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EXHIBIT 4.3
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SNYDER OIL CORPORATION
SUBSIDIARY GUARANTORS
Named Herein
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
Trustee
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SECOND SUPPLEMENTAL INDENTURE
Dated as of June 10, 1997
to
Indenture dated as of June 10, 1997
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$175,000,000
8 3/4% Senior Subordinated Notes due 2007
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TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Other Definition Changes. . . . . . . . . . . . . . . . 20
Section 1.3 Other Definitions. . . . . . . . . . . . . . . . . . . 20
ARTICLE II - NOTE FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.1 Form of Face of Note . . . . . . . . . . . . . . . . . 21
Section 2.2 Form of Reverse of Note . . . . . . . . . . . . . . . . 23
Section 2.3 Form of Notation Relating to Subsidiary Guarantees . . 27
ARTICLE III - THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.1 Forms Generally . . . . . . . . . . . . . . . . . . . . 29
Section 3.2 Title and Terms . . . . . . . . . . . . . . . . . . . . 30
Section 3.3 Denominations . . . . . . . . . . . . . . . . . . . . . 30
Section 3.4 Book-Entry Provisions for Global Note . . . . . . . . . 30
ARTICLE IV - DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . 31
Section 4.1 Events of Default . . . . . . . . . . . . . . . . . . . 31
Section 4.2 Acceleration of Maturity; Rescission and Annulment . . 33
ARTICLE V - CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OF OR LEASE . . . . . 35
Section 5.1 Consolidation, Merger, Conveyance, Transfer Of or
Lease . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VI - SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . 37
Section 6.1 Additional Provisions Relating to Supplemental
Indentures. . . . . . . . . . . . . . . . . . . . . . . 37
Section 6.2 Additional Restrictions on Supplemental Indentures . . 37
Section 6.3 Notice of Supplemental Indentures and Waivers . . . . . 38
Section 6.4 Effect on Senior Indebtedness . . . . . . . . . . . . . 38
ARTICLE VII - COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.1 Existence . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.2 Maintenance of Properties . . . . . . . . . . . . . . . 39
Section 7.3 Statement by Officer as to Default . . . . . . . . . . 39
Section 7.4 Additional Covenants . . . . . . . . . . . . . . . . . 40
Section 7.5 Waiver of Certain Covenants . . . . . . . . . . . . . . 54
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ARTICLE VIII - REDEMPTION OF NOTES . . . . . . . . . . . . . . . . . 54
Section 8.1 Right of Redemption . . . . . . . . . . . . . . . . . . 54
ARTICLE IX - DEFEASANCE AND COVENANT DEFEASANCE . . . . . . . . . . . . . . . 55
Section 9.1 Defeasance and Discharge . . . . . . . . . . . . . . . 55
Section 9.2 Covenant Defeasance . . . . . . . . . . . . . . . . . . 55
Section 9.3 Conditions to Defeasance or Covenant Defeasance . . . . 55
ARTICLE X - SUBSIDIARY GUARANTEES . . . . . . . . . . . . . . . . . . . . . . 56
Section 10.1 Subsidiary Guarantees . . . . . . . . . . . . . . . . . 56
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THIS SECOND SUPPLEMENTAL INDENTURE, dated as of June 10, 1997, is among
SNYDER OIL CORPORATION, a Delaware corporation (hereinafter called the
"Company"), the SUBSIDIARY GUARANTORS (as defined hereinafter) and TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, a national banking association (hereinafter
called the "Trustee").
RECITALS
WHEREAS, the Company has executed and delivered to the Trustee an
Indenture, dated as of June 10, 1997 (the "Base Indenture"), as supplemented by
the First Supplemental Indenture, dated as of June 10, 1997 (together with the
Base Indenture, the "Original Indenture"), and as supplemented by this Second
Supplemental Indenture (together with the Original Indenture, the "Indenture"),
providing for the issuance and sale by the Company from time to time of its
debt securities (the "Securities"), issuable in one or more series;
WHEREAS, all capitalized terms used herein which are defined in the
Original Indenture shall have the meanings assigned to them in the Original
Indenture unless otherwise defined herein;
WHEREAS, Section 901(6) of the Original Indenture permits the execution
of supplemental indentures without the consent of any Holders to establish the
form and terms of any series of Securities;
WHEREAS, 901(5) of the Original Indenture permits the execution of
supplemental indentures without the consent of any Holders to change or
eliminate an provision of the Original Indenture with respect to any series of
Securities when there is no Security of such series Outstanding;
WHEREAS, Sections 901(2) and 901(3) of the Original Indenture permit the
execution of supplemental indentures without the consent of any Holders to add
to the covenants of the Company and to add any additional Events of Default,
respectively, for the benefit of all or any series of Securities;
WHEREAS, Section 301 of the Original Indenture provides that the Company
may enter into an indenture supplemental to the Original Indenture to establish
certain terms of a series of Securities issued pursuant to the Original
Indenture;
WHEREAS, the Company has duly authorized the issuance of a series of its
Securities named its 8 3/4% Senior Subordinated Notes due 2007 (the "Notes") of
substantially the tenor and in the amount hereinafter set forth;
WHEREAS, the Company, pursuant to the foregoing authority, proposes in
and by this Second Supplemental Indenture to supplement and amend the Original
Indenture insofar as it will apply to the Notes (and the related Subsidiary
Guarantees) in certain respects; and
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WHEREAS, all things necessary have been done to make the Notes, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and the related
Subsidiary Guarantees, when executed by the Subsidiary Guarantors and delivered
hereunder and duly issued by the Subsidiary Guarantors, the valid obligations
of the Subsidiary Guarantors, and to make this Second Supplemental Indenture a
valid agreement of the Company and the Subsidiary Guarantors, in accordance
with their and its terms.
NOW, THEREFORE, the Company, the Subsidiary Guarantors and the Trustee
hereby agree that the following provisions supplement and amend the Original
Indenture solely with respect to the series of Securities that consists of the
Notes:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions.
"6% Convertible Preferred Stock" means the 6% convertible preferred
stock, par value $.01 per share, of the Company.
"Acquired Indebtedness" means Indebtedness of a Person (a) assumed in
connection with an acquisition of Properties from such Person or (b)
outstanding at the time such Person becomes a Subsidiary of any other Person
(other than any Indebtedness incurred in connection with, or in contemplation
of, such acquisition or such Person becoming such a Subsidiary). Acquired
Indebtedness shall be deemed to be incurred on the date, of the related
acquisition of Properties from any Person or the date the acquired Person
becomes a Subsidiary.
"Adjusted Consolidated Net Tangible Assets" means (without duplication),
as of the date of determination, (i) the sum of (a) discounted future net
revenues from proved oil and gas reserves of the Company and its Restricted
Subsidiaries calculated in accordance with Commission guidelines before any
state or federal income taxes, with no less than 90% of such discounted future
net revenues estimated or audited by one or more nationally recognized firms of
independent petroleum engineers in a reserve report prepared as of the end of
the Company's most recently completed fiscal year, as increased by, as of the
date of determination, the estimated discounted future net revenues from (1)
estimated proved oil and gas reserves acquired since the date of such year-end
reserve report, and (2) estimated oil and gas reserves attributable to upward
revisions of estimates of proved oil and gas reserves since the date of such
year-end reserve report due to exploration, development or exploitation
activities, in each case calculated in accordance with Commission guidelines
(utilizing the prices utilized in such year-end reserve report), and decreased
by, as of the date of determination, the estimated discounted future net
revenues from (3) estimated proved oil and gas reserves produced or disposed of
since the date of such year-end reserve report and (4) estimated oil and gas
reserves attributable to downward revisions of estimates of proved oil and gas
reserves since the date of such year-end reserve report due to changes in
geological conditions or other factors
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which would, in accordance with standard industry practice, cause such
revisions, in each case calculated in accordance with Commission guidelines
(utilizing the prices utilized in such year-end reserve report); provided that,
in the case of each of the determinations made pursuant to clauses (1) through
(4), such increases and decreases shall be as estimated by the Company's
petroleum engineers, unless in the event that there is a Material Change as a
result of such acquisitions, dispositions or revisions, then the discounted
future net revenues utilized for purposes of this clause (i)(a) shall be
confirmed in writing by a nationally recognized firm of independent petroleum
engineers, (b) the capitalized costs that are attributable to oil and gas
properties of the Company and its Restricted Subsidiaries to which no proved
oil and gas reserves are attributable, based on the Company's books and records
as of a date no earlier than the date of the Company's latest annual or
quarterly financial statements, (c) the Net Working Capital of the Company and
its Restricted Subsidiaries on a date no earlier than the date of the Company's
latest annual or quarterly financial statements and (d) the greater of (i) the
net book value on a date no earlier than the date of the Company's latest
annual or quarterly financial statements or (ii) the appraised value, as
estimated by independent appraisers, of other tangible assets (including,
without duplication, Investments in unconsolidated Restricted Subsidiaries) of
the Company and its Restricted Subsidiaries, as of the date no earlier than the
date of the Company's latest audited financial statements, minus (ii) the sum
of (a) minority interests (other than a minority interest in a Subsidiary that
is a business trust or similar entity formed for the primary purpose of issuing
preferred securities the proceeds of which are loaned to the Company or a
Restricted Subsidiary), (b) any net gas balancing liabilities of the Company
and its Restricted Subsidiaries reflected in the Company's latest audited
financial statements, (c) to the extent included in (i)(a) above, the
discounted future net revenues, calculated in accordance with Commission
guidelines (utilizing the prices utilized in the Company's year-end reserve
report), attributable to reserves which are required to be delivered to third
parties to fully satisfy the obligations of the Company and its Restricted
Subsidiaries with respect to Volumetric Production Payments on the schedules
specified with respect thereto and (d) the discounted future net revenues,
calculated in accordance with Commission guidelines, attributable to reserves
subject to Dollar-Denominated Production Payments which, based on the estimates
of production and price assumptions included in determining the discounted
future net revenue specified in (i)(a) above, would be necessary to fully
satisfy the payment obligations of the Company and its Restricted Subsidiaries
with respect to Dollar-Denominated Production Payments on the schedules
specified with respect thereto. If the Company changes its method of
accounting from the successful efforts method to the full cost method or a
similar method of accounting, "Adjusted Consolidated Net Tangible Assets" will
continue to be calculated as if the Company were still using the successful
efforts method of accounting.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean
the amount by which the fair value of the Properties of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under its Subsidiary Guarantee, of such Subsidiary Guarantor at
such date.
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"Affiliate" of any specified Person means (i) any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person or (ii) any other Person who is a director
or executive officer of (a) such specified Person or (b) any Person described
in the preceding clause (i). For the 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 Stock of a Person shall be
deemed to be control.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition to any Person other than the Company or any of its Restricted
Subsidiaries (including, without limitation, by way of merger or consolidation)
(collectively, for purposes of this definition, a "transfer"), directly or
indirectly, in one or a series of related transactions, of (i) any Capital
Stock of any Restricted Subsidiary held by the Company or any Restricted
Subsidiary, (ii) all or substantially all of the Properties of the Company or
any of its Restricted Subsidiaries or (iii) any other Properties of the Company
or any of its Restricted Subsidiaries (including Production Payments) other
than (a) a disposition of hydrocarbons or other mineral products (other than
Production Payments), inventory, accounts receivable, cash, Cash Equivalents or
other property in the ordinary course of business, (b) any lease, abandonment,
disposition, relinquishment or farm-out of any oil and gas Property in the
ordinary course of business or (c) the liquidation Of Property received in
settlement of debts owing to the Company or any Restricted Subsidiary as a
result of foreclosure, perfection or enforcement of any Lien or debt, which
debts were owing to the Company or any Restricted Subsidiary in the ordinary
course of business of the Company or such Restricted Subsidiary. For the
purposes of this definition, the term "Asset Sale" shall not include (i) any
transfer of Properties which is governed by, and made in accordance with, the
provisions of Article Eight hereof, (ii) any transfer of Properties to an
Unrestricted Subsidiary, if permitted under Section 1012 hereof, (iii) any
transfer of the securities of or property or assets of Patina or SOCO
International or (iv) any transfer, in one or a series of related transactions,
of Properties having a Fair Market Value of less than $2,000,000.
"Average Life" means, with respect to any Indebtedness, as at any date
of determination, the quotient obtained by dividing (i) the sum of the products
of (a) the number of years (and any portion thereof) from the date of
determination to the date or dates of each successive scheduled principal
payment (including, without limitation, any sinking fund or mandatory
redemption payment requirements) of such Indebtedness multiplied by (b) the
amount of each such principal payment by (ii) the sum of all such principal
payments.
"Board of Directors" means, with respect to the Company, either the
board of directors of the Company or any duly authorized committee of such
board of directors and, with respect to any Subsidiary, either the board of
directors of such Subsidiary or any duly authorized committee of that board.
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"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
its Board of Directors and, to be in full force and effect on the date of such
certification, and delivered to the Trustee, and with respect to a Subsidiary,
a copy of a resolution certified by the Secretary or an Assistant Secretary of
such Subsidiary to have been duly adopted by its Board of Directors and to be
in full force and effect on the date of such certification, delivered to the
Trustee.
"Cash Equivalents" means (i) any evidence of Indebtedness with a
maturity of 365 days or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (ii) demand and time deposits and certificates of
deposit or acceptances with a maturity of 365 days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $500,000,000; (iii)
commercial paper with a maturity of 365 days or less issued by a corporation
that is not an Affiliate of the Company and is organized under the laws of any
state of the United States or the District of Columbia and rated at least A-1
by S&P or at least P-1 by Moody's; (iv) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clause (i) above entered into with any commercial bank meeting the
specifications of clause (ii) above; (v) overnight bank deposits and bankers'
acceptances at any commercial bank meeting the qualifications specified in
clause (ii) above; (vi) deposits available for withdrawal on demand with any
commercial bank not meeting the qualifications specified in clause (ii) above
but which is organized under the laws of any country in which the Company or
any Restricted Subsidiary maintains an office or is engaged in the Oil and Gas
Business, provided that (a) all such deposits are required to be made in such
accounts in the ordinary course of business, (b) such deposits do not at any
one time exceed $5,000,000 in the aggregate and (c) no funds so deposited
remain on deposit in such bank for more than 30 days; (vii) deposits available
for withdrawal on demand with any commercial bank not meeting the
qualifications specified in clause (ii) above but which is a lending bank under
any of the Company's or any Restricted Subsidiary's credit facilities, provided
all such deposits do not exceed $5,000,000 in the aggregate at any one time;
and (viii) investments in money market funds substantially all of whose assets
comprise securities of the types described in clauses (i) through (v).
"Change of Control" means the occurrence of any of the following events:
(i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), other than the Permitted Holder, is or becomes the
"beneficial owner" (as defined in Rule l3d-3 under the Exchange Act), directly
or indirectly, of more than 50% of the total voting power of the outstanding
Voting Stock of the Company; (ii) the Company is merged with or into or
consolidated with another Person and, immediately after giving effect to the
merger or consolidation, (a) less than 50% of the total voting power of the
outstanding Voting Stock of the surviving or resulting Person is then
"beneficially owned" (within the meaning of Rule 13d-3 under the Exchange Act)
in the aggregate by the stockholders of the Company immediately prior to such
merger or consolidation, and (b) any "person" or "group" (as defined in Section
13(d)(3) or 14(d)(2) of the Exchange Act) has become the direct or indirect
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more
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than 50% of the total voting power of the Voting Stock of the surviving or
resulting Person; (iii) the Company, either individually or in conjunction,
with one or more Restricted Subsidiaries, sells, assigns, conveys, transfers,
leases, or otherwise disposes of, or one or more Restricted Subsidiaries sells,
assigns, conveys, transfers, leases or otherwise dispose of, all or
substantially all of the Properties of the Company and the Restricted
Subsidiaries, taken as a whole (either in one transaction or a series of
related transactions), including Capital Stock of the Restricted Subsidiaries,
to any Person (other than the Company or a Wholly Owned Restricted Subsidiary);
(iv) during any consecutive two-year period, individuals who at the beginning
of such period constituted the Board of Directors of the Company (together with
any new directors whose election by such Board of Directors or whose nomination
for election by the stockholders of the Company was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office; or (v) the liquidation or
dissolution of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended, as now
or hereafter in effect, together with all regulations thereunder issued by the
Internal Revenue Service.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution
of assets upon any voluntary or involuntary liquidation, dissolution or
winding-up of such Person, to shares of Capital Stock of any other class of
such Person.
"Consolidated Exploration Expenses" means, for any period, exploration
expenses of the Company and its Restricted Subsidiaries for such period, as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the
ratio of (i) the sum of Consolidated Net Income, Consolidated Interest Expense,
Consolidated Exploration Expenses, Consolidated Income Tax Expense and
Consolidated Non-cash Charges deducted in computing Consolidated Net Income, in
each case, for such period of the Company and its Restricted Subsidiaries on a
consolidated basis, all determined in accordance with GAAP, decreased (to the
extent included in determining Consolidated Net Income) by the sum of (a) the
amount of deferred revenues that are amortized during such period and are
attributable to reserves that are subject to Volumetric Production Payments and
(b) amounts recorded in accordance with GAAP as repayments of principal and
interest pursuant to Dollar-Denominated Production Payments to (ii) the
Consolidated Interest Expense for such period; provided, however, that (a) the
Consolidated Fixed Charge Coverage Ratio shall be calculated on the assumption
that (1) the Indebtedness to be incurred (and all other Indebtedness incurred
after the first day of such period of four full fiscal quarters referred to in
Section 1014(i) hereof through and including the date of determination) and (if
applicable) the application of the net proceeds therefrom (and from any other
such Indebtedness), including to refinance other Indebtedness, had been
incurred on the first day of such four-quarter period and, in the case of
Acquired Indebtedness, on the assumption that the related transaction
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(whether by means of purchase, merger or otherwise) also had occurred on such
date with the appropriate adjustments with respect to such acquisition being
included in such pro forma calculation and (2) any acquisition or disposition
by the Company or any Restricted Subsidiary of any Properties outside the
ordinary course of business or any repayment of any principal amount of any
Indebtedness of the Company or any Restricted Subsidiary prior to the Stated
Maturity thereof, in either case since the first day of such period of four
full fiscal quarters through and including the date of determination, had been
consummated on such first day of such four-quarter period, (b) in making such
computation, the Consolidated Interest Expense attributable to interest on any
Indebtedness required to be computed on a pro forma basis in accordance with
Section 1014(i) hereof and (1) bearing a floating interest rate shall be
computed as if the rate in effect on the date of computation had been the
applicable rate for the entire period and (2) which was not outstanding during
the period for which the computation is being made but which bears, at the
option of the Company, a fixed or floating rate of interest, shall be computed
by applying, at the option of the Company, either the fixed or floating rate,
(c) in making such computation, the Consolidated Interest Expense attributable
to interest on any Indebtedness under a revolving credit facility required to
be computed on a pro forma basis in accordance with Section 1014(i) hereof
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period, provided that such average daily balance shall be
reduced by the amount of any repayment of Indebtedness under a revolving credit
facility during the applicable period, which repayment permanently reduced the
commitments or amounts available to be reborrowed under such facility, (d)
notwithstanding clauses (b) and (c) of this proviso, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by
agreements relating to Interest Rate Protection Obligations, shall be deemed to
have accrued at the rate per annum resulting after giving effect to the
operation of such agreements, (e) in making such calculation, Consolidated
Interest Expense shall exclude interest attributable to Dollar-Denominated
Production Payments, and (f) if after the first day of the period referred to
in clause (i) of this definition the Company has retired any Indebtedness out
of the net cash proceeds of the issue and sale of shares of Qualified Capital
Stock of the Company within 30 days of such issuance and sale, Consolidated
Interest Expense shall be calculated on a pro forma basis as if such
Indebtedness had been retired on the first day of such period.
"Consolidated Income Tax Expense" means, for any period, the provision
for federal, state, local and foreign income taxes (including state franchise
taxes accounted for as income taxes in accordance with GAAP) of the Company and
its Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, without
duplication, (i) the sum of (a) the interest expense of the Company and its
Restricted Subsidiaries for such period as determined on a consolidated basis
in accordance with GAAP, including, without limitation, (1) any amortization of
debt discount, (2) the net cost under Interest Rate Protection Obligations
(including any amortization of discounts), (3) the interest portion of any
deferred payment obligation constituting indebtedness, (4) all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and (5) all accrued interest, in each case to the
extent attributable to such period, (b) to the extent any Indebtedness of any
Person (other than
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the Company or a Restricted Subsidiary) is guaranteed by the Company or any
Restricted Subsidiary, the aggregate amount of interest paid (to the extent not
accrued in a prior period) or accrued by such other Person during such period
attributable to any such Indebtedness, in each case to the extent attributable
to that period, (c) the aggregate amount of the interest component of
Capitalized Lease Obligations paid (to the extent not accrued in a prior
period), accrued or scheduled to be paid or accrued by the Company and its
Restricted Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP and (d) the aggregate amount of dividends paid
(to the extent not accrued in a prior period) or accrued on Redeemable Capital
Stock or 6% Convertible Preferred Stock of the Company and its Restricted
Subsidiaries, to the extent such Redeemable Capital Stock or 6% Convertible
Preferred Stock is owned by Persons other than the Company or its Restricted
Subsidiaries and to the extent such dividends are not paid in Common Stock,
divided by one minus the applicable actual combined federal, state, local and
foreign income tax rate of the Company and its Subsidiaries (expressed as a
decimal), on a consolidated basis, for the period preceding the date of the
transaction giving rise to the need to calculate Consolidated Interest Expense,
less (ii) to the extent included in clause (i), amortization of capitalized
debt issuance costs of the Company and its Restricted Subsidiaries during such
period.
"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of the Company and its Restricted Subsidiaries for such period
as determined in accordance with GAAP, adjusted by excluding (i) net after-tax
extraordinary gains or losses (less all fees and expenses relating thereto),
(ii) net after-tax gains or losses (less all fees and expenses relating
thereto) attributable to Asset Sales, (iii) the net income (or net loss) of any
Person (other than the Company or any of its Restricted Subsidiaries), in which
the Company or any of its Restricted Subsidiaries has an ownership interest,
except to the extent of the amount of dividends or other distributions or
interest on indebtedness actually paid to the Company or any of its Restricted
Subsidiaries in cash by such other Person during such period (regardless of
whether such cash dividends, distributions or interest on indebtedness is
attributable to net income (or net loss) of such Person during such period or
during any prior period), (iv) net income (or net loss) of any Person combined
with the Company or any of its Restricted Subsidiaries on a "pooling of
interests" basis attributable to any period prior to the date of combination
and (v) the net income of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary is not at the date of determination permitted, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgement, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders (vi) income
resulting from the transfers of property or assets received by the Company or
Restricted Subsidiaries from Unrestricted Subsidiaries, (vii) the cumulative
effect of a change in accounting principles and (viii) any write-downs of non-
current assets, provided, however, that any ceiling limitation write-downs
shall be treated as capitalized costs. Notwithstanding for foregoing, any net
gains or losses related to the sale or disposition of any securities of or any
properties or assets of Patina or SOCO International shall be excluded from the
determination of Consolidated Net Income.
"Consolidated Net Worth" means, at any date, the consolidated
stockholders' equity of the Company and its Restricted Subsidiaries less the
amount of such stockholders' equity attributable
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to Redeemable Capital Stock or treasury stock of the Company and its Restricted
Subsidiaries, as determined in accordance with GAAP.
"Consolidated Non-cash Charges" means, for any period, the aggregate
depreciation, depletion, amortization and other non-cash expenses of the
Company and its Restricted Subsidiaries reducing Consolidated Net Income for
such period, determined on a consolidated basis in accordance with GAAP
(excluding any such non-cash charge which requires an accrual of or reserve for
cash charges for any future period).
"Convertible Subordinated Notes" means the 7% convertible subordinated
notes due 2001 of the Company.
"Default" means any event that is or with the passage of time or giving
of notice or both would be an Event of Default.
"Depository" means The Depository Trust Company, its nominees and their
respective successors.
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors of the
Company is required to deliver a Board Resolution hereunder, a member of the
Board of Directors of the Company who does not have any material direct or
indirect financial interest (other than in interest arising solely from the
beneficial ownership of Capital Stock of the Company) in or with respect to
such transaction or series of transactions.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor act thereto.
"Federal Bankruptcy Code" means the United States Bankruptcy Code of
Title 11 of The United States Code, as amended from time to time.
The term "guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments or documents for
collection in the ordinary course of business), direct or indirect, in any
manner, of any part or all of such obligation and (ii) an agreement direct or
indirect, contingent or otherwise, the practical effect of which is to assure
in any way the payment or performance (or payment of damages in the event of
non-performance) of all or any part of such obligation, including, without
limiting the foregoing, the payment of amounts drawn down by letters of credit;
provided however, that a guarantee by any Person shall not include a
contractual commitment by one Person to invest in another Person provided that
such Investment is otherwise permitted by this Indenture. When used as a verb,
"guarantee" shall have a corresponding meaning.
"Guarantor Senior Indebtedness" means the principal of (and premium, if
any, on) and interest on (including interest accruing after the filing of a
petition initiating any proceeding pursuant to any bankruptcy law) and other
amounts due on or in correction with (including any fees,
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premiums, expenses, including costs of collection, and indemnities) any
Indebtedness of a Subsidiary Guarantor, whether outstanding on the date of this
Second Supplemental Indenture or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness will be pari passu with or subordinated in
right of payment to its Subsidiary Guarantee. Notwithstanding the foregoing,
Guarantor Senior Indebtedness of a Subsidiary Guarantor shall not include (i)
Indebtedness of such Subsidiary Guarantor evidenced by its Subsidiary
Guarantee, (ii) Indebtedness of such Subsidiary Guarantor that is expressly
pari passu with its Subsidiary Guarantee or is expressly subordinated in right
of payment to any Guarantor Senior Indebtedness of such Subsidiary Guarantor or
its Subsidiary Guarantee, (iii) Indebtedness of such Subsidiary Guarantor to
the extent incurred in violation of Section 1014 hereof, (iv) Indebtedness of
such Subsidiary Guarantor to the Company or any of the Company's other
Subsidiaries or to any Affiliate of the Company or any Subsidiary of such
Affiliate and (v) Indebtedness which when incurred and without regard to any
election under Section 1111(b) of the Federal Bankruptcy Code is without
recourse to such Subsidiary Guarantor.
"Holder" means a Person in whose name a Note is registered in a Security
Register.
"Indenture" means the Original Indenture, as supplemented by the First
Supplemental Indenture and as further supplemented by this Second Supplemental
Indenture and as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto and thereto entered into pursuant to the
applicable provisions hereof and thereof.
"Interest Rate Protection Obligations" means the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest
on a stated notional amount in exchange for periodic payments made by such
Person calculated by applying a fixed or a floating rate of interest on the
same notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar agreements or arrangements designed to
protect against or manage such Person's and any of its Subsidiaries' exposure
to fluctuations in interest rates.
"Investment" means, with respect to any Person, any direct or indirect
advance, loan, guarantee of Indebtedness or other extension of credit or
capital contribution to (by means of any transfer of cash or other Property to
others or any payment for Property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities (including derivatives and
including, without limitation, any interests in any partnership or joint
venture) or evidences of Indebtedness issued by, any other Person. In addition,
(i) the Fair Market Value of the net assets of any Restricted Subsidiary at the
time that such Restricted Subsidiary is designated an Unrestricted Subsidiary
shall be deemed to be an "Investment" made by the Company in such Unrestricted
Subsidiary at such time and (ii) the fair market value of Capital Stock
retained by the Company or a Restricted Subsidiary in connection with the sale
or issuance of Capital Stock of a Restricted Subsidiary in accordance with
Section 1016 hereof that,
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as a result of such transaction, is no longer a Restricted Subsidiary shall be
deemed to be an "Investment" made at the time of such transaction.
"Investments" shall exclude (a) extensions of trade credit under a joint
operating agreement or otherwise in the ordinary course of business, workers'
compensation, utility, lease and similar deposits and prepaid expenses in the
ordinary course of business, (b) Interest Rate Protection Obligations entered
into in the ordinary course of business or as required by any Permitted
Indebtedness or any other Indebtedness incurred in compliance with Section 1016
hereof, but only to the extent that the stated aggregate notional amounts of
such Interest Rate Protection Obligations do not exceed 105% of the aggregate
principal amount of such Indebtedness to which such Interest Rate Protection
Obligations relate, (c) bonds, notes, debentures or other securities received
as a result of Asset Sales permitted under Section 1019 hereof and (d)
endorsements of negotiable instruments and documents in the ordinary course of
business.
"Material Change" means an increase or decrease (excluding changes that
result solely from changes in prices) of more than 20% during a fiscal quarter
in the estimated discounted future net revenues from proved oil and gas
reserves of the Company and its Restricted Subsidiaries, calculated in
accordance with clause (i)(a) of the definition of Adjusted Consolidated Net
Tangible Assets; provided, however, that the following will be excluded from
the calculation of Material Change: (i) any acquisitions during the quarter of
oil and gas reserves that have been estimated by a nationally recognized firm
of independent petroleum engineers and on which a report or reports exist and
(ii) any disposition of properties held at the beginning of such quarter that
have been disposed of as provided in Section 1019 hereof.
"Material Subsidiary" means, at any particular time, any Restricted
Subsidiary that, together with its Subsidiaries, (a) accounted for more than 5%
of the consolidated revenues of the Company and its Restricted Subsidiaries for
the most recently completed fiscal year of the Company, or (b) was the owner of
more than 5% of the consolidated assets of the Company and its Restricted
Subsidiaries at the end of such fiscal year, all as shown in the case of (a)
and (b) on the consolidated financial statements of the Company and its
Restricted Subsidiaries for such fiscal year.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (except to the extent that such obligations are financed or sold
with recourse to the Company or any Restricted Subsidiary), net of (i)
brokerage commissions and other fees and expenses (including fees and expenses
of legal counsel and investment banks) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale, (iii) amounts
required to be paid to any Person (other than the Company or any Restricted
Subsidiary) owning a beneficial interest in the Property subject to the Asset
Sale and (iv) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve required in accordance
with GAAP consistently applied against any liabilities associated with such
Asset Sale and retained by the Company or any Restricted Subsidiary, as the
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case may be, after such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as reflected in an Officers' Certificate delivered to the
Trustee; provided, however, that any amounts remaining after adjustments.
revaluations or liquidations of such reserves shall constitute Net Cash
Proceeds.
"Net Working Capital" means (i) all current assets of the Company and
its Restricted Subsidiaries, minus (ii) all current liabilities of the Company
and its Restricted Subsidiaries, except current liabilities included in
Indebtedness, in each case as set forth in financial statements of the Company
prepared in accordance with GAAP.
"Non-payment Event of Default" means any event (other than a Payment
Event of Default), the occurrence of which (with or without notice or the
passage of time) entitles one or more Persons to accelerate the maturity of any
Specified Senior Indebtedness.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of the Company or a Restricted Subsidiary incurred in connection
with the acquisition by the Company or a Restricted Subsidiary of any property
or assets and as to which (i) the holders of such Indebtedness agree that they
will look solely to the property or assets so acquired and securing such
Indebtedness for payment on or in respect of such Indebtedness and (ii) no
default with respect to such Indebtedness would permit (after notice or passage
of time or both), according to the terms thereof, any holder of any
Indebtedness of the Company or a Restricted Subsidiary to declare a default on
such Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity.
"Notes" has the meaning stated in the recitals of this Second
Supplemental Indenture and more particularly means any Notes authenticated and
delivered under this Second Supplemental Indenture.
"Officer" means, with respect to any Person, the Chairman of the Board,
the President, any Vice President, the Chief Financial Officer or the Treasurer
of such Person.
"Oil and Gas Business" means (i) the acquisition, exploration,
development, operation and disposition of interests in oil, gas and other
hydrocarbon Properties, (ii) the gathering, marketing. treating, processing,
storage, 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, hydrocarbons and other minerals and products produced in
association therewith and (iv) any activity necessary, appropriate or
incidental to the activities described in the foregoing clauses (i) through
(iii) of this definition.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company (or any Subsidiary Guarantor), including an employee of
the Company (or any Subsidiary Guarantor), and who shall be reasonably
acceptable to the Trustee.
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"Outstanding," when used with respect to Notes, means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(1) Notes theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(2) Notes, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders of such Notes,
provided that, if such Notes are to be redeemed, notice of such
redemption has been duly given Pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(3) Notes, except to the extent provided in Sections 402 and
403 hereof, with respect to which the Company has effected legal
defeasance or covenant defeasance as provided in Article Four hereof;
and
(4) Notes which have been paid pursuant to Section 306 hereof
or in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture, other than any
such Notes in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Notes are held by a bona fide
purchaser in whose hands the Notes are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Notes owned by
the Company, any Subsidiary Guarantor or any other obligor upon the Notes or
any Affiliate of the Company, any Subsidiary Guarantor or such other obligor
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in making such calculation
or in relying upon any such request, demand, authorization, direction, consent,
notice or waiver, only Notes which the Trustee actually knows to be so owned
shall be so disregarded. Notes so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such Notes and
that the pledgee is not the Company, any Subsidiary Guarantor or any other
obligor upon the Notes or any Affiliate of the Company, any Subsidiary
Guarantor or such other obligor.
"Patina" means Patina Oil & Gas Corporation, a Delaware corporation.
"Payment Event of Default" means any default in the payment or required
prepayment of Principal of (or premium, if any, on) or interest on any
Specified Senior Indebtedness when due (whether at final maturity, upon
scheduled installment, upon acceleration or otherwise).
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"Permitted Designees" means (i) trusts for the benefit of the Permitted
Holder and (ii) in the event of death or incompetence of the Permitted Holder,
his estate, heirs, executor, administrator, committee or other personal
representative, provided that if any such estate, heir, executor,
administrator, committee or other personal representative acquires, subsequent
to the death or incapacity of the Permitted Holder, any additional shares of
Voting Stock of the Company, such person will cease to be a Permitted Designee.
"Permitted Guarantor Junior Notes" means with respect to any Subsidiary
Guarantor, equity securities or subordinated debt securities of such Subsidiary
Guarantor or any successor Obligor with respect to its Guarantor Senior
Indebtedness provided for by a plan of reorganization or readjustment that, in
the case of any such subordinated debt securities, are subordinated in right of
payment to all Guarantor Senior Indebtedness of such Subsidiary Guarantor or
successor obligor that may at the time be outstanding to substantially the same
extent as, or to a greater extent than, the Subsidiary Guarantee of such
Subsidiary Guarantor is so subordinated as provided in this Indenture.
"Permitted Holder" means John C. Snyder and his Permitted Designees.
"Permitted Indebtedness" means any of the following:
(i) Indebtedness under the Bank Credit Facility in an
aggregate principal amount at any one time outstanding not to exceed the
greater of (a) $250,000,000 and (b) an amount equal to the sum of (1)
$100,000,000 and (2) 15% of Adjusted Consolidated Net Tangible Assets,
less any amounts applied to repay or prepay permanently any such
Indebtedness in accordance with Section 1019 hereof, including any
guarantee of any such Indebtedness (including by any Subsidiary) and any
fees, premiums, expenses (including costs of collection), indemnities
and other amounts payable in connection with such indebtedness;
(ii) Indebtedness under the Notes and the Subsidiary
Guarantees;
(iii) Indebtedness outstanding on the date of this Second
Supplemental Indenture (and not repaid or defeased with the proceeds of
the offering of the Notes);
(iv) obligations of the Company or a Restricted Subsidiary
pursuant to Interest Rate Protection Obligations, but only to the extent
that the stated aggregate notional amounts of such obligations do not
exceed 105% of the aggregate principal amount of the Indebtedness
covered by such Interest Rate Protection Obligations; obligations under
currency exchange contracts entered into in the ordinary course of
business; and hedging arrangements that the Company or a Restricted
Subsidiary enters into in the ordinary course of business for the
purpose of protecting its production against fluctuations in oil or
natural gas prices;
(v) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary and Indebtedness of a Restricted Subsidiary to the Company or
a Wholly Owned Restricted
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Subsidiary; provided, however, that upon any subsequent issuance or
transfer of any Capital Stock or any other event which results in any
such Wholly Owned Restricted Subsidiary ceasing to be a Wholly Owned
Restricted Subsidiary or any other subsequent transfer of any such
Indebtedness (except to the Company or a Wholly Owned Restricted
subsidiary), such Indebtedness shall be deemed, in each case, to be
incurred and shall be treated as an incurrence for purposes of Section
1014 at the time the Wholly Owned Restricted Subsidiary in question
ceased to be a Wholly Owned Restricted Subsidiary;
(vi) in-kind obligations relating to net gas balancing
positions arising in the ordinary course of business and consistent with
past practice;
(vii) Indebtedness in respect of bid, performance or surety
bonds issued for the account of the Company or any Restricted Subsidiary
in the ordinary course of business, including guaranties and letters of
credit supporting such bid, performance or surety obligations (in each
case other than for an obligation for money borrowed); any guarantee of
Senior Indebtedness or Guarantor Senior Indebtedness incurred in
compliance with Section 1014 hereof, by a Restricted Subsidiary or the
Company;
(viii) any guarantee of Senior Indebtedness or Guarantor Senior
Indebtedness, incurred in compliance with Section 1014, by a Restricted
Subsidiary or the Company;
(ix) any renewals, substitutions, financings or replacements
(each, for purposes of this clause, a "refinancing") by the Company or a
Restricted Subsidiary of any Indebtedness incurred pursuant to clause
(ii) or (iii) of this definition, including any successive refinancings
by the Company or such Restricted Subsidiary, so long as (a) any such
new Indebtedness shall be in a principal amount that does not exceed the
principal amount (or, if such Indebtedness being refinanced provides for
an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration thereof, such lesser amount as of the
date of determination) so refinanced plus the amount of any premium
required to be paid in connection with such refinancing pursuant to the
terms of the Indebtedness refinanced or the amount of any premium
reasonably determined by the Company or such Restricted Subsidiary as
necessary to accomplish such refinancing, plus the amount of expenses of
the Company or such Restricted Subsidiary incurred in connection with
such refinancing, and (b) in the case of any refinancing of Indebtedness
of the Company that is not Senior Indebtedness, such new Indebtedness is
either pari passu with the Notes or subordinated to the Notes at least
to the same extent as the Indebtedness being refinanced and (c) such new
Indebtedness has an Average Life equal to or longer than the Average
Life of the Indebtedness being refinanced and a final Stated Maturity
equal to or later than the final Stated Maturity of the Indebtedness
being refinanced;
(x) Non-Recourse Indebtedness; and
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(xi) any additional Indebtedness in an aggregate principal
amount not in excess of $25,000,000 at any one time outstanding.
"Permitted Investments" means any of the following: (i) Investments in
Cash Equivalents; (ii) Investments in the Company or any of its Restricted
Subsidiaries; (iii) Investments in an amount not to exceed $10,000,000 at any
one time outstanding; (iv) Investments by the Company or any of its Restricted
Subsidiaries in another Person, if as a result of such Investment (a) such
other Person becomes a Restricted Subsidiary or (b) such other Person is merged
or consolidated with or into, or transfers or conveys all or substantially all
of its Properties to, the Company or a Restricted Subsidiary; (v) Investments
and expenditures 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 activity
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 the Oil and Gas Business jointly
with third parties, including, without limitation (a) ownership interests in
oil and gas properties or gathering systems and (b) Investments and
expenditures 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
arrangements, joint bidding agreements, service contracts, joint venture
agreements, partnership agreements (whether general or limited), subscription
agreements, stock purchase agreements and other similar agreements with third
parties limited liability company agreements (including Unrestricted
Subsidiaries); (vi) entry into any hedging arrangements in the ordinary course
of business for the purpose of protecting the Company's or any Restricted
Subsidiary's production against fluctuations in oil or natural gas prices;
(vii) entry into any currency exchange contract in the ordinary course of
business; and (viii) Investments in stock, obligations or securities received
in settlement of debts owing to the Company or a Restricted Subsidiary as a
result of bankruptcy or insolvency proceedings or upon the foreclosure,
perfection or enforcement of any Lien in favor of the Company or a Restricted
Subsidiary, in each case as to debt owing to the Company or a Restricted
Subsidiary that arose in the ordinary course of business of the Company or any
such Restricted Subsidiary.
"Permitted Liens" means the following types of Liens:
(i) Liens existing as of the date the Notes are first issued
(except to the extent such Liens secure Indebtedness that is repaid or
defeased with the proceeds of the offering of the Notes) and any
renewal, extension or refinancing of any such Lien provided that
thereafter such Lien extends only to the properties that were subject to
such Lien prior to the renewal, extension or refinancing thereof;
(ii) Liens securing the Notes or the Subsidiary Guaranties; and
(iii) Liens in favor of the Company.
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"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's preferred or preference stock, whether now outstanding or issued after
the date of this Second Supplemental Indenture, including, without limitation,
all classes and series of preferred or preference stock of such Person.
"Public Equity Offering" means an underwritten public offering for cash
by the Company of its Qualified Capital Stock pursuant to a registration
statement that has been declared effective by the Commission (other than a
registration statement on Form S-8 or any successor form or otherwise relating
to equity securities issuable under any employee benefit plan of the Company).
"Qualified Capital Stock" of any Person means any and all Capital Stock
of such person other than Redeemable Capital Stock.
"Record Date" means a Regular Record Date or a Special Record Date.
"Redemption Date," when used with respect to any Note to be redeemed, in
whole or in part, means the date fixed for such redemption by or pursuant to
this Second Supplemental Indenture.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Second
Supplemental Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the June 1 or December 1 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on or after the date of this Second Supplemental Indenture, unless
such Subsidiary of the Company is an Unrestricted Subsidiary or is designated
as an Unrestricted Subsidiary pursuant to the terms of this Second Supplemental
Indenture.
"S&P" means Standard and Poor's Ratings Service, a division of McGraw-
Hill, Inc., and its successors.
"SOCO International" means SOCO International, Inc., a Delaware
corporation.
"Specified Guarantor Senior Indebtedness" means, with respect to a
Subsidiary Guarantor, (a) all Guarantor Senior Indebtedness of such Subsidiary
Guarantor in respect of the Bank Credit Facility and any renewals, amendments,
extensions, supplements, modifications, deferrals, refinancings or replacements
(each, for purposes of this definition, a "refinancing") thereof by such
Subsidiary Guarantor, including any successive refinancings thereof by such
Subsidiary Guarantor, and (b) any other Guarantor Senior Indebtedness and any
refinancings thereof having a principal amount of at least $10,000,000 as of
the date of determination and provided that the agreements, indentures or other
instruments evidencing such Guarantor Senior Indebtedness or pursuant to which
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such Guarantor Senior Indebtedness was issued specifically designates such
Guarantor Senior Indebtedness as "Specified Guarantor Senior Indebtedness" for
purposes of the Indenture. For purposes of this definition, a refinancing of
any Specified Guarantor Senior Indebtedness shall be treated as Specified
Guarantor Senior Indebtedness only if the Indebtedness issued in such
refinancing ranks or would rank pari passu with the Specified Guarantor Senior
Indebtedness refund and only if the Indebtedness issued in such refinancing is
permitted under Section 1014(i) hereof.
"Stated Maturity" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable, and, when used with respect to any other Indebtedness or any
installment of interest thereon, means the date specified in the instrument
evidencing or governing such Indebtedness as the fixed date on which the
principal of such Indebtedness or such installment of interest is due and
payable.
"Subordinated Indebtedness" means Indebtedness of the Company which is
expressly subordinated in right of payment to the Note.
"Subsidiary" means, with respect to any Person, (i) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
such Person, by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation), including, without limitation, a joint venture, in which such
Person, one or more Subsidiaries thereof or such Person and one or more
Subsidiaries thereof, directly or indirectly, at the date of determination
thereof, have at least majority ownership interest entitled to vote in the
election of directors, managers or trustees thereof (or other Persons
performing similar functions).
"Subsidiary Guarantee" has the meaning specified in Section 1501 hereof.
"Subsidiary Guarantor" means each of (i) DelMar Petroleum, Inc., a
Delaware corporation, (ii) Mexican Flats Service Company, a Delaware
corporation, (iii) Snyder Fluid Technologies, Inc., a Delaware corporation,
(iv) Snyder Gas Marketing, Inc., a Delaware corporation, (v) SOCO Gas Systems,
Inc., a Delaware corporation, (vi) SOCO Holdings, Inc., a Delaware corporation,
(vii) SOCO Louisiana Leasing, Inc., a Delaware corporation, (viii) SOCO
Offshore, Inc., a Delaware corporation, (ix) Western Transmission Corporation,
a Delaware corporation, (x) Wyoming Gathering and Production Company, a
Delaware corporation, (xi) each of the Company's Restricted Subsidiaries, if
any, executing a supplemental indenture in compliance with the provisions of
Section 1015(i) hereof and (xii) any Person that becomes a successor guarantor
of the Notes in compliance with the provisions of Section 1502 hereof.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination is designated an Unrestricted Subsidiary by the
Board of Directors of the Company as provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors of the Company may
designate any Subsidiary of the Company as an Unrestricted Subsidiary so long
as (a) neither the Company nor any Restricted Subsidiary is directly or
indirectly liable pursuant to
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the terms of any Indebtedness of such Subsidiary; (b) no default with respect
to any Indebtedness of such Subsidiary would permit (upon notice, lapse of time
or otherwise) any holder of any other Indebtedness of the Company or any
Restricted Subsidiary to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its Stated Maturity;
(c) the Company certifies to the Trustee that such designation complies with
Section 1012 hereof; and (d) such designation shall not result in the creation
or imposition of any Lien on any of the Properties of the Company or any
Restricted Subsidiary (other than any Permitted Lien or any Lien the creation
or imposition of which shall have been in compliance with Section 1017 hereof);
provided, however, that with respect to clause (a), the Company or a Restricted
Subsidiary my be liable for Indebtedness of an Unrestricted Subsidiary if (x)
such liability constituted a Permitted Investment or a Restricted Payment
permitted by Section 1012 hereof, in each case at the time of incurrence, or
(y) the liability would be a Permitted Investment at the time of designation of
such Subsidiary as an Unrestricted Subsidiary. Any such designation by the
Board of Directors of the Company shall be evidenced to the Trustee by filing a
Board Resolution with the Trustee giving effect to such designation. The Board
of Directors of the Company may designate any Unrestricted Subsidiary as a
Restricted Subsidiary if, immediately after giving effect to such designation,
(i) no Default or Event of Default shall have occurred and be continuing, (ii)
the Company could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under Section 1014(i) hereof and (iii) if any of the Properties
of the Company or any of its Restricted Subsidiaries would upon such
designation become subject to any Lien (other than a Permitted Lien), the
creation or imposition of such Lien shall have been in compliance with Section
1017 hereof. Each of Patina and SOCO International will be an Unrestricted
Subsidiary unless it is designated a Restricted Subsidiary in accordance with
the terms hereof.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stork
of any other class or classes shall have, or might have, voting power by reason
of the happening of any contingency).
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary to
the extent (i) all of the Capital Stock or other ownership interests in such
Restricted Subsidiary, other than any directors' qualifying shares mandated by
applicable law, is owned directly or indirectly by the Company or (ii) such
Restricted Subsidiary is organized in a foreign jurisdiction and is required
by the applicable laws and regulations of such foreign jurisdiction to be
partially owned by the government of such foreign jurisdiction or individual or
corporate citizens of such foreign jurisdiction in order for such Restricted
Subsidiary to transact business in such foreign jurisdiction, provided that the
Company, directly or indirectly, owns the remaining Capital Stock or ownership
interest in such Restricted Subsidiary and, by contract or otherwise, controls
the management and business of such Restricted Subsidiary and derives the
economic benefits of ownership of such Restricted Subsidiary to substantially
the same extent as if such Restricted Subsidiary were a wholly owned
Subsidiary.
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Section 1.2 Other Definition Changes.
(i) The following is hereby added to the end of the definition
of "Senior Indebtedness," but only with respect to the Notes issued in
accordance with the provisions hereof: " and (vii) Indebtedness of the
Company to the extent incurred in violation of Section 1014(i) hereof."
(ii) The following is hereby added to the end of the definition
of "Specified Senior Indebtedness," but only with respect to the Notes
issued in accordance with the provisions hereof: "For purposes of this
definition, a refinancing of any Specified Senior Indebtedness shall be
treated as a Specified Senior Indebtedness only if the Indebtedness
issued in such refinancing ranks or would rank pari passu with the
Specified Senior Indebtedness refinanced and only if Indebtedness issued
in such refinancing is permitted by Section 1014(i) hereof."
Section 1.3 Other Definitions.
Defined
Term in Section
---- ----------
"Agent Members" . . . . . . . . . . . . . . . . . . . . . . . . . . 203
"Change of Control Notice" . . . . . . . . . . . . . . . . . . 1018(ii)
"Change of Control Offer" . . . . . . . . . . . . . . . . . . . 1018(i)
"Change of Control Purchase Date" . . . . . . . . . . . . . . . 1018(i)
"Change of Control Purchase Price" . . . . . . . . . . . . . . 1018(i)
"Excess Proceeds" . . . . . . . . . . . . . . . . . . . . . . . 1019(ii)
"Funding Guarantor" . . . . . . . . . . . . . . . . . . . . . . . . 1605
"Global Note . . . . . . . . . . . . . . . . . . . . . . . . . . . 201
"Net Proceeds Deficiency" . . . . . . . . . . . . . . . . . . 1019(iii)
"Net Proceeds Offer" . . . . . . . . . . . . . . . . . . . . 1019(iii)
"Net Proceeds Payment Date" . . . . . . . . . . . . . . . . . 1019(iii)
"Offered Price" . . . . . . . . . . . . . . . . . . . . . . . 1019(iii)
"Pari Passu Indebtedness Amount" . . . . . . . . . . . . . . 1019(iii)
"Pari Passu Offer" . . . . . . . . . . . . . . . . . . . . . 1019(iii)
"Payment Amount" . . . . . . . . . . . . . . . . . . . . . . 1019(iii)
"Physical Note" . . . . . . . . . . . . . . . . . . . . . . . . . . 201
"Purchase Notice" . . . . . . . . . . . . . . . . . . . . . . 1019(iii)
"Restricted Payment" . . . . . . . . . . . . . . . . . . . . . 1012(i)
"Subsidiary Guarantor Non-Payment Default" . . . . . . . . . . 1609(ii)
"Subsidiary Guarantor Payment Default" . . . . . . . . . . . . 1609(i)
"Subsidiary Guarantor Payment Notice" . . . . . . . . . . . . . 1609(ii)
"Surviving Entity . . . . . . . . . . . . . . . . . . . . . . . . 801(a)
"Trigger Date . . . . . . . . . . . . . . . . . . . . . . . . 1018(iii)
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ARTICLE II
NOTE FORMS
Section 2.1 Form of Face of Note.
SNYDER OIL CORPORATION
8 3/4% Senior Subordinated Note due 2007
No. _____ $_________
CUSIP No. 833482AC6
Snyder Oil Corporation, a Delaware corporation (herein called the
"Company" which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
____________________ or registered assigns the principal sum of ______________
Dollars on June 15, 2007, at the office or agency of the Company referred to
below, and to pay interest thereon, commencing on December 15, 1997 and
continuing semiannually thereafter, on June 15 and December 15 in each year,
from June 10, 1997, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, at the rate of 8.75% per annum,
until the principal hereof is paid or duly provided for, and (to the extent
lawful) to pay on demand interest on any overdue interest at the rate borne by
the Notes from the date on which such overdue interest becomes payable to the
date payment of such interest has been made or duly provided for. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name
this Note (or one or more Predecessor Securities) is registered on the Security
Register at the close of business on the Regular Record Date for such interest,
which shall be the June 1 or December 1 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date. Any such interest not
so punctually paid or duly provided for shall forthwith cease to be payable to
the Holder on such Regular Record Date, and such defaulted interest, and (to
the extent lawful) interest on such defaulted interest at the rate borne by the
Notes, may be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered on the Security Register at the close of
business on a Special Record Date for the payment of such defaulted interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Notes not
less than 10 days prior to such Special Record Date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any, on) and interest on
this Note will be made at the office or agency of the Company maintained for
that purpose in The City of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for
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payment of public and private debts; provided, however, that payment of
interest may be made on Physical Notes at the option of the Company by check
mailed to the address of the Person entitled thereto as such address shall
appear on the Security Register.
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Security 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. The Depository Trust Company (55 Water Street, New York, New
York) ("DTC") shall act as the Depository until a successor shall be appointed
by the Company and the Registrar. Unless this certificate is presented by an
authorized representative of the 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.](1)
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
SNYDER OIL CORPORATION
By:
----------------------------------
President
Attest:
- ----------------------------
Secretary
- --------------------
(1) This paragraph should be included only if the Security is issued in global
form.
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Section 2.2 Form of Reverse of Note.
This Note is one of a duly authorized issue of securities of the Company
designated as its 8 3/4% Senior Subordinated Notes due 2007 (herein called the
"Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount to $175,000,000, which may be issued under
an Indenture dated as of June 10, 1997 between the Company and Texas Commerce
Bank National Association, as trustee (herein called the "Trustee," which term
includes any successor trustee), as amended by a First Supplemental Indenture
dated as of June 10, 1997 (herein called the "Original Indenture"), and a
Second Supplemental Indenture dated as of June 10, 1997 (herein called the
"Supplemental Indenture" and, together with the Original Indenture, the
"Indenture), among the Company, the initial Subsidiary Guarantors named
therein, and the Trustee, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Company, the Subsidiary Guarantors, the Trustee and the Holders of the Notes,
and of the terms upon which the Notes are, and are to be, authenticated and
delivered.
The Indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment
to the prior payment in full of all Senior Indebtedness and this Note is issued
subject to such provisions. Each Holder of this Note, by accepting the same,
(i) agrees to and shall be bound by such provisions, (ii) authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture and
(iii) appoints the Trustee as his attorney-in-fact for such purpose.
The Notes are subject to redemption, at the option of the Company, in
whole or in part, at any time on or after June 15, 2002, upon not less than 30
or more than 60 days' notice at the following Redemption Prices (expressed as
percentages of principal amount) set forth below if redeemed during the 12-
month period beginning June 15 of the years indicated below:
Redemption
Year Price
---- --------------
2002 104.375%
2003 102.916%
2004 101.458%
2005 and thereafter 100.000%
together in the case of any such redemption with accrued and unpaid interest,
if any, to the Redemption Date (subject to the right of Holders of record on
the relevant Record Date to receive interest due on an Interest Payment Date
that is on or prior to the Redemption Date), all as provided in the Indenture.
In the case of any redemption of Notes, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to
Holders of such Notes, or one or more Predecessor
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Securities, of record at the close of business on the relevant Record Date
referred to on the face hereof. Notes (or portions thereof) for whose
redemption and payment provision is made in accordance with the Indenture shall
cease to bear interest from and after the Redemption Date. In the event of
redemption or purchase of this Note in part only, a new Note or Notes for the
unredeemed or unpurchased portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
At any time and from time to time prior to June 15, 2000, the Company
may, at its option, redeem Notes in an amount in the aggregate up to 30% of the
aggregate principal amount of the Notes originally issued under the Indenture
with the proceeds of one or more Public Equity Offerings by the Company at a
redemption price (expressed as a percentage of principal amount) of 108.75%,
plus accrued and unpaid interest, if any, to the Redemption Date (subject to
the right of Holders on the relevant Record Date to receive interest due on the
relevant Interest Payment Date); provided, however, that at least $122.5
million aggregate principal amount of the Notes must remain outstanding after
each such redemption. In order to effect the foregoing redemption, the Company
must mail notice of redemption no later than 60 days after the related Public
Equity Offering and must consummate such redemption within 90 days of the
closing of the Public Equity Offering.
The Notes do not have the benefit of any mandatory redemption or sinking
fund obligations.
In the event of a Change of Control of the Company, and subject to
certain conditions and limitations provided in the Indenture, the Company will
be obligated to make an offer to purchase, on a Business Day not more than 60
or less than 30 days following the occurrence of a Change of Control of the
Company, all of the then Outstanding Notes at a purchase price equal to 101% of
the principal amount thereof, together with accrued and unpaid interest to the
Change of Control Purchase Date, all as provided in the Indenture.
In the event of Asset Sales, under certain circumstances, the Company
will be obligated to make a Net Proceeds Offer to purchase all or a specified
portion of each Holder's Notes at a purchase price equal to 100% of the
principal amount of the Notes, together with accrued and unpaid interest to the
Net Proceeds Payment Date.
As set forth in the Indenture, an Event of Default is generally (i)
default for 30 days in payment of interest on any of the Notes, (ii) failure to
pay principal (and premium, if any) upon maturity, redemption or otherwise
(including pursuant to a Change of Control Offer or a Net Proceeds Offer),
(iii) default in the performance of agreements relating to mergers,
consolidations and sales of all or substantially all assets or the failure to
make or consummate a Change of Control Offer or a Net Proceeds Offer, (iv)
failure for 30 days after notice to comply with any other covenants in the
Indenture or the Notes, (v) certain payment defaults under, and the
acceleration prior to the maturity of, certain Indebtedness of the Company or
any Restricted Subsidiary in an aggregate principal amount in excess of
$10,000,000, (vi) the failure of any Subsidiary Guarantee to be in full force
and effect or otherwise to be enforceable (except as permitted by the
Indenture), (vii) certain final judgments or orders against the Company or any
Restricted Subsidiary in an
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aggregate amount of more than $10,000,000 over the coverage under applicable
insurance policies which remain unsatisfied and either become subject to
commencement of enforcement proceedings or remain unstayed for a period of 60
days and (viii) certain events of bankruptcy, insolvency or reorganization of
the Company or any Material Subsidiary. If any Event of Default occurs and is
continuing, the Trustee or the holders of at least 25% in aggregate principal
amount of the Outstanding Notes may declare the principal amount of, premium,
if any, and accrued interest on all the Notes to be due and payable
immediately, except that (i) in the case of an Event of Default arising from
certain events of bankruptcy, insolvency or reorganization of the Company or
any Material Subsidiary, the principal amount of, premium, if any, and accrued
interest on the Notes will become due and payable immediately without further
action or notice, and (ii) in the case of an Event of Default which relates to
certain payment defaults or acceleration with respect to certain Indebtedness,
any Event of Default and any consequential acceleration of the Notes will be
automatically rescinded if any such Indebtedness is repaid or if the default
relating to such Indebtedness is cured or waived and if the holders thereof
have accelerated such Indebtedness then such holders have rescinded their
declaration of acceleration. No Holder may pursue any remedy under the
Indenture unless the Trustee shall have failed to act after notice from such
Holder of an Event of Default and written request by Holders of at least 25% in
aggregate principal amount of the Outstanding Notes, and the offer to the
Trustee of indemnity reasonably satisfactory to it; however, such provision
does not affect the right to sue for enforcement of any overdue payment on a
Note by the Holder thereof. Subject to certain limitations, Holders of a
majority in aggregate principal amount of the Outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing Default (except Default in payment of
principal, premium or interest) if it determines in good faith that withholding
the notice is in the interest of the Holders. The Company is required to file
annual and quarterly reports with the Trustee as to the absence or existence of
Defaults.
The Indenture contains provisions for (i) defeasance at any time of the
entire indebtedness of the Company on this Note and (ii) discharge from certain
restrictive covenants and the related Defaults and Events of Default, upon
compliance by the Company with certain conditions set forth therein, which
provisions apply to this Note.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Subsidiary Guarantors and the rights of the Holders under the
Indenture at any time by the Company, the Subsidiary Guarantors and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount
of the Notes at the time Outstanding, on behalf of the Holders of all the
Notes, to waive compliance by the Company with certain provisions of the
Indenture and certain past Defaults under the Indenture and their consequences.
Any such consent or waiver by or on behalf of the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. Without the consent of any Holder, the Company,
the
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Subsidiary Guarantors and the Trustee may amend or supplement the Indenture or
the Notes to cure any ambiguity, defect or inconsistency, to add or release any
Subsidiary Guarantor pursuant to the Indenture, to provide for uncertificated
Notes in addition to or in place of certificated Notes and to make certain
other specified changes and other changes that do not adversely affect the
interests of any Holder in any material respect.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any, on)
and interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture, and subject to certain limitations therein
set forth, the transfer of this Note is registerable on the Security Register
of the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company maintained for such purpose duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A director, officer, employee, incorporator, stockholder or Affiliate of
the Company or any Subsidiary Guarantor, as such, past, present or future shall
not have any personal liability under this Note or the Indenture by reason of
his or its status as such director, officer, employee, incorporator,
stockholder or Affiliate, or any liability for any obligations of the Company
or any Subsidiary Guarantor under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of such obligations or their creation.
Each Holder, by accepting this Note with the notation of Subsidiary Guarantee
endorsed hereon, waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of this Note with the
notation of Subsidiary Guarantee endorsed hereon.
Prior to the time of due presentment of this Note for registration of
transfer, the Company, the Subsidiary Guarantors, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name this Note is
registered as the owner hereof for all purposes, whether or not this Note is
overdue, and neither the Company, the Subsidiary Guarantors, the Trustee nor
any agent shall be affected by notice to the contrary.
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All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture. The Company will furnish
to any Holder upon written request and without charge a copy of the Indenture.
Requests may be made to the Company at 777 Main Street, Fort Worth, Texas
76102, Attention: Investor Relations.
Pursuant to a recommendation promulgated by the Committee on Uniform
Note Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes as a convenience to the Holders thereof. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identifying information
printed hereon.
Interest on this Note shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
This Note shall be governed by and construed in accordance with the laws
of the State of New York without regard to conflicts of law principles.
Section 2.3 Form of Notation Relating to Subsidiary Guarantees.
The form of notation to be set forth on each Note relating to the
Subsidiary Guarantees shall be in substantially the following form:
SUBSIDIARY GUARANTEES
Subject to the limitations set forth in the Indenture, the initial
Subsidiary Guarantors and, if any, all additional Subsidiary Guarantors (as
defined in the Indenture referred to in the Note upon which this notation is
endorsed and each being hereinafter referred to as a "Subsidiary Guarantor,"
which term includes any additional or successor Subsidiary Guarantor under the
Indenture) have, jointly and severally, unconditionally guaranteed (a) the due
and punctual payment of the principal (and premium, if any) of and interest on
the Notes, whether at maturity, acceleration, redemption or otherwise, (b) the
due and punctual payment of interest on the overdue principal of and interest
on the Notes, if any, to the extent lawful, (c) the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee, all in accordance with the terms set forth in the Indenture, and (d)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, the prompt payment in full when due or performance in
accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise.
The obligations of each Subsidiary Guarantor are limited to the maximum
amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor
under its Subsidiary Guarantee or pursuant to its contribution obligations
under the Indenture, result in the obligations of such Subsidiary Guarantor
under the Subsidiary Guarantee not constituting a fraudulent
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conveyance or fraudulent transfer under federal or state law. Each Subsidiary
Guarantor that makes a payment or distribution under a Subsidiary Guarantee
shall be entitled to a contribution from each other Subsidiary Guarantor in a
pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor.
The obligations of the Subsidiary Guarantors to the Holders or the
Trustee pursuant to the Subsidiary Guarantees and the Indenture are expressly
subordinate to all Guarantor Senior Indebtedness to the extent set forth in
Article Fifteen of the Indenture and reference is made to such Indenture for
the precise terms of such subordination.
No stockholder, officer, director, employee, incorporator or Affiliate
as such, past, present or future, of any Subsidiary Guarantor shall have any
personal liability under its Subsidiary Guarantee by reason of his or its
status as such stockholder, officer, director, employee, incorporator or
Affiliate, or any liability for any obligations of any Subsidiary Guarantor
under the Notes or the Indenture or for any claim based on, in respect of, or
by reason of such obligations or their creation.
Any Subsidiary Guarantor may be released from its Subsidiary Guarantee
upon the terms and subject to the conditions provided in the Indenture.
All terms used in this notation of Subsidiary Guarantee which are
defined in the Indenture referred to in this Note upon which this notation of
Subsidiary Guarantees is endorsed shall have the meanings assigned to them in
such Indenture.
The Subsidiary Guarantees shall be binding upon the Subsidiary
Guarantors and shall inure to the benefit of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee respecting the Note upon which the foregoing Subsidiary Guarantees are
noted, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof and in the Indenture.
The Subsidiary Guarantees shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which the
foregoing Subsidiary Guarantees are noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
signatories.
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DELMAR PETROLEUM, INC.
MEXICAN FLATS SERVICE COMPANY
SNYDER FLUID TECHNOLOGIES, INC.
SNYDER GAS MARKETING, INC.
SOCO GAS SYSTEMS, INC.
SOCO HOLDINGS, INC.
SOCO LOUISIANA LEASING, INC.
SOCO OFFSHORE, INC.
WESTERN TRANSMISSION CORPORATION
WYOMING GATHERING AND PRODUCTION
COMPANY
By:
----------------------------------
Vice President
ARTICLE III
THE NOTES
Section 3.1 Forms Generally.
The following paragraphs are added to the end of Section 201 of the
Indenture, but only with respect to the Notes issued in accordance with the
provisions hereof:
Notes (including the notations thereon relating to the Subsidiary
Guarantees and the Trustee's certificate of authentication) offered and sold
shall be issued initially in the form of one or more permanent global
Securities substantially in the form set forth in Sections 2.1 through 2.3
hereof and Section 202 of the Original Indenture (the "Global Note") deposited
with the Trustee, as custodian for the Depository, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. Subject to the
limitation set forth in Section 3.2 hereof, the principal amounts of the Global
Notes may be increased or decreased from time to time by adjustments made on
the records of the Trustee as custodian for the Depository, as hereinafter
provided.
Notes (including the notations thereon relating to the Subsidiary
Guarantees and the Trustee's certificate of authentication) offered and sold
other than as described in the preceding paragraph shall be issued in the form
of permanent certificated securities in registered form in substantially the
form set forth in Sections 2.1 through 2.3 hereof and Section 202 of the
Original Indenture ("Physical Notes").
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Section 3.2 Title and Terms.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture for original issue is limited to $150,000,000.
The aggregate principal amount of Notes Outstanding at any one time may not
exceed such amount except as provided in Section 306 hereof.
The Notes shall be known and designated as the "8 3/4% Senior
Subordinated Notes due 2007, of the Company. Their Stated Maturity shall be
June 15, 2007, and they shall bear interest at the rate of 8.75% per annum from
June 10, 1997, or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, payable semiannually on June 15 and
December 15 in each year, commencing December 15, 1997, and at said Stated
Maturity, until the principal thereof is paid or duly provided for.
The principal of (and premium, if any, on) and interest on the Notes
shall be payable at the office or agency of the Company maintained for such
purpose in The City of New York; provided, however, that, at the option of the
Company, interest may be paid on Physical Notes by check mailed to addresses of
the Persons entitled thereto as such addresses shall appear on the Security
Register.
Section 3.3 Denominations.
The Notes shall be issuable only in registered form without coupons and
only in denominations of $1,000 and any integral multiple thereof.
Section 3.4 Book-Entry Provisions for Global Note. The following
replaces Section 203 of the Indenture, but only with respect to the Notes
issued in accordance with the provisions hereof:
SECTION 203. Book-Entry Provisions for Global Security.
Each Global Note shall be registered in the name of the Depository for
such Global Note or the nominee or such Depository and be delivered to the
Trustee as custodian for such Depository.
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 Trustee as its custodian, or under such
Global Note, and the Depository may be treated by the Company, the Subsidiary
Guarantors, the Trustee and any agent of the Company, the Subsidiary
Guarantors, or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Subsidiary Guarantors, or the Trustee or any agent of
the Company, the Subsidiary Guarantors, or the Trustee from giving effect to
any written certification, proxy or other authorization furnished by the
Depository or shall 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.
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Transfers of a Global Note shall be limited to transfers of such Global
Note in whole, but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in a Global Note may be
transferred or exchanged for Physical Notes in accordance with the rules and
procedures of the Depository; provided, however, Physical Notes shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a Global Note if, and only if, either (i) the Depository notifies the
Company that it is unwilling or unable to continue as depositary for the Global
Note and a successor depositary is not appointed by the Company within 90 days
of such notice or (ii) an Event of Default has occurred and is continuing and
the Note Registrar has received a request from the Depository to issue Physical
Notes in lieu of all or a portion of the Global Note (in which case the Company
shall deliver Physical Notes within 30 days of such request).
In connection with the transfer of an entire Global Note to beneficial
owners pursuant to this Section, the Global Note 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 Note,
an equal aggregate principal amount of Physical Notes of authorized
denominations.
The Holder of the 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 IV
DEFAULTS AND REMEDIES
Section 4.1 Events of Default. The following replaces Section 501 of
the Indenture, but only with respect to the Notes issued in accordance with the
provisions hereof:
SECTION 501. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article Thirteen or be voluntary or involuntary
or be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):
(i) default for 30 days in the payment of interest on the Notes; or
(ii) default in the payment of the principal of or premium, if any, on
any of the Notes when the same becomes due and payable, whether such payment is
due at Stated Maturity, upon redemption, upon repurchase pursuant to a Change
of Control Offer or a Net Proceeds Offer, upon acceleration or otherwise; or
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(iii) default in the performance or breach of the provisions of Article
VIII hereof, the failure to make or consummate a Change of Control Offer in
accordance with the provisions of Section 1018 or the failure to make or
consummate a Net Proceeds Offer in accordance with the provisions of Section
1019; or
(iv) failure of the Company or any Subsidiary Guarantor to comply with
any other term, covenant or agreement contained in the Notes, any Subsidiary
Guarantee or this Indenture (other than a default specified in subparagraph
(i), (ii) or (iii) above) for a period of 30 days after written notice of such
failure stating that it is a "notice of default" hereunder and requiring the
Company or such Subsidiary Guarantor, as the case may be, to remedy the same
shall have been given (a) to the Company by the Trustee or (b) to the Company
and the Trustee by the Holders of at least 25 % in aggregate principal amount
of the Notes then Outstanding; or
(v) the occurrence and continuation beyond any applicable grace
period of any default in the payment of the principal of (or premium, if any,
on) or interest on any Indebtedness of the Company (other than the Notes) or
any Restricted Subsidiary for money borrowed when due, or any other default
resulting in acceleration of any Indebtedness of the Company or any Restricted
Subsidiary for money borrowed, provided that the aggregate principal amount of
such Indebtedness shall exceed $10,000,000; or
(vi) any Subsidiary Guarantee shall, for any reason cease to be, or be
asserted by the Company or any Subsidiary Guarantor, as applicable, not to be,
in full force and effect, enforceable in accordance with its terms (except
pursuant to the release or termination of any such Subsidiary Guarantee in
accordance with this Indenture); or
(vii) final judgments or orders 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
$10,000,000 over the coverage under applicable insurance policies and either
(a) commencement by any creditor of an enforcement proceeding upon such
judgment (other than a judgment that is stayed by reason of pending appeal or
otherwise) or (b) the occurrence of a 60-day period during which a stay of such
judgment or order, by reason of pending appeal or otherwise, was not in effect;
or
(viii) the entry of a decree or order by a court having jurisdiction in
the premises (a) for relief in respect of the Company or any Material
Subsidiary in an involuntary case or proceeding under the Federal Bankruptcy
Code or any other applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (b) adjudging the Company or any
Material Subsidiary bankrupt or insolvent, or approving a petition seeking
reorganization, arrangement, adjustment or composition of the Company or a
Material Subsidiary under the Federal Bankruptcy Code or any applicable federal
or state law, or appointing under any such law a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or any Material Subsidiary or of a substantial part of its consolidated
assets, or ordering the winding up or liquidation of its
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affairs, and the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 60 consecutive
days; or
(ix) the commencement by the Company or any Material Subsidiary of a
voluntary case or proceeding under the Federal Bankruptcy Code or any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by the Company or any Material Subsidiary to the
entry of a decree or order for relief in respect thereof in an involuntary case
or proceeding under the Federal Bankruptcy Code or any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or
the filing by the Company or any Material Subsidiary of a petition or consent
seeking reorganization or relief under any applicable federal or state law, or
the consent by it under any such law to the filing of any such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or other similar official) of any of the
Company or any Material Subsidiary or of any substantial part of its
consolidated assets, or the making by it of an assignment for the benefit of
creditors under any such law, or the admission by it in writing of its
inability to pay its debts generally as they become due or the taking of
corporate action by the Company or any Material Subsidiary in furtherance of
any such action.
Section 4.2 Acceleration of Maturity; Rescission and Annulment. The
following replaces Section 502 of the Indenture, but only with respect to the
Notes issued in accordance with the provisions hereof:
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If any Event of Default (other than an Event of Default specified in
Section 501(viii) or (ix) hereof) occurs and is continuing, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Notes then
Outstanding, by written notice to the Company (and to the Trustee if such
notice is given by the Holders), may, and the Trustee upon the request of the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Notes shall, by a notice in writing to the Company, declare all unpaid
principal of, premium, if any, and accrued and unpaid interest on all the Notes
to be due and payable immediately, upon which declaration all amounts payable
in respect of the Notes shall be immediately due and payable. If an Event of
Default specified in Section 501(viii) or (ix) hereof occurs and is continuing,
then the amounts described above shall become and be immediately due and
payable without any declaration, notice or other act on the part of the Trustee
or any Holder.
At any time after a declaration of acceleration has been made and before
a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this Article provided, the Holders of a majority in
aggregate principal amount of the Notes Outstanding, by written notice to the
Company, the Subsidiary Guarantors and the Trustee, may rescind and annul such
declaration and its consequences if
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(i) the Company or any Subsidiary Guarantor has paid or deposited
with the Trustee a sum sufficient to pay,
(a) all overdue interest on all Outstanding Notes,
(b) all unpaid principal of (and Premium, if any, on) any
Outstanding Notes which have become due otherwise than by such declaration of
acceleration, including any Notes required to have been purchased on a Change
of Control Date or a Net Proceeds Payment Date pursuant to a Change of Control
Offer or a Net Proceeds Offer, as applicable, and interest on such unpaid
principal at the rate borne by the Notes,
(c) to the extent that payment of such interest is lawful,
interest on overdue interest and overdue principal at the rate borne by the
Notes (without duplication of any amount paid or deposited pursuant to clauses
(a) and (b) above), and
(d) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel;
(ii) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction as certified to the Trustee by the Company;
and
(iii) all Events of Default, other than the non-payment of amounts of
principal of (or premium, if any, on) or interest on Notes which have become
due solely by such declaration of acceleration, have been cured or waived as
provided in Section 513 hereof.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Notwithstanding the foregoing, if an Event of Default specified in
Section 501(v) hereof shall have occurred and be continuing, such Event of
Default and any consequential acceleration shall be automatically rescinded if
the Indebtedness that is the subject of such Event of Default has been repaid,
or if the default relating to such Indebtedness is waived or cured and if such
Indebtedness has been accelerated, then the holders thereof have rescinded
their declaration of acceleration in respect of such Indebtedness (provided, in
each case, that such repayment, waiver, cure or rescission is effected within a
period of 10 days from the continuation of such default beyond the applicable
grace period or the occurrence of such acceleration), and written notice of
such repayment, or cure or waiver and rescission, as the case may be, shall
have been given to the Trustee by the Company and countersigned by the holders
of such Indebtedness or a trustee, fiduciary or agent for such holders or other
evidence satisfactory to the Trustee of such events is provided to the Trustee,
within 30 days after any such acceleration in respect of the Notes, and so long
as such rescission of any such acceleration of the Notes does not conflict with
any judgment or decree as certified to the Trustee by the Company.
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ARTICLE V
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OF OR LEASE
Section 5.1 Consolidation, Merger, Conveyance, Transfer Of or Lease.
The following replaces Article Eight of the Indenture, but only with respect to
the Notes issued in accordance with the provisions hereof:
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not, in any single transaction or a series of
related transactions, merge or consolidate with or into any other Person, or
sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all the Properties of the Company and its Restricted Subsidiaries
on a consolidated basis to any Person or group of Affiliated Persons, and the
Company shall not permit any of its Restricted Subsidiaries to enter into any
such transaction or series of transactions if such transaction or series of
transactions, in the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or other disposition of all or substantially all of the
Properties of the Company and its Restricted Subsidiaries on a consolidated
basis to any other Person or group of Affiliated Persons, unless at the time
and after giving affect thereto:
(a) either (i) if the transaction is a merger or consolidation, the
Company shall be the surviving Person of such merger or consolidation, or (ii)
the Person (if other than the Company) formed by such consolidation or into
which the Company is merged or to which the Properties of the Company or its
Restricted Subsidiaries, as the case may be, are sold, assigned, conveyed,
transferred, leased or otherwise disposed of (any such surviving Person or
transferee Person being the "Surviving Entity") shall be a corporation
organized and existing under the laws of the United States of America, any
state thereof or the District of Columbia and shall, in either case, expressly
assume by a supplemental indenture to this Indenture executed and delivered to
the Trustee, in form satisfactory to the Trustee, all the obligations of the
Company under the Notes and this Indenture, and, in each case, this Indenture
shall remain in full force and effect;
(b) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (and treating any
Indebtedness not previously an obligation of the Company or any of its
Restricted Subsidiaries which becomes the obligation of the Company or any of
its Restricted Subsidiaries in connection with or as a result of such
transaction or transactions as having been incurred at the time of such
transaction or transactions), no Default or Event of Default shall have
occurred and be continuing;
(c) except in the case of the consolidation or merger of any
Restricted Subsidiary with or into the Company, immediately after giving effect
to such transaction or transactions on a pro forma basis, the Consolidated Net
Worth of the Company (or the Surviving Entity if the Company is not the
continuing obligor under this Indenture) is at least equal to the Consolidated
Net Worth of the Company immediately before such transaction or transactions;
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(d) except in the case of the consolidation or merger of the Company
with or into a Wholly-owned Restricted Subsidiary or any Restricted Subsidiary
with or into the Company or any Wholly Owned Restricted Subsidiary, immediately
before and immediately after giving effect to such transaction or transactions
on a pro forma basis (on the assumption that the transaction or transactions
occurred on the first day of the period of four full fiscal quarts ending
immediately prior to the consummation of the transaction or transactions, with
the appropriate adjustments with respect to the transaction or transactions
being included in such pro forma calculation), the Company (or the Surviving
Entity if the Company is not the continuing obligor under this Indenture) could
incur $1.00 of Additional Indebtedness (excluding Permitted Indebtedness) under
Section 1014(i) hereof;
(e) if the Company is not the continuing obligor under this
Indenture, then each Subsidiary Guarantor, unless it is the Surviving Entity,
shall have by supplemental indenture confirmed that its Subsidiary Guarantee of
the Notes shall apply to the Surviving Entity's obligations under this
Indenture and the Notes;
(f) if any of the Properties of the Company or any of its Restricted
Subsidiaries would, upon such transaction or series of related transactions,
become subject to any Lien (other than a Permitted Lien), the creation or
imposition of such Lien shall have been in compliance with Section 1017 hereof;
and
(g) The Company (or the Surviving Entity if the Company is not the
continuing obligor under this Indenture) shall have delivered to the Trustee,
in form and substance reasonably satisfactory to the Trustee, (i) an Officers'
Certificate stating that such consolidation, merger, conveyance, transfer,
lease or other disposition and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture, comply with this
Indenture and (ii) an Opinion of Counsel stating that the requirements of
Section 801(a) have been satisfied.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with or merger of the Company into
any other corporation or any sale, assignment, lease, conveyance, transfer or
other disposition of all or substantially all of the Properties of the Company
and its Restricted Subsidiaries on a consolidated basis in accordance with
Section 801 hereof, the Surviving Entity shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such Surviving Entity had been named as
the Company herein, and in the event of any such sale, assignment, lease,
conveyance, transfer or other disposition, the Company (which term shall for
this purpose mean the Person named as the "Company" in the first paragraph of
this Indenture or any successor Person which shall theretofore become such in
the manner described in Section 801 hereof), except in the case of a lease,
shall be discharged of all obligations and covenants under this Indenture and
the Notes and the Company may be dissolved and liquidated and such dissolution
and liquidation shall not cause a Change of Control under clause (c) of the
definition thereof to occur unless the merger, or the sale, assignment, lease,
conveyance, transfer or
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other disposition of all or substantially all of the Properties of the Company
and its Restricted Subsidiaries on a consolidated basis to any Person otherwise
results in a Change of Control.
ARTICLE VI
SUPPLEMENTAL INDENTURES
Section 6.1 Additional Provisions Relating to Supplemental Indentures.
The following provisions are hereby added to Section 901 of the Indenture, but
only with respect to the Notes issued in accordance with the provisions hereof:
(9) to secure the Notes pursuant to the requirements of Section 1017
hereof or otherwise; or
(10) to add any Restricted Subsidiary as an additional Subsidiary
Guarantor as provided in Section 1015(i) hereof or to evidence the succession
of another Person to any Subsidiary Guarantor pursuant to Section 1502 hereof
and the assumption by any such successor of the covenants and agreements of
such Subsidiary Guarantor contained herein, in the Notes and in the Subsidiary
Guarantee of such Subsidiary Guarantor; or
(11) to release a Subsidiary Guarantor from its Subsidiary Guarantee
pursuant to Section 1503 hereof; or
(12) to provide for uncertificated Notes in addition to or in place of
certificated Notes; or
(13) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA.
Section 6.2 Additional Restrictions on Supplemental Indentures. The
following provisions are hereby added to Section 902 of the Indenture, but only
with respect to the Notes issued in accordance with the provisions hereof:
(4) waive any of the provisions with respect to the redemption of the
Notes, except as provided below with respect to Sections 1018 and 1019 hereof;
(5) reduce the rate of or change the time for payment of interest,
including Defaulted Interest, on any Note;
(6) 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 then Outstanding Notes and a waiver of the payment
default that resulted from such acceleration);
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(7) 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 or interest on the Notes;
(8) waive a redemption payment with respect to any Note (other than a
payment required by Section 1018 or Section 1019 hereof); or
(9) make any change in Section 508, 513 or 1008 hereof or in the
foregoing amendment and waiver provisions; or
(10) modify any provisions of this Indenture relating to the relative
ranking of the Notes or the Subsidiary Guarantees in a manner adverse to the
Holders thereof.
Section 6.3 Notice of Supplemental Indentures and Waivers. A new
Section 907 is hereby added to Article Nine of the Indenture, but only with
respect to the Notes issued in accordance with the provisions hereof, as
follows:
SECTION 907. Notice of Supplemental Indentures and Waivers.
Promptly after (i) the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902 hereof or (ii)
a waiver under Section 513 or 1008 hereof becomes effective, the Company shall
give notice thereof to the Holders of each Outstanding Note affected, in the
manner provided for in Section 1008 hereof, setting forth in general terms the
substance of such supplemental indenture or waiver, as the case may be.
Section 6.4 Effect on Senior Indebtedness. A new Section 908 is
hereby added to Article Nine of the Indenture, but only with respect to the
Notes issued in accordance with the provisions hereof, as follows:
SECTION 908. Effect on Senior Indebtedness.
No supplemental indenture shall adversely affect the rights of the
holders of Senior Indebtedness under Article Thirteen hereof or the holders of
Guarantor Senior Indebtedness under Sections 1508, 1509, 1510, 1511, 1513,
1514, 1515, 1516 and 1519 hereof unless expressly consented to in writing by or
on behalf of such holders (or by any specified percentage of holders of a class
of Senior Indebtedness or Guarantor Senior Indebtedness, as the case may be,
required to consent thereto pursuant to the terms of the agreement or
instrument creating, evidencing or governing such Senior Indebtedness or
Guarantor Senior Indebtedness as the case may be), in which event such
supplemental indenture shall be binding on all successors and assigns of such
holders and on all persons who become holders (of such Senior Indebtedness or
Guarantor Senior Indebtedness issued after the date of such amendment or
modification.
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ARTICLE VII
COVENANTS
Section 7.1 Existence. The following replaces Section 1004 of the
Indenture, but only with respect to the Notes issued in accordance with the
provisions hereof:
SECTION 1004. Existence.
Except as expressly permitted by Article Eight hereof, Section 1019
hereof or other provisions of this Indenture, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect the
corporate existence, rights (charter and statutory) and franchises of the
Company and each Restricted Subsidiary; provided, however, that the Company
shall not be required to preserve any such existence of its Restricted
Subsidiaries, rights or franchises, if the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not
disadvantageous in any material respect to the Holders.
Section 7.2 Maintenance of Properties. The following replaces Section
1005 of the Indenture, but only with respect to the Notes issued in accordance
with the provisions hereof:
SECTION 1005. Maintenance of Properties.
The Company shall cause all material Properties owned by the Company or
any Restricted Subsidiary and used or held for use in the conduct of its
business or the business of any Restricted Subsidiary to be maintained and kept
in good condition, repair and working order (ordinary wear and tear excepted),
all as in the judgment of the Company or such Restricted Subsidiary may be
necessary so that its or its Restricted Subsidiary's business may be properly
and advantageously conducted at all times; provided, however, that nothing in
this Section shall prevent the Company or any Restricted Subsidiary from
discontinuing the maintenance of any of such Properties if such discontinuance
is, in the judgment of the Company or such Restricted Subsidiary, as the case
may be, desirable in the conduct of the business of the Company or such
Restricted Subsidiary and not disadvantageous in any material respect to the
Holders. Notwithstanding the foregoing, nothing contained in this Section 1005
shall limit or impair in any way the right of the Company and its Restricted
Subsidiaries to sell, divest and otherwise to engage in transactions that are
otherwise permitted by this Indenture.
Section 7.3 Statement by Officer as to Default. The following
replaces Section 1007 of the Indenture, but only with respect to the Notes
issued in accordance with the provisions hereof:
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SECTION 1007. Statement by Officers as to Default.
(i) The company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company and within 45 days of the end of
each of the first, second and third quarters of each fiscal year of the
Company, an Officers' Certificate stating that a review of the activities of
the Company and its Restricted Subsidiaries during the preceding fiscal quarter
or fiscal year, as applicable, has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of such Officer's knowledge the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and no Default or
Event of Default has occurred and is continuing (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which such Officer may have knowledge and what action the Company is taking
or proposes to take with respect thereto). Such Officers' Certificate shall
comply with TIA Section 314(a)(4). For purposes of this Section 1007(i), such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.
(ii) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee forthwith upon any of its Officers becoming aware of any
Default or Event of Default an Officers' Certificate specifying such Default or
Event of Default and what action the Company proposes to take with respect
thereto.
Section 7.4 Additional Covenants. New Sections 1010 through 1021 are
hereby added to Article Ten of the Indenture, but only with respect to the
Notes issued in accordance with the provisions hereof.
SECTION 1010. Insurance.
The Company shall at all times keep all of its, and cause its Restricted
Subsidiaries to keep their, Properties which are of an insurable nature inured
with insurers, believed by the Company to be responsible, against loss or
damage to the extent that property of similar character and in a similar
location is usually so insured by corporations similarly situated and owning
like Properties.
The Company or any Restricted Subsidiary may adopt such other plan or
method of protection, in lieu of or supplemental to insurance with insurers,
whether by the establishment of an insurance fund or reserve to be held and
applied to make good losses from casualties, or otherwise, conforming to the
systems of self-insurance maintained by corporations similarly situated and in
a similar location and owning like Properties, as may be determined by the
Board of Directors of the Company or such Restricted Subsidiary.
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SECTION 1011. Provision of Financial Information.
The Company shall file on a timely basis with the Commission, to the
extent such filings are accepted by the Commission and whether or not the
Company has a class of securities registered under the Exchange Act, the annual
reports, quarterly reports and other documents that the Company would be
required to file if it were subject to Section 13 or 15 of the Exchange Act.
The Company shall also file with the Trustee (with exhibits), and provide to
each Holder of Notes (without exhibits), without cost to such Holder, copies of
such reports and documents within 30 days after the date on which the Company
files such reports and documents with the Commission or the date on which the
Company would be required to file such reports and documents if the Company
were so required and, if filing such reports and documents with the Commission
is not accepted by the Commission or is prohibited under the Exchange Act, the
Company shall supply at its cost copies of such reports and documents
(including any exhibits thereto) to any Holder of Notes, securities analyst or
prospective purchaser of any Notes promptly upon written request given in
accordance with Section 106 hereof.
SECTION 1012. Limitation on Restricted Payments.
(i) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, take the following actions:
(a) declare or pay any dividend or make any distribution of
the Company's Capital Stock (other than dividends or distributions
payable solely in shares of Qualified Capital Stock of the Company or in
options, warrants or other rights to purchase Qualified Capital Stock of
the Company or dividends or distributions payable to the Company or any
Wholly Owned Restricted Subsidiary);
(b) purchase, redeem or otherwise acquire or retire for value
any Capital Stock of the Company or any Subsidiary or other Affiliate of
the Company (other than Capital Stock owned by the Company or any Wholly
Owned Restricted Subsidiary) or any options, warrants or other rights to
acquire such Capital Stock;
(c) make any principal payment on, or repurchase, redeem,
defease or otherwise acquire or retire for value, prior to any scheduled
principal payment, scheduled sinking fund payment or maturity, any Pari
Passu Indebtedness or Subordinated Indebtedness, except (1) pursuant to
a Pari Passu Offer or a Net Proceeds Deficiency pursuant to Section 1019
hereof or (2) upon the occurrence of a Change of Control to the extent
(and only to the extent) required by the indenture or other agreement or
instrument pursuant to which such Pari Passu Indebtedness or
Subordinated Indebtedness was issued, provided that the Company is then
in compliance with its obligations under Section 1018 hereof.
(d) declare or pay any dividend on, or make any distribution
to the holders of, any shares of Capital Stock of any Restricted
Subsidiary (other than to the Company or any of
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its Wholly Owned Restricted Subsidiaries) or purchase, redeem or
otherwise acquire or retire for value any Capital Stock of any
Restricted Subsidiary or any options, warrants or other rights to
acquire any such Capital Stock (other than with respect to any such
Capital Stock held by the Company or any Wholly Owned Restricted
Subsidiary or the Company); or
(e) make any Investment (other than any Permitted Investment);
(such payments or other actions described in (but not excluded from) clauses
(a) through (e) are collectively referred to as "Restricted Payments"), unless
at the time of and after giving effect to the proposed Restricted Payment (the
amount of any such Restricted Payment, if other than cash, shall be the amount
determined by the Board of Directors of the Company, whose determination shall
be conclusive and evidenced by a Board Resolution), (1) no Default or Event of
Default shall have occurred and be continuing, (2) the Company could incur
$1.00 of additional Indebtedness (excluding Permitted Indebtedness) in
accordance with Section 1014(i) hereof and (3) the aggregate amount of all
Restricted Payments declared or made after the date of this First Supplemental
Indenture shall not exceed the sum (without duplication) of the following:
(A) 50% of the aggregate Consolidated Net Income of the
Company accrued on a cumulative basis during the period beginning on the
first day of the month in which this Second Supplemental Indenture is
signed and ending on the last day of the Company's last fiscal quarter
ending prior to the date of such proposed Restricted Payment (or, if
such aggregate Consolidated Net Income shall be a loss, minus 100% of
such loss), plus
(B) the aggregate net cash proceeds received after the date of
this Second Supplemental Indenture by the Company as capital
contributions to the Company (other than from any Restricted
Subsidiary), plus
(C) the aggregate net cash proceeds received after the date of
this Second Supplemental Indenture by the Company from the issuance or
sale (other than to any of its Restricted Subsidiaries) of shares of
Qualified Capital Stock of the Company or any option, warrants or rights
to purchase such shares of Qualified Capital Stock of the Company, plus
(D) the aggregate net cash proceeds received after the date of
this Second Supplemental Indenture by the Company (other than from any
of its Restricted Subsidiaries) upon the exercise of any options,
warrants or rights to purchase shares of Qualified Capital Stock of the
Company, plus
(E) the aggregate net cash proceeds received after the date of
this Second Supplemental Indenture by the Company from the issuance or
sale (other than to any of its Restricted Subsidiaries) of debt
securities or shares of Redeemable Capital Stock that have been
converted into or exchanged for Qualified Capital Stock of the Company,
together with the aggregate cash received by the Company at the time of
such conversion or exchange, plus
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(F) to the extent not otherwise included in the Company's
Consolidated Net Income, the net reduction in Investments in
Unrestricted Subsidiaries resulting from the payments of interest on
Indebtedness, dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Company or a Restricted
Subsidiary after the date of the Supplemental Indenture from any
Unrestricted Subsidiary or from the redesignation of an Unrestricted
Subsidiary (other than Patina or SOCO International) as a Restricted
Subsidiary (in an amount equal to the fair market value of the net
assets of such Unrestricted Subsidiary at the time that such
Unrestricted Subsidiary is designated a Restricted Subsidiary), not to
exceed in the case of such Unrestricted Subsidiary the total amount of
Investments (other than Permitted Investments) in such Unrestricted
Subsidiary made by the Company and its Restricted Subsidiaries in such
Unrestricted Subsidiary after the date of this Second Supplemental
Indenture, plus
(G) to the extent not otherwise included in the Company's
Consolidated Net Income, an amount equal to (x) the aggregate net
proceeds received by the Company or any Restricted Subsidiary as a
result of the sale (net of all provisions for all taxes payable as a
result of such sale) after the date of the Supplemental Indenture of
securities or assets of Patina or SOCO International or both or (y) the
net reduction in Investments in Unrestricted Subsidiaries resulting from
the redesignation of Patina or SOCO International as a Restricted
Subsidiary (in an amount equal to the fair market value of the net
assets of Patina or SOCO International, as the case may be, at the time
such Unrestricted Subsidiary is designated a Restricted Subsidiary),
plus
(H) $25,000,000.
(ii) Notwithstanding paragraph (a) above, the Company and its
Restricted Subsidiaries may take the following actions so long as (in the case
of clauses (i), (iii), (iv) and (v) below) no Default or Event of Default shall
have occurred and be continuing:
(a) the payment of any dividend on any Capital Stock of the
Company or any Restricted Subsidiary within 60 days after the date of
declaration thereof, if at such declaration date such declaration
complied with the provisions of paragraph (i) above (and such payment
shall be deemed to have been paid on such date of declaration for
purposes of any calculation required by the provisions of paragraph (i)
above);
(b) the payment of any dividend or the making of any
distribution on account of or the repurchase of the Company's Capital
Stock payable solely in shares of Capital Stock of either Patina or SOCO
International (including cash in lieu of fractional shares in an amount
not to exceed the aggregate proceeds from the sale of such fractional
shares) provided that Patina or SOCO International, as the case may be,
is an Unrestricted Subsidiary at the time of such distribution;
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(c) the payment of dividends in an aggregate annual amount not
in excess of (A) $6,200,000 on any shares of 6% Convertible Preferred
Stock of the Company outstanding on the date of this Second Supplemental
Indenture (and on shares of Common Stock of the Company into which the
shares of 6% Convertible Preferred Stock are converted) and (B)
$8,500,000 on shares of the Company's Common Stock, provided that (1)
such dividends are paid within 60 days of the date of declaration
thereof and (2) on the date of declaration and having given pro forma
effect to the making of such payment (x) the Company could incur $1.00
of additional Indebtedness (excluding Permitted Indebtedness) in
accordance with the covenant described under "--Incurrence of
Indebtedness" and (y) the ratio of the Company's Adjusted Consolidated
Net Tangible Assets to total Indebtedness is equal to or greater than
2.0 to 1.0;
(d) the repurchase, redemption or other acquisition or
retirement of any shares of any class of Capital Stock of the Company or
any Restricted Subsidiary, in exchange for, or out of the aggregate net
cash proceeds of, a substantially concurrent issuance and sale (other
than to a Restricted Subsidiary) of shares of Qualified Capital Stock of
the Company;
(e) the repurchase, redemption, repayment, defeasance or other
acquisition or retirement for value of any Pari Passu Indebtedness or
Subordinated Indebtedness (other than Redeemable Capital Stock) in
exchange for or out of the aggregate net cash proceeds of a
substantially concurrent issuance and sale (other than to a Restricted
Subsidiary) of shares of Qualified Capital Stock of the Company;
(f) the purchase, redemption, repayment, defeasance or other
acquisition or retirement for value of Pari Passu Indebtedness or
Subordinated Indebtedness in exchange for, or out of the aggregate net
cash proceeds of, a substantially concurrent incurrence (other than to a
Restricted Subsidiary) of, Pari Passu Indebtedness or Subordinated
Indebtedness so long as (A) the principal amount of such new
Indebtedness does not exceed the principal amount (or, if such Pari
Passu Indebtedness or Subordinated Indebtedness being refinanced
provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration thereof, such lesser
amount as of the date of determination) of the Indebtedness being so
purchased, redeemed, repaid, defeased, acquired or retired, plus the
amount of any premium required to be paid in connection with such
refinancing pursuant to the terms of the Indebtedness refinanced or the
amount of any premium reasonably determined by the Company as necessary
to accomplish such refinancing, plus the amount of expenses of the
Company incurred in connection with such refinancing, (B) such new
Indebtedness is pari passu with or subordinated to the Notes at least to
the same extent as such Indebtedness so purchased, redeemed, repaid,
defeased, acquired or retired, (C) such new Indebtedness has an Average
Life to Stated Maturity that is longer than the Average Life to Stated
Maturity of the Notes and such new Indebtedness has a Stated Maturity
for its final scheduled principal payment that is at least 91 days later
than the Stated Maturity for the final scheduled principal payment of
the Notes; and
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(g) the redemption of the Convertible Subordinated Notes out
of the aggregate net cash proceeds of the offering of the Notes.
The actions described in clauses (a), (c), (d) and (e) of this paragraph (ii)
shall be Restricted Payments that shall be permitted to be taken in accordance
with this paragraph (ii) but shall reduce the amount that would otherwise be
available for Restricted Payments under clause (3) of paragraph (i), provided
that any dividend paid pursuant to clause (a) and (c) of this paragraph (ii)
shall reduce the amount that would otherwise be available under clause (3) of
paragraph (i) when declared, but not also when subsequently paid pursuant to
such clause (a) or (c), as the case may be), and the actions described in
clauses (b), (f) and (g) of this paragraph (ii) shall be Restricted Payments
that shall be permitted to be taken in accordance with this paragraph and shall
not reduce the amount that would otherwise be available for Restricted Payments
under clause (3) of paragraph (i). Further, the Company or any Restricted
Subsidiary may make a Restricted Payment, if at the time the Company or any
Restricted Subsidiary first incurred a commitment for such Restricted Payment
such Restricted Payment could have been made; provided that all commitments
incurred and outstanding shall be treated as if such commitments were
Restricted Payments expended by the Company or a Restricted Subsidiary at the
time the commitments were incurred, except that commitments incurred and
outstanding which are treated as a Restricted Payment expended by the Company
or a Restricted Subsidiary and which are terminated shall no longer be treated
as a Restricted Payment expended by the Company or a Restricted Subsidiary upon
the termination of such commitment for such purposes; and provided, further,
that at the time such Restricted Payment is made no Default or Event of Default
shall have occurred and be continuing and the Company could incur $1.00 of
additional Indebtedness (excluding Permitted Indebtedness) in accordance with
Section 1014(i) hereof.
(iii) In computing Consolidated Net Income of the Company under
paragraph (a) above, (1) the Company shall use audited financial statements for
the portions of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based on the books and records of the Company for
the remaining portion of such period and (2) the Company shall be permitted to
rely in good faith on the financial statements and other financial data derived
from the books and records of the Company that are available on the date of
determination. If the Company makes a Restricted Payment which, at the time of
the making of such Restricted Payment would in the good faith determination of
the Company be permitted under the requirements of this Indenture, such
Restricted Payment shall be deemed to have been made in compliance with this
Indenture notwithstanding any subsequent adjustments made in good faith to the
Company's financial statements affecting Consolidated Net Income of the Company
for any period.
SECTION 1013. Limitation on Other Senior Subordinated Indebtedness.
The Company will not (i) incur (as such term is defined in Section
1014(i) hereof), or permit to remain outstanding, any Indebtedness (including
Acquired Indebtedness and Permitted Indebtedness) other than the Notes, that is
subordinated in right of payment to any Senior
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Indebtedness, unless such Indebtedness is also pari passu with, or subordinated
in right of payment to, the Notes pursuant to subordination provisions
substantially similar to those contained in this Indenture, and (ii) permit any
Subsidiary Guarantor to incur, or to permit to remain outstanding, any
Indebtedness (including Acquired Indebtedness and Permitted Indebtedness) other
than such Subsidiary Guarantor's Subsidiary Guaranty, that is subordinated in
right of payment to any Guarantor Senior Indebtedness unless such Indebtedness
is also pari passu with, or subordinated in right of payment to, such
Subsidiary Guarantee pursuant to subordination provisions substantially similar
to those contained in this Indenture.
SECTION 1014. Incurrence of Indebtedness.
(i) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume, guarantee or otherwise become directly
or indirectly liable for (collectively, "incur") any Indebtedness (including
any Acquired Indebtedness), other than Permitted Indebtedness, unless (a) at
the time of such event and after giving effect thereto on a pro forma basis the
Company's Consolidated Fixed Charge Coverage Ratio for the four full fiscal
quarters immediately preceding such event, taken as one period, would have been
at least equal to 2.5 to 1.0 and (b) no Default or Event of Default shall have
occurred and be continuing at the time such additional Indebtedness is incurred
or would occur as a consequence of the incurrence of the additional
Indebtedness..
(ii) The amount of any guarantees by the Company or any Restricted
Subsidiary of any Indebtedness of the Company or one or more Restricted
Subsidiaries shall not be deemed to be outstanding or incurred for purposes of
this Section 1014 hereof in addition to the amount of Indebtedness which it
guarantees.
SECTION 1015. Limitation on Guarantees of Indebtedness by Restricted
Subsidiaries.
(i) The Company will not permit any Restricted Subsidiary that is not
a Subsidiary Guarantor to guarantee the payment of any Indebtedness of the
Company unless (a) (1) such Restricted Subsidiary simultaneously executes and
delivers a supplemental indenture to this Indenture providing for a Subsidiary
Guarantee of the Notes by such Restricted Subsidiary, which Subsidiary
Guarantee shall be subordinated to Guarantor Senior Indebtedness (but no other
Indebtedness) to the same extent that the Notes are subordinated to Senior
Indebtedness and (2) with respect to any guarantee of Subordinated Indebtedness
by a Restricted Subsidiary, any such guarantee shall be subordinated to such
Restricted Subsidiary's Subsidiary Guarantee at least to the same extent as
such Subordinated Indebtedness is subordinated to the Notes; (b) such
Restricted Subsidiary waives and agrees not in any manner whatsoever to claim
or take the benefit or advantage of, any rights of reimbursement, indemnity or
subrogation or any other rights against the Company or any other Restricted
Subsidiary as a result of any payment by such Restricted Subsidiary under its
Subsidiary Guarantee until such time as the obligations guaranteed thereby are
paid in full; and (c) such Restricted Subsidiary shall deliver to the Trustee
an Opinion of Counsel to the effect that such Subsidiary Guarantee has been
duly executed and authorized and constitutes a valid, binding
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and enforceable obligation of such Restricted Subsidiary, except insofar as
enforcement thereof may be limited by bankruptcy, insolvency or similar laws
(including, without limitation, all laws relating to fraudulent transfers) and
except insofar as enforcement thereof is subject to general principles of
equity; provided that this paragraph (i) shall not be applicable to any
guarantee of any Restricted Subsidiary that (x) existed at the time such Person
became a Restricted Subsidiary of the Company and (y) was not incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary of the Company.
(ii) Notwithstanding the foregoing and the other provisions of this
Indenture, any Subsidiary Guarantee incurred by a Restricted Subsidiary
pursuant to this Section 1015 shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon the terms and
conditions set forth in Section 1503 hereof.
SECTION 1016. Limitation on Issuance and Sale of Capital Stock by Restricted
Subsidiaries.
The Company (i) shall not permit any Restricted Subsidiary to issue any
Capital Stock (other than to the Company or a Wholly Owned Restricted
Subsidiary) and (ii) shall not permit any Person (other than the Company or a
Wholly Owned Restricted Subsidiary) to own any Capital Stock of any Restricted
Subsidiary, except, in each case, for (a) directors' qualifying shares, (b)
Capital Stock of a Restricted Subsidiary organized in a foreign jurisdiction
required to be issued to, or owned by, the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction
in order for such Restricted Subsidiary to transact business in such foreign
jurisdiction, (c) a sale of all or substantially all the Capital Stock of a
Restricted Subsidiary effected in accordance with Section 1012 and Section 1019
hereof, (d) the issuance of Capital Stock by a Restricted Subsidiary to a
Person other than the Company or a Restricted Subsidiary which issuance was
made in accordance with Section 1012 and Section 1019 hereof and (e) the
Capital Stock of a Restricted Subsidiary owned by a Person at the time such
Restricted Subsidiary became a Restricted Subsidiary or acquired by such Person
in connection with the formation of the Restricted Subsidiary; provided,
however, that any Capital Stock retained by the Company or a Restricted
Subsidiary in the case of clauses (c), (d) or (e) shall be treated as an
Investment for purposes of Section 1012, if the amount of such Capital Stock
represents less than a majority of the Voting Stock of such Restricted
Subsidiary.
SECTION 1017. Limitation on Liens.
The Company shall not and shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume or suffer to exist any Lien of
any kind, except for Permitted Liens, upon any of their respective Properties,
whether new owned or acquired after the date of this Second Supplemental
Indenture, or any income or profits therefrom to secure any Pari Passu
Indebtedness or Subordinated Indebtedness, 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
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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 1018. Purchase of Notes Upon Change of Control.
(i) Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right to require the Company to purchase such Holder's Notes, in
whole or in part, in a principal amount that is an integral multiple of $
1,000, pursuant to the offer described in Section 1018(ii) hereof (the "Change
of Control Offer") at a purchase price (the "Change of Control Purchase Price")
in cash equal to 101 % of the aggregate principal amount thereof plus accrued
and unpaid interest, if any, thereon to the date of purchase (the "Change of
Control Purchase Date"). The Company will not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer at the same times and otherwise in substantial compliance with
the requirements applicable to a Change of Control Offer made by the Company
and purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
(ii) Within 30 calendar days after the date of any Change of Control,
the Company, or the Trustee at the request and expense of the Company, shall
send to each Holder, in the manner provided in Section 107 a notice (the
"Change of Control Notice") prepared by the Company describing the transaction
or transactions that constitute the Change of Control and stating:
(a) that a Change of Control has occurred and a Change of
Control Offer is being made pursuant to this Section 1018, and that all
Notes that are timely tendered will be accepted for payment;
(b) the Change of Control Purchase Price and the Change of
Control Purchase Date, which date shall be a Business Day no earlier
than 30 calendar days nor later than 60 calendar days subsequent to the
date such notice is mailed;
(c) that any Notes or portions thereof not tendered or
accepted for payment will continue to accrue interest;
(d) that, unless the Company defaults in the payment of the
Change of Control Purchase Price with respect thereto, all Notes or
portions thereof accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest from and after the Change of
Control Purchase Date;
(e) that any Holder electing to have any Notes or portions
thereof purchased pursuant to a Change of Control Offer will be required
to surrender such Notes, with the form to elect purchase by the Company
pursuant to this Section 1018 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 Purchase Date;
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(f) that any Holder shall be entitled to withdraw such
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control
Purchase Date, a 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 such Holder's election
to have such Notes or portions thereof purchased pursuant to the Change
of Control Offer;
(g) that any Holder electing to have Notes purchased pursuant
to the Change of Control offer must specify the principal amount that is
being tendered for purchase, which principal amount must be $1,000 or an
integral multiple thereof;
(h) if Physical Notes have been issued pursuant to Section
201, that any Holder of Physical Notes whose Physical Notes are being
purchased only in part will be issued new Physical Notes equal in
principal amount to the unpurchased portion of the Physical Notes
surrendered, which unpurchased portion will be equal in principal amount
to $1,000 or an integral multiple thereof; and
(i) any other information necessary to enable any Holder to
tender Notes and to have such Notes purchased pursuant to this Section
1018.
(iii) On the Change of Control Payment Date, the Company shall (a)
accept for payment all Notes or portions thereof properly tendered pursuant to
the Change of Control Offer, (b) irrevocably deposit with the Paying Agent, by
11:00 a.m., Eastern time on such date, in immediately available funds, an
amount equal to the Change of Control Purchase Price in respect of all Notes or
portions thereof so accepted and (c) deliver or cause to be delivered to the
Trustee the Notes so accepted together with in Officers' Certificate stating
the aggregate principal amount of Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly send, in the manner provided in
Section 107, to each Holder of Notes or portions thereof so accepted for
payment the Change of Control Purchase Price for such Notes or portions
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. For purposes of this Section 1018, the Trustee shall act as the Paying
Agent.
(iv) Upon surrender and cancellation of a Physical Note that is
purchased in part pursuant to the Change of Control Offer, the Company shall
promptly issue and the Trustee shall authenticate and deliver to the
surrendering Holder of such Physical Note a new Physical Note equal in
principal amount to the unpurchased portion of such surrendered Physical Note;
provided that each such new Physical Note shall be in a principal amount of
$1,000 or an integral multiple thereof.
(v) The Company shall comply with Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable, in the event that a Change of Control
occurs and the Company is required to purchase Notes as described in this
Section 1018. To the extent that the provisions of any securities laws or
regulations
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conflict with the provisions relating to the Change of Control Offer, the
Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under this Section 1018 by
virtue thereof.
(vi) Prior to complying with the provisions of this Section 1018, but
in any event within 30 days following a Change of Control, the Company shall
either repay all outstanding Senior Indebtedness or obtain the requisite
consents, if any, under all agreements governing outstanding Senior
Indebtedness to permit the repurchase of Notes required by this Section 1018.
SECTION 1019. Disposition of Proceeds of Asset Sales.
(i) The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any Asset Sale unless (a) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time
of such Asset Sale at least equal to the Fair Market Value of the Properties
sold or otherwise disposed of pursuant to the Asset Sale (as determined by the
Board of Directors of the Company in the case of Asset Sales greater than
$5,000,000, whose determination shall be conclusive and evidenced by a Board
Resolution), (b) at least 85% of the consideration received by the Company or
the Restricted Subsidiary, as the case may be, in respect of such Asset Sale
consists of cash, Cash Equivalents or properties used in the Oil and Gas
Business of the Company and its Restricted Subsidiaries and (c) the Company
delivers to the Trustee an Officers' Certificate, which shall be conclusive,
certifying that such Asset Sale complies with clauses (a) and (b) of this
Section 1019(i). The amount (without duplication) of any Indebtedness (other
than Subordinated Indebtedness or Pari Passu Indebtedness) of the Company or
such Restricted Subsidiary that is expressly assumed by the transferee in such
Asset Sale and with respect to which the Company or such Restricted Subsidiary,
as the case may be, is unconditionally released by the holder of such
Indebtedness, shall be deemed to be cash or Cash Equivalents for purposes of
clause (b) and shall also be deemed to constitute a repayment of, and a
permanent reduction in, the amount of such Indebtedness for purposes of the
next following paragraph.
(ii) If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company or such Restricted Subsidiary may, no later than 365 days
after such Asset Sale, either (a) apply all (or any of the Net Cash Proceeds
therefrom to repay Indebtedness (other than Subordinated Indebtedness or Pari
Passu Indebtedness) of the Company or any Restricted Subsidiary, provided, in
each case, that the related loan commitment (if any) is thereby permanently
reduced by the amount of such Indebtedness so repaid, or (b) invest all or any
part of the Net Cash Proceeds thereof in properties and assets that will be
used in the Oil and Gas Business of the Company or its Restricted Subsidiaries,
as the case may be. The amount of such Net Cash Proceeds not applied or
invested as provided in this paragraph (after the periods specified in this
paragraph) shall constitute "Excess Proceeds."
(iii) When the aggregate amount of Excess Proceeds equals or exceeds
$10,000,000 (the "Trigger Date"), the Company shall make an offer to purchase,
from all Holders of the Notes and holders of any then outstanding Pari Passu
Indebtedness required to be repurchased or repaid on a
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permanent basis in connection with an Asset Sale, an aggregate principal amount
of Notes and any such Pari Passu Indebtedness equal to such Excess Proceeds as
follows:
(a) Not later than the 30th day following the Trigger Date,
the Company shall (1) give to the Trustee in the manner provided in
Section 106 hereof and each Holder of the Notes in the manner provided
in Section 107 hereof, a notice (a "Purchase Notice") offering to
purchase (a "Net Proceeds Offer") from all Holders of the Notes the
maximum principal amount (expressed as a multiple of $1,000) of Notes
that may be purchased out of an amount (the "Payment Amount") equal to
the product of such Excess Proceeds multiplied by a fraction, the
numerator of which is the outstanding principal amount of the Notes and
the denominator of which is the sum of the outstanding principal amount
of the Notes and any such Pari Passu Indebtedness (subject to proration
in the event such amount is less than the aggregate Offered Price (as
hereinafter defined) of all Notes tendered), and (2) to the extent
required by any Pari Passu Indebtedness and provided there is a
permanent reduction in the principal amount of such Pari Passu
Indebtedness, the Company shall make an offer to purchase such Pari
Passu Indebtedness (a "Pari Passu Offer") in an amount (the "Pari Passu
Indebtedness Amount") equal to the excess of the Excess Proceeds over
the Payment Amount.
(b) The offer price for the Notes shall be payable in cash in
an amount equal to 100% of the aggregate principal amount of the Notes
tendered pursuant to a Net Proceeds Offer, plus accrued and unpaid
interest, if any, to the date such Net Proceeds Offer is consummated
(the "Offered Price"), In accordance with paragraph (iv) of this
Section. To the extent that the aggregate Offered Price of the Notes
tendered pursuant to a Net Proceeds Offer is less than the Payment
Amount relating thereto or the aggregate amount of the Pad Passu.
Indebtedness that is purchased or repaid pursuant to the Pari Passu
Offer is less than the Pari Passu Indebtedness Amount (such shortfall
constituting a "Net Proceeds Deficiency"), the Company may use such Net
Proceeds Deficiency, or a portion thereof, for general corporate
purposes, subject to the limitations of Section 1012 hereof.
(c) If the aggregate Offered Price of Notes validly tendered
and not withdrawn by Holders thereof exceeds the Payment Amount Notes to
be purchased will be selected on a pro rata basis by the Trustee based
on the aggregate principal amount of Notes so tendered. Upon completion
of a Net Proceeds Offer and a Pari Passu Offer, the amount of Excess
Proceeds shall be reset to zero.
(d) The Purchase Notice shall set forth a purchase date (the
"Net Proceeds Payment Date"), which shall be on a Business Day no
earlier than 30 days nor later than 60 days from the Trigger Date. The
Purchase Notice shall also state (1) that a Trigger Date with respect to
one or more Asset Sales has occurred and that such Holder has the right
to require the Company to repurchase such Holder's Notes at the Offered
Price. subject to the limitations described in the forgoing paragraph
(c), (2) any information regarding such Net Proceeds Offer required to
be furnished pursuant to Rule 14e-1 under the Exchange Act and
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any other securities laws and regulations thereunder, (3) that any Note,
or portion thereof, not tendered or accepted for payment will continue
to accrue interest, (4) that, unless the Company defaults in depositing
money with the Paying Agent in accordance with the last paragraph of
clause (iv) of this Section 1019, or payment is otherwise prevented, any
Note, or portion thereof, accepted for payment pursuant to the Net
Proceeds Offer shall cease to accrue interest after the Net Proceeds
Payment Date, and (5) the instructions a Holder must follow in order to
have his Notes repurchased in accordance with paragraph (iv) of this
Section.
(iv) Holders electing to have Notes purchased will be required to
surrender such Notes to the Paying Agent at the address specified in the
Purchase Notice prior to the close of business on the third Business Days prior
to the Net Proceeds Payment Date. Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the close of business on
the second Business Days prior to the Net Proceeds Payment Date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Notes delivered for purchase by the Holder as to which his
election is to be withdrawn and a statement that such Holder is withdrawing his
election to have such Notes purchased. Holders of Physical Notes whose Notes
are purchased only in part will be issued new Notes equal in principal amount
to the unpurchased portion of the Notes surrendered, which unpurchased portion
will be equal to $1,000 or an integral multiple thereof.
On the Net Proceeds Payment Date, the Company shall (1) accept for
payment Notes or portions thereof validly tendered pursuant to a Net Proceeds
Offer in an aggregate principal amount equal to the Payment Amount or such
lesser amount of Notes as has been tendered, (2) irrevocably deposit with the
Paying Agent by 11:00 a.m., Eastern time, immediately available funds
sufficient to pay the purchase price of all Notes or portions thereof so
tendered in an aggregate principal amount equal to the Payment Amount or such
lesser amount and (3) deliver or cause to be delivered to the Trustee the Notes
so accepted. The Paying Agent shall promptly send, in the manner provided in
Section 107, to Holders of the Notes so accepted payment in an amount equal to
the purchase price, and the Company shall execute and the Trustee shall
authenticate and mail or make available for delivery to such Holders a new Note
equal in principal amount to any unpurchased portion of the Note which any such
Holder did not surrender for purchase. Any Notes not so accepted will be
promptly mailed or delivered to the Holder thereof. The Company shall announce
the results of a Net Proceeds Offer on or as soon as practicable after the Net
Proceeds Payment Date. For purposes of this Section 1019, the Trustee will act
as the Paying Agent.
(v) The Company shall not permit any Subsidiary to enter into or
suffer to exist any agreement that would place any restriction of any kind
(other than pursuant to law or regulation) on the ability of the Company to
make a Net Proceeds Offer following any Asset Sale. The Company shall comply
with Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder, if applicable, in the event that an Asset Sale occurs
and the Company is required to purchase Notes as described in this Section
1019. To the extent that the provisions of any securities laws or regulations
conflict with the provisions relating to the Net Proceeds offer, the Company
will
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comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 1019 by virtue
thereof.
SECTION 1020. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including. without limitation,
the sale, purchase, exchange or lease of Property or services) with any
Affiliate of the Company (other than the Company or a Restricted Subsidiary)
unless (i) such transaction or series of related transactions is on terms that
are no less favorable to the Company or such Restricted Subsidiary, as the case
may be, than would be available in a comparable transaction in arm's-length
dealings with an unrelated third party, (d) with respect to a transaction or
series of related transactions involving payments in excess of $1,000,000 in
the aggregate, the Company delivers an Officers' Certificate to the Trustee
certifying that such transaction complies with clause (i) above, (iii) with
respect to a transaction or series of transactions involving payments in excess
of $5,000,000 but less than $15,000,000 in the aggregate, the Company delivers
an Officers' Certificate to the Trustee certifying that (a) such transaction or
series of related transactions complies with clause (i) above and (b) such
transaction or series of related transactions shall have been approved by a
majority of the independent directors of the Board of Directors of the Company
and (iv) with respect to a transaction or series of transactions involving
payments of $15,000,000 or more in the aggregate, the Company delivers an
Officers' Certificate to the Trustee certifying that (a) such transaction or
series of related transactions complies with clause (i) above, (b) such
transaction or series of related transactions shall have been approved by a
majority of the Disinterested Directors of the Company and (c) the Company
shall have received the written opinion of a firm of investment bankers
nationally recognized in the United States that such transaction or series of
transactions is fair, from a financial point of view, to the Company or such
Restricted Subsidiary; provided, however, that the foregoing restriction shall
not apply to (1) loans or advances to officers, directors and employees of the
Company or any Restricted Subsidiary made in the ordinary course of business
and consistent with past practices of the Company and its Restricted
Subsidiaries in an aggregate amount not to exceed $3,000,000 outstanding at any
one time, (2) the payment of reasonable and customary regular fees to directors
of the Company or any of its Restricted Subsidiaries who are not employees of
the Company or any Affiliate, (3) the Company's employee compensation and other
benefit arrangements or (4) indemnities of officers and directors of the
Company or any Subsidiary consistent with such Person's charter and bylaws and
applicable statutory provisions..
SECTION 1021. Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (i) pay dividends, in cash or
otherwise, or make any other distributions on or in respect of its Capital
Stock to the Company or any other Restricted Subsidiary, (ii) pay any
Indebtedness owed to the Company
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or any other Restricted Subsidiary, (iii) make an investment in the Company or
any other Restricted Subsidiary, or (iv) transfer any of its Properties to the
Company or any other Restricted Subsidiary, (v) grant liens or security
interests on its properties or assets in favor of the Holders or (vi) guarantee
the Notes or any renewals or refinancings thereof, except for such encumbrances
or restrictions existing as of the date of the Supplemental Indenture, except
in each instance for such encumbrances or restrictions pursuant to (a) this
Indenture, the Bank Credit Facility or any other agreement in effect on the
date of this Indenture, (b) any agreement or other instrument of a Person
acquired by the Company or any Restricted Subsidiary in existence at the time
of such acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any other Person, or the
Properties of any other Person, other than the Person, so acquired, (c)
customary restrictions in leases and licenses relating to the Property covered
thereby and entered into in the ordinary course of business or (d) any
agreement that extends, renews, refinances or replaces the agreements
containing restrictions in the foregoing clauses (a) through (c), provided that
the terms and conditions of any such restrictions are not materially less
favorable to the Holders of the Notes than those under or pursuant to the
agreement evidencing the Indebtedness so extended, renewed, refinanced or
replaced, and except with respect to clause (iv) only, (1) restrictions in the
form of Liens which are not prohibited under Section 1017 and which contain
customary limitations on the transfer of collateral and (2) with respect to
clause (d) only, customary restrictions contained in asset sale agreements
limiting the transfer of such assets pending the closing of such sale.
Section 7.5 Waiver of Certain Covenants. Section 1008 of the
Indenture is hereby amended, but only with respect to the Notes issued in
accordance with the provisions hereof, such that the Company may omit in any
particular instance to comply with any covenant or condition set forth in
Sections 1006 and 1007, Sections 1010 through 1014, Sections 1016 and 1017,
Sections 1020 and 1021 hereof in accordance with the conditions set forth in
Section 1008.
ARTICLE VIII
REDEMPTION OF NOTES
Section 8.1 Right of Redemption.
The Notes may be redeemed, at the election of the Company, as a whole or
from time to time in part, at any time on or after June 15, 2002, upon not less
than 30 or more than 60 days' notice to each Holder of Notes to be redeemed,
subject to the conditions and at the Redemption Prices (expressed as
percentages of principal amount) specified in the form of Note, together with
accrued and unpaid interest, if any, to the Redemption Date. In addition, at
any time and from time to time prior to June 15, 2000, the Company may, at its
option, redeem Notes in an amount in the aggregate up to 30% of the aggregate
principal amount of the Notes originally issued under this Indenture with the
proceeds of one or more Public Equity Offerings by the Company at a redemption
price (expressed as a percentage of principal amount) of 108.75%, plus accrued
and unpaid interest, if any, to the redemption date (subject to the right of
Holders on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that at least $122.5 million
aggregate
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principal amount of the Notes must remain outstanding after each such
redemption. In order to effect the foregoing redemption, the Company must mail
notice of redemption no later than 60 days after the related Public Equity
Offering and must consummate such redemption within 90 days of the closing of
the Public Equity Offering.
ARTICLE IX
DEFEASANCE AND COVENANT DEFEASANCE
Section 9.1 Defeasance and Discharge. Section 402 of the Indenture is
hereby amended, but only with respect to the Notes issued in accordance with
the provisions hereof, such that clause (b) of Section 402 is deleted and
replaced with the following: "(b) the respective obligations of the Company and
the Subsidiary Guarantors under Sections 303, 304, 305, 306, 307, 508, 515,
607, 610, 611, 1002, 1003, 1501 (to the extent it relates to the foregoing
sections and this Article Four), 1504 and 1505, hereof."
Section 9.2 Covenant Defeasance. Section 403 of the Indenture is
hereby amended, but only with respect to the Notes issued in accordance with
the provisions hereof, such that the first sentence of Section 403 is deleted
and replaced with the following: "Upon the Company's exercise under Section 401
hereof of the option applicable to this Section 403, the Company and the
Subsidiary Guarantors shall be released from their respective obligations under
any covenant contained in Article Eight, Sections 1005 through 1021, and in
Section 402 hereof 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 to be "Outstanding"
for the purposes of any direction, waiver consent or declaration or Act of
Holders (and the consequences of any thereof) in connection with such
covenants, but shall not be deemed "Outstanding" for all purposes hereunder."
Section 9.3 Conditions to Defeasance or Covenant Defeasance. Section
404(ii) of the Indenture is hereby amended, but only with respect to the Notes
issued in accordance with the provisions hereof, such that Section 404(ii) is
deleted and replaced with the following: "No Default or Event of Default with
respect to the Securities shall have occurred and be continuing on the date of
such deposit or, insofar as Sections 501(viii) and 501(ix) are concerned, at
any time during the period ending on the 91st day after the date of such
deposit.
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ARTICLE X
SUBSIDIARY GUARANTEES
Section 10.1 Subsidiary Guarantees. A new Article Fifteen is hereby
added to the Indenture, but only with respect to the Notes issued in accordance
with the provisions hereof, as follows:
SECTION 1501. Unconditional Guarantee.
Each Subsidiary Guarantor hereby unconditionally, jointly and severally,
guarantees (each such guarantee being referred to herein as this "Subsidiary
Guarantee," with all such guarantees being referred to herein as the
("Subsidiary Guarantees") to each Holder of Notes authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, the full and
prompt performance of the Company's obligations under this Indenture and the
Notes and that:
(i) the principal of (and premium, if any, on) and interest on the
Notes will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of
and interest on the Notes, if any, to the extent lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and
(ii) in case of any extension of time of payment or renewal of any
Notes or of any such other obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at Stated Maturity by acceleration or otherwise; subject however, in
the case of clauses (i) and (ii) above, to the limitations set forth in Section
1504 hereof.
Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Subsidiary Guarantors will be jointly
and severally obligated to pay the same immediately. Each Subsidiary Guarantor
hereby agrees that its obligations hereunder shall, to the extent permitted by
law be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Subsidiary Guarantor hereby waves, to the extent permitted by law,
diligence, presentment, demand of payment, filing of claim with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that its Subsidiary Guarantee will not be discharged
except by complete performance of the obligations contained in the Notes, this
Indenture and in this Subsidiary Guarantee. If any Holder or the Trustee is
required by any court or otherwise to return to the Company, any Subsidiary
Guarantor, or any custodian, trustee, liquidator or other
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similar official acting in relation to the Company or any Subsidiary Guarantor,
any amount paid by the Company or any Subsidiary Guarantor to the Trustee or
such Holder, this Subsidiary Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Subsidiary Guarantor agrees
it shall not be entitled to enforce any right of subrogation in relation to the
Holders in respect of any obligations guaranteed, hereby until payment in full
of all obligations guaranteed hereby. Each Subsidiary Guarantor further agrees
that, as between each Subsidiary guarantor, on the one hand, and the Holders
and the Trustee, on the other hand, (a) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article Five hereof for the
purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (b) in the event of any acceleration of such obligations
as provided in Article Five hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by each Subsidiary Guarantor
for the purpose of this Subsidiary Guarantee.
SECTION 1502. Subsidiary Guarantor May Consolidate, etc., on Certain Terms.
(i) Except as set forth in Article Eight hereof, nothing contained in
this Indenture or in any of the Notes shall prevent any consolidation or merger
of a Subsidiary Guarantor with or into the Company or another Subsidiary
Guarantor or shall prevent any sale, conveyance or other disposition of all or
substantially all the Properties of a Subsidiary Guarantor to the Company or
another Subsidiary Guarantor.
(ii) Except as set forth in Article Eight hereof, nothing contained in
this Indenture or in any of the Notes shall prevent any consolidation or merger
of a Subsidiary Guarantor with or into a Person other than the Company or
another Subsidiary Guarantor (whether or not Affiliated with the Subsidiary
Guarantor), or successive consolidations or mergers in which a Subsidiary
Guarantor or its successor or successors shall be a party or parties, or shall
prevent any sale, conveyance or other disposition of all or substantially all
the Properties of a Subsidiary Guarantor to a Person other than the Company or
another Subsidiary Guarantor (whether or not Affiliated with the Subsidiary
Guarantor) authorized to acquire and operate the same; provided, however, that
(a) immediately after such transaction, and giving effect thereto, no Default
or Event of Default shall have occurred as a result of such transaction and be
continuing, (b) such transaction shall not violate any of the covenants of
Sections 1001 through 1007 and Sections 1009 to 1021 hereof and (c) each
Subsidiary Guarantor hereby covenants and agrees that, upon any such
consolidation, merger, sale, conveyance or other disposition, such Subsidiary
Guarantor's Subsidiary Guarantee set forth in this Article Fifteen and in a
notation to the Notes, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by such
Subsidiary Guarantor, shall be expressly assumed (in the event that the
Subsidiary Guarantor is not the surviving corporation in a merger), by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by such Person formed by such consolidation or into
which the Subsidiary Guarantor shall have merged, or by the Person that shall
have acquired such Property (except to the extent the following Section 1503
would result in the release of such Subsidiary Guarantee, in which case such
surviving Person or transferee of such Property shall not have to execute any
such
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supplemental indenture and shall not have to assume such Subsidiary Guarantor's
Subsidiary Guarantee). In the case of any such consolidation, merger, sale,
conveyance or other disposition and upon the assumption by the successor
Person, by supplemental indenture executed and delivered to the Trustee and
satisfactory in form, to the Trustee of the due and punctual performance of all
of the covenants and conditions of this Indenture to be performed by the
Subsidiary Guarantor, such successor Person shall succeed to and be substituted
for the Subsidiary Guarantor with the same effect as if it had been named
herein as the initial Subsidiary Guarantor.
SECTION 1503. Release of Subsidiary Guarantors.
Upon the sale or disposition (by merger or otherwise) of a Subsidiary
Guarantor (or all or substantially all of its Properties) to a Person other
than the Company or another Subsidiary Guarantor and pursuant to a transaction
that is otherwise in compliance with the terms of this Indenture, including but
not limited to the provisions of Section 1502 hereof or pursuant to Article
Eight hereof, such Subsidiary Guarantor shall be deemed released from its
Subsidiary Guarantee and all related obligations under this Indenture;
provided, however, that any such termination shall occur only to the extent
that all obligations of such Subsidiary Guarantor under all of its guarantees
of, and under all of its pledges of assets or other security interests which
secure, other Indebtedness of the Company or any other Restricted Subsidiary
shall also terminate upon such sale or other disposition. The Trustee shall
deliver an appropriate instrument evidencing such release upon receipt of a
Company Request accompanied by an Officers' Certificate and an Opinion of
Counsel certifying that such sale or other disposition was made by the Company
in accordance with the provisions of this Indenture.
Each Subsidiary Guarantor that is designated as an Unrestricted
Subsidiary in accordance with the provisions of this Indenture shall be
released from its Subsidiary Guarantee and all related obligations under this
Indenture for so long as it remains an Unrestricted Subsidiary. The Trustee
shall deliver an appropriate instrument evidencing such release upon its
receipt of the Board Resolution designating such Unrestricted Subsidiary.
Notwithstanding any other provision of this Indenture, all of the
Subsidiary Guarantors shall be deemed released from their respective Subsidiary
Guarantees and all related obligations under this Indenture in the event that
all obligations of the Subsidiary Guarantors under all of their guarantees of,
and under all of their pledges of assets or other security interests which
secure, other indebtedness of the Company (excluding any Senior Indebtedness)
shall also terminate. The Trustee shall deliver an appropriate instrument
evidencing such release upon receipt of a Company Request accompanied by an
Officer's Certificate and Opinion of Counsel certifying that all such
obligations of the Subsidiary Guarantee have terminated.
Any Subsidiary Guarantor not released in accordance with this Section
1503 shall remain liable for the full amount of principal of (and premium, if
any, on) and interest on the Notes as provided in this Article Fifteen.
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SECTION 1504. Limitation of Subsidiary Guarantors' Liability.
Each Subsidiary Guarantor, and by its acceptance hereof each Holder,
hereby confirm that it is the intention of all such parties that the guarantee
by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee not
constitute a fraudulent transfer or conveyance for purposes of the Federal
Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law. To effectuate the foregoing
intention, the Holders and each Subsidiary Guarantor hereby irrevocably agree
that the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee shall be limited to the maximum amount as will, after giving effect
to all other contingent and fixed liabilities (including, but not limited to,
Guarantor Senior Indebtedness) of such Subsidiary Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under its Subsidiary Guarantee or pursuant to Section 1505 hereof,
result in the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee not constituting such a fraudulent conveyance or fraudulent transfer.
This Section 1504 is for the benefit of the creditors of each Subsidiary
Guarantor.
SECTION 1505. Contribution.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under its Subsidiary Guarantee, such Funding Guarantor
shall be entitled to a contribution from each other Subsidiary Guarantor (if
any) in a pro rata amount based on the Adjusted Net Assets of each Subsidiary
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Notes or any other Subsidiary Guarantor's
obligations with respect to its Subsidiary Guarantee.
SECTION 1506. Execution and Delivery of Notations of Subsidiary Guarantees.
To evidence its Subsidiary Guarantee set forth in Section 1501 hereof,
each Subsidiary Guarantor hereby agrees to execute the notations of Subsidiary
Guarantees in substantially the form set forth in Section 2.3 hereof to be
endorsed on all Notes ordered to be authenticated and delivered by the Trustee,
and each Subsidiary Guarantor agrees that this Indenture shall be executed on
behalf of such Subsidiary Guarantor by its President or one of its Vice
Presidents. Each Subsidiary Guarantor hereby agrees that its Subsidiary
Guarantee set forth in Section 1501 hereof shall remain in full force and
effect notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee. Each such notation of Subsidiary Guarantee shall be
signed on behalf of each Subsidiary Guarantor by its President or one of its
Vice Presidents (each of whom shall, in each case, have been duly authorized by
all requisite corporate action) prior to the authentication of the Note on
which it is endorsed, and the delivery of such Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Indenture on behalf of such Subsidiary
Guarantor. Such signatures upon the notation of Subsidiary Guarantee
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may be by manual or facsimile signature of such officers and may be imprinted
or otherwise reproduced on the Subsidiary Guarantee, and in case any such
officer who shall have signed the notation of Subsidiary Guarantee shall cease
to be such officer before the Note on which such notation of Subsidiary
Guarantee is endorsed shall have been authenticated and delivered by the
Trustee or disposed of by the Company, such Note nevertheless may be
authenticated and delivered or disposed of as though the Person who signed the
notation of Subsidiary Guarantee had not ceased to be such officer of the
Subsidiary Guarantor.
SECTION 1507. Severability.
In case any provision of this Subsidiary Guarantee shall be invalid,
illegal or unenforceable, that portion of such provision that is not invalid,
illegal or unenforceable shall remain in effect, and the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 1508. Subsidiary Guarantees Subordinated to Guarantor Senior
Indebtedness.
Each Subsidiary Guarantor covenants and agrees, and each Holder of a
Note, by his acceptance of the Subsidiary Guarantees, likewise covenants and
agrees, for the benefit of the holders, from time to time, of Guarantor Senior
Indebtedness, that the payments by such Subsidiary Guarantor in respect of its
Subsidiary Guarantee are subordinated and subject in right of payment, to the
extent and in the manner provided in this Article Fifteen, to the prior payment
in full of all Guarantor Senior Indebtedness of such Subsidiary Guarantor,
whether outstanding on the date of this Indenture or thereafter created,
incurred, assumed or guaranteed; provided, however, that the Subsidiary
Guarantee of such Subsidiary Guarantor, the Indebtedness represented thereby
and the payment of the principal of (and premium, if any, on) and the interest
on the Notes pursuant to such Subsidiary Guarantee in all respects shall rank
pari passu with, or prior to, all existing and future unsecured indebtedness
(including, without limitation, Indebtedness) of such Subsidiary Guarantor that
is subordinated to its Guarantor Senior Indebtedness.
This Article Fifteen shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Guarantor Senior Indebtedness, and such provisions are made for the benefit of
the holders of Guarantor Senior Indebtedness, and such holders are made
obligees hereunder and any of them may enforce such provisions.
SECTION 1509. Subsidiary Guarantors Not to Make Payments with Respect to
Subsidiary Guarantees in Certain Circumstances.
(i) No payment or distribution of any Property of any Subsidiary
Guarantor of any kind or character (other than Permitted Guarantor Junior
Notes) may be made by such Subsidiary Guarantor in respect of its Subsidiary
Guarantee upon the happening of any default in respect of the payment or
required prepayment of any of its Guarantor Senior Indebtedness when the same
becomes due and payable (a "Subsidiary Guarantor Payment Default"), unless and
until such
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Subsidiary Guarantor Payment Default shall have been cured or waived in writing
or shall have ceased to exist or such Guarantor Senior Indebtedness shall have
been paid in full or otherwise discharged, after which such Subsidiary
Guarantor shall resume making any and all required payments in respect of its
Subsidiary Guarantee, including any missed payments.
(ii) Upon the happening of any event (other than a Subsidiary
Guarantor Payment Default) the occurrence of which entitles one or more Persons
to accelerate the maturity of any Specified Guarantor Senior Indebtedness (a
"Subsidiary Guarantor Non-payment Default"), and receipt by the applicable
Subsidiary Guarantor and the Trustee of written notice thereof from one or more
of the holders of such Specified Guarantor Senior Indebtedness or their
representative (a "Subsidiary Guarantor Payment Notice"), then, unless and
until such Subsidiary Guarantor Nonpayment Default shall have been cured or
waived in writing or shall have ceased to exist or such Specified Guarantor
Senior Indebtedness is paid in full or otherwise discharged or the holders (or
a representative of the holders) of such Specified Guarantor Senior
Indebtedness give their written approval, no payment or distribution shall be
made by such Subsidiary Guarantor in respect of its Subsidiary Guarantee (other
than Permitted Guarantor Junior Notes); provided, however, that these
provisions will not prevent the making of any payment for more than 179 days
after a Subsidiary Guarantor Payment Notice shall have been given after which
such Subsidiary Guarantor will resume, (unless otherwise prohibited pursuant
to the immediately preceding paragraph) making any and all required payments in
respect of its Subsidiary Guarantee, including any missed payments.
Notwithstanding the foregoing, not more than one Subsidiary Guarantor Payment
Notice shall be given with respect to any Subsidiary Guarantee within a period
of 360 consecutive days. No Subsidiary Guarantor Non-payment Default that
existed or was continuing on the date of delivery of any Subsidiary Guarantor
Payment Notice with respect to the Specified Guarantor Senior Indebtedness
initiating such Subsidiary Guarantor Payment Notice will be, or can be, made
the basis for the commencement of a subsequent Subsidiary Guarantor Payment
Notice with respect to such Subsidiary Guarantee.
(iii) In the event that, notwithstanding the foregoing, a Subsidiary
Guarantor shall make any payment in respect of its Subsidiary Guarantee to the
Trustee or the Holder of any Note prohibited by the foregoing provisions of
this Section 1509, then and in such event such payment shall be paid over and
delivered forthwith to the Company. In the event that a Subsidiary Guarantor
shall make any payment in respect of its Subsidiary Guarantee to the Trustee,
and the Trustee shall receive written notice of a Subsidiary Guarantor Payment
Default or a Subsidiary Guarantor Nonpayment Default from one or more of the
holders of Guarantor Senior Indebtedness; (or their representative) prior to
making any payment to Holders in respect of the Subsidiary Guarantee and prior
to 11:00 a.m., Eastern Time on the date which is two Business Days prior to the
date upon which by the terms hereof any money may become payable for any
purpose, such payments shall be paid over by the Trustee and delivered
forthwith to the Company. Each Subsidiary Guarantor shall give prompt written
notice to the Trustee of any default under any of its Guarantor Senior
Indebtedness or under any agreement pursuant to which its Guarantor Senior
Indebtedness may have been issued.
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SECTION 1510. Subsidiary Guarantees subordinated to prior payment of all
guarantor senior indebtedness upon Dissolution, etc.
Upon any distribution of Properties of any Subsidiary Guarantor or
payment on behalf of a Subsidiary Guarantor in the event of any Insolvency or
Liquidation Proceeding with respect to such Subsidiary Guarantor:
(i) the holders of such Subsidiary Guarantor's Guarantor Senior
Indebtedness shall be entitled to reserve payment in full of such Guarantor
Senior Indebtedness, or provision must be made for such payment, before the
Holders are entitled to receive any direct or indirect payment or distribution
of any kind or character, whether in cash, property or securities (other than
Permitted Guarantor Junior Notes), on account of any payment in respect of such
Subsidiary Guarantor's Subsidiary Guarantee;
(ii) any direct or indirect payment or distribution of Properties of
such Subsidiary Guarantor of any kind or character, whether in cash, property
or securities (other than a payment or distribution in the form of Permitted
Guarantor Junior Notes) by set-off or otherwise, to which the Holders or the
Trustee, on behalf of the Holders, would be entitled except for the provisions
of this Article Fifteen, shall be paid by the Subsidiary Guarantor or by any
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of such Guarantor Senior
Indebtedness or their representative or representatives or to the trustee or
trustees under any indenture under which any instruments evidencing any of such
Senior Guarantor Indebtedness may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of such Senior Guarantor
Indebtedness held or represented by each, to the extent necessary to make
payment in full of all such Guarantor Senior Indebtedness after giving effect
to any concurrent payment or distribution to the holders of such Guarantor
Senior Indebtedness, and
(iii) in the event that, notwithstanding the foregoing provisions of
this Section 1510, any direct or indirect payment or distribution of Properties
of such Subsidiary Guarantor of any kind or character, whether in cash,
property or securities (other than a payment or distribution in the form of
Permitted Guarantor Junior Notes), shall be received by the Trustee or the
Holders before all such Guarantor Senior Indebtedness is paid in full or
otherwise discharged, such Properties shall be received and held in trust for
and shall be paid over to the holders of such Guarantor Senior Indebtedness
remaining unpaid or their representatives, for application to the payment of
such Guarantor Senior Indebtedness until all such Guarantor Senior Indebtedness
shall have been paid or provided for in full, after giving effect to any
concurrent payment or distribution to the holders of such Guarantor Senior
Indebtedness.
The Company or a Subsidiary Guarantor shall give prompt written notice
to the Trustee of the occurrence of any Insolvency or Liquidation Proceeding
with respect to such Subsidiary Guarantor.
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SECTION 1511. Holders to be Subrogated to Rights of Holders of Guarantor
Senior Indebtedness.
After the payment in full of all Guarantor Senior Indebtedness of a
Subsidiary Guarantor, the Holders shall be subrogated (equally and ratably with
the holders of all other Indebtedness of such Subsidiary Guarantor which by its
express terms is subordinated to such Guarantor Senior Indebtedness to
substantially the same extent as each Subsidiary Guarantee is so subordinated
and which is entitled to the rights of subrogation as a result of payments made
to the holders of such Guarantor Senior Indebtedness) to the rights of the
holders of such Guarantor Senior Indebtedness to receive payments or
distributions of cash, property and securities of such Subsidiary Guarantor
applicable to such Guarantor Senior Indebtedness until all amounts owing on the
Notes shall be paid in full, and for the purpose of such subrogation no
payments or distributions to the holders of such Guarantor Senior Indebtedness
by or on behalf of such Subsidiary Guarantor or by or on behalf of the Holders
by virtue of this Article Fifteen which otherwise would have been made to the
Holders shall, as between such Subsidiary Guarantor, its creditors other than
the holders of Guarantor Senior Indebtedness, and the Holders of the Notes, be
deemed to be a payment or distribution by such Subsidiary Guarantor to or on
amount of such Guarantor Senior Indebtedness, it being understood that the
subordination provisions of this Article Fifteen are, and are intended solely
for, the purpose of defining the relative rights of the Holders, on the one
hand, and the holders of Guarantor Senior Indebtedness, on the other hand.
SECTION 1512. Obligations of Subsidiary Unconditional.
Nothing contained in this Article Fifteen or elsewhere in this Indenture
or in any Note is intended to or shall impair, as between the Subsidiary
Guarantors and the Holders, the obligation of the Subsidiary Guarantors under
the Subsidiary Guarantees, or is intended to or shall affect the relative
rights of the Holders and creditors of the Subsidiary Guarantors, nor shall
anything herein or therein prevent the Trustee or any Holder from exercising
all remedies otherwise permitted by applicable law upon Default under this
Indenture, subject to the rights, if any, under this Article XIII of the
holders of Guarantor Senior Indebtedness in respect of cash, property or
securities of any Subsidiary Guarantor received upon the exercise of any such
remedy. Upon any distribution of Properties of a Subsidiary Guarantor referred
to in this Article Fifteen, the Trustee, subject to the provisions of Section
603 hereof, and the Holders of the Notes shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of a trustee in bankruptcy, receivers, liquidating trustee,
custodian, assignee for the benefit of creditors, or agent or other Person
making any distribution to the Trustee or to the Holders of the Notes for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the related Guarantor Senior Indebtedness and
other indebtedness of such Subsidiary Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article Fifteen.
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SECTION 1513. Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts that would prohibit the making of any payment to or by
the Trustee, unless it shall have received at its Corporate Trust Office
written notice thereof from a Subsidiary Guarantor or from one or more holders
of Guarantor Senior Indebtedness or Specified Guarantor Senior Indebtedness, in
the case of a Subsidiary Guarantor Non-payment Default, or from any
representative thereof, and, prior to the receipt of any such written notice,
the Trustee, subject to TIA Sections 315(a) through 315(d), shall be entitled
to assume conclusively that no such facts exist. The Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Guarantor Senior Indebtedness, or Specified Guarantor
Senior Indebtedness, in the case of a Subsidiary Guarantor Non-payment Default
(or a representative on behalf of such holder), to establish that such notice
has been given by a holder of Guarantor Senior Indebtedness or Specified
Guarantor Senior Indebtedness, in the case of a Subsidiary Guarantor Non-
payment Default, or a representative on behalf of any such holder or holders.
SECTION 1514. Application by Trustee of Money Deposited with it.
Except as provided in Article Thirteen, any deposit of money by a
Subsidiary Guarantor with the Trustee or any Paying Agent (whether or not in
trust) for any payment in respect of the related Subsidiary Guarantee shall be
subject to the provisions of Sections 1508, 1509, 1510 and 1511 hereof except
that, if prior to 11:00 a.m., Eastern time, on the date which is two Business
Days prior to the date on which by the terms of this Indenture any such money
may become payable for any purpose, the Trustee or, in the case of any such
deposit of money with a Paying Agent, the Paying Agent shall not have received
with respect to such money the notice provided for in Section 1513 hereof, then
the Trustee or such Paying Agent, as the case may be, shall have full power and
authority to receive such money and to apply the same to the purpose for which
it was received, and shall not be affected by any notice to the contrary which
may be received by it on or after 11:00 a.m., Eastern time, two Business Days
prior to such payment date. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Guarantor Senior Indebtedness to participate in any payment or
distribution pursuant to this Article Fifteen, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Guarantor Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article
Fifteen, and if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payments.
The Trustee, however, shall not be deemed to owe any fiduciary duty to
the holders of Guarantor Senior Indebtedness but shall have only such
obligations to such holders as are expressly set forth in this Article Fifteen.
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SECTION 1515. Subordination Rights Not Impaired by Acts or Omissions of
Subsidiary Guarantors or Holders of Guarantor Senior Indebtedness.
No right of any present or future holders of any Guarantor Senior
Indebtedness of a Subsidiary Guarantor to enforce subordination as provided
herein shall at any time in any way be prejudiced or impaired by any act or any
act or failure to act on the part of such Subsidiary Guarantor or by any act or
failure to act by any such holder, or by any noncompliance by such Subsidiary
Guarantor with the terms of this Indenture, regardless of any knowledge thereof
which any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the preceding paragraph of
this Section, the holders of Guarantor Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the Trustee or the
Holders of the Notes, without incurring responsibility to the Holders of the
Notes and without impairing or releasing the subordination or other benefits
provided in this Article, or the obligations hereunder of the Holders of the
Notes to the holders of Guarantor Senior Indebtedness, do any one or more of
the following: (1) change the manner, place or terms of payment or extend the
time of payment of, or renew, exchange, amend, increase or alter, Guarantor
Senior Indebtedness or the term of any instrument evidencing the same or any
agreement under which Guarantor Senior Indebtedness is outstanding or any
liability of any obligor thereon (unless such change, extension or alteration
results in such Indebtedness no longer being Guarantor Senior Indebtedness as
defined in this Indenture); (2) sell, exchange. release or otherwise deal with
any Property pledged, mortgaged or otherwise securing Guarantor Senior
Indebtedness; (3) settle or compromise any Guarantor Senior Indebtedness or any
liability of any Obligor thereon or release any Person liable in any manner for
the collection of Guarantor Senior Indebtedness; and (4) exercise or refrain
from exercising any rights against the Company and any other Person.
SECTION 1516. Holders Authorize Trustee to Effectuate Subordination of
Subsidiary Guarantees.
Each Holder, by his acceptance thereof, authorizes and expressly directs
the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article Fifteen
and appoints the Trustee as his attorney-in-fact for such purpose, including,
in the event of any Insolvency or Liquidation Proceeding with respect to any
Subsidiary Guarantor, the immediate filing of a claim for the unpaid balance of
his Notes pursuant to the related Subsidiary Guarantee in the form required in
said proceedings and the causing of said claim to be approved.
SECTION 1517. Right of Trustee to Hold Guarantor Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this
Article Fifteen in respect of any Guarantor Senior Indebtedness at any time
held by it to the same extent as any other holder of Guarantor Senior
Indebtedness, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
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SECTION 1518. Article XIII Not to Prevent Events of Default.
The failure to make a payment on account of the Subsidiary Guarantees by
reason of any provision in this Article Fifteen shall not be construed as
preventing the occurrence of an Event of Default under this Indenture.
SECTION 1519. Payment.
For purposes of this Article Fifteen, a payment with respect to any
Subsidiary Guarantor or with respect to principal of or interest on the Note or
any Subsidiary Guarantee shall include, without limitation, payment of
principal of and interest on any Note, any depositing of funds under Article
Four hereof, any payment on account of any repurchase or redemption of any Note
and any payment or recovery on any claim (whether for rescission or damages and
whether based on contract, tort, duty imposed by law, or any other theory of
liability) relating to or arising out of the offer, sale or purchase of any
Note.
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IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, all as of the day and year first
above written.
ISSUER
SNYDER OIL CORPORATION,
By: /s/ James H. Shonsey
------------------------------
James H. Shonsey
Vice President - Finance
SUBSIDIARY GUARANTORS:
DELMAR PETROLEUM, INC.
By: /s/ James H. Shonsey
------------------------------
James H. Shonsey
Vice President
MEXICAN FLATS SERVICE COMPANY
By: /s/ James H. Shonsey
------------------------------
James H. Shonsey
Vice President
SNYDER FLUID TECHNOLOGIES, INC.
By: /s/ James H. Shonsey
------------------------------
James H. Shonsey
Vice President
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SNYDER GAS MARKETING, INC.
By: /s/ James H. Shonsey
------------------------------
James H. Shonsey
Vice President
SOCO GAS SYSTEMS, INC.
By: /s/ James H. Shonsey
------------------------------
James H. Shonsey
Vice President
SOCO HOLDINGS, INC.
By: /s/ James H. Shonsey
------------------------------
James H. Shonsey
Vice President
SOCO LOUISIANA LEASING, INC.
By: /s/ James H. Shonsey
------------------------------
James H. Shonsey
Vice President
SOCO OFFSHORE, INC.
By: /s/ James H. Shonsey
------------------------------
James H. Shonsey
Vice President
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WESTERN TRANSMISSION CORPORATION
By: /s/ James H. Shonsey
-------------------------------
James H. Shonsey
Vice President
WYOMING GATHERING AND PRODUCTION
COMPANY
By: /s/ James H. Shonsey
-------------------------------
James H. Shonsey
Vice President
TRUSTEE:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By: /s/ John G. Jones
-------------------------------
Name: John G. Jones
----------------------
Title: Senior Trust Officer
---------------------
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