidiaries may act in any
such capacity.
A-3
96
4. Indenture. The Company issued the Notes under an
Indenture dated as of July 2, 1996 ("Indenture") among the Company, the Parent
and the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject
to all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Notes are general unsecured obligations of the
Company and are limited to $264,000,000 in aggregate principal amount (at
maturity) and will mature on July 1, 2006.
5. Optional Redemption.
(a) The Notes are not redeemable at the Company's option
prior to July 1, 2001. From and after July 1, 2001, the Notes will be subject
to redemption at the option of the Company, in whole or in part, upon not less
than 30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest thereon from July 1, 2001 to the applicable redemption date, if
redeemed during the twelve-month period beginning on July 1, of the years
indicated below:
YEAR PERCENTAGE
---- ----------
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.813%
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.875%
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.938%
2004 and thereafter . . . . . . . . . . . 100.000%
(b) Notwithstanding the provisions of clause (a) of this
Paragraph 5, prior to July 1, 1999 the Company may, at its option, on any one
or more occasions, redeem up to $88 million of the aggregate principal amount
(at maturity) of Notes at a redemption price equal to 110% of the Accreted
Value (at the redemption date) thereof, with the net proceeds of sales of
Equity Interests (other than Disqualified Stock) of the Company or Parent;
provided that at least $176 million aggregate principal amount (at maturity) of
Notes must remain outstanding immediately after the occurrence of such
redemption; and provided, further, that any such redemption shall occur within
60 days of the date after the closing of the related sale of such Equity
Interests.
"Accreted Value" with respect to any Note means, as of the
date of issuance of the Notes, 56.855% of the offering price of the stated
principal amount of such Note, and as of any date after such date of issuance
and prior to July 1, 2001 as of which the Accreted Value is being calculated
(the "Accreted Value Calculation Date") (a) if the Accreted Value Calculation
Date is a January 1 or July 1 interest payment dates, the percentage of the
stated principal amount of such Note as of such date as shown in the table
below or (b) if the Accreted Value Calculation Date is not a January 1 or July
1, an amount equal to the sum of (i) the Accreted Value of such Note as of the
January 1 or July 1, as the case may be, immediately preceding the Accreted
Value Calculation Date, plus (ii) the accrued amortization of the original
issue discount from (but excluding) such immediately preceding January 1 or
July 1 to (and including) the Accreted Value Calculation Date,
A-4
97
calculated as the product of (x) 5.8125 % of annual coupon rate of the Accreted
Value of such Note as of such immediately proceeding January 1 or July 1 and
(y) a fraction, the numerator of which is the number of days from (but
excluding) such immediately preceding January 1 or July 1 to (and including)
the Accreted Value Calculation Date (assuming a 360-day year of twelve 30-day
months), and the denominator of which is 180. The Accreted Value of each Note
as of each January 1 and July 1 prior to July 1, 2001 shall be an amount in
dollars equal to a percentage of the stated principal amount of such Note as
set forth below:
January 1 June 1
Payment Date Payment Date
------------ ------------
1997 60.141% 63.636%
1998 67.335% 71.249%
1999 75.390% 79.772%
2000 84.409% 89.315%
2001 94.507% 100.00%
On and after July 1, 2001, the Accreted Value of each Note
shall be equal to 100% of the stated principal amount thereof.
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Company shall
not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
7. Repurchase at Option of Holder.
(a) Upon the occurrence of a Change of Control, each
Holder of Notes shall have the right to require the Company to repurchase all
or any part (equal to $1,000 or an integral multiple thereof) of such Holder's
Notes pursuant to the offer described below (the "Change of Control Offer") at
an offer price in cash equal to prior to July 1, 2001, 101% of the Accreted
Value of the Notes on the date of purchase and, on July 1, 2001 and thereafter,
101% of the aggregate principal amount thereof plus accrued and unpaid
interest, if any, thereon to the date of purchase (the "Change of Control
Payment"). The right of the Holders of the Notes to require the Company to
repurchase such Notes upon a Change of Control may not be waived by the Trustee
without the approval of the Holders of the Notes required by Section 9.2 of the
Indenture. Within 30 days following any Change of Control, the Company will
mail a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Notes pursuant to
the procedures required by the Indenture and described in such notice. The
Change of Control Payment shall be made on a business day not less than 30 days
nor more than 60 days after such notice is mailed. The Parent, the Company and
each Subsidiary Guarantor will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to
the extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control.
A-5
98
(b) If the Company or a Restricted Subsidiary consummates
any Asset Sales permitted by the Indenture, when the aggregate amount of Excess
Proceeds exceeds $10.0 million, the Company shall make an Asset Sale Offer to
purchase the maximum principal amount of Notes and any other Pari Passu
Indebtedness to which the Asset Sale Offer applies that may be purchased out of
the Excess Proceeds, at an offer price in cash in an amount equal to, in the
case of the Notes, prior to July 1, 2001, 100% of the Accreted Value thereof on
the date of purchase and, thereafter, 100% of the principal amount of the
Notes, plus, after July 1, 2001, accrued but unpaid interest thereon, if any,
to the date of purchase or, in the case of any Pari Passu Indebtedness, 100% of
the principal amount thereof (or with respect to discount Pari Passu
Indebtedness, accreted value thereof on the date of purchase, in each case, in
accordance with the procedures set forth in Section 3.9 of the Indenture or the
agreements governing the Pari Passu Indebtedness, as applicable. To the extent
that the aggregate principal amount (or accreted value, as the case may be) of
Notes and Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is
less than the Excess Proceeds, the Company may use any remaining Excess
Proceeds for general corporate purposes. If the sum of (i) the aggregate
Accreted Value (or, if after July 1, 2001, the principal amount) of Notes
surrendered by Holders thereof and (ii) the aggregate principal amount or
accreted value, as the case may be, of Pari Passu Indebtedness surrendered by
holders or lenders thereof exceeds the amount of Excess Proceeds, the Trustee
and the trustee or other lender representative for the Pari Passu Indebtedness
shall select the Notes and the other Pari Passu Indebtedness to be purchased on
a pro rata basis, based on the aggregate principal amount (or accreted value,
as applicable) thereof surrendered in such Asset Sale Offer. Upon completion
of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
8. 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 whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes
or on the aggregate principal amount of the Notes called for redemption, as the
case may be.
9. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons and only in denominations of $1,000 principal
amount (at maturity) and integral multiples of $1,000. The transfer of Notes
may be registered and Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Note or portion
of a Note selected for redemption, except for the unredeemed portion of any
Note being redeemed in part. Also, it need not exchange or register the
transfer of any Note for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a
Note may be treated as its owner for all purposes.
A-6
99
11. Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in aggregate principal amount (at
maturity) of the Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or the tender offer or
exchange offer for, such Notes), and any existing Default or Event of Default
under, or compliance with any provision of the Indenture or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes. Without the consent of any Holder of a Note, the
Indenture or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to provide for the assumption of the Company's
obligations to Holders of the Notes in case of a merger or consolidation, to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, or to comply with the requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act.
12. Defaults and Remedies. Events of Default include:
(i) default for 30 consecutive days in the payment when due of interest on the
Notes (whether or not prohibited by the provisions of Article 10 of the
Indenture; (ii) default in payment when due of the Stated Price of or premium,
if any, on the Notes (whether or not prohibited by the provisions of Article 10
of the Indenture); (iii) failure by the Company to comply with the provisions
of Article 5 of the Indenture; (iv) failure by the Company for 30 consecutive
days after notice from the Trustee or the Holders of at least 25% in aggregate
principal amount at stated maturity of the Notes then outstanding to comply
with the provisions of Sections 4.3, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13,
4.14, 4.16 and 4.17 of the Indenture; (v) failure by the Company for 60
consecutive days after notice from the Trustee or the Holders of at least 25%
in aggregate principal amount at stated maturity of the Notes then outstanding
to comply with any of its other agreements or covenants in, or provisions of,
this Note or in the Indenture; (vi) except as permitted by the Indenture, any
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or the
Parent or a Subsidiary Guarantor or any Person acting on behalf of the Parent
or a Subsidiary Guarantor, shall deny or disaffirm the Parent's or such
Subsidiary Guarantor's obligations under its Guarantee; (vii) the failure by
the Parent to issue Preferred Stock for gross proceeds in the amount of $132
million pursuant to the Rights Offering and Standby Commitment or either
thereof within 90 days following the date of issuance of the Notes; (viii)
default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by the Company or any Subsidiary Guarantor whether such Indebtedness
or guarantee now exists, or is created after the date of the Indenture, which
default (a) is caused by a failure to pay principal of or premium, if any, or
interest on such Indebtedness prior to the expiration of the 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 final
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 is then existing a Payment Default or the maturity of which has been so
accelerated, aggregates $10.0 million or more provided, that if any such
default is cured or waived or any such acceleration rescinded, or such
Indebtedness
A-7
100
is repaid, within a period of 10 days from the continuation of such default
beyond the applicable grace period or the occurrence of such acceleration, as
the case may be, such Event of Default under the Indentures and any
consequential acceleration of the Notes shall be automatically rescinded; (ix)
a final judgment or order or final judgments or orders are rendered against the
Company or any Restricted Subsidiary that are unsatisfied and that require the
payment in money, either individually or in an aggregate amount, that is more
than $10.0 million over the coverage under applicable insurance policies and
either (a) a creditor has commenced an enforcement proceeding upon such
judgment (other than a judgment that is stayed by reason of pending appeal or
otherwise) or (b) a 60-day period transpired during which a stay of such
judgment, order, judgments or orders (by reason of pending appeal or otherwise)
was not in effect; and (x) certain events of bankruptcy or insolvency with
respect to the Company, the Parent or any Subsidiary Guarantor. If any Event
of Default (other than an Event of Default described in clause (x) above)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency with
respect to the Company, the Parent or any Subsidiary Guarantor, all outstanding
Notes will become due and payable without further action or notice. Holders of
the Notes may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount at stated maturity of the then outstanding Notes may direct the Trustee
in its exercise of any trust or power. The Trustee may withhold from Holders
of the Notes notice of any continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of principal or interest)
if it determines that withholding notice is in their interest. The Holders of
a majority in aggregate principal amount at stated maturity of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest or premium on, or the principal of, the Notes. The Company is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required, within 5 Business days after
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
"Stated Price" means, with respect to any Note as of any date
of determination, (i) the Accreted Value thereof on the date of determination,
if such date is on or prior to July 1, 2001 or (ii) 100% of the principal
amount thereof plus accrued but unpaid interest thereon to the date of
determination, if such date is after July 1, 2001, and in the cases, and only
the cases, of an optional redemption effected pursuant to the provisions of
Sections 3.7 and 4.13 of the Indenture, the premium (if any) payable pursuant
to such Sections, as applicable.
13. Subordination. The Notes are subordinated to Senior
Debt of the Company. To the extent provided in the Indenture, Senior Debt must
be paid before the Notes may be paid. The Company agrees, and each Holder by
accepting a Note agrees, that the Indebtedness evidenced by the Notes,
including, but not limited to, the payment of principal of, premium, if any,
and interest on the Notes, and any other payment Obligation of the Company in
respect of the Notes is subordinated in right of payment, to the extent and in
the manner provided in the Indenture, to the
A-8
101
prior payment in full in cash of all Senior Debt of the Company (whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed) and authorizes the Trustee to give effect and appoints the Trustee
as attorney-in-fact for such purpose.
14. Trustee Dealings with Company. The Indenture
contains certain limitations on the rights of the Trustee, should it become a
creditor of the Company, to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security
or otherwise. The Trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the Commission for permission to continue or
resign.
15. No Recourse Against Others. No director, officer,
employee, incorporator or stockholder of the Company, as such, shall have any
liability for any obligations of the Company under the Notes or the Indenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Notes, by accepting a Note, waives and releases
all such liability. The waiver and release are part of the consideration for
issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the Commission that
such a waiver is against public policy.
16. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. Abbreviations. Customary abbreviations may be used
in the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act.
18. CUSIP Numbers. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to:
Mesa Operating Co.
1400 Williams Square West
5205 North O'Connor Boulevard
Irving, Texas 75039
Telecopier No.: (214) 444-9001
Attention: Secretary
A-9
102
[NOTE: THE FORM OF GUARANTEE ATTACHED AS EXHIBIT C TO THE INDENTURE IS TO BE
ATTACHED TO THIS NOTE.]
A-10
103
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign
and transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's Social Security or tax I.D. No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
- --------------------------------------------------------------------------------
Date:
------------------
Your Signature:
-------------------------------
(Sign exactly as your name appears on the
face of this Security)
Signature Guarantee:*
-------------------------
- -----------------------
*/ Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-11
104
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.10 or 4.13 of the Indenture, check the box below:
/ / Section 4.10 / / Section 4.13
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.10 or Section 4.13 of the Indenture, state
the principal amount at maturity you elect to have purchased: $
---------------
Date:
----------------
Your Signature:
-------------------------------
(Sign exactly as your name appears on the
face of this Security)
Signature Guarantee:*
-------------------------
- ------------------------
*/ Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-12
105
EXHIBIT B
(Form of Legend for Global Note)
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except 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 or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be 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.
B-1
106
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES
[To be attached to Global Note]
The following exchanges of a part of this Global Note for
definitive Notes have been made:
Principal Amount of
Amount of decrease in Amount of increase in this Global Note Signature of authorized
Principal Amount Principal Amount following such officer of Trustee
Date of Exchange of this Global Note of this Global Note decrease (or increase) or Note Custodian
---------------- ------------------- ------------------- ---------------------- -----------------
B-2
107
EXHIBIT C
Guarantee
Each of the Parent and the Subsidiary Guarantors, if any,
hereby, jointly and severally, unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes or the obligations of the Company hereunder or thereunder,
that: (a) the Stated Price of and premium and interest on the Notes shall be
promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest
on premium and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or
thereunder shall be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that same
shall 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. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Parent and the Subsidiary
Guarantors shall be jointly and severally obligated to pay the same
immediately.
The obligations of the Parent and the Subsidiary Guarantors
to the Holders of Notes and to the Trustee pursuant to this Guarantee and the
Indenture (including the subordination provisions thereof) are expressly set
forth in Article 11 of the Indenture, and reference is hereby made to such
Indenture for the precise terms of this Guarantee. The terms of Article 11 of
the Indenture are incorporated herein by reference.
This is a continuing Guarantee and shall remain in full force
and effect and shall be binding upon each of the Parent and the Subsidiary
Guarantors and its respective successors and assigns to the extent set forth in
the Indenture until full and final payment of all of the Company's Obligations
under the Notes and the Indenture and shall inure to the benefit of the Trustee
and the Holders of Notes and their successors and assigns and, in the event of
any transfer or assignment of rights by any Holder of Notes or the Trustee, the
rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the
terms and conditions hereof. Notwithstanding the foregoing, any Subsidiary
Guarantor that satisfies the provisions of Section 11.4 of the Indenture shall
be released of its
C-1
108
obligations hereunder. This is a Guarantee of payment and not a guarantee of
collection.
This Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
For purposes hereof, each Subsidiary Guarantor's liability
will be that amount from time to time equal to the aggregate liability of such
Subsidiary Guarantor hereunder but shall be limited to the lesser of (i) the
aggregate amount of the obligations of the Company under the Notes and the
Indenture and (ii) the amount, if any, which would not have (A) rendered such
Subsidiary Guarantor "insolvent" (as such term is defined in the federal
Bankruptcy Law and in the Debtor and Creditor law of the State of New York) or
(B) left it with unreasonably small capital at the time its Guarantee of the
Notes was entered into, after giving effect to the incurrence of existing
Indebtedness immediately prior to such time; provided that, it shall be a
presumption in any lawsuit or other proceeding in which such Subsidiary
Guarantor is a party that the amount guaranteed pursuant to its Guarantee is
the amount set forth in clause (i) above unless any creditor, or representative
of creditors of such Subsidiary Guarantor, or debtor in possession or trustee
in bankruptcy of such Guarantor, otherwise proves in such a lawsuit that the
aggregate liability of such Subsidiary Guarantor is limited to the amount set
forth in clause (ii). The Indenture provides that, in making any determination
as to the solvency or sufficiency of capital of a Subsidiary Guarantor in
accordance with the previous sentence, the right of such Subsidiary Guarantor
to contribution from other Subsidiary Guarantors and the Parent and any other
rights such Subsidiary Guarantor may have, contractual or otherwise, shall be
taken into account.
C-2
109
Capitalized terms used herein have the same meanings given in
the Indenture unless otherwise indicated.
MESA INC.,
a Texas corporation
By:
------------------------------------
Name:
---------------------------------
Title:
---------------------------------
[ANY SUBSIDIARY GUARANTORS]
By:
------------------------------------
Name:
---------------------------------
Title:
---------------------------------
C-3