EXHIBIT 7.1
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Execution Copy
INDENTURE, dated as of July 9, 2003 between Baytex Energy Ltd., a
corporation duly organized and existing under the laws of the Province of
Alberta, Canada (herein called the "Company") and The Bank of Nova Scotia Trust
Company of New York, a bank and trust company duly organized and existing under
the laws of New York, as trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of and issue of 9?% Senior
Subordinated Notes due 2010 (herein called the "Initial Securities"), and 95/8%
Senior Series B Subordinated Notes due 2010 (the "Exchange Securities" and,
together with the Initial Securities, the "Securities") of substantially the
tenor and amount hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture.
Upon the issuance of the Exchange Securities, if any, or the
effectiveness of the Exchange Offer Registration Statement (as defined herein)
or, under certain circumstances, the effectiveness of the Shelf Registration
Statement (as defined herein), this Indenture will be subject to the provisions
of the Trust Indenture Act of 1939, as amended, that are required to be part of
this Indenture and shall, to the extent applicable, be governed by such
provisions.
The Company has also duly authorized the issuance of an unlimited
amount of additional Securities to be issued from time to time having identical
terms and conditions to the Securities offered hereby.
All things necessary have been done to make the Securities, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company and to make this
Indenture a valid agreement of the Company, each in accordance with their
respective terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01 DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and "self-liquidating
paper", as used in TIA Section 311, shall have the meanings assigned to them in
the rules of the Commission adopted under the Trust Indenture Act;
(c) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries (a) existing at the time such Person is amalgamated, merged with or
into the Company or becomes a Restricted Subsidiary or (b) assumed in connection
with the acquisition of assets from such Person; PROVIDED that any Indebtedness
of such Person that is redeemed, defeased, retired or otherwise repaid at the
time of or immediately upon consummation of the transaction by which such Person
is merged with or into the Company, becomes a Restricted Subsidiary or such
assets are acquired from such Person shall not be Acquired Indebtedness.
"Act", when used with respect to any Holder, has the meaning specified
in Section 1.04.
"Additional Mirror Note" means an additional mirror note issued to the
Company by a Restricted Subsidiary upon the Company's issuance of Additional
Securities, in an amount equivalent to the aggregate principal amount of
Additional Securities issued, in form and substance substantially similar to the
Mirror Note, PROVIDED that there shall be no Additional Mirror Notes after the
release and discharge of the Collateral Documents pursuant to the terms of this
Indenture.
"Additional Amounts" has the meaning set forth in Section 10.23.
"Additional Securities" has the meaning set forth in Section 3.01.
"Adjusted Net Assets" has the meaning set forth in Section 13.01.
"Adjusted Consolidated Net Tangible Assets" means, without duplication,
as of the date of determination:
(i) the sum of (a) discounted future net cash flows from
the proved oil and gas reserves of the Company and its Restricted Subsidiaries
calculated in accordance with Commission guidelines but before any federal,
state, provincial or foreign income taxes, as estimated by the Company and
confirmed by a Canadian nationally recognized firm of independent petroleum
engineers in a reserve report prepared as of the end of the Company's most
recently completed fiscal year for which
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audited financial statements are available, increased and/or decreased, as the
case may be, as described in clause (b), and determined without including as an
encumbrance the Net Profits Interest, (b) the capitalized costs that are
attributable to the 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 on a date no earlier than the date of the Company's latest annual or
quarterly financial statements and (d) the greater of:
(1) the net book value on a date no earlier than
the date of the Company's latest annual or quarterly financial
statements, and
(2) appraised value, as estimated by independent
appraisers, of other tangible assets of the Company and its Restricted
Subsidiaries, including, without duplication, Investments in
unconsolidated Restricted Subsidiaries, as of the date no earlier than
the date of the Company's latest audited financial statements,
(ii) minus the sum of
(a) minority interests,
(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 the clause (i)(a)
above, the discounted future net cash flows, calculated in
accordance with Commission guidelines but before any federal,
state, provincial or foreign income taxes and utilizing the
prices utilized in the Company's and its Restricted
Subsidiaries' 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.
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(d) the discounted future net cash flows,
calculated in accordance with Commission guidelines but before
any federal, state, provincial or foreign income taxes,
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 cash flows specified in clause (i)(a) above,
would be necessary to fully satisfy payment obligations of the
Company and its Restricted Subsidiaries with respect to
Dollar-Denominated Production payments on the schedules
specified with respect thereto.
Discounted future net cash flows will be increased pursuant to clauses
(i) and (ii) below and decreased pursuant to clauses (iii) and (iv) below, as of
the date of determination, by the estimated discounted future net cash flows,
calculated in accordance with Commission guidelines but before any federal,
state, provincial or foreign income taxes and utilizing the prices utilized in
such year-end reserve report referred to in clause (i)(a) above, from:
(i) estimated proved oil and gas reserves acquired since
such year-end, which reserves were not reflected in such year-end reserve
report,
(ii) estimated oil and gas reserves attributable to upward
revisions of estimates of proved oil and gas reserves since such year-end due to
exploration, development, exploitation, production or other activities,
(iii) estimated proved oil and gas reserves produced or
disposed of since such year-end, and
(iv) estimated oil and gas reserves attributable to
downward revisions of estimates of proved oil and gas reserves since such
year-end due to exploration, development, exploitation, production or other
activities.
In the case of each of the determinations made pursuant to clauses (i)
through (iv) immediately above, such increases and decreases shall be as
estimated by the Company's petroleum engineers, except that in the event there
is a Material Change as a result of such acquisitions, dispositions or
revisions, then the discounted future net cash flows utilized for purposes of
clauses (i)(a) through (i)(d) shall be confirmed in writing by a Canadian
nationally recognized firm of independent petroleum engineers.
"Affected Obligor" has the meaning set forth in Section 14.02.
"Affected Obligor Senior Indebtedness" has the meaning set forth in
Section 14.02.
"Affiliate" means, with respect to any specified Person, (a) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (b) any other Person that
owns, directly or indirectly, 10% or more of such specified Person's Capital
Stock or with respect to any natural Person, any Person having a relationship
with such Person by blood, marriage or adoption no more remote than first
cousin. For the purposes of this definition, "control", when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
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"Applicable Procedures" means applicable procedures of the Depositary,
CDS, Euroclear System or Clearstream Banking, as the case may be.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger,
consolidation or sale and leaseback transaction) (collectively, a "transfer") by
the Company or a Restricted Subsidiary, directly or indirectly, in one
transaction or a series of related transactions, of: (a) any Capital Stock of
any Restricted Subsidiary (other than directors' qualifying shares or shares
required by applicable law to be held by a Person other than the Company or a
Restricted Subsidiary) or (b) all or substantially all of the properties and
assets of the Company and its Restricted Subsidiaries representing a division or
line of business or (c) any other properties or assets of the Company or any
Restricted Subsidiary, other than in the ordinary course of business. For the
purposes of this definition, the term "Asset Sale" shall not include any
transfer of properties or assets (i) that is governed by the provisions of
Article VIII, (ii) between or among the Company and its Restricted Subsidiaries
pursuant to transactions that do not violate any other provision of this
Indenture, (iii) to any Person to the extent it constitutes a Restricted Payment
that is permitted under Section 10.11, (iv) consisting of inventory or worn-out,
obsolete or permanently retired equipment and facilities, (v) that constitutes a
Permitted Investment, or (vi) in connection with the Reorganization.
"Asset Sale Offer" has the meaning set forth in Section 10.13.
"Asset Sale Purchase Date" has the meaning set forth in Section 10.13.
"Bankruptcy Law" means the Bankruptcy and Insolvency Act (Canada), the
Companies' Creditors Arrangement Act (Canada) or any other Canadian federal or
provincial law relating to, or Title 11, U.S. Code or any similar United States
federal or state law relating to, the relief of debtors.
"Banks" means the banks and other financial institutions that from time
to time are lenders under the Senior Credit Facilities.
"Baytex Marketing Agreement" means the Crude Oil Supply Agreement,
dated as of December 16, 2002, between the Company and Baytex Marketing Ltd.
"Blockage Notice" has the meaning set forth in Section 14.03.
"Board of Directors" means, as the context requires, either the board
of directors of the Company or a Guarantor, if any, as the case may be, or any
duly authorized committee of that board.
"Board Resolution" means, as the context requires, a copy of a
resolution certified by the Secretary or an Assistant Secretary of the Company,
to have been duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, and delivered to the Trustee.
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"Borrowing Base" means the borrowing base under the Senior Credit
Facilities, which may include any other covenant in such Senior Credit
Facilities which limits the amount of Indebtedness the Company may incur or have
outstanding.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York or Calgary,
Alberta, Canada are authorized or obligated by law, regulation or executive
order to close.
"Canadian Final Prospectus" means the final prospectus filed with each
of the Canadian Securities Commissions qualifying the distribution of Exchange
Securities issuable in exchange for Initial Securities pursuant to the Exchange
Offer.
"Canadian Securities Commissions" shall mean the securities commission
or other appropriate regulatory authority in each of the Relevant Provinces.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" of any Person means any and all shares, partnership
interests, trust units, participations, rights in or other equivalents of, or
interests in, the equity of such Person, including each class of common stock
and Preferred Stock, but excluding any debt securities convertible into such
equity.
"Cash Equivalents" means (a) any evidence of Indebtedness with a
maturity of one year or less issued or directly and fully guaranteed or insured
by the United States or Canada or any agency or instrumentality of the United
States or Canada or any province or agency thereof (PROVIDED that the full faith
and credit of the United States or Canada or any province thereof, as the case
may be, is pledged in support thereof, and PROVIDED, FURTHER, that any province
of Canada must be rated, as the case may be, at least "R-1" by the Dominion Bond
Rating Service Limited (in the case of a Canadian provincial issuer); (b)
certificates of deposit or acceptances or Eurodollar time deposits with a
maturity of one year or less of, and overnight bank deposits with, any financial
institution that is a member of the Federal Reserve System or any Canadian
chartered bank having combined capital and surplus and undivided profits of not
less than US$500 million; (c) commercial paper with a maturity of 180 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 or Canada or any province thereof and rated at least A-1 by S&P or at
least P-1 by Moody's or at least "R-1" by Dominion Bond Rating Service Limited
(in the case of a Canadian issuer), and (d) funds which invest in any of the
foregoing.
"CDS" means The Canadian Depository for Securities Limited
"Change of Control" means the occurrence of any of the following
events:
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(a) prior to the Reorganization, any Person or "group" (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act), is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person will be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the voting power of all classes of the Company's
Voting Stock,
(b) subsequent to the Reorganization, any Person or "group" (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act), is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person will be deemed to have "beneficial ownership"
of all securities that such Person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the voting power of all classes of the Voting
Stock of the Company's direct parent Baytex Energy Trust,
(c) 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 to such Board of Directors, or
whose nomination for election by the stockholders of the Company, was approved
by a vote of at least 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
(d) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution, other than a transaction that complies with the
provisions of Article VIII.
"Change of Control Offer" has the meaning set forth in Section 10.12.
"Change of Control Payment Date" has the meaning set forth in Section
10.12.
"Clearstream" means Clearstream Banking, or any successor securities
clearing agency.
"Closing Date" means the date on which the Initial Securities are
originally issued under this Indenture.
"Collateral Documents" means the Mirror Note, along with all guarantees
of the Mirror Note (including the Guarantee and Indemnity from each of Baytex
Resources Ltd. and Baytex Exploration Ltd.), the Mirror Note Assignment from
Baytex Energy Ltd. in favor of the Trustee, the Baytex Energy Partnership
Consent and Acknowledgment, the Baytex Resources Ltd. Consent and
Acknowledgment, the Baytex Exploration Ltd. Consent and Acknowledgment and all
other related documents pledging such note and guarantees to the Trustee for the
benefit of the Holders, and any Additional
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Mirror Notes, along with all guarantees of such Additional Mirror Notes (if any)
and all other related documents pledging such notes and guarantees to the
Trustee for the benefit of the Holders.
"Collateral Documents Subordination Agreement" means the Subordination
Agreement dated as of July 9, 2003 among Baytex Energy Ltd., Baytex Energy
Partnership, Baytex Resources Ltd., Baytex Exploration Ltd. and the Trustee,
substantially in the form of Exhibit F hereto, as such agreement may be amended
from time to time after the date hereof.
"Commission" means the U.S. Securities and Exchange Commission and any
successor agency or organization.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its Chief Executive Officer,
its President, any Vice President, its Treasurer or an Assistant Treasurer, and
delivered to the Trustee.
"Consolidated Cash Flow from Operations" means, for any period, the sum
of, without duplication, Consolidated Net Income for such period, plus (or, in
the case of clause (3) below, plus or minus) the following items to the extent
included in computing Consolidated Net Income for such period:
(1) the Company's and its Restricted Subsidiaries'
federal, state, local and foreign future income tax expense for such
period accrued in accordance with GAAP for such period (other than
income taxes attributable to extraordinary, unusual or nonrecurring
gains or losses or taxes attributable to sale or dispositions outside
the ordinary course of business and PROVIDED that current income tax
expense determined in accordance with GAAP shall not be included), plus
(2) the Company and its Restricted Subsidiaries'
depletion, depreciation and amortization expense for such period, plus
(3) site restoration costs plus any other non-cash
charges for such period (including any non-cash charges related to a
ceiling test write-down required under GAAP) and minus non-cash credits
for such period, other than non-cash charges or credits resulting from
changes in prepaid assets or accrued liabilities in the ordinary course
of business.
PROVIDED that income tax expense, depletion, depreciation and amortization
expense and non-cash charges and credits of a Restricted Subsidiary will be
included in Consolidated
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Cash Flow from Operations only to the extent, and in the same proportion, that
the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income for such period.
"Consolidated Debt" means, at any time, Indebtedness of the Company and
Indebtedness of its Restricted Subsidiaries, other than Hedging Obligations, at
such time as determined on a consolidated basis in accordance with GAAP and as
shown on the Company's most recent annual audited or quarterly unaudited balance
sheets; PROVIDED, HOWEVER, that Consolidated Debt shall not include Deeply
Subordinated Inter-company Debt.
"Consolidated EBITDA" means, for any period, the sum of, without
duplication, Consolidated Net Income for such period, plus (or, in the case of
clauses (d) and (e) below, plus or minus) the following items to the extent
included in computing Consolidated Net Income for such period (a) Fixed Charges
for such period, plus (b) the federal, provincial, state, local and foreign
income tax expense of the Company and its Restricted Subsidiaries for such
period paid or accrued in accordance with GAAP for such period (other than
income taxes attributable to extraordinary, unusual or nonrecurring gains or
losses or taxes attributable to sales or dispositions outside the ordinary
course of business), plus (c) the depletion, depreciation and amortization
expense of the Company and its Restricted Subsidiaries for such period, plus (d)
site restoration costs, plus (e) any other non-cash charges for such period
(including any non-cash charges related to a ceiling test write-down required
under GAAP) and minus non-cash credits for such period, other than non-cash
charges or credits resulting from changes in prepaid assets or accrued
liabilities in the ordinary course of business; PROVIDED that income tax
expense, depletion, depreciation and amortization expense and non-cash charges
and credits of a Restricted Subsidiary shall be included in Consolidated EBITDA
only to the extent (and in the same proportion) that the net income of such
Restricted Subsidiary was included in calculating Consolidated Net Income for
such period.
"Consolidated Net Income" means, for any period, the net income (or net
loss) of the Company and its Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP, adjusted to the
extent included in calculating such net income or loss by excluding (a) any net
after-tax extraordinary gains or losses (less all fees and expenses relating
thereto), (b) any net after-tax gains or losses (less all fees and expenses
relating thereto) attributable to Asset Sales, (c) the net income (but not the
net loss) of any Person (other than the Company or a Restricted Subsidiary), in
which the Company or any Restricted Subsidiary has an equity interest, except
that the aggregate amount of dividends or other distributions actually paid to
the Company or any Restricted Subsidiary in cash during such period will be
included in such Consolidated Net Income, (d) the net income (or loss) of any
Person acquired by the Company or any Restricted Subsidiary in a "pooling of
interests" transaction attributable to any period prior to the date of such
acquisition, (e) the net income (but not the net loss) of any Restricted
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of such net income is at the date of
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determination restricted, directly or indirectly, except that the aggregate
amount of such net income that could be paid to the Company or a Restricted
Subsidiary thereof by loans, advances, intercompany transfers, principal
repayments or otherwise will be included in such Consolidated Net Income, (f)
any non-cash charges related to a ceiling test write down under GAAP, (g) any
interest expense on Deeply Subordinated Inter-company Debt and (h) any
distributions made by the Company on account of the Net Profits Interest.
"Consolidated Net Worth" means, at any date of determination, the
shareholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted
Subsidiaries, less any amounts attributable to Disqualified Stock or any equity
security convertible into or exchangeable for Indebtedness, the cost of treasury
stock and the principal amount of any promissory notes receivable from the sale
of the Capital Stock of the Company and less, to the extent included in
calculating such shareholders' equity of the Company and its Restricted
Subsidiaries, the shareholders' equity attributable to Unrestricted
Subsidiaries, each item to be determined in conformity with GAAP.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee, at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this Indenture is
located at One Liberty Plaza, New York, New York 10006, except that with respect
to presentation of Securities for payment or for registration of transfer or
exchange, such term shall mean the office or agency of the Trustee at which, at
any particular time, its corporate trust and agency business shall be conducted.
"Currency Agreements" means, with respect to any Person, any spot or
forward foreign exchange agreements and currency swap, currency option or other
similar financial agreements or arrangements entered into by such Person or any
of its Restricted Subsidiaries in the ordinary course of business and designed
to protect against or manage exposure to fluctuations in foreign currency
exchange rates.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Deeply Subordinated Inter-company Debt" means any Subordinated
Indebtedness owed by the Company or any Restricted Subsidiary to any Person that
owns, directly or indirectly, 100% of the Outstanding Voting Stock of the
Company, PROVIDED THAT such Subordinated Indebtedness cannot by its terms mature
prior to the maturity of the Securities under this Indenture.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 3.09.
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"Depositary" means The Depository Trust Company, its nominees and
successors.
"Designated Senior Indebtedness" means (i) all Senior Indebtedness
under the Senior Credit Facilities and (ii) any other issue of Senior
Indebtedness or refinancing thereof permitted by the definition of Senior
Indebtedness, having a principal amount of at least US$20.0 million.
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors, to make a finding or otherwise
take action under this Indenture, a member of the Board of Directors who does
not have any material direct or indirect financial interest in or with respect
to such transaction or series of transactions.
"Disqualified Stock" means any class or series of Capital Stock that,
either by its terms, or by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise (a) is, or upon the
happening of an event or passage of time would be, required to be redeemed on or
prior to the final Stated Maturity of the Securities, (b) is redeemable at the
option of the holder thereof at any time on or prior to such final Stated
Maturity or (c) at the option of the holder thereof, is convertible into or
exchangeable for debt securities at any time on or prior to such final Stated
Maturity; PROVIDED that any Capital Stock that would not constitute Disqualified
Stock but for provisions therein giving holders thereof the right to cause the
issuer thereof to repurchase or redeem such Capital Stock upon the occurrence of
an "asset sale" or "change of control" occurring prior to the Stated Maturity of
the Securities will not constitute Disqualified Stock if the "asset sale" or
"change of control" provisions applicable to such Capital Stock are no more
favorable to the holders of such Capital Stock than the provisions contained in
Sections 10.12 and 10.13 and such Capital Stock specifically provides that the
issuer will not repurchase or redeem any of such stock pursuant to such
provision prior to the Company's repurchase of such of the Securities as are
required to be repurchased pursuant to Sections 10.12 and 10.13.
"Dollar-Denominated Production Payments" means production payment
obligations of the Company or a Restricted Subsidiary recorded as liabilities in
accordance with GAAP, together with all undertakings and obligations in
connection therewith.
"Euroclear" means the Euroclear Clearance System, or any successor
securities clearing agency.
"Event of Default" has the meaning specified in Section 5.01.
"Excess Proceeds" has the meaning set forth in Section 10.13.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder.
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"Exchange Offer" means the exchange offer that may be effected pursuant
to the Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Exchange Securities" has the meaning stated in the first recital of
this Indenture and refers to any Exchange Securities containing terms
substantially identical to the Initial Securities (except that such Exchange
Securities shall not contain terms with respect to the interest rate step-up
provisions in Section 3.09 of the Initial Securities and transfer restrictions
in Section 3.07 of the Initial Securities) that are issued and exchanged for the
Initial Securities pursuant to the Registration Rights Agreement and this
Indenture.
"Exchanged Properties" means properties or assets used or useful in the
Oil and Gas Business received by the Company or a Restricted Subsidiary, whether
directly or indirectly through the acquisition of the Capital Stock of a Person
holding such assets so that such Person becomes a Wholly Owned Restricted
Subsidiary of the Company, in trade or as a portion of the total consideration
for such other properties or assets.
"Excluded Holder" has the meaning specified in Section 10.25.
"fair market value" means (unless the context otherwise requires), with
respect to any asset, the price which could be negotiated in an arm's-length
free market transaction, for cash, between an informed and willing seller and an
informed and willing buyer, neither of which is under pressure or compulsion to
complete the transaction.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the
United States Code, as amended from time to time.
"Fixed Charges" means, for any period, without duplication, the sum of
(a) the amount that, in conformity with GAAP, would be set forth opposite the
caption "interest expense" (or any like caption) on a consolidated statement of
operations of the Company and its Restricted Subsidiaries for such period,
including, without limitation, (i) amortization of debt discount, (ii) the net
cost of Interest Rate Agreements (including amortization of discounts), (iii)
the interest portion of any deferred payment obligation, (iv) amortization of
debt issuance costs and (v) the interest component of Capital Lease Obligations,
plus (b) cash dividends paid on Preferred Stock and Disqualified Stock by the
Company and any Restricted Subsidiary to any Person other than the Company and
its Restricted Subsidiaries, plus (c) all interest on any Indebtedness of any
Person guaranteed by the Company or any of its Restricted Subsidiaries;
PROVIDED, HOWEVER, that Fixed Charges shall not include (i) any gain or loss
from extinguishment of debt, including the write-off of debt issuance costs and
(ii) the fixed charges of a Restricted Subsidiary to the extent (and in the same
proportion) that the net income of such Subsidiary was excluded in calculating
Consolidated Net Income pursuant to clause (e) of
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the definition thereof for such period and (iii) interest on any Deeply
Subordinated Inter-company Debt.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of
Consolidated EBITDA for such period to Fixed Charges for such period.
"Frontier Agreement" means the Crude Oil Supply Agreement dated as of
October 15, 2002 between the Company and Frontier Oil and Refining Company, as
assigned to Baytex Marketing Ltd. pursuant to the Assignment and Novation
Agreement dated November 29, 2002, among the Company, Baytex Marketing Ltd. and
Frontier Oil and Refining Company.
"Funding Guarantor" has the meaning set forth in Section 13.02.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in Canada, consistently applied, that are in
effect on the date of this Indenture.
"Global Security" shall have the meaning specified in Section 2.01.
"guarantee" means, as applied to any obligation, (a) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of all or any part of
such obligation and (b) 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 limitation, the payment of
amounts drawn down under letters of credit.
"Guarantee" means a guarantee of the Securities that is made pursuant
to the covenant in Section 10.21(b) or 10.22(b).
"Guarantor" means each Restricted Subsidiary that has executed a
Guarantee, PROVIDED that any Person constituting a Guarantor shall cease to
constitute a Guarantor when its respective Guarantee is released in accordance
with the terms of this Indenture.
"Guarantor Senior Indebtedness" means, as to any Guarantor, the
principal of (premium, if any) and interest on (including interest accruing
after the filing of a petition initiating any proceeding pursuant to any
bankruptcy law, whether or not allowed) and other amounts due on or in
connection with any Indebtedness of such Guarantor (other than the Guarantee
made by such Guarantor or Pari Passu Indebtedness), whether outstanding on the
Closing Date or thereafter incurred, 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
subordinate in right of payment to the Guarantees by such Guarantor. Without
limiting the generality of the foregoing, "Guarantor Senior Indebtedness"
includes the principal of (premium, if any) and interest (including interest
accruing after the
13
occurrence of an event of default or after the filing of a petition initiating
any proceeding pursuant to any bankruptcy law, whether or not allowed) on and
all other amounts owing in respect of (i) all obligations of every nature of
such Guarantor from time to time owed to the Banks and the Senior Credit
Facilities Agent under the Senior Credit Facilities; PROVIDED, HOWEVER, that any
Indebtedness under any refinancing, refunding or replacement of the Senior
Credit Facilities shall not constitute Guarantor Senior Indebtedness to the
extent that the Indebtedness thereunder is by its express terms subordinate to
any other Indebtedness of such Guarantor, and (ii) all Hedging Obligations,
including, in each such case, any guarantee by such Guarantor in respect
thereof. Notwithstanding the foregoing, "Guarantor Senior Indebtedness" shall
not include (a) Indebtedness that is represented by Disqualified Stock, (b) any
trade payables, (c) Indebtedness of or amounts owed by such Guarantor for
compensation to employees or for services rendered to such Guarantor, (d) any
liability for foreign, federal, provincial, state, local or other taxes owed or
owing by such Guarantor, (e) Indebtedness of such Guarantor to the Company, a
Subsidiary of the Company or any other Affiliate of the Company or any of such
Affiliate's Subsidiaries, (f) that portion of any Indebtedness that, at the time
of the incurrence, is incurred by such Guarantor in violation of this Indenture,
and (g) amounts owing under leases (other than Capital Lease Obligations).
"Hedging Obligations" means the obligations of any Person under
Interest Rate Agreements, Currency Agreements and Oil and Gas Hedging Contracts.
"Holder" means the Person in whose name a Security is, at the time of
determination, registered on the Security Register.
"Indebtedness" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent, (a) every obligation of such Person for money borrowed,
excluding any trade accounts payable and accrued liabilities incurred in the
ordinary course of business, (b) every obligation of such Person evidenced by
bonds, debentures, notes or other similar instruments, (c) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person, (d)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services, (e) all conditional sale obligations or all obligations
under any title retention agreement, but excluding a title retention agreement
to the extent it constitutes an operating lease under Canadian law, (f) every
Capital Lease Obligation of such Person, (g) all Disqualified Stock of such
Person valued at its maximum fixed repurchase price (including, without
duplication, accrued and unpaid dividends), (h) all obligations of such Person
under or in respect of Hedging Obligations and (i) every obligation of the type
referred to in clauses (a) through (h) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed.
For purposes of this definition, the "maximum fixed repurchase price" of any
Disqualified Stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were repurchased on any date on which Indebtedness is
required to be determined pursuant to this Indenture, and if such price is based
upon, or measured by, the fair market value of such Disqualified Stock, such
fair
14
market value shall be determined in good faith by the board of directors of the
issuer of such Disqualified Stock.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Indenture Obligations" means the obligations of the Company and any
other obligor hereunder or under the Securities, including the Guarantors, if
any, to pay principal of (premium, if any) and interest on the Securities when
due and payable at Maturity, and all other amounts due or to become due under or
in connection with this Indenture, the Securities and the performance of all
other obligations to the Trustee (including all amounts due to the Trustee under
Section 6.06) hereof) and the Holders under this Indenture and the Securities,
according to the terms hereof and thereof.
"Initial Period" has the meaning set forth in Section 14.03.
"Initial Securities" has the meaning stated in the first recital of
this Indenture.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Agreements" means any interest rate protection
agreements and other types of interest rate hedging agreements including,
without limitation, interest rate swaps, caps, floors, collars and similar
agreements and other related agreements entered into in the ordinary course of
business and designed to protect against or manage exposure to fluctuations in
interest rates.
"Investment" in any Person means (a) any direct or indirect advance,
loan or other extension of credit (including, without limitation, a guarantee)
or capital contribution (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)
to, or any purchase, acquisition or ownership of, any Capital Stock,
Indebtedness or other securities issued by such Person, the acquisition (by
purchase or otherwise) of all or substantially all of the business or assets of
such Person, or the making of any investment of cash or other property in such
Person, (b) the designation of any Restricted Subsidiary as an Unrestricted
Subsidiary, (c) the transfer of any assets or properties from the Company or a
Restricted Subsidiary to an Unrestricted Subsidiary, other than the transfer of
assets or properties made in the ordinary course of business and (d) the fair
market value of the Capital Stock (or any other Investment), held by the Company
or any of its Restricted Subsidiaries, of (or in) any Person that has ceased to
be a Restricted Subsidiary. Investments exclude extensions of trade credit on
commercially reasonable terms in accordance with normal trade practices.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind, including any conditional sale or other title retention
agreement or
15
lease in the nature thereof, but excluding a title retention agreement to the
extent it constitutes an operating lease under Canadian law.
"Liquid Securities" means securities of an issuer that is not an
Affiliate of the Company, and that are publicly traded on the New York Stock
Exchange, the American Stock Exchange, the Toronto Stock Exchange, the London
Stock Exchange, the Nasdaq National Market or the Canadian Venture Exchange.
Securities meeting the requirements of the preceding sentence shall be treated
as Liquid Securities from the date of receipt thereof until and only until the
earlier of: (a) the date on which such securities, or securities exchangeable
for, or convertible into, such securities, are sold or exchanged for cash or
Cash Equivalents, and (b) 180 days following the date of receipt of such
securities. If such securities, or securities exchangeable for, or convertible
into, such securities, are not sold or exchanged for cash or Cash Equivalents
within 180 days of receipt thereof, for purposes of determining whether the
transaction pursuant to which the Company or its Restricted Subsidiary received
the securities was in compliance with the provisions of Section 10.13, such
securities shall not be deemed to have been Liquid Securities until 181 days
following the date of receipt of such securities.
"Material Change" means an increase or decrease, excluding changes that
result solely from changes in prices, of more than 30% during a fiscal quarter
in the estimated discounted future net cash flows from proved oil and gas
reserves of the Company and its Restricted Subsidiaries, calculated in
accordance with clause (i) of the definition of Adjusted Consolidated Net
Tangible Assets; PROVIDED, HOWEVER, that the following will be excluded from the
calculation of Material Change: (a) any acquisitions during the quarter of oil
and gas reserves that have been estimated by a Canadian nationally recognized
firm of independent petroleum engineers and on which a report or reports exist,
and (b) any disposition of properties held at the beginning of such quarter that
have been disposed of as provided in the covenant described under Section 10.13.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption or otherwise.
"Mirror Note" means the demand note issued to the Company by Baytex
Energy Partnership, in the amount of US$179,699,000, with interest to accrue at
the rate of at least 9 5/8% and which will be pledged to the Trustee for the
benefit of Holders.
"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, but only as and when received, in the form of,
or stock or other assets when disposed of for, 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 (a) brokerage commissions and
other reasonable fees and expenses (including fees and expenses of legal
counsel, accountants and investment banks) related
16
to such Asset Sale, (b) provisions for all taxes payable or required to be
accrued in accordance with GAAP as a result of such Asset Sale, (c) payments
made to retire Indebtedness where payment of such Indebtedness is secured by a
Lien on the assets that are the subject of such Asset Sale, (d) amounts required
to be paid to any Person (other than the Company or any Restricted Subsidiary)
owning a beneficial interest in the assets that are subject to the Asset Sale,
and (e) 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
against any liabilities associated with such Asset Sale and retained by the
seller after such Asset Sale, including pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale.
"Net Profits Interest" means the interest in the Company's revenue from
resource properties, less all royalties, operating and administrative costs,
interest, principal repayments, cash taxes and capital spending funded from the
Company's cash flow, which will be created and issued to Baytex Energy Trust in
connection with the Reorganization, which will entitle Baytex Energy Trust to
receive distributions from the Company, and which interest is subordinated to
the Securities to the same extent as Subordinated Indebtedness.
"Net Working Capital" means, as set forth in the Company's consolidated
financial statements prepared in accordance with GAAP: (a) all of the Company's
and its Restricted Subsidiaries' current assets, less (b) all of the Company's
and its Restricted Subsidiaries' current liabilities, except current liabilities
included in Indebtedness.
"Non-Guarantors" means Subsidiaries which are not Guarantors.
"Non-Recourse Purchase Money Indebtedness" means: (a) the Company's and
any Restricted Subsidiary's Indebtedness, other than Capital Lease Obligations,
incurred in connection with the acquisition by the Company or such Restricted
Subsidiary in the ordinary course of business of fixed assets used in the Oil
and Gas Business, including office buildings and other real property used the
Company or such Restricted Subsidiary in conducting the Company's or such
Restricted Subsidiary's operations, and (b) any renewals and refinancings of
such Indebtedness. For Indebtedness described in the clauses (a) and (b) to
qualify as Non-Recourse Purchase Money Indebtedness, the holders of such
Indebtedness must agree that they will look solely to the fixed assets so
acquired and the proceeds thereof which secure such Indebtedness, subject to
customary exceptions such as indemnifications for environmental, title, fraud
and other matters, and neither the Company nor any Restricted Subsidiary may:
(x) be directly or indirectly liable for such Indebtedness, or (y) provide
credit support, including any undertaking, guarantee, agreement or instrument
that would constitute Indebtedness, other than the grant of a Lien on such
acquired fixed assets and the proceeds therefrom.
"Offering" means the offering of 9 5/8% Senior Subordinated Notes Due
2011 by the Company.
17
"Officers' Certificate" means a certificate signed by the Chairman, the
Chief Executive Officer, the President, or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
"Oil and Gas Business" means: (a) the acquisition, exploration,
development, operation and disposition of interests in oil, gas and other
hydrocarbon properties, (b) the gathering, marketing, treating, processing,
storage, selling and transporting of any production from such interests or
properties, (c) any business relating to or arising from exploration for or
development, production, treatment, processing, storage, transportation or
marketing of oil, gas and other minerals and products produced in association
therewith, (d) any power generation and electrical transmission business in a
jurisdiction within North America where fuel required by such business is
supplied, directly or indirectly, from production reserves substantially from
blocks in which the Company or its Restricted Subsidiaries participate, and (e)
any activity necessary, appropriate or incidental to the activities described in
the clauses (a) through (d).
"Oil and Gas Hedging Contracts" means any agreement or arrangement, or
any combination thereof, relating to oil and gas prices, transportation or basis
costs or differentials or other similar financial factors, that is customary in
the Oil and Gas Business and is entered into by such Person in the ordinary
course of business for the purpose of limiting or managing risk associated with
fluctuations in such prices, costs, differentials or similar factors.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, including an employee of the Company, and who shall be
acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment, redemption
or purchase 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 Securities; PROVIDED that, if such
Securities 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;
(c) Securities, except to the extent provided in Sections 12.02
and 12.03, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article XII; and
18
(d) Securities which have been paid pursuant to Section 3.08 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands the
Securities are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities 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, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company 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, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities 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 Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or such other
obligor.
"Pari Passu Indebtedness" means any Indebtedness of the Company or any
Guarantor, if any, whether outstanding at the date of this Indenture or incurred
thereafter, that ranks pari passu in right of payment with the Securities.
"Paying Agent" means The Bank of Nova Scotia Trust Company of New York
and any successor (including the Company acting as Paying Agent) authorized by
the Company to pay the principal of (premium, if any) or interest on any
Securities on behalf of the Company.
"Payment Blockage Period" has the meaning set forth in Section 14.03.
"Permitted Consideration" has the meaning set forth in Section 10.13.
"Permitted Indebtedness" means, without duplication:
(i) Indebtedness of the Company or any Restricted
Subsidiary under the Senior Credit Facilities in an aggregate principal amount
at any one time outstanding not to exceed the greater of (x) CAN$165.0 million,
which amount shall be permanently reduced by the amount of Net Cash Proceeds
used to permanently repay Indebtedness under the Senior Credit Facilities and
not subsequently invested in property and assets that will be used in the Oil
and Gas Business or used to reduce other Senior Indebtedness pursuant to the
provisions of Section 10.13 and (y) the Borrowing Base;
(ii) Indebtedness of the Company or any Restricted
Subsidiary outstanding on the Closing Date, reduced by the amount of any
scheduled amortization
19
payments or mandatory prepayments when actually paid or permanent reductions
thereon, other than Indebtedness described under clause (i) above;
(iii) Indebtedness owed by the Company to any Wholly-Owned
Restricted Subsidiary or owed by any Restricted Subsidiary to the Company or a
Wholly-Owned Restricted Subsidiary, PROVIDED, HOWEVER, that if the Company is
the obligor on such Indebtedness, such Indebtedness in unsecured; and PROVIDED,
FURTHER, HOWEVER, that if any such Wholly-Owned Restricted Subsidiary ceases to
be (for any reason) a Wholly-Owned Restricted Subsidiary, then this clause (iii)
shall no longer be applicable to Indebtedness owed by the Company or any
Restricted Subsidiary to such Restricted Subsidiary that was formerly a
Wholly-Owned Restricted Subsidiary;
(iv) Indebtedness represented by the Securities (other
than the Additional Securities) and the Guarantees (if any);
(v) Indebtedness of the Company or any Restricted
Subsidiary in respect of Hedging Obligations incurred in the ordinary course of
business; PROVIDED that, with respect to Interest Rate Agreements, the notional
amount of any such Interest Rate Agreement does not exceed the principal amount
of the Indebtedness to which the Interest Rate Agreement relates;
(vi) Capital Lease Obligations of the Company or any
Restricted Subsidiary, PROVIDED that the aggregate amount of Indebtedness under
this clause (vi) does not exceed US$5,000,000 at any one time outstanding;
(vii) Indebtedness of the Company or any Restricted
Subsidiary under purchase money mortgages or secured by purchase money security
interests so long as (x) such Indebtedness is not secured by any property or
assets of the Company or any Restricted Subsidiary other than the property and
assets so acquired and the proceeds thereof and (y) such Indebtedness is created
within 90 days of the acquisition of the related property; PROVIDED that the
aggregate amount of Indebtedness under this clause (vii) does not exceed
US$5,000,000 at any one time outstanding;
(viii) guarantees by the Company or any Restricted
Subsidiary of Indebtedness that was permitted to be incurred by the provisions
of Section 10.10, and, with respect to guarantees by any Restricted Subsidiary,
that fall within the definition of Collateral Documents;
(ix) in-kind obligations relating to net gas balancing
positions arising in the ordinary course of business and consistent with past
practice;
(x) Non-Recourse Purchase Money Indebtedness;
(xi) Indebtedness pursuant to any of the Collateral
Documents;
(xii) Deeply Subordinated Inter-company Debt;
20
(xiii) any renewals, extensions, substitutions, refinancings
or replacements (each, for purposes of this clause, a "refinancing") of any
outstanding Indebtedness incurred pursuant to clause (ii), (iv), (xi) (including
the refinancing of Additional Securities, if any) or (xii) above, including any
successive refinancings thereof, so long as (A) any such new Indebtedness is in
a principal amount that does not exceed the principal amount 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 as necessary to accomplish
such refinancing, plus the amount of the expenses of the Company reasonably
estimated to be incurred in connection with such refinancing, (B) in the case of
any refinancing of Subordinated Indebtedness of the Company, any Guarantors or
any guarantors or issuer of the Mirror Note or any Additional Mirror Note, such
new Indebtedness is subordinated to the Securities or the Guarantees or
Collateral Documents, as the case may be, at least to the same extent as the
Indebtedness being refinanced and (C) such refinancing Indebtedness has a
Weighted Average Life equal to or greater than the Weighted Average Life of the
Indebtedness being refinanced and has a final Stated Maturity no earlier than
the final Stated Maturity of the Indebtedness being refinanced PROVIDED that if
such Indebtedness being refinanced is Indebtedness of the Company, then such
refinancing Indebtedness shall be solely the Company's Indebtedness; and (xiv)
Indebtedness not otherwise permitted by the first paragraph of Section 10.10 and
any other clause of this definition, in an aggregate principal amount not to
exceed US$20.0 million at any one time outstanding.
For purposes of determining compliance with Section 10.10, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (i) through (xiv)
above or is entitled to be incurred pursuant to the Fixed Charge Coverage Ratio
provisions of Section 10.10, the Company will, in its sole discretion, classify
(or later reclassify) such item of Indebtedness in any manner that complies with
Section 10.10. Accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
will not be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Stock for purposes of Section 10.10.
"Permitted Investments" means any of the following:
(a) Investments in Cash Equivalents.
(b) Investments by the Company or any Restricted Subsidiary in
another Person, if as a result of such Investment such other Person (i) becomes
a Wholly-Owned Restricted Subsidiary or (ii) is merged, amalgamated or
consolidated with or into, or transfers or conveys all or substantially all of
its assets to, the Company or a Wholly-Owned Restricted Subsidiary.
21
(c) Investments by the Company or any of the Restricted
Subsidiaries in any one of the other of them; PROVIDED that any Indebtedness
evidencing such Investment is unsecured.
(d) Investments existing on the Closing Date.
(e) Investments made as a result of the receipt of non-cash
consideration in an Asset Sale permitted under Section 10.13.
(f) Investments consisting of loans and advances to officers and
employees of the Company for reasonable travel, relocation and business expenses
in the ordinary course of business for bona fide business purposes not in excess
of US$1,000,000 at any one time outstanding.
(g) Investments the payment for which consists exclusively of
Capital Stock (exclusive of Disqualified Stock) of the Company.
(h) Hedging Obligations of the Company and its Restricted
Subsidiaries in compliance with this Indenture.
(i) Investments made by the Company or any of its Restricted
Subsidiaries in connection with the Reorganization.
(j) Other Investments that do not exceed US$7,500,000 in the
aggregate at any one time outstanding.
"Person" means any individual, corporation, limited or general
partnership, limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.08 in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, partnership interests, participations, or other equivalents
(however designated) of such Person's preferred or preference stock, whether now
outstanding or issued after the Closing Date, and including, without limitation,
all classes and series of preferred or preference stock of such Person.
"Principal Operating Subsidiaries" means, at the date of this
Indenture, Baytex Exploration Ltd. (formerly known as Bellator Exploration
Inc.), Baytex Resources Ltd. (formerly known as Aquilo Energy Inc.) and Baytex
Energy Partnership.
22
"Production Payments" means, collectively, Dollar-Denominated
Production Payments and Volumetric Production Payments.
"Private Placement Legend" has the meaning specified in Section 2.02.
"Proceeding" has the meaning set forth in Section 14.02.
"Qualified Equity Interest" means any Qualified Stock and all warrants,
options or other rights to acquire Qualified Stock (but excluding any debt
security that is convertible into or exchangeable for Capital Stock).
"Qualified Stock" of any Person means any and all Capital Stock of such
Person, other than Disqualified Stock.
"QIB" means a "Qualified Institutional Buyer" under Rule 144A.
"Redemption Date", when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registrar" means The Bank of Nova Scotia Trust Company of New York and
any successor authorized by the Company to act as Registrar.
"Registration Rights Agreement" means the Registration Rights Agreement
between the Company and the dealer managers named therein, dated as of July 9,
2003 relating to the Securities.
Registration Statement" means the Exchange Offer Registration Statement
or the Shelf Registration Statement, as the case may be.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the February 1 or August 1 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" has the meaning specified in Section
2.01.
"Relevant Provinces" shall mean any of the provinces of Canada in which
purchases of Initial Securities were made pursuant to applicable exceptions from
prospectus requirements.
"Reorganization" means the transactions contemplated by the Company's
plan of reorganization, which transactions include, without limitation, the
formation of a new oil and gas trust and the transfer, directly and indirectly,
of 100% of the Company's
23
Voting Stock to the trust; the formation of a new wholly-owned Subsidiary by the
Company that focuses primarily on oil and gas exploration, the transfer of a
portion of the Company's assets and undeveloped land to such Subsidiary and the
distribution by the Company of such Subsidiary's Capital Stock to the Company's
shareholders; the issuance by the Company of Deeply Subordinated Inter-company
Debt to the newly-formed trust; the creation and distribution by the Company of
the Net Profits Interest; and the issuance by the Company to the Company's
shareholders of non-voting exchangeable shares exchangeable for units of the
trust; PROVIDED that these transactions will have substantially the same
economic consequences as described in the offering memorandum, dated as of June
4, 2003, relating to the Offering.
"Restricted Global Security" has the meaning specified in Section 2.01.
"Restricted Payment" means any of the following:
(a) the declaration or payment of any dividend on, or the making
of any distribution to holders of, any shares of the Capital Stock of the
Company or any Restricted Subsidiary other than (i) dividends or distributions
payable solely in Qualified Equity Interests (ii) dividends or distributions to
holders of exchangeable shares in connection with the Reorganization or (iii)
dividends or distributions by a Restricted Subsidiary payable to the Company or
another Restricted Subsidiary;
(b) the purchase, redemption or other acquisition or retirement
for value, directly or indirectly of any shares of Capital Stock (or any
options, warrants or other rights to acquire shares of Capital Stock) of (i) the
Company or any Unrestricted Subsidiary or (ii) any Restricted Subsidiary held by
any Affiliate of the Company (other than, in either case, any such Capital Stock
owned by the Company or any of its Restricted Subsidiaries);
(c) the making of any principal payment on, or the repurchase,
redemption, defeasance or other acquisition or retirement for value, prior to
any scheduled principal payment, sinking fund payment or maturity, of any Pari
Passu Indebtedness or any Subordinated Indebtedness;
(d) the making of any Investment (other than a Permitted
Investment) in any Person;
(e) the making of any payment of interest or principal on Deeply
Subordinated Inter-company Debt; or
(f) the making of any payment or distribution on the Net Profits
Interest.
"Restricted Period" has the meaning set forth in Section 3.06.
"Restricted Subsidiary" means any Subsidiary, including the Principal
Operating Subsidiaries, other than an Unrestricted Subsidiary.
24
"Rule 144A" means Rule 144A under the Securities Act.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture. For all purposes of this Indenture, the term "Securities"
shall include any Exchange Securities to be issued and exchanged for any Initial
Securities in accordance with the Exchange Offer as provided for in the
Registration Rights Agreement and this Indenture. From and after the issuance of
any Additional Securities pursuant to Section 3.12 (but, not for purposes of
determining whether such issuance is permitted hereunder), "Securities" shall
include such Additional Securities for purposes of this Indenture, and all
Initial Securities, Exchange Securities and Additional Securities shall vote
together as one series of Securities under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and the rules and regulations thereunder.
"Securities Payment" has the meaning set forth in Section 14.02.
"Security Register" has the meaning set forth in Section 3.05.
"Senior Credit Facilities" means the credit agreement made as of July
9, 2003, among the Company, the Banks and The Toronto-Dominion Bank, as agent,
together with the related documents thereto (including, without limitation, any
guarantee agreements and security documents), as the credit agreement or such
other documents may be amended, renewed, extended, substituted, assigned by the
agent or any lender, restated, refinanced, restructured, supplemented or
otherwise modified from time to time (including, without limitation, any
successive amendments, renewals, extensions, substitutions, assignments,
restatements, refinancings, restructuring, supplements or other modifications of
the foregoing (including increasing the amount of available borrowings
thereunder, PROVIDED that such increase in borrowings is permitted by Section
10.10, or adding Restricted Subsidiaries as additional borrowers or guarantors
thereunder)) of all or any portion of the Indebtedness under such agreement or
any successor or replacement agreement and whether by the same or any other
agent, lender or group of lenders).
"Senior Credit Facilities Agent" means The Toronto-Dominion Bank, as
agent for the Banks under the Senior Credit Facilities or any successor thereto
identified as "agent" in written notice to the Trustee given by the predecessor
agent.
"Senior Indebtedness" means the principal of (and premium, if any) and
interest on (including interest accruing after the filing of a petition
initiating any proceeding pursuant to any bankruptcy law, whether or not
allowed) and other amounts due on or in connection with any Indebtedness of the
Company (other than the Securities or Pari Passu Indebtedness), whether
outstanding on the Closing Date or thereafter incurred, unless, in the case of
such Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness will be
subordinate in right of payment to the Securities. Without limiting the
generality of the foregoing, "Senior Indebtedness" includes the principal of
(and
25
premium, if any) and interest (including interest accruing after the occurrence
of an event of default or after the filing of a petition initiating any
proceeding pursuant to any bankruptcy law, whether or not allowed) on and all
other amounts owing in respect of (i) all obligations of every nature of the
Company from time to time owed to the Banks and the Senior Credit Facilities
Agent under the Senior Credit Facilities, PROVIDED, HOWEVER, that any
Indebtedness under any refinancing, refunding or replacement of the Senior
Credit Facilities shall not constitute Senior Indebtedness to the extent that
the Indebtedness thereunder is by its express terms subordinate to any other
Indebtedness of the Company and (ii) all Hedging Obligations. Notwithstanding
the foregoing, "Senior Indebtedness" shall not include (a) Indebtedness that is
represented by Disqualified Stock, (b) any trade payables, (c) Indebtedness of
or amounts owed by the Company for compensation to employees or for services
rendered to the Company, (d) any liability for foreign, federal, provincial,
state, local or other taxes owed or owing by the Company, (e) Indebtedness of
the Company to a Subsidiary of the Company or any other Affiliate of the Company
or any of such Affiliate's Subsidiaries, (f) that portion of any Indebtedness
that, at the time of the incurrence, is incurred by the Company in violation of
this Indenture and (g) amounts owing under leases (other than Capital Lease
Obligations). "Senior Nonmonetary Default" has the meaning set forth in Section
14.03.
"Senior Payment Default" has the meaning set forth in Section 14.03.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary of the Company
that would be a "Significant Subsidiary" of the Company within the meaning of
Rule 1-02 under Regulation S-X promulgated by the Commission as such Rule is in
effect on the date of this Indenture.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, and its successors.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.09.
"Stated Maturity" means, when used with respect to any Security or any
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable and, when used with respect to any other
Indebtedness, means the date specified in the instrument governing such
Indebtedness as the fixed date on which the principal of such Indebtedness or
any installment of interest thereon is due and payable, and will not, in either
case, include any contingent obligations to repay, redeem or repurchase any such
interest or principal prior to the date originally scheduled for the payment
thereof.
26
"Subordinated Indebtedness" means Indebtedness of the Company or a
Guarantor that is subordinated in right of payment to the Securities or the
Guarantee issued by such Guarantor (if any), as the case may be.
"Subsidiary" means any Person a majority of the equity ownership or
Voting Stock (including, without limitation, partnership interests) of which is
at the time owned, directly or indirectly, by the Company and/or one or more
Subsidiaries of the Company.
"Surviving Entity" has the meaning specified in Section 8.01.
"Taxes" has the meaning specified in Section 10.23.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this Indenture was executed,
except as provided in Section 9.05.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unpaid Restricted Payment Funds" means the total amount of Restricted
Payments that the Company and its Restricted Subsidiaries were permitted to make
pursuant to clause (a)(i) of Section 10.11, but that the Company did not
actually make, and that for the purposes of this Indenture have only accrued on
a cumulative basis for every fiscal quarter during which the Company was
permitted to make Restricted Payments pursuant to such clause (a)(i).
"Unrestricted Subsidiary" means (a) any Subsidiary that is designated
by the Board of Directors as an Unrestricted Subsidiary in accordance with
Section 10.18 and (b) any Subsidiary of an Unrestricted Subsidiary.
"U.S. Government Obligations" has the meaning set forth in Section
12.04.
"U.S. Physical Securities" has the meaning set forth in Section 2.01.
"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, stock of
any other class or classes has, or might have, voting power by reason of the
happening of any contingency).
"Volumetric Production Payments" means production payment obligations
of the Company or its Restricted Subsidiaries recorded as deferred revenue in
accordance with GAAP, together with all undertakings and obligations in
connection therewith.
27
"Weighted Average Life" means, as of the date of determination with
respect to any Indebtedness or Disqualified Stock, the quotient obtained by
dividing (a) the sum of the product of (i) the number of years from the date of
determination to the date or dates of each successive scheduled principal or
liquidation value payment of such Indebtedness or Disqualified Stock,
respectively, multiplied by (ii) the amount of each such principal or
liquidation value payment, by (b) the sum of all such principal or liquidation
value payments.
"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary,
all of the Capital Stock (other than directors' qualifying shares or shares of
Restricted Subsidiaries required to be owned by foreign nationals pursuant to
applicable law) of which is owned, directly or indirectly, by the Company.
SECTION 1.02 COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company or any Guarantor, if
any, to the Trustee to take any action under any provision of this Indenture,
the Company or such Guarantor, as the case may be, shall furnish to the Trustee
an Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture (including any covenant compliance with which constitutes
a condition precedent) relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 10.08(a)) shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
28
SECTION 1.03 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company and/or any
Guarantor, if any, may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company and/or any such Guarantor stating that the information with respect to
such factual matters is in the possession of the Company and/or any such
Guarantors, as applicable, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04 ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company and
the Guarantors, if any. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and conclusive in favor of the Trustee, the
Company and the Guarantors, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer
29
acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of authority. The fact and date
of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner that the
Trustee deems sufficient and in accordance with such reasonable rules as the
Trustee may determine; and the Trustee may in any instance require further
reasonable proof with respect to any of the matters referred to in this Section.
(c) The ownership, principal amount and serial numbers of
Securities held by any Person, and the dates of commencement and termination of
holding the same, shall be proved by the Security Register.
(d) If the Company or any Guarantor, if any, shall solicit from
the Holders of Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company or any such Guarantor (as the case may
be) may, at its option, by or pursuant to a Board Resolution, fix in advance a
record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company or any such Guarantor (as the case may be) shall have no obligation to
do so. Notwithstanding TIA Section 316(c), such record date shall be the record
date specified in or pursuant to such Board Resolution, which shall be a date
not earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
PROVIDED that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company and/or the Guarantors in reliance thereon, whether or not notation
of such action is made upon such Security.
(f) For all purposes of this Indenture, all Initial Securities and
Exchange Securities shall vote together as one series of Securities under this
Indenture.
30
SECTION 1.05 NOTICES, ETC., TO TRUSTEE, COMPANY OR GUARANTORS.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder, the Company or any Guarantor shall
be sufficient for every purpose hereunder if made, given, furnished or filed in
writing or mailed, first-class postage prepaid, to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Finance Department, (212) 225-5436,
or sent by facsimile to the Trustee at One Liberty Plaza, New York, New York
10006 (with receipt confirmed by telephone at (212) 225-5426); or
(b) the Company by the Trustee, any Holder or any Guarantor shall
be sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Company,
addressed to it at 205 -5th Avenue S.W., Suite 2200, Calgary, Alberta, Canada
T2P 2V7, Attention: Chief Financial Officer, or sent by facsimile to the Company
at (403) 205-3845 with receipt confirmed by telephone at (403) 269-4282 (or at
any other address or facsimile number previously furnished in writing to the
Trustee by the Company); or
(c) any Guarantor by the Company, any other Guarantor, the Trustee
or any Holder shall be sufficient for any purpose hereunder (unless otherwise
herein expressly provided) if in writing, and mailed, first class postage
prepaid, to such Guarantor addressed to it at c/o Baytex Energy Ltd., 205 -5th
Avenue S.W., Suite 2200, Calgary, Alberta, Canada T2P 2V7, Attention: Chief
Financial Officer, or sent by facsimile to such Guarantor at (403) 205-3845
(with receipt confirmed by telephone at (403) 269-4282), or at any other address
or facsimile number previously furnished in writing to the Trustee by such
Guarantor.
SECTION 1.06 NOTICE TO HOLDERS, WAIVER.
Where this Indenture provides for notice of any event to Holders by the
Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
31
In case, by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be directed by the Company and reasonably satisfactory to the Trustee
shall be deemed to be a sufficient giving of such notice for every purpose
hereunder.
SECTION 1.07 CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST
INDENTURE ACT.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 318,
inclusive, of the Trust Indenture Act, or conflicts with any provision (an
"incorporated provision") required by or deemed to be included in this Indenture
by operation of such Trust Indenture Act sections, such imposed duties or
incorporated provision shall control. Notwithstanding the previous sentence, if
any provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or excluded, as the case may
be.
SECTION 1.08 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.09 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company and the
guarantors, if any, shall bind their respective successors and assigns, whether
so expressed or not.
SECTION 1.10 SEVERABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto, any Paying Agent, any
Securities Registrar and their successors hereunder, the Holders and any holder
of Senior Indebtedness with respect to Article XIV, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 1.12 GOVERNING LAW.
This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York (without regard to applicable
32
principles of conflicts of law thereof). Upon the issuance of the Exchange
Securities, if any, or the effectiveness of the Exchange Offer Registration
Statement or, under certain circumstances, the effectiveness of the Shelf
Registration Statement, this Indenture shall be subject to the provisions of the
Trust Indenture Act of 1939, as amended, that are required to be part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
SECTION 1.13 LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date, date
established for payment of Defaulted Interest pursuant to Section 3.09, Stated
Maturity or Maturity, Change of Control Purchase Date or Asset Sale Purchase
Date with respect to any Security or other day on which principal (premium, if
any) or interest in respect or the Securities is due, shall not be a Business
Day, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of principal (or premium, if any) or interest need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date, Redemption Date,
date established for payment of Defaulted Interest pursuant to Section 3.09,
Stated Maturity or Maturity, Change of Control Purchase Date or Asset Sale
Purchase Date; PROVIDED that no interest shall accrue for the period from and
after such Interest Payment Date or other such day, Redemption Date, date
established for payment of Defaulted Interest pursuant to Section 3.09, Stated
Maturity or Maturity, Change in Control Purchase Date or Asset Sale Purchase
Date, as the case may be, to the next succeeding Business Day.
SECTION 1.14 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles in effect in Canada from time to time, and any other
reference in this Indenture to "generally accepted accounting
principles" refers to GAAP, as defined in this Indenture;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words
in the plural include the singular;
(5) provisions apply to successive events and
transactions;
33
(6) all references to "US$", U.S. dollars" or `United
States Dollars" shall refer to the lawful currency of the United States
of America.
SECTION 1.15 AGENT FOR SERVICE; SUBMISSION TO JURISDICTION; WAIVER
OF IMMUNITIES.
By the execution and delivery of this Agreement, the Company (i)
acknowledges that it will, by separate written instrument, designate and appoint
CT Corporation System, 111 Eighth Avenue, 13th Floor, New York, New York 10011
(and any successor entity) as its authorized agent upon which process may be
served in any suit or proceeding arising out of or relating to this Indenture,
the Securities or the Exchange Securities that may be instituted in any Federal
or state court in the State of New York, the City of New York, the Borough of
Manhattan, or brought under federal or state securities laws, and acknowledges
that CT Corporation System will accept such designation, (ii) submits to the
jurisdiction of any such court in any such suit or proceeding, and (iii) agrees
that service of process upon CT Corporation System and written notice of said
service to the Company in accordance with Section 1.05 shall be deemed in every
respect effective service of process upon the Company in any such suit or
proceeding.
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
SECTION 1.16 JUDGMENT CURRENCY.
The Company agrees to indemnify each Holder against any loss incurred
by such Holder as a result of any judgment or order being given or made against
the Company for any U.S. dollar amount due under this Indenture and such
judgment or order being expressed and paid in a currency (the "Judgment
Currency") other than United States dollars and as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the Judgment Currency for the purpose of such judgment or order
and (ii) the spot rate of exchange in the City of New York at which such party
on the date of payment of such judgment or order is able to purchase United
States dollars with the amount of the Judgment Currency actually received by
such party if such party had utilized such amount of Judgment Currency to
purchase United States dollars as promptly as practicable upon such party's
receipt thereof. The foregoing indemnity shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "spot rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase or, or conversion into, United States dollars.
34
ARTICLE II
SECURITY FORMS
SECTION 2.01 FORMS GENERALLY.
The Securities and the Trustee's certificate of authentication shall be
in substantially the form annexed hereto as Exhibit A, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. Any portion of the text of
any Security may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved on
steel-engraved borders or may be produced in any other manner, all as determined
by the officers of the Company executing such Securities, as evidenced by their
execution of such Securities.
The terms and provisions contained in the form of the Securities
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Indenture. To the extent applicable, the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Initial Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global Securities without
interest coupons substantially in the form set forth in Exhibit A (collectively
"Restricted Global Security") deposited with, or on behalf of, the Depositary or
with the Trustee, as custodian for the Depositary, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Restricted Global Security may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as hereinafter provided.
Initial Securities offered and sold in reliance on Regulation S shall
be issued initially in the form of one or more permanent global Securities in
fully registered form without interest coupons substantially in the form set
forth in Exhibit A (collectively, the "Regulation S Global Security" and,
together with the Restricted Global Security, the "Global Securities" or each
individually, a "Global Security") deposited with, or on behalf of the
Depository or with the Trustee, as custodian for the Depositary. Interests in
the Regulation S Global Security may be held through the accounts of CDS,
Euroclear and Clearstream, which are indirect participants in DTC, duly executed
by the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the Regulation S Global Security may from time to
time be increased
35
or decreased by adjustments made on the records of the Depositary or its
nominee, or of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
If DTC is at any time unwilling or unable to continue as a depositary,
the Company will issue certificates for the Securities in definitive, fully
registered, non-global form without interest coupons in exchange for the
Regulation S Global Security or Restricted Global Security, as the case may be.
In all cases, certificates for Securities delivered in exchange for any Global
Security or beneficial interests therein will be registered in the names, and
issued in any approved denominations, requested by DTC.
In the case of certificates for Securities in non-global form issued in
exchange for the Regulation S Global Security or Restricted Global Security,
such certificates will bear the first legend appearing under Section 2.02 of
this Indenture (unless the Company determines otherwise in accordance with
applicable law). The holder of a Security in non-global form may transfer such
Security, subject to compliance with the provisions of such legend, by
surrendering it at the office or agency maintained by the Company for such
purpose in the Borough of Manhattan, The City of New York, which initially will
be the office of the Trustee.
Initial Securities offered and sold other than as global securities
shall be issued in the form of permanent certificated Securities in registered
form in substantially the form set forth in this Article (the "U.S. Physical
Securities").
SECTION 2.02 RESTRICTIVE LEGENDS.
Unless and until an Initial Security is sold under an effective
Registration Statement, exchanged for an Exchange Security in connection with an
effective Registration Statement or exchanged pursuant to a Canadian Final
Prospectus for which receipts have been issued by each of the Canadian
Securities Commissions in the Relevant Provinces, in each case pursuant to the
Registration Rights Agreement, each certificate representing a Security shall
contain a legend substantially to the following effect (the "Private Placement
Legend") on the face thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT
THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR
(Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY
AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE
OF SUCH TRANSFER, IN EITHER CASE
36
OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER
ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE
OF THIS SECURITY), OR (4) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 (IF APPLICABLE) UNDER THE SECURITIES ACT, IN EACH
CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES;
and, if issued to holders resident in Canada:
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE
HOLDER OF THE SECURITIES SHALL NOT TRADE THE SECURITIES
BEFORE [INSERT THE DATE THAT IS FOUR MONTHS, OR SUCH
OTHER DATE AS MAY BE REQUIRED BY THE SECURITIES LAWS IN
THE PROVINCE IN WHICH THE HOLDER IS RESIDENT, AND A DAY
AFTER THE DATE OF ISSUE].
Each Global Security, whether or not an Initial Security, shall also
bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER,
37
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC OR SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE
& CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS
3.06 AND 3.07 OF THE INDENTURE.
ARTICLE III
THE SECURITIES
SECTION 3.01 TITLE AND TERMS.
The initial aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to US$179,699,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section
3.04, 3.05, 3.06, 3.07, 3.08, 9.06, 10.12, 10.13 or 11.08, pursuant to an
Exchange Offer or pursuant to Section 3.12. The Company may also issue
additional Securities under this Indenture having identical terms and conditions
to the Securities, subject to compliance with the covenants contained herein
including, without limitation, the covenant contained in Section 10.22 (the
"Additional Securities").
The Initial Securities shall be known and designated as the "9 5/8%
Senior Subordinated Notes due 2010" and the Exchange Securities shall be known
and designated as the "9 5/8% Senior Series B Subordinated Notes due 2010."
Their Stated Maturity shall be July 15, 2010, and they shall bear interest at
the rate of 9 5/8% per annum from the Closing Date, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
payable semiannually in arrears on January 15 and July 15 in each year,
commencing January 15, 2004, until the principal thereof is paid or
38
duly provided for, to the Person in whose name the Security (or any predecessor
Security) is registered at the close of business on the January 1 or July 1 next
preceding such Interest Payment Date.
The principal of (premium, if any) and interest on the Securities shall
be payable, and the Securities shall be exchangeable and transferable, at the
office or agency of the Company in The City of New York maintained for such
purposes, (which initially shall be the office of the Trustee located at One
Liberty Plaza, 23rd Floor, New York, New York 10006) or, at the option of the
Company, interest may be paid by check mailed to the address of the Person
entitled thereto as such address shall appear on the Security Register; PROVIDED
that all payments with respect to the U.S. Global Securities, as well as
Physical Securities the Holders of which have given wire transfer instructions
to the Trustee (or other Paying Agent) by the Regular Record Date for such
payment, will be required to be made by wire transfer of immediately available
funds to the accounts specified by the Holders thereof.
Securities that remain outstanding after the consummation of the
Exchange Offer and Exchange Securities issued in connection with the Exchange
Offer will be treated as a single class of securities under this Indenture.
The Securities shall be redeemable as provided in Article XI.
SECTION 3.02 DENOMINATIONS.
The Securities shall be issuable only in registered form without
coupons and only in denominations of US$1,000 and any integral multiple thereof.
SECTION 3.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its
Chairman, its President or a Vice President. The signature of any of these
officers on the Securities may be manual or facsimile signatures of the present
or any future such authorized officer and may be imprinted or otherwise
reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Initial Securities executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Initial Securities directing the Trustee to
authenticate the Securities and certifying that all conditions precedent to the
issuance of Securities contained herein have been fully complied with, and the
Trustee in accordance with such Company Order shall authenticate and deliver
such Initial Securities. On Company Order, the Trustee shall
39
authenticate for original issue Exchange Securities in an aggregate principal
amount not to exceed US$179,699,000 plus the aggregate principal amount of any
Additional Securities issued; PROVIDED that such Exchange Securities shall be
issuable only upon the valid surrender for cancellation of Initial Securities of
a like aggregate principal amount in accordance with an Exchange Offer pursuant
to the Registration Rights Agreement and a Company Order for the authentication
of such securities certifying that all conditions precedent to the issuance have
been complied with (including the effectiveness of a registration statement
related thereto). In each case, the Trustee shall be entitled to receive an
Officers' Certificate and an Opinion of Counsel of the Company that it may
reasonably request in connection with such authentication of Securities. Such
order shall specify the amount of Securities to be authenticated and the date on
which the original issue of Initial Securities or Exchange Securities is to be
authenticated.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for in Exhibit
A duly executed by the Trustee by manual signature of an authorized officer, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture.
In case the Company, pursuant to Article VIII, shall be amalgamated,
consolidated or merged with or into any other Person or shall convey, transfer,
lease or otherwise dispose of its properties and assets substantially as an
entirety to any Person, and the successor Person resulting from such
amalgamation, consolidation, or surviving such merger, or into which the Company
shall have been merged, or the Person which shall have received a conveyance,
transfer, lease or other disposition as aforesaid, shall have executed an
indenture supplemental hereto with the Trustee pursuant to Article VIII, any of
the Securities authenticated or delivered prior to such amalgamation,
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for
other Securities executed in the name of the successor Person with such changes
in phraseology and form as may be appropriate, but otherwise in substance of
like tenor as the Securities surrendered for such exchange and of like principal
amount; and the Trustee, upon Company Request of the successor Person, shall
authenticate and deliver Securities as specified in such request for the purpose
of such exchange. If Securities shall at any time be authenticated and delivered
in any new name of a successor Person pursuant to this Section in exchange or
substitution for or upon registration of transfer of any Securities, such
successor Person, at the option of the Holders but without expense to them,
shall provide for the exchange of all Securities at the time Outstanding for
Securities authenticated and delivered in such new name.
40
SECTION 3.04 TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as conclusively evidenced
by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 10.02,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 3.05 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.02 being herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities and of transfers of Securities. The Security Register shall be in
written form or any other form capable of being converted into written form
within a reasonable time. At all reasonable times, the Security Register shall
be open to inspection by the Trustee. The Trustee is hereby initially appointed
as "Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided. The Company shall have the right to remove and
replace from time to time the Registrar; PROVIDED, THAT, no such removal or
replacement shall be effective until a successor Registrar with respect to such
Securities shall have been appointed by the Company and shall have accepted such
appointment by the Company. In the event that the Trustee shall not be or shall
cease to be the Registrar with respect to the Securities, it shall have the
right to examine the Security Register at any reasonable times. There shall be
the one Security Register for such Securities.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 10.02, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
any authorized denomination or denominations of a like aggregate principal
amount.
41
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange (including an
exchange of Initial Securities for Exchange Securities), the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities, which
the Holder making the exchange is entitled to receive; PROVIDED that no exchange
of Initial Securities for Exchange Securities shall occur until an Exchange
Offer Registration Statement shall have been declared effective by the
Commission or receipts for a Canadian Final Prospectus have been issued by the
Canadian Securities Commissions in each of the Relevant Provinces, as
applicable, and that the Initial Securities to be exchanged for the Exchange
Securities shall be cancelled by the Trustee.
Whenever any Securities are so surrendered for exchange, the Company
shall execute and the Trustee shall authenticate and deliver, the Securities
which the Holder making the election is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 2.01, any permanent global Security shall be
exchangeable only as provided in this paragraph and the immediately following
paragraph. If any beneficial owner of an interest in a permanent global Security
is entitled to exchange such interest for Securities of such series and of like
tenor and principal amount of another authorized form and denomination, as
contemplated by Section 3.01 and provided that any applicable notice provided in
the permanent global Security shall have been given, then without unnecessary
delay but in any event not later than the earliest date on which such interest
may be so exchanged, the Company shall deliver to the Trustee definitive
Securities in aggregate principal amount equal to the principal amount of such
beneficial owner's interest in such permanent global Security, executed by the
Company. On or after the earliest date on which such interests may be so
exchanged, such permanent global Security shall be surrendered by DTC or such
other depository as shall be specified in the Company Order with respect thereto
to the Trustee, as the Company's agent for such purpose, to be exchanged, in
whole or from time to time in part, for definitive Securities without charge,
and the Trustee shall authenticate and deliver, in exchange for each portion of
such permanent global Security, an equal aggregate principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor as the portion of such permanent global Security to be exchanged, which
shall be in the form of definitive Securities, PROVIDED, HOWEVER, that no such
exchanges may occur during a period beginning at the opening of business 15 days
before any selection of Securities to be redeemed and ending on the relevant
Redemption Date if the Security for which exchange is requested may be among
those selected for redemption. If a Security is issued in exchange for any
portion of a permanent global Security after the close of business at the office
or agency where such exchange occurs on (i) any Regular Record Date and before
the opening of business at such office or agency on the relevant Interest
Payment Date, or (ii) any special date for payment of Defaulted Interest,
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of such
42
Security, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the Person to whom interest in respect of
such portion of such permanent global Security is payable in accordance with the
provisions of this Indenture.
Upon the exchange of a global Security for Securities in definitive
registered form, such global Securities shall be cancelled by the Trustee.
Securities issued in exchange for a global Security pursuant to this Section
shall be registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee in writing. The Trustee shall deliver such
Securities to the person in whose name such Securities are so registered.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 3.04, 9.06, 10.12, 10.13 or 11.08 not
involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Security during a period beginning at the opening of business
15 days before the selection of Securities to be redeemed under Section 11.04
and ending at the close of business on the day of such mailing of the relevant
notice of redemption, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
Notwithstanding anything to the contrary contained herein, the Trustee
shall have no duty whatsoever to monitor Federal or State securities laws.
SECTION 3.06 BOOK-ENTRY PROVISIONS FOR RESTRICTED GLOBAL SECURITY.
(a) The Global Security initially shall (i) be registered in the
name of Cede & Co., as nominee of the Depositary, (ii) be deposited with, or on
behalf of, the Depositary or with the Trustee, as custodian for such Depositary,
and (iii) bear legends as set forth in Section 2.02.
43
The Depositary or its nominee shall be the Holder of the Global
Securities, and owners of beneficial interests in the Securities represented by
the Global Securities shall hold such interests pursuant to the procedures and
practices of the Depositary. Any such owner's beneficial ownership of any such
Securities will be shown only on, and the transfer of such ownership interest
shall be effected only through, records maintained by the Depositary or its
nominee. Investors in the Regulation S Global Security may hold their interests
in Regulation S Global Security through CDS, Euroclear or Clearstream, if they
are participants in such systems, or indirectly through organizations which are
participants in such systems. CDS, Euroclear and Clearstream will hold interests
in the Regulation S Global Security on behalf of their participants through
customers' securities accounts in their respective names on the books of their
respective depositaries, which, in turn, will hold such interests in the
Regulation S Global Security in customer's securities accounts in the
depositaries' names on the books of the Depositary. All interests in a Global
Security, including those held through CDS, Euroclear or Clearstream, may be
subject to the procedures and requirements of the Depositary. Those interests
held through CDS, Euroclear and Clearstream will be subject to the procedures
and requirements of such system.
(b) Transfers of any Global Security shall be limited to transfers
of such Global Security in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in any
Global Security may be transferred in accordance with the rules and procedures
of the Depositary and the provisions of Section 3.07.
Unless (i) the Depositary notifies the Company that it is unwilling or
unable to continue as depositary for a Global Security or ceases to be a
"Clearing Agency" registered under the Exchange Act or announces an intention
permanently to cease business or does in fact do so 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 with respect to a Global Security,
owners of beneficial interests in a Global Security will not be entitled to have
any portions of such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Securities in definitive form and
will not be considered the owners or holders of the Global Security.
(c) Securities issued in exchange for a Global Security or any
portion thereof pursuant to the last sentence of subsection (b) of this Section
shall be issued in definitive, fully registered form, without interest coupons,
shall have an aggregate principal amount equal to that of such Global Security
or portion thereof to be so exchanged, shall be registered in such names and be
in such authorized denominations as the Depositary shall designate and shall
bear any legends required hereunder. Any Global Security to be exchanged in
whole shall be surrendered by the Depositary to the Trustee, as Registrar. With
regard to any Global Security to be exchanged in part, either such Global
Security shall be so surrendered for exchange or, if the Trustee is acting as
custodian for the Depositary or its nominee with respect to such Global
Security, the principal amount thereof shall be reduced, by an amount equal to
the portion thereof to be so exchanged, by means of an appropriate adjustment
made on the records of the Trustee.
44
Upon any such surrender or adjustment, the Trustee shall authenticate and make
available for delivery the Security issuable on such exchange to or upon the
order of the Depositary or an authorized representative thereof. In the event of
the occurrence of any of the events specified in the last sentence of subsection
(b) of this Section 3.06, the Company will promptly make available to the
Trustee a reasonable supply of certificated Securities in definitive form.
(d) Except as otherwise set forth in this Indenture or a Global
Security, owners of beneficial interests in the Securities evidenced by a Global
Security will not be entitled to any rights under this Indenture with respect to
such Global Security, and the Depositary or its nominee may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the owner
and Holder of such Global Security for all purposes whatsoever. None of the
Company, the Trustee, any Paying Agent or the Registrar will have any
responsibility or liability for any aspect of the records relating to beneficial
ownership interest of a Security in global form or for maintaining any records
relating to such beneficial ownership interests. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any such agent from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or its nominee or impair, as between the Depositary
or its nominee and such owners of beneficial interests, the operation of
customary practices governing the exercise of the rights of the Depositary or
its nominee as Holder of any Security.
SECTION 3.07 SPECIAL TRANSFER PROVISIONS.
Unless and until (i) an Initial Security is sold under an effective
Registration Statement, or (ii) an Initial Security is exchanged for an Exchange
Security in connection with an effective Registration Statement, the following
provisions shall apply:
(a) RESTRICTED GLOBAL SECURITY TO REGULATION S GLOBAL SECURITY.
If, at any time, an owner of a beneficial interest in a Restricted Global
Security deposited with the Depositary (or the Trustee as custodian for the
Depositary) wishes to transfer its interest in such Restricted Global Security
to a Person who is required or permitted to take delivery thereof in the form of
an interest in a Regulation S Global Security, such owner shall, subject to the
Applicable Procedures, exchange or cause the exchange of such interest for an
equivalent beneficial interest in a Regulation S Global Security as provided in
this Section 3.07(a). Upon receipt by the Trustee of (1) instructions given in
accordance with the Applicable Procedures from an Agent Member directing the
Trustee to credit or cause to be credited a beneficial interest in the
Regulation S Global Security in an amount equal to the beneficial interest in
the applicable Restricted Global Security to be exchanged, (2) a written order
given in accordance with the Applicable Procedures containing information
regarding the participant account of the Depositary and the CDS, Euroclear or
Clearstream account (if applicable) to be credited with such increase, and (3) a
certificate substantially in the form of Exhibit B hereto given by the owner of
such beneficial interest, the Trustee, as Registrar, shall instruct the
Depositary to reduce or cause to be reduced the aggregate principal amount of
the
45
applicable Restricted Global Security and to increase or cause to be increased
the aggregate principal amount of the applicable Regulation S Global Security by
the principal amount of the beneficial interest in the Restricted Global
Security to be exchanged, to credit or cause to be credited to the account of
the Person specified in such instructions a beneficial interest in the
Regulation S Global Security equal to the reduction in the aggregate principal
amount of the applicable Restricted Global Security, and to debit, or cause to
be debited, from the account of the Person making such exchange or transfer the
beneficial interest in the Restricted Global Security that is being exchanged or
transferred.
(b) REGULATION S GLOBAL SECURITY TO RESTRICTED GLOBAL SECURITY.
If, at any time, an owner of a beneficial interest in a Regulation S Global
Security deposited with the Depositary or with the Trustee as custodian for the
Depositary wishes to transfer its interest in such Regulation S Global Security
to a Person who is required or permitted to take delivery thereof in the form of
an interest in a Restricted Global Security, such owner shall, subject to the
Applicable Procedures, exchange or cause the exchange of such interest for an
equivalent beneficial interest in a Restricted Global Security, as provided in
this Section 3.07(b). Upon receipt by the Trustee of (1) instructions given in
accordance with the Applicable Procedures from an Agent Member, directing the
Trustee, as Registrar, to credit or cause to be credited a beneficial interest
in the Restricted Global Security equal to the beneficial interest in the
Regulation S Global Security to be exchanged, (2) a written order given in
accordance with the Applicable Procedures containing information regarding the
participant account of the Depositary to be credited with such increase and (3)
if such transfer is requested prior to the expiration of the Restricted Period,
a certificate in the form of Exhibit C attached hereto given by the owner of
such beneficial interest, the Trustee, as Registrar, shall instruct the
Depositary to reduce or cause to be reduced the aggregate principal amount of
such Regulation S Global Security and to increase or cause to be increased the
aggregate principal amount of the applicable Restricted Global Security by the
principal amount of the beneficial interest in the Regulation S Global Security
to be exchanged, and the Trustee, as Registrar, shall instruct the Depositary,
concurrently with such reduction, to credit or cause to be credited to the
account of the Person specified in such instructions a beneficial interest in
the applicable Restricted Global Security equal to the reduction in the
aggregate principal amount of such Regulation S Global Security and to debit or
cause to be debited from the account of the Person making such transfer the
beneficial interest in the Regulation S Global Security that is being
transferred. After the expiration of the Restricted Period, the certificate
described in clause (3) above shall no longer be required to effect transfers
pursuant to this Section 3.07(b).
(c) TRANSFERS OF U.S. PHYSICAL SECURITIES FOR RESTRICTED GLOBAL
SECURITY OR REGULATION S GLOBAL SECURITY. If the holder of a U.S. Physical
Security wishes at any time to transfer such holder's U.S. Physical Security to
a Person who wishes to take delivery thereof in the form of a beneficial
interest in the Regulation S Global Security or the Restricted Global Security,
such transfer may be effected, subject to the Applicable Procedures, only in
accordance with the provisions of this Section 3.07(c). Upon receipt by the
Trustee of (1) instructions given in accordance with the Applicable Procedures
from an Agent Member directing the Trustee to credit or cause to be credited a
beneficial interest in the Regulation S Global Security or Restricted Global
Security, as the case may be, in a principal amount equal to that of the U.S.
Physical Securities to be so
46
transferred, (2) a written order given in accordance with the Applicable
Procedures containing information regarding the participant account of the
Depositary (and CDS, Euroclear or Clearstream account, as applicable) to be
credited with such beneficial interest and (3) a certificate in substantially
the form set forth in Exhibit D, given by the holder of such U.S. Physical
Security, the Trustee, as Security Registrar, shall instruct the Depositary to
increase the principal amount of the Regulation S Global Security or the
Restricted Global Security, as the case may be, by the principal amount of the
U.S. Physical Security to be so transferred, and to cancel or cause to be
canceled such U.S. Physical Security.
(d) RESTRICTED GLOBAL SECURITY OR U.S. PHYSICAL SECURITY TO
REGULATION S GLOBAL SECURITY AFTER TWO YEARS. If the holder of a beneficial
interest in a Restricted Global Security or U.S. Physical Security wishes at any
time after the second anniversary of the date of original issuance of the
Securities to (A) transfer such interest to a Person who wishes to take delivery
thereof in the form of a beneficial interest in the Regulation S Global Security
or (B) to exchange such interest for a beneficial interest in a Regulation S
Global Security, such transfer or exchange may be effected, subject to the
Applicable Procedures, only in accordance with this Section 3.07(d). Upon
receipt by the Trustee of (1) in the case of a transfer or exchange of an
interest in the Restricted Global Security or a U.S. Physical Security,
instructions given in accordance with the Applicable Procedures from an Agent
Member directing the Trustee to credit or cause to be credited to a beneficial
interest in the Regulation S Global Security in an amount equal to that the
beneficial interest in the Restricted Global Security to be so transferred or
exchanged, (2) a written order given in accordance with the Applicable
Procedures containing information regarding the participant account of the
Depositary (and, if applicable, the CDS, Euroclear or Clearstream account, as
the case may be) to be credited with such beneficial interest and (3) a
certificate substantially in the form of Exhibit E hereto given by the holder of
such beneficial interest, the Trustee, as Registrar, shall (i) in the case of a
transfer or exchange of an interest in the Restricted Global Security, instruct
the Depositary to reduce the principal amount of the Restricted Global Security,
and to increase the principal amount of the Regulation S Global Security, by the
principal amount of the beneficial interest in the Restricted Global Security to
be so transferred or exchanged, and to credit or cause to be credited to the
account of the Person specified in such instructions a beneficial interest in
the Regulation S Global Security having a principal amount equal to the amount
by which the principal amount of the Restricted Global Security was reduced upon
such transfer or exchange or (ii) in the case of a transfer or exchange of a
U.S. Physical Security, cancel such U.S. Physical Security and increase the
principal amount of the Regulation S Global Security accordingly.
(e) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless either (i) the circumstances contemplated by
clauses (i) or (ii) or Section 2.02 exist and the Company directs the Trustee
pursuant to an Officers' Certificate to remove such legend or (ii) there is
delivered to the Registrar an Opinion of Counsel reasonably
47
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act.
(f) GENERAL. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain as required by law copies of all letters,
notices and other written communications received pursuant to Section 3.06 or
this Section 3.07. The Company shall have the right to inspect and make copies
of all such letters, notices or other written communications at any reasonable
time upon the giving of reasonable written notice to the Registrar.
SECTION 3.08 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If (i) any mutilated Security is surrendered to the Trustee or the
Registrar, or (ii) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a bona
fide purchaser, the Company shall execute and upon Company Order the Trustee
shall authenticate and deliver, in exchange for any such mutilated Security or
in lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
48
SECTION 3.09 PAYMENT OF PRINCIPAL AND INTEREST; INTEREST RIGHTS
PRESERVED.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name such Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest at the
office or agency of the Company in The City of New York maintained for such
purposes (which initially shall be the office of the Trustee located at One
Liberty Plaza, 23rd Floor, New York, New York 10006) pursuant to Section 10.02
or, at the option of the Company, principal (premium, if any, on) and interest
may be paid by check mailed to the address of the Person entitled thereto
pursuant to Section 3.10 as such address appears in the Security Register;
PROVIDED that all payments with respect to Global Securities, and Physical
Securities, the Holders of which have given wire transfer instructions to the
Trustee (or other Paying Agent) by the Regular Record Date shall be required to
be made by wire transfer of immediately available funds to the accounts
specified by the holders thereof PROVIDED FURTHER, that principal paid in
relation to any Security redeemed at the option of the Company pursuant to
Article XI, or paid at Maturity, shall be paid to the holder of such Security
only upon presentation and surrender of such Security to such office or agency
referred to in this Section 3.07.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date shall forthwith cease to
be payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such defaulted interest and interest on such defaulted
interest (to the extent lawful) at the rate borne by the Securities (such
defaulted interest and interest thereon herein collectively called "Defaulted
Interest") may be paid by the Company, at its election in each case, as provided
in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date, and in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be given in the manner provided for in
Section 1.06, not less than 10 days prior to such Special
49
Record Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so given, such Defaulted Interest shall
be paid to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
If the Company shall be required to pay any additional interest
pursuant to the terms of the Registration Rights Agreement, it shall deliver an
Officers' Certificate to the Trustee setting forth the new interest rate and the
period for which such rate is applicable.
SECTION 3.10 PERSONS DEEMED OWNERS.
Prior to the due presentment of a Security for registration of
transfer, the Company, each Guarantor, the Trustee and any agent of the Company,
such Guarantor or the Trustee may treat the Person in whose name such Security
is registered as the owner of such Security for the purpose of receiving payment
of principal of (premium, if any) and (subject to Sections 3.05 and 3.09)
interest on such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and none of the Company, the Guarantors, the Trustee
or any agent of the Company, such Guarantor or the Trustee shall be affected by
notice to the contrary.
SECTION 3.11 CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. If
the Company shall so acquire any of the Securities, however, then, unless
provided otherwise in a supplemental indenture, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Securities unless and
50
until the same are surrendered to the Trustee for cancellation. No Securities
shall be authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this Indenture. All
cancelled Securities held by the Trustee shall be disposed of by the Trustee in
accordance with its customary procedures and certification of their disposal
delivered to the Company unless by Company Order the Company shall direct that
cancelled Securities be returned to it.
SECTION 3.12 ISSUANCE OF ADDITIONAL SECURITIES.
The Company may, subject to Article X of this Indenture issue
Additional Securities having identical terms and conditions to the Securities
offered hereby. Any Additional Securities will be part of the same issue as the
Securities offered hereby and will vote on all matters with the Securities
offered hereby.
SECTION 3.13 CUSIP AND CINS NUMBERS.
The Company in issuing the Securities may use "CUSIP" and "CINS"
numbers (if then generally in use) and, if so, the Trustee shall use "CUSIP" and
"CINS" numbers in notices of redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.
SECTION 3.14 COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a 360-day
year consisting of twelve 30-day months. For the purposes of disclosure under
the INTEREST ACT (Canada), the yearly rate of interest to which interest
calculated under a Security for any period in any calendar year (the
"calculation period") is equivalent, is the rate payable under a Security in
respect of the calculation period multiplied by a fraction the numerator which
is the actual number of days in such calendar year and the denominator of which
is the actual number of days in the calculation period.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture and the Collateral Documents shall upon Company Request
cease to be of further effect (except as to surviving rights of registration of
transfer or exchange of the Securities, as expressly provided for herein or
pursuant hereto) and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
when
51
(a) either
(i) all the Securities theretofore authenticated and
delivered (other than mutilated, destroyed, lost or stolen Securities that have
been replaced or paid as provided in Section 3.08, Securities that have been
subject to defeasance under Article XII and Securities for which payment has
theretofore been deposited in trust with the Trustee or any Paying Agent or
segregated and held in Trust by the Company and thereafter repaid to the
Company, as provided in Section 10.03 or discharged from such trust) have been
delivered to the Trustee for cancellation; or
(ii) all Securities not theretofore delivered to the
Trustee for cancellation
(A) have become due and payable,
(B) will become due and payable at Stated
Maturity within one year, or
(C) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, or the Guarantors, as the case may be, in the case of (A), (B)
or (C) above, has irrevocably deposited or caused to be deposited with the
Trustee funds in trust for the purpose in an amount sufficient to pay and
discharge the entire Indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any) and
interest on the Securities to the date of such deposit (in the case of
Securities that have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be, together with irrevocable instructions
directing the Trustee to apply the funds to the payment of the Securities at the
Stated Maturity or Redemption Date, as the case may be;
(b) the Company or the Guarantors, as the case may be, has paid or
caused to be paid all sums payable hereunder by the Company; and
(c) the Company or the Guarantors, as the case may be, has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.06 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive.
52
SECTION 4.02 APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 10.03, all
money deposited with the Trustee pursuant to Section 4.01 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (premium, if any)
and interest for whose payment such money has been deposited with the Trustee;
but such money need not be segregated from other funds except to the extent
required by law.
SECTION 4.03 DISCHARGE OF COLLATERAL DOCUMENTS OR GUARANTEES
Upon the dissolution or winding up of a Subsidiary who has executed a
guarantee of the Mirror Note or any Additional Mirror Note or any Guarantee, and
the transfer of such Subsidiary's assets to the Company, such Subsidiary's
guarantee or Guarantee, as applicable, will automatically be discharged and
released and will cease to be of further effect.
Further, upon the dissolution or winding up of all of the Company's
Restricted Subsidiaries (other than Baytex Marketing Ltd.) and the transfer of
all of the Company's Restricted Subsidiaries' assets to the Company (other than
the assets of Baytex Marketing Ltd.), all of the Collateral Documents will
automatically be discharged and released and will cease to be of further effect.
ARTICLE V
REMEDIES
SECTION 5.01 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 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 unless such event is deleted or
modified in or pursuant to a supplemental indenture executed in accordance with
all of the terms of this Indenture):
(a) default in the payment of any interest on any Security when it
becomes due and payable, and continuance of such default for a period of 30 days
(whether or not prohibited by Article XIV of this Indenture);
(b) default in the payment of the principal of (or premium, if
any) on any Security when due;
(c) failure to perform or comply with the provisions described in
Article VIII or to make or consummate a Change of Control Offer or an Asset Sale
Offer
53
in accordance with the provision of Section 10.12 and Section 10.13,
respectively (whether or not such payment shall be prohibited by Article XIV of
this Indenture);
(d) default in the observance or performance, or breach, of any
covenant or agreement of the Company or any Guarantor contained in this
Indenture or any Guarantee (other than as contemplated by clauses (a), (b) and
(c) above) and continuance of such default or breach for a period of 30 days
after written notice has been given (x) to the Company by the Trustee or (y) to
the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Securities then Outstanding;
(e) the occurrence of an event of default under any mortgage,
bond, indenture, loan agreement or other document evidencing Indebtedness of the
Company or any Restricted Subsidiary, which Indebtedness has an aggregate
outstanding principal amount of US$10,000,000 or more, and such default (i)
results in the acceleration of such Indebtedness prior to its Stated Maturity or
(ii) constitutes a failure to make any payment with respect to any such
Indebtedness when due and payable after expiration of any applicable grace
period;
(f) failure by the Company or any of its Restricted Subsidiaries
to pay one or more final judgments the uninsured portion of which exceeds in the
aggregate US$10,000,000, which judgment or judgments are not paid, discharged or
stayed for a period of 60 days;
(g) the occurrence of an event of default under any of the
Collateral Documents;
(h) the Mirror Note, any Additional Mirror Note, any guarantee of
the Mirror Note, any Additional Mirror Note or the Securities or any of the
related Collateral Documents ceases to be in full force and effect or is
declared null and void or the issuer of the Mirror Note, any Additional Mirror
Note or any guarantor of the Mirror Note, any Additional Mirror Note or the
Securities denies that it has any further liability under such note or guarantee
or the related Collateral Documents, or gives notice to such effect, except in
the case of termination of this Indenture or the discharge or release of any
such note or guarantee in accordance with Article IV or any other provision in
this Indenture, and such condition has continued for a period of 30 days after
written notice of such failure requiring that such default be remedied has been
given (x) to the Company by the Trustee or (y) to the Company and the Trustee by
the Holders of 25% in aggregate principal amount of the Securities then
Outstanding;
(i) other than in respect of the Reorganization, an entry of a
decree or order by a court having jurisdiction in the premises adjudging the
Company or any Significant Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustments or
composition of or in respect of the Company or any Significant Subsidiary under
any Bankruptcy Law or any other applicable United States or Canadian federal,
state or provincial law, or appointing a Custodian of the Company or any
Significant Subsidiary or of any substantial part of its
54
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
90 consecutive days; or
(j) other than in respect of the Reorganization, the institution
by the Company or any Significant Subsidiary of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any Bankruptcy Law or the
consent by it to the filing of any such petition or to the appointment of a
Custodian of the Company or any Significant Subsidiary or of any substantial
part of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due.
SECTION 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than as specified in Section 5.01(i) or
(j)) occurs and is continuing, the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Securities then Outstanding may, and the
Trustee at the request of such Holders shall, declare the principal of (and
premium, if any) and accrued and unpaid interest on, all of the Outstanding
Securities immediately due and payable and, upon any such declaration, all such
amounts will become due and payable immediately. If an Event of Default
specified in Section 5.01(i) or (j) above occurs and is continuing, then the
principal (and premium, if any), and accrued and unpaid interest on all of the
Securities then Outstanding will IPSO FACTO become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder of Securities. The Company shall deliver to the Trustee, within 10 days
after the occurrence thereof, notice of any default or acceleration referred to
in Section 5.01(e).
At any time after a declaration of acceleration, but before a judgment
or decree for payment of the money due has been obtained by the Trustee, the
Holders of a majority in aggregate principal amount of the Outstanding
Securities, by written notice to the Company and the Trustee, may rescind such
declaration and its consequences if:
(i) the Company or any Guarantor has paid or deposited
with the Trustee a sum sufficient to pay,
(A) all overdue interest on all Securities;
(B) all unpaid principal of (and premium, if
any) on any Outstanding Securities that has become due other than by
such declaration of acceleration and interest thereon at the rate borne
by the Securities;
(C) to the extent that payment of such interest
is lawful, interest on overdue interest and overdue principal at the
rate borne by the Securities; and
55
(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; and
(ii) all Events of Default, other than the non-payment of
amounts of principal of (and premium, if any) or interest on the Securities that
have become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 5.13.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
Notwithstanding the preceding paragraph, in the event of a declaration
of acceleration in respect of the Securities because an Event of Default
specified in Section 5.01(e) shall have occurred and be continuing, such
declaration of acceleration shall be automatically annulled if the Indebtedness
that is the subject of such Event of Default has been discharged or the holders
thereof have rescinded their declaration of acceleration in respect of such
Indebtedness, and written notice of such discharge or 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, within 30 days after such declaration of acceleration in respect of the
Securities, and no other Event of Default has occurred during such 30-day period
which has not been cured or waived during such period.
SECTION 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE.
The Company and each of the Guarantors, if any, covenants that if
(a) default is made in the payment of any installment of interest
on any Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or
premium, if any) on any Security at the Maturity thereof,
the Company and each Guarantor (if any) will, upon demand of the Trustee, pay to
the Trustee for the benefit of the Holders of such Securities, the whole amount
then due and payable on such Securities for principal (and premium, if any) and
interest, and interest on any overdue principal (and premium, if any) and, to
the extent that payment of such interest shall be legally enforceable, upon any
overdue installment of interest, at the rate borne by the Securities, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company or any Guarantor (if any), as the case may be, fails to
pay such amounts forthwith upon such demand, the Trustee, in its own name as
trustee of an
56
express trust, may institute a judicial proceeding for the collection of the
sums so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Company, such Guarantor or any other
obligor upon the Securities and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company, such
Guarantor or any other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.04 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company and its debts or any other obligor
upon the Securities (including the Guarantors, if any), and their debts or the
property of the Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
overdue principal (and premium, if any) or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other securities or
property payable or deliverable upon the conversion or exchange of such
securities or upon any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.06.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the
57
rights of any Holder thereof, or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
SECTION 5.05 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.06 APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.06;
SECOND: To the payment of the amounts then due and unpaid for principal
of (premium, if any), and interest on the Securities in respect of which or for
the benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Securities for principal (premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Company and/or the Guarantors, as
the case may be.
SECTION 5.07 LIMITATION ON SUITS.
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
58
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities (including fees and
expenses of its agents and counsel) to be incurred in compliance with such
request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority or
more in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 5.08 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment, as provided herein (including, if applicable, Article XII and
Section 14.04) and in such Security of the principal of (and premium, if any)
and (subject to Section 3.09) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 5.09 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Guarantors (if any), the
Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been instituted.
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 3.08, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall,
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to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 5.12 CONTROL BY HOLDERS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, PROVIDED that
(a) such direction shall not be in conflict with any rule of law
or with this Indenture,
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(c) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders not consenting.
SECTION 5.13 WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may, on behalf of the Holders of all of the Securities,
waive any past defaults hereunder, except a default
(a) in the payment of the principal of (premium, if any) or
interest on any Security, or
(b) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the Holder of
each Security Outstanding.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
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SECTION 5.14 WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 5.15 UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorney's fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal (premium, if any) or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
ARTICLE VI
THE TRUSTEE
SECTION 6.01 NOTICE OF DEFAULTS.
If a Default or an Event of Default occurs and is continuing and is
known to the Trustee, the Trustee shall mail to each Holder of the Securities in
the manner and to the extent provided in TIA Section 313(c) notice of the
Default or Event of Default within 90 days after the occurrence thereof;
PROVIDED, HOWEVER, that, except in the case of a Default or an Event of Default
in the payment of principal of (premium, if any) or interest on any Securities,
the Trustee may withhold the notice to the Holders of the Securities if it in
good faith determines that withholding such notice is in the interests of the
Holders of the Securities.
SECTION 6.02 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of TIA Sections 315(a) through 315(d):
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(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting, pursuant to the terms of this Indenture or
otherwise, upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper Person or Persons;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate or an Opinion of Counsel;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities (including fees and expenses of its agents and counsel)
which might be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into,
and may conclusively rely upon, the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture; and
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(i) except during the continuance of an Event of Default, the
Trustee need perform only those duties as are specifically set forth in this
Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
In acting under the Collateral Documents and the Collateral Documents
Subordination Agreement, the Trustee shall have the full benefit of the
exculpatory and protective provisions under this Indenture.
SECTION 6.03 TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The recitals contained herein and in the Securities, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture, the Securities or any Guarantee, except that the Trustee represents
that it is duly authorized to execute and deliver this Indenture, authenticate
the Securities and perform its obligations hereunder and, upon the effectiveness
of the Registration Statement, that the statements made by it in a Statement of
Eligibility on Form T-1 supplied to the Company will be true and accurate,
subject to the qualifications set forth therein. The Trustee shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
SECTION 6.04 MAY HOLD SECURITIES.
The Trustee, any Paying Agent, any Registrar or any other agent of the
Company or of the Trustee, in its individual or any other capacity, may become
the owner or pledgee of Securities and, subject to TIA Sections 310(b) and 311,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Paying Agent, Registrar or such other agent.
SECTION 6.05 MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company or any Guarantor, as the case may be.
SECTION 6.06 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
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(a) to pay to the Trustee (in its capacity as Trustee, Paying
Agent and Registrar) from time to time reasonable compensation for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture, any Collateral Document or the Collateral Documents
Subordination Agreement (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and
(c) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without willful misconduct, negligence
or bad faith on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of enforcing this
Indenture against the Company or the Guarantors (including this Section 6.06) or
any Collateral Document or the Collateral Documents Subordination Agreement
against the relevant party thereto and of defending itself against any claim
(whether asserted by any Holder or the Company or any other party to any
Collateral Document or the Collateral Documents Subordination Agreement) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder or thereunder.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture and any termination under any bankruptcy law. As
security for the performance of such obligations of the Company, the Trustee
shall have a claim prior to the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the payment of
principal of (premium, if any) or interest on particular Securities.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 5.01(i) or (j), the expenses (including
the reasonable charges and expenses of its counsel) of and the compensation for
such services are intended to constitute expenses of administration under any
applicable bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 6.07 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall be at all times a Trustee hereunder which shall be eligible
to act as Trustee under TIA Section 310(a)(1) and shall have a combined capital
and surplus (together with its parent) of at least US$50,000,000. If such
corporation publishes reports
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of condition at least annually, pursuant to law or to the requirements of United
States federal, state, territorial or District of Columbia supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 6.08 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.09.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 6.09 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders
of not less than a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the
provisions of TIA Section 310(b) after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Security
for at least six months, except when the Trustee's duty to resign is
stayed in accordance with the provisions of TIA Section 310(b), or
(2) the Trustee shall cease to be eligible under
Section 6.07 and shall fail to resign after written request therefor by
the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(3) the Trustee shall become incapable of acting
or shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly
65
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and to that extent supersede the successor Trustee appointed
by the Company. If no successor Trustee shall have been so appointed by the
Company or the Holders and accepted appointment in the manner hereinafter
provided subject to TIA Section 315(e), any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to the
Holders of Securities in the manner provided for in Section 1.06. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
SECTION 6.09 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder subject to the retiring Trustee's rights as
provided under the last sentence of Section 6.06. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.10 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation
66
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities. In case
at that time any of the Securities shall not have been authenticated, any
successor Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee. In all such cases
such certificates shall have the full force and effect which this Indenture
provides that the certificate of authentication of the Trustee shall have;
PROVIDED, HOWEVER, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Securities in the name of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE
SECTION 7.01 CORPORATION TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
HOLDERS.
The Company will furnish or cause to be furnished to the Trustee (1)
not more than 15 days after each Regular Record Date a list, in such form as the
Trustee may reasonably require, of the names and addresses of Holders as of such
Regular Record Date; PROVIDED, HOWEVER, that the Company shall not be obligated
to furnish or cause to be furnished such list at any time that the list shall
not differ in any respect from the most recent list furnished to the Trustee by
the Company and at such times as the Trustee is acting as Registrar for the
Securities and (2) at such other times as the Trustee may request in writing
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished.
SECTION 7.02 PRESERVATION OF LIST OF NAMES AND ADDRESSES OF
HOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
Holders contained in the most recent list furnished to it as provided in Section
7.01 and as to the names and addresses of Holders received by the Trustee in its
capacity as Registrar for the Securities (if acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided
in Section 7.01 upon receipt of a new list so furnished.
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(c) Holders may communicate as provided in TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or under the
Securities.
SECTION 7.03 DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that none of the Company or the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders in accordance
with TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
SECTION 7.04 REPORTS BY TRUSTEE.
(a) Within 60 days after July 1 of each year commencing with the
first July 1 after the first issuance of Securities, the Trustee shall transmit
to the Holders, in the manner and to the extent provided in TIA Section 313(c),
a brief report dated as of such July 1 if required by TIA Section 313(a).
(b) The Trustee shall comply with Sections 313(b) and 313(c) of
the Trust Indenture Act.
(c) A copy of such report shall, at the time of such transmission
to the Holders, be filed by the Trustee with the Company (Attention: Chief
Financial Officer), with each securities exchange upon which any of the
Securities are listed (if so listed) and also with the Commission. The Company
agrees to notify the Trustee when the Securities become listed on any stock
exchange.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 8.01 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
Except in connection with the Reorganization, the Company shall not
amalgamate, consolidate or merge with or into any other Person (whether or not
the Company is the surviving Person), or directly or indirectly sell, assign,
convey, transfer, lease or otherwise dispose of all or substantially all of its
properties or assets (determined on a consolidated basis for the Company and its
Subsidiaries taken as a whole) to any Person or Persons, in one transaction or a
series of related transactions, unless each of the following conditions is
satisfied:
(a) either (i) the Company is the surviving corporation or (ii)
the Person (if other than the Company) formed by such amalgamation or
consolidation or into which the Company is merged or the Person that acquires by
sale, assignment,
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conveyance, transfer, lease or other disposition of all or substantially all of
the properties and assets of the Company and its Restricted Subsidiaries on a
consolidated basis (the "Surviving Entity") (A) is a corporation, partnership,
limited liability company or trust duly organized and validly existing under the
laws of Canada or any province thereof or the United States, any state thereof
or the District of Columbia and (B) expressly assumes, by a supplemental
indenture in form reasonably satisfactory to the Trustee, all the obligations of
the Company under this Indenture and the Securities;
(b) immediately after giving effect to such transaction or series
of transactions on a pro forma basis, no Default or Event of Default has
occurred and is continuing;
(c) immediately after giving effect to such transaction or series
of transactions on a pro forma basis (including giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in
connection with such transaction or series of transactions), the Consolidated
Net Worth of the Company (or of the Surviving Entity if the Company is not the
continuing obligor under this Indenture) is equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such transaction or
series of transactions;
(d) immediately after giving effect to such transaction or series
of transactions on a pro forma basis (on the assumption that the transaction or
series of transactions occurred at the beginning of the most recently ended
four-full-fiscal-quarter period), the Company (or the Surviving Entity if the
Company is not the continuing obligor under this Indenture) could incur at least
US$1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant
to the first paragraph of Section 10.10;
(e) in the event any of the property of the Company or its
Restricted Subsidiaries would become subject to any Lien as a result of the
transaction or series of transactions, the provisions of Section 10.17 are
complied with;
(f) the transaction or series of transactions will not result in
the Company (or the Surviving Entity if the Company is not the continuing
obligor under this Indenture) being required to make any deduction or
withholding on account of taxes described under Section 10.25, from any payment
under or in respect of the Securities that the Company would not have been
required to make had such transaction or series of transactions not occurred;
and
(g) the Company (or the Surviving Entity if the Company is not the
continuing obligor under this Indenture) delivers, or causes to be delivered, to
the Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
transaction or series of transactions complies with the requirements of this
Indenture.
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise, in a single transaction or series of related transactions) of all
or substantially all of the properties or assets of one or more Restricted
Subsidiaries that constitutes all or
69
substantially all of the properties and assets of the Company on a consolidated
basis, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
SECTION 8.02 SUCCESSOR SUBSTITUTED.
In the event of any transaction or series of related transactions
described in and complying with the conditions listed in the first paragraph of
Section 8.01 in which the Company is not the continuing obligor under this
Indenture, 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 thereafter the Company shall, except in the case of a transfer by lease, be
discharged of all its obligations and covenants under this Indenture and the
Securities.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO INDENTURE,
GUARANTEES, COLLATERAL DOCUMENTS AND COLLATERAL
DOCUMENT SUBORDINATION AGREEMENT
SECTION 9.01 WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and any affected
Guarantor, each when authorized by or pursuant to a Board Resolution, and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, for any of the following purposes:
(a) to evidence the succession of another Person to the Company or
any Guarantor and the assumption by any such successor of the covenants of the
Company contained herein and in the Securities or to add any Guarantors of the
Securities; or
(b) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the Company; or
(c) to add any additional Events of Default; or
(d) to provide for uncertificated Securities in addition to or in
place of the certificated Securities; or
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of Section 6.09;
or
(f) to secure the Securities or any Guarantee; or
(g) to cure any ambiguity, to correct or supplement any provision
in this Indenture which may be defective or inconsistent with any other
provision herein, or
70
to make any other provisions with respect to matters or questions arising under
this Indenture, PROVIDED that such action shall not adversely affect the
interests of the Holders; or
(h) to comply with any requirement of the Commission or any
Canadian regulatory authority in order to effect or maintain the qualification
of this Indenture under the Trust Indenture Act or any Canadian regulation.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture,
Security or Guarantee, and upon receipt by the Trustee of the documents
described in Section 6.02 hereof, the Trustee shall join with the Company in the
execution of any amended or supplemental Indenture or Guarantee authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall
not be obligated to enter into such amended or supplemental Indenture or
Guarantee that affects its own rights, duties or immunities under this Indenture
or otherwise.
SECTION 9.02 WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company, any affected Guarantor and the Trustee, the Company
and the Guarantors, each when authorized by or pursuant to a Board Resolution,
and the Trustee may enter into one or more indentures supplemental hereto or
other agreement for the purpose of modifying in any manner this Indenture, any
Guarantee, any Collateral Document or the Collateral Documents Subordination
Agreement; PROVIDED, HOWEVER, that no such indenture supplemental or other
agreement may, without the consent of the Holder of each Outstanding Security
affected thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount thereof
or the rate of interest thereon or any premium payable upon the redemption
thereof, or change the place of payment where, or the coin or currency in which
any Security or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date); or
(b) reduce the percentage in aggregate principal amount of the
Outstanding Securities required to consent to any amendment of, or waiver of
compliance with, any provision of or defaults under this Indenture; or
(c) waive a Default or Event of Default in the payment of
principal of (or premium, if any) or interest on the Securities (except a
rescission of acceleration of Securities by the Holders of at least a majority
in aggregate principal amount of the then Outstanding Securities (including
Additional Securities issued under this Indenture, if any)); or
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(d) release any party to the Collateral Documents, or release the
issuer or guarantor of the Mirror Note, any issuer or guarantor of any
Additional Mirror Note or any Guarantor from any of its obligations under the
Mirror Note, Additional Mirror Note, guarantee or Guarantee, as applicable,
except in accordance with the terms of this Indenture, including, without
limitation, the discharge and release described under Section 4.03; or
(e) amend, change or modify any of the provisions of this
Indenture relating to the subordination of the Securities, the Guarantees, the
Mirror Note, any Additional Mirror Note, any guarantee of the Mirror Note, any
guarantee of any Additional Mirror Notes, any other Collateral Documents or the
Collateral Documents Subordination Agreement, in a manner adverse to the
Holders; or
(f) amend, change or modify the obligation of the Company to make
and consummate a Change of Control Offer or Asset Sale Offer in accordance with
the provisions of Section 10.12 on Section 10.13, respectively; or
(g) amend, change or modify any of the provisions in Article XIII
or XIV in a manner adverse to the Holders; or
(h) make any change that would adversely affect the rights of
Holders to receive Additional Amounts; or
(i) amend, change or modify any of the provisions in this Section
9.02.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture and that such supplemental indenture constitutes the legal, valid and
binding obligation of the Company and the Guarantors (if any) subject to the
customary exceptions. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise.
SECTION 9.04 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
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SECTION 9.05 CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.06 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 9.07 NOTICE OF SUPPLEMENTAL INDENTURES.
Promptly after the execution by the Company, any affected Guarantor and
the Trustee of any supplemental indenture pursuant to the provisions of Section
9.02, the Company shall give notice thereof to the Holders of each Outstanding
Security affected, in the manner provided for in Section 1.06, setting forth in
general terms the substance of such supplemental indenture.
ARTICLE X
COVENANTS
SECTION 10.01 PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.
The Company covenants and agrees for the benefit of the Holders that it
will duly and punctually pay the principal of (premium, if any) and interest on
the Securities in accordance with the terms of the Securities and this
Indenture. Principal and interest shall be considered paid on the date due if on
such date the Trustee or the Paying Agent holds in accordance with this
Indenture money sufficient to pay all principal and interest then due and the
Trustee or the Paying Agent, as the case may be, is not prohibited from paying
such money to the Securityholders on that date pursuant to the terms of this
Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 10.02 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in The City of New York, an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or
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upon the Company in respect of the Securities or any Guarantor
in respect of the Guarantees and this Indenture may be served. The Corporate
Trust Office located at One Liberty Plaza, 23rd Floor, New York, New York 10006
of the Trustee shall be such office or agency of the Company, unless the Company
shall designate and maintain some other office or agency for one or more of such
purposes. The Company will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such other
office or agency.
SECTION 10.03 MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (or premium, if any) or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal of (or premium,
if any) or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it will, on or before each due date of the principal of (premium, if
any) or interest on any Securities, deposit with a Paying Agent a sum sufficient
to pay the principal (premium, if any) or interest so becoming due, such sum to
be held in trust for the benefit of the Persons entitled to such principal
(premium, if any) or interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of such action or any failure so to
act.
The Company will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of
(premium, if any) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
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(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of principal
(premium, if any) or interest; and
(c) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (premium, if any)
or interest on any Security and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 10.04 CORPORATE EXISTENCE.
Subject to Article VIII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and corporate power (or, in the case of Baytex Energy Partnership,
partnership existence and power) of the Company and each Restricted Subsidiary;
PROVIDED, HOWEVER, that the Company shall not be required to preserve any such
corporate existence and corporate power (or, in the case of Baytex Energy
Partnership, partnership existence and power) (i) if the Board of Directors
shall determine that 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, or (ii) in connection with the Reorganization.
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SECTION 10.05 PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or property of the Company or any
Restricted Subsidiary and (b) lawful claims for labor, materials and supplies,
which, if unpaid, might by law become a lien upon the property of the Company or
any Restricted Subsidiary; PROVIDED, HOWEVER, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION 10.06 MAINTENANCE OF PROPERTIES.
The Company will cause all properties owned by the Company or any
Restricted Subsidiary or 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 and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; PROVIDED, HOWEVER, that
nothing in this Section shall prevent the Company from discontinuing the
maintenance of any of such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business or the business of any
Restricted Subsidiary and not disadvantageous in any material respect to the
Holders.
SECTION 10.07 INSURANCE.
The Company will at all times keep all of its and its Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Company to be responsible, against loss or damage to the extent
that property of similar character is usually so insured by corporations
similarly situated and owning like properties and conducting the same business
as the Company.
SECTION 10.08 STATEMENT BY OFFICERS AS TO DEFAULT.
(a) The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year, a brief certificate from the principal executive
officer, principal financial officer or principal accounting officer as to his
or her knowledge of compliance by the Company and the Restricted Subsidiaries
with all conditions and covenants under this Indenture. For purposes of this
Section 10.08(a), such compliance shall be determined without regard to any
period of grace or requirement of notice under this Indenture.
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of
Indebtedness of the Company or any Restricted Subsidiary gives any notice or
takes any other action with
76
respect to a claimed default, the Company shall deliver to the Trustee by
registered or certified mail or by facsimile transmission an Officers'
Certificate, specifying such event, notice or other action within ten Business
Days of its occurrence.
SECTION 10.09 PROVISION OF REPORTS AND FINANCIAL STATEMENTS.
The Company will file with the Trustee and provide the Holders, within
15 days after the filing thereof with the Commission, copies of all documents
that the Company is required to file with the Commission pursuant to Section
13(a) or 15(d) of the Exchange Act. If the Company is not subject to Section
13(a) or 15(d) of the Exchange Act, the Company will furnish to the Holders and
the Trustee:
(a) within 120 days after the end of each fiscal year, audited
year-end consolidated financial statements (including a balance sheet, income
statement and statement of cash flows) prepared in accordance with GAAP, with a
reconciliation of such financial statements to accounting principles generally
accepted in the United States, and
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year, unaudited quarterly consolidated financial
statements (including a balance sheet, income statement and statement of cash
flows) prepared in accordance with GAAP, which, regardless of applicable
requirements, shall, at a minimum, contain "the Management's Discussion and
Analysis of Financial Condition and Results of Operations" that the Company's
parent trust distributes to its unitholders pursuant to applicable Canadian
securities law requirements.
The Company shall for so long as any Securities remain outstanding,
furnish to the Holders upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 10.10 LIMITATION ON INCURRENCE OF INDEBTEDNESS AND ISSUANCE
OF DISQUALIFIED STOCK.
The Company shall not, and shall not permit any Restricted Subsidiary
to, create, issue, assume, guarantee or otherwise become directly or indirectly
liable for the payment of, or otherwise incur (collectively, "incur"), any
Indebtedness (including Acquired Indebtedness), other than Permitted
Indebtedness, or issue any Disqualified Stock, other than Disqualified Stock
issued in connection with the Reorganization, except that the Company or a
Restricted Subsidiary may incur Indebtedness or issue Disqualified Stock if, at
the time of such incurrence or issuance, the Fixed Charge Coverage Ratio for the
four full fiscal quarters (taken as one accounting period) immediately preceding
the incurrence of such Indebtedness or the issuance of such Disqualified Stock
for which internal financial statements are available would have been greater
than 2.5 to 1.0.
In making the foregoing calculation, pro forma effect will be given to:
(i) the incurrence of such Indebtedness and the application of the net proceeds
from the incurrence of Indebtedness, including to refinance other Indebtedness,
since the first day
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of such four-quarter period as if such Indebtedness was incurred and the
application of such proceeds occurred at the beginning of such four-quarter
period, (ii) the incurrence, repayment or retirement of any other Indebtedness
by the Company or its Restricted Subsidiaries since the first day of such
four-quarter period as if such Indebtedness was incurred, repaid or retired at
the beginning of such four-quarter period, and (iii) the acquisition (whether by
purchase, merger or otherwise) or disposition (whether by sale, merger or
otherwise) of any other company, entity, business or assets acquired or disposed
of by the Company or any Restricted Subsidiary, as the case may be, since the
first day of such four-quarter period, as if such acquisition or disposition
(including the incurrence, assumption or liability for any such Acquired
Indebtedness) occurred at the beginning of such four-quarter period. In making a
computation under the foregoing clause (i) or (ii), (A) interest on Indebtedness
bearing a floating interest rate shall be computed as if the rate in effect on
the dated of computation had been the applicable rate for the entire period
(taking into account any Hedging Obligations applicable to such Indebtedness if
such Hedging Obligations have a remaining term at the date of determination in
excess of 12 months), (B) if such Indebtedness bears, at the option of the
Company, a fixed or floating rate of interest, interest thereon will be computed
by applying, at the option of the Company, either the fixed or floating rate and
(C) the amount of any Indebtedness under a revolving credit facility (including
the Senior Credit Facilities to the extent they constitute a revolving credit
facility) will be computed based on the average daily balance of such
Indebtedness during such four-quarter period.
SECTION 10.11 LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, make any Restricted Payment unless at the
time of, and immediately after giving effect to, the proposed Restricted
Payment, no Default or Event of Default has occurred and is continuing, and
either:
(i) (A) the Company could incur at least US$1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant to the
first paragraph of Section 10.10; (B) the ratio of Consolidated Debt to
Consolidated Cash Flow from Operations does not exceed 3.0 to 1.0; and (C) the
aggregate amount of all Restricted Payments declared or made after the Closing
Date pursuant to this clause (i) does not exceed the sum of:
(1) 80% of Consolidated Cash Flow from
Operations accrued on a cumulative basis from the Closing Date, PLUS
(2) 100% of the aggregate net cash proceeds
received by the Company after the Closing Date from (i) the issuance by
the Company of Deeply Subordinated Inter-company Debt, or (ii) capital
contributions in respect of Qualified Equity Interests that the Company
receives from any Person that owns, directly or indirectly, 100% of the
Company's outstanding Voting Stock; PLUS
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(3) the aggregate net proceeds, including the
fair market value of property other than cash (as determined by the
Company's Board of Directors, whose good faith determination will be
conclusive), received by the Company after the Closing Date from any
Person, other than a Subsidiary, from the issuance or sale of debt
securities or Disqualified Stock that have been converted into or
exchanged for Qualified Stock of the Company, plus the aggregate net
cash proceeds received by the Company at the time of such conversion or
exchange; OR
(ii) The aggregate amount of all Restricted Payments
declared or made after the Closing Date pursuant to this clause (ii) does not
exceed the sum of Unpaid Restricted Payment Funds not previously expended under
this clause (ii), PLUS US$30,000,000.
(b) Notwithstanding paragraph (a) above, the following will be
permitted under this Indenture:
(i) the payment of any dividend within 60 days after the
date of declaration thereof, if at the declaration date such payment would not
have been prohibited by the foregoing provision; PROVIDED no Default or Event of
Default has occurred and is continuing or would occur as a result of the actions
or payments set forth in this clause (i);
(ii) the purchase, redemption or other acquisition or
retirement for value of any shares of Capital Stock of the Company, in exchange
for, or out of the net cash proceeds of a substantially concurrent issuance and
sale (other than to a Subsidiary) of, Qualified Equity Interests of the Company;
PROVIDED no Default or Event of Default has occurred and is continuing or would
occur as a result of the actions or payments set forth in this clause (ii);
(iii) the purchase, redemption, defeasance or other
acquisition or retirement for value of any Pari Passu Indebtedness or
Subordinated Indebtedness in exchange for, or out of the net cash proceeds of a
substantially concurrent issuance and sale (other than to a Subsidiary) of,
Qualified Equity Interests of the Company;
(iv) the purchase, redemption, defeasance or other
acquisition or retirement for value of Pari Passu Indebtedness or Subordinated
Indebtedness in exchange for, or out of the net cash proceeds of a substantially
concurrent issuance or sale (other than to a Subsidiary) of, new Subordinated
Indebtedness, so long as the Company or a Restricted Subsidiary would be
permitted to refinance such original Subordinated Indebtedness with such new
Subordinated Indebtedness pursuant to clause (xiii) of the definition of
Permitted Indebtedness;
(v) provided no Default or Event of Default has occurred
and is continuing or would result from the actions or payments set forth in this
clause (v), the repurchase of any Subordinated Indebtedness at a purchase price
not greater than 101% of the principal amount of such Subordinated Indebtedness
in the event of a "change of
79
control" in accordance with provisions similar to the provisions of Section
10.12; PROVIDED that, prior to or simultaneously with such repurchase, the
Company has made the Change of Control Offer as provided in that covenant with
respect to the Securities and has repurchased all Securities validly tendered
for payment in connection with such Change of Control Offer;
(vi) provided no Default or Event of Default has occurred
and is continuing or would result from the actions or payments set forth in this
clause (vi), the repurchase, redemption or other acquisition or retirement for
value of Capital Stock (or options therefor) from directors, officers or
employees of the Company pursuant to any agreement upon the death, disability or
termination of employment of such directors, officers or employees, in an amount
not to exceed US$500,000 in any calendar year or US$2,000,000 in the aggregate;
(vii) payments or distributions in connection with an
amalgamation, consolidation, merger, including by way of takeover bid, exchange
offer or tender offer, or transfer of assets that complies with the conditions
set forth in Section 8.01; and
(viii) payments or distributions in connection with the
Reorganization.
In determining the aggregate amount of Restricted Payments made subsequent to
the Closing Date in accordance with Section 10.11(a)(i) or Section 10.11(a)(ii),
as applicable, amounts expended pursuant to clauses (i), (ii), (iii), (v) and
(vi) of Section 10.11(b) shall be included in such calculation, unless expended
in connection with the Reorganization.
(c) For the purpose of making any Restricted Payment calculations
under this Indenture (i) if a Restricted Subsidiary is designated an
Unrestricted Subsidiary, the Company shall be deemed to have made an Investment
in an amount equal to the greater of fair market value or net book value of the
net assets of such Restricted Subsidiary at the time of such designation as
determined by the Board of Directors of the Company, whose good faith
determination will be conclusive, (ii) any property transferred to or from an
Unrestricted Subsidiary will be valued at fair market value at the time of such
transfer, as determined by the Board of Directors of the Company, whose good
faith determination will be conclusive and (iii) subject to the foregoing, the
amount of any Restricted Payment, if other than cash, will be determined by the
Board of Directors of the Company, whose good faith determination will be
conclusive.
If the aggregate amount of all Restricted Payments calculated under
paragraph (a)(i) of this Section 10.11 includes an Investment in an Unrestricted
Subsidiary or other Person that thereafter becomes a Restricted Subsidiary, the
aggregate amount of all Restricted Payments calculated under Section 10.11(a)(i)
shall be reduced by the lesser of (x) the net asset value of such Subsidiary at
the time it becomes a Restricted Subsidiary and (y) the initial amount of such
Investment.
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If an Investment resulted in the making of a Restricted Payment, the
aggregate amount of all Restricted Payments calculated under this Section 10.11
shall be reduced by the amount of any net reduction in such Investment
(resulting from the payment of interest or dividends, loan repayment, transfer
of assets or otherwise), to the extent such net reduction is not included in the
Company's Consolidated Net Income; PROVIDED that the total amount by which the
aggregate amount of all Restricted Payments may be reduced shall not exceed the
lesser of (x) the cash proceeds received by the Company and its Restricted
Subsidiaries in connection with such net reduction and (y) the initial amount of
such Investment.
In computing the Consolidated Net Income of the Company for purposes of
clause (i) of paragraph (a) of this Section 10.11, (i) the Company may 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 (ii) the Company will be permitted to rely in
good faith on the financial statements that are available on the date of
determination. If the Company makes a Restricted Payment that, 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 10.12 PURCHASE OF SECURITIES UPON A CHANGE OF CONTROL.
Except for any Change of Control in connection with the Reorganization,
if a Change of Control occurs at any time, then each Holder shall have the right
to require that the Company purchase such Holder's Securities, in whole or in
part, at a purchase price in cash equal to 101% of the principal amount of such
Securities, plus accrued and unpaid interest, if any, to the date of purchase,
pursuant to the offer described below (the "Change of Control Offer") and the
other procedures set forth in this Indenture.
Within 30 days following the date on which a Change of Control occurs,
the Company shall notify the Trustee and give written notice of such Change of
Control to each holder of Securities by first-class mail, postage prepaid, at
its address appearing in the Security Register, stating, among other things, (i)
the purchase price and the purchase date, which will be a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is mailed
or such later date as is necessary to comply with requirements under the
Exchange Act; (ii) that any Security not tendered will continue to accrue
interest; (iii) that, unless the Company defaults in the payment of the purchase
price, any Securities accepted for payment pursuant to the Change of Control
Offer will cease to accrue interest after the Change of Control purchase date;
(iv) that Holders electing to have any Securities purchased pursuant to a Change
of Control Offer shall be required to surrender the Securities, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Securities
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding
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the purchase date (the "Change of Control Payment Date"); (v) that Holders shall
be entitled to withdraw their election if the Paying Agent receives, not later
than the close of business on the second Business Day preceding the Change of
Control Payment Date, a facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Securities delivered for purchase, and a
statement that such Holder is withdrawing his election to have such Securities
purchased; (vi) that Holders whose Securities are being purchased only in part
shall be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered, which unpurchased portion must be equal
to US$1,000 in principal amount or an integral multiple thereof; (vii) the
instructions that the Holders of Securities must follow in order to tender their
Securities; and (viii) the circumstances and relevant facts regarding such
Change of Control.
The Company shall comply with any applicable tender offer rules
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws and regulations in connection with a Change of Control Offer.
SECTION 10.13 LIMITATION ON CERTAIN ASSET SALES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any Asset Sale unless (i) the consideration received by
the Company or such Restricted Subsidiary for such Asset Sale is at least equal
to the fair market value of the assets and properties sold or otherwise disposed
of (as determined by the Board of Directors of the Company, whose good faith
determination will be conclusive, and evidenced by a resolution of the Board of
Directors) and (ii) the consideration received by the Company or the relevant
Restricted Subsidiary in respect of such Asset Sale is either (x) cash, Cash
Equivalents, Liquid Securities or Exchanged Properties (collectively, "Permitted
Consideration") or (y) the property or assets received that do not constitute
Permitted Consideration have an aggregate fair market value of no more than 10%
of the Company's Adjusted Consolidated Net Tangible Assets.
(b) If the Company or any Restricted Subsidiary engages in an
Asset Sale, the Company may, at its option, within 365 days after such Asset
Sale, (i) apply all or a portion of the Net Cash Proceeds to the permanent
reduction of amounts outstanding under the Senior Credit Facilities, or to the
repayment of other Senior Indebtedness of the Company or a Restricted
Subsidiary, (ii) invest all or a portion of such Net Cash Proceeds in properties
and assets that will be used by the Company or its Restricted Subsidiaries in
the Oil and Gas Business, or (iii) make an Asset Sale Offer pursuant to clause
(c) below. The amount of Net Cash Proceeds from all Asset Sales after the
Closing Date not used for one of the purposes described in clause (i) or (ii)
will constitute "Excess Proceeds." If at any time any non-cash consideration
received by the Company or any Restricted Subsidiary in connection with any
Asset Sale is converted into or sold or otherwise disposed of for cash (other
than interest received with respect to any such non-cash consideration), then
such conversion or disposition shall be deemed to constitute an Asset Sale for
purposes of this Section 10.13 and the Net Cash Proceeds thereof shall be
applied in accordance with this Section 10.13.
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(c) On any day when the aggregate amount of Excess Proceeds
exceeds US$10,000,000, the Company shall, within 30 days thereafter, make an
offer to purchase (an "Asset Sale Offer") from all Holders of Securities, on a
pro rata basis, in accordance with the procedures set forth in paragraph (d)
below, the maximum principal amount (expressed as a multiple of US$1,000) of
Securities that may be purchased with the Excess Proceeds. The offer price as to
each Security will be payable in cash in an amount equal to 100% of the
principal amount of such Security plus in each case accrued and unpaid interest,
if any, to the date of repurchase. To the extent that the aggregate principal
amount of Securities validly tendered and not withdrawn pursuant to an Asset
Sale Offer is less than the Excess Proceeds, the Company may use the portion of
the Excess Proceeds not required to be used to repurchase the Securities for any
other purpose not prohibited by this Indenture. If the aggregate principal
amount of Securities validly tendered and not withdrawn by holders thereof
exceeds the Excess Proceeds, the Securities to be purchased will be selected by
the Trustee on a pro rata basis (based upon the principal amount of Securities).
Upon completion of such Asset Sale Offer, the amount of Excess Proceeds will be
reset to zero.
(d) Within the time period described in paragraph (c) above for
making an Asset Sale Offer, the Company shall mail a notice to each Holder in
the manner provided in Section 1.06 stating: (1) that the Asset Sale Offer is
being made pursuant to the provisions of Section 10.13 of this Indenture and
that all Securities duly and timely tendered shall be accepted for payment
(except, as provided above, if the aggregate principal amount as the case may
be, of the Securities exceeds the amount of Excess Proceeds); (2) the purchase
price and the purchase date (the "Asset Sale Purchase Date"), which date shall
be no earlier than 30 days nor later than 60 days from the date such notice is
mailed (or as otherwise required by the Exchange Act); (3) that any Securities
not tendered shall continue to accrue interest; (4) that, unless the Company
defaults in the payment of the purchase price, all Securities accepted for
payment pursuant to the Asset Sale Offer shall cease to accrue interest after
the Asset Sale Purchase Date; (5) that Holders electing to have any Securities
purchased pursuant to an Asset Sale Offer shall be required to surrender the
Securities, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Securities 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 Asset Sale Purchase Date; (6) that Holders shall be entitled to
withdraw their election if the Paying Agent receives, not later than the close
of business on the second Business Day preceding the Asset Sale Purchase Date, a
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Securities delivered for purchase, and a statement that such
Holder is withdrawing his election to have such Securities purchased; (7) that
Holders whose Securities are being purchased only in part shall be issued new
Securities equal in principal amount to the unpurchased portion of the
Securities surrendered, which unpurchased portion must be equal to US$1,000 in
principal amount or an integral multiple thereof; (8) any other procedures that
the Holders of Securities must follow in order to tender their Securities; and
(9) the circumstances and relevant facts regarding such Asset Sale.
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SECTION 10.14 LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, enter into or suffer to exist any transaction or
series of related transactions with, or for the benefit of, any Affiliate of the
Company or any of its Restricted Subsidiaries unless (a) 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 those that could
have been obtained in an arm's length transaction with a Person that is not an
Affiliate of the Company or its Restricted Subsidiaries and (b) either (i) with
respect to any transaction or series of related transactions involving aggregate
payments in excess of US$2,500,000, but less than US$10,000,000, the Company
delivers to the Trustee a resolution of the Board of Directors of the Company
set forth in an Officers' Certificate certifying that such transaction or series
of related transactions comply with clause (a) above and that such transaction
or transactions have been approved by the Board of Directors (including a
majority of the Disinterested Directors) of the Company or (ii) with respect to
a transaction or series of related transactions involving aggregate payments
equal to or greater than US$10,000,000, the Company delivers to the Trustee (x)
an Officers' Certificate certifying that such transaction or series of related
transactions have been approved by the Board of Directors (including a majority
of the Disinterested Directors) of the Company and (y) a written opinion from a
nationally recognized investment banking firm to the effect that such
transaction or series of related transactions are fair to the Company or such
Restricted Subsidiary from a financial point of view.
The foregoing covenant shall not restrict any of the following:
(A) transactions exclusively among the Company and/or
its Restricted Subsidiaries provided such transactions are not
otherwise prohibited under this Indenture;
(B) the Company from paying reasonable and customary
regular compensation or fees to, or executing customary expense
reimbursement, indemnification or similar arrangements with, directors
or executive officers of the Company or any Restricted Subsidiary made
in the ordinary course of business;
(C) transactions permitted by the provisions of
Section 10.11;
(D) the issuance of the Mirror Note, the guarantees of
the Mirror Note and transactions permitted by Section 10.21 and Section
10.22;
(E) transactions in connection with the Reorganization;
and
(F) the incurrence by the Company or any Restricted
Subsidiary of Deeply Subordinated Inter-company Debt.
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SECTION 10.15 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 encumbrance or restriction of any kind on the ability of
any Restricted Subsidiary to (a) pay dividends, in cash or otherwise, or make
any other distributions on or in respect of its Capital Stock, (b) pay any
Indebtedness or other obligation owed to the Company or any other Restricted
Subsidiary, (c) make loans or advances to the Company or any other Restricted
Subsidiary, or (d) transfer any of its properties or assets to the Company or
any other Restricted Subsidiary, except for such encumbrances or restrictions
existing under or by reason of any of the following:
(i) this Indenture, the Collateral Documents, any
Guarantee, the Securities, the Senior Credit Facilities, as originally
executed, and any other agreement in effect on the Closing Date;
(ii) applicable law;
(iii) customary non-assignment provisions of any lease
governing a leasehold interest, or of any contract, of the Company or
any Restricted Subsidiary, relating to the property covered thereby and
entered into in the ordinary course of business;
(iv) 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
Person, or the properties or assets of any Person, other than the
Person, or the property or assets of the Person, so acquired;
(v) any encumbrance or restriction contained in contracts
for sales of assets permitted by Section 10.13 with respect to assets
to be sold pursuant to such contract;
(vi) any encumbrance or restriction existing under any
agreement that extends, renews, refinances or replaces the agreements
containing the encumbrances or restrictions in the foregoing clauses
(i) and (iv); PROVIDED that the terms and conditions of any such
encumbrances or restrictions are not less favorable in any material
respect to the Holders of Securities than those under or pursuant to
the agreement so extended, renewed, refinanced or replaced.
SECTION 10.16 LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any Restricted Subsidiary,
directly or indirectly, to convey, sell, assign, transfer, lease or otherwise
dispose of any shares of Capital Stock of a Restricted Subsidiary (including
options, warrants or other
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rights to purchase shares of such Capital Stock) except (a) to the Company or a
Wholly-Owned Restricted Subsidiary, (b) in a transaction or series of related
transactions consisting of a sale, PROVIDED that immediately after giving effect
to such sale, neither the Company nor any of its Subsidiaries owns any shares of
Capital Stock of such Restricted Subsidiary (including options, warrants or
other rights to purchase shares of such Capital Stock) and such sale complies
with the provisions of Section 10.13 or (c) in connection with the
Reorganization.
The Company shall not permit any Restricted Subsidiary to issue
Preferred Stock (other than to the Company or its Wholly-Owned Restricted
Subsidiary) or permit any Person (other than the Company or its Wholly-Owned
Restricted Subsidiaries) to own any Preferred Stock of any of the Company's
Restricted Subsidiaries.
SECTION 10.17 LIMITATION ON LIENS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, create, incur, affirm or suffer to exist any Lien of any kind securing any
Pari Passu Indebtedness or Subordinated Indebtedness (including any assumption,
guarantee or other liability with respect thereto by any Restricted Subsidiary)
upon any property or assets (including any intercompany notes) of the Company or
any Restricted Subsidiary now owned or acquired after the Closing Date, or any
income or profits therefrom, unless the Securities are directly secured equally
and ratably with (or prior to in the case of Subordinated Indebtedness) the
obligation or liability secured by such Lien, and except for any Lien securing
Acquired Indebtedness created prior to the incurrence of such Indebtedness by
the Company or any Restricted Subsidiary, PROVIDED that any such Lien only
extends to the assets that were subject to such Lien securing such Acquired
Indebtedness prior to the related acquisition by the Company or the Restricted
Subsidiary. Notwithstanding the foregoing, nothing in the Indenture shall
prohibit the creation or incurrence of a Lien under any of the Collateral
Documents or any guarantee issued pursuant to Section 10.21 or Section 10.22.
SECTION 10.18 UNRESTRICTED SUBSIDIARIES.
(a) The Board of Directors of the Company may designate any
Subsidiary (including any newly acquired or newly formed Subsidiary) an
Unrestricted Subsidiary so long as (i) neither the Company nor any Restricted
Subsidiary is directly or indirectly liable for any Indebtedness of such
Subsidiary, (ii) 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, (iii) any Investment in such Subsidiary
made as a result of designating such Subsidiary an Unrestricted Subsidiary will
not violate the provisions of Section 10.11, (iv) neither the Company nor any
Restricted Subsidiary has a contract, agreement, arrangement, understanding or
obligation of any kind, whether written or oral, with such Subsidiary other than
those that might be obtained at the time from Persons who are not Affiliates of
the Company and (v) neither the Company nor any Restricted Subsidiary has any
obligation to subscribe for
86
additional shares of Capital Stock or other equity interest in such Subsidiary,
or to maintain or preserve such Subsidiary's financial condition or to cause
such Subsidiary to achieve certain levels of operating results.
(b) The Board of Directors of the Company may designate any
Unrestricted Subsidiary as a Restricted Subsidiary; PROVIDED, that (i) no
Default or Event of Default has occurred and is continuing following such
designation, (ii) the Company could incur at least US$1.00 of additional
Indebtedness (except for Permitted Indebtedness) pursuant to the first paragraph
of Section 10.10 (treating any Indebtedness of such Unrestricted Subsidiary as
the incurrence of Indebtedness by a Restricted Subsidiary), and (iii) such
designation is evidenced by a Board Resolution, which is filed with the Trustee,
together with an Officer's Certificate certifying that such designation complied
with the provisions of this paragraph (b).
SECTION 10.19 LIMITATION ON LAYERING INDEBTEDNESS.
The Company and each Restricted Subsidiary shall not, directly or
indirectly, incur or otherwise permit to exist any Indebtedness that is
subordinate in right of payment to any Indebtedness of the Company or such
Restricted Subsidiary, as the case may be, unless such Indebtedness is also pari
passu with, or subordinate in right of payment to, the Securities or the
Collateral Documents, as the case may be.
SECTION 10.20 GUARANTEES OF INDEBTEDNESS BY RESTRICTED
SUBSIDIARIES.
The Company shall not permit any Restricted Subsidiary (other than
Baytex Marketing Ltd.) that is not a Guarantor, directly or indirectly, to
guarantee, assume or in any other manner become liable for the payment of any
Indebtedness of the Company or any other Restricted Subsidiary, unless (a) if
such Restricted Subsidiary is not the issuer or a guarantor of the Mirror Note
or any Additional Mirror Note, and is not a Guarantor, such Restricted
Subsidiary simultaneously executes and delivers a guarantee of the Mirror Note
or a Guarantee, as applicable; and (b) with respect to any guarantee of
Subordinated Indebtedness by a Restricted Subsidiary, any such guarantee is
subordinated to such Restricted Subsidiary's Mirror Note, Additional Mirror
Note, guarantee of the Mirror Note or Additional Mirror Note or Guarantee, as
applicable, at least to the same extent as such Subordinated Indebtedness is
subordinated to the Securities, PROVIDED that the foregoing provision shall not
be applicable to any guarantee by Baytex Marketing Ltd. or any Restricted
Subsidiary that existed at the time such Person became a Restricted Subsidiary
and was not incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary.
SECTION 10.21 ADDITIONAL SUBSIDIARIES TO BECOME A PARTY TO
COLLATERAL DOCUMENTS OR TO GUARANTEE THE NOTES.
(a) So long as the Mirror Note and any Additional Mirror Notes
remain outstanding, if the Company or any of its Restricted Subsidiaries
transfer or cause to be transferred, in one transaction or a series of related
transactions, property having an aggregate net book value in excess of
US$500,000 to any Restricted Subsidiary that is
87
not the issuer or a guarantor of the Mirror Note and any Additional Mirror Note
(except in connection with the Reorganization), or if the Company or any of its
Restricted Subsidiaries shall organize, acquire or otherwise invest in another
Restricted Subsidiary having total assets with a net book value in excess of
US$500,000 or if all Restricted Subsidiaries that are not the issuer or
guarantors of the Mirror Note and any Additional Mirror Notes have total assets
with a net book value aggregating US$2,000,000 or more, then such transferee,
transferees or acquired Restricted Subsidiary or other Restricted Subsidiary or
Restricted Subsidiaries (other than Baytex Marketing Ltd.) shall execute and
deliver to the Trustee to be pledged for the benefit of the Holders a guarantee
of the Mirror Note and any Additional Mirror Notes, in form and substance
similar to the guarantees of the Mirror Note and guarantees of the Additional
Mirror Notes previously executed.
(b) At any point after the Collateral Documents have been released
and discharged in accordance with the terms of this Indenture, if the Company or
any of its Restricted Subsidiaries transfer or cause to be transferred, in one
transaction or a series of related transactions, property having an aggregate
net book value in excess of US$500,000 to any Restricted Subsidiary (except in
connection with the Reorganization), or if the Company or any of its Restricted
Subsidiaries shall organize, acquire or otherwise invest in another Restricted
Subsidiary having total assets with a net book value in excess of US$500,000 or
if all Restricted Subsidiaries that are not Guarantors of the Securities have
total assets with a net book value aggregating US$2,000,000 or more, then such
transferee, transferees or acquired Restricted Subsidiary or other Restricted
Subsidiary or Restricted Subsidiaries (other than Baytex Marketing Ltd.) shall
execute and deliver to the Trustee for the benefit of the Holders a guarantee of
the notes, in form and substance substantially similar to the guarantee set
forth in Article XIII of this Indenture.
SECTION 10.22 ADDITIONAL COLLATERAL DOCUMENTS AND GUARANTEES UPON
ISSUANCE OF ADDITIONAL SECURITIES.
In the event that the Company issues Additional Securities pursuant to
Section 3.12 of this Indenture after the Closing Date, and there are Restricted
Subsidiaries in existence at the time of such issuance of Additional Securities,
the Company will simultaneously therewith either:
(a) if the Collateral Documents are still in effect at such time,
cause Baytex Energy Partnership or another one of its Restricted Subsidiaries
(other than Baytex Marketing Ltd.) to issue a corresponding Additional Mirror
Note, which note shall be guaranteed by all of the Company's Restricted
Subsidiaries (other than Baytex Marketing Ltd.) existing at such time, such
guarantee to be in form and substance substantially similar to the guarantee set
forth in Article XIII of this Indenture; OR
(b) if the Collateral Documents have been released and discharged
at such time, cause all of its Restricted Subsidiaries (other than Baytex
Marketing Ltd.) to issue guarantees of the Securities in form and substance
substantially similar to the guarantee set forth in Article XIII of this
Indenture.
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SECTION 10.23 LIMITATION ON CONDUCT OF BUSINESS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, conduct any business other than the Oil and Gas Business.
SECTION 10.24 LIMITATION ON INCURRENCE OF INDEBTEDNESS, LIENS AND
CONDUCT OF BUSINESS FOR BAYTEX MARKETING LTD.
(a) The Company shall not permit Baytex Marketing Ltd. to create,
issue, assume, guarantee or otherwise become directly or indirectly liable for
the payment of, or otherwise incur (collectively, "incur"), any Indebtedness
(including Acquired Indebtedness), except as required or permitted under the
Baytex Marketing Agreement or the Frontier Agreement (collectively, the
"Frontier Agreements"), each as in effect on the date of this Indenture, or in
connection with the incurrence of Senior Indebtedness or Guarantor Senior
Indebtedness.
(b) The Company shall not permit Baytex Marketing Ltd. to create,
incur, affirm or suffer to exist any Lien of any kind upon any property or
assets of Baytex Marketing Ltd. or any income or profits therefrom, unless the
Securities are directly secured equally and ratably with the obligation or
liability secured by such Lien and except as required or permitted under the
Frontier Agreements, as in effect on the date of this Indenture, or in
connection with the incurrence of Senior Indebtedness or Guarantor Senior
Indebtedness. Notwithstanding the foregoing, nothing in the Indenture shall
prohibit the creation or incurrence of a Lien under any of the Collateral
Documents or any guarantee issued pursuant to Section 10.21 or Section 10.22
(c) The Company shall not permit Baytex Marketing Ltd. to conduct
any business other than that connected with the Frontier Agreements, as in
effect on the date of this Indenture.
(d) The Company shall cause Baytex Marketing Ltd. to (i)
immediately pay to the Company any amounts that are due or are to become due to
the Company under the Baytex Marketing Agreement as soon as Baytex Marketing
Ltd. receives payment from Frontier Oil and Refining Company or its successor
under the Frontier Agreement, as in effect on the date of this Indenture,
including any amounts received as liquidated damages under Article 15 of the
Frontier Agreement, and (ii) immediately deliver to Frontier all crude oil that
is to be delivered to Frontier under the Frontier Agreement as soon as crude oil
is received by Baytex Marketing Ltd. from the Company under the Baytex
Agreement.
SECTION 10.25 PAYMENT OF ADDITIONAL AMOUNTS.
(a) All payments made by or on behalf of the Company with respect
to the Securities will be made free and clear of and without withholding or
deduction for or on account of any present or future tax, duty, levy, impost,
assessment or other governmental charge (including penalties, interest and other
liabilities related thereto) imposed or levied by or on behalf of the Government
of Canada or of any province or
89
territory thereof or by any authority or agency therein or thereof having power
to tax (hereinafter "Taxes"), unless the Company is required to withhold or
deduct Taxes by law or by the interpretation or administration thereof by the
relevant government authority or agency. If the Company is so required to
withhold or deduct any amount for or on account of Taxes from any payment made
under or with respect to the Securities, the Company will pay such additional
amounts ("Additional Amounts") as may be necessary so that the net amount
received by each Holder (including Additional Amounts) after such withholding or
deduction will not be less than the amount the Holder would have received if
such Taxes had not been withheld or deducted; PROVIDED, HOWEVER, that no
Additional Amounts will be payable with respect to a payment made to a Holder
(an "Excluded Holder") in respect of a beneficial owner (i) with which the
Company does not deal at arm's length (for the purposes of the Income Tax Act
(Canada)) at the time of the making of such payment or (ii) which is subject to
such Taxes by reason of its being connected with Canada or any province or
territory thereof otherwise than by the mere holding of Securities or the
receipt of payments thereunder. The Company will also make such withholding or
deduction and remit the full amount deducted or withheld to the relevant
authority as and when required in accordance with applicable law. The Company
will furnish to the Holders of the Securities, within 30 days after the date the
payment of any Taxes is due pursuant to applicable law, official receipts of the
relevant governmental authorities for all amounts deducted or withheld or if
such receipts are not obtainable, other evidence of such payment by the Company.
(b) The Company will indemnify and hold harmless each Holder on
the date of the withholding or deduction (other than an Excluded Holder) and
will upon written request of each Holder (other than an Excluded Holder),
reimburse each such Holder for the amount of (i) any Taxes so levied or imposed
and paid by such Holder as a result of payments made under or with respect to
the Securities and (ii) any Taxes so levied or imposed with respect to any
reimbursement under the foregoing clause (i), but excluding any such Taxes on
such Holder's net income, so that the net amount received by such Holder after
such reimbursement will not be less than the net amount the Holder would have
received if Taxes (other than such Taxes on such Holder's net income) on such
reimbursement had not been imposed.
(c) At least 15 days prior to each date on which Additional
Amounts are payable, the Company will deliver to the Trustee and Paying Agent an
Officers' Certificate instructing the Trustee and Paying Agent whether such
payment on the Securities shall be made without deduction or withholding for or
on account of any tax, assessment or other governmental charge. In the absence
of any such certificate the Trustee and Paying Agent may assume that no such
deduction or withholding shall be required.
(d) At least 15 days prior to each date on which any payment under
or with respect to the Securities is due and payable, if the Company will be
obligated to pay Additional Amounts with respect to such payment, the Company
will deliver to the Trustee and the Paying Agent an Officers' Certificate
stating the fact that such Additional Amounts will be payable and will set forth
such other information necessary to enable the
90
Trustee and the Paying Agent to pay such Additional Amounts to Holders on the
payment date.
(e) Whenever in this Indenture there is mentioned, in any context,
the payment of amounts based upon the principal, (premium, if any, interest),
purchase prices in connection with a repurchase of Securities or any other
amount payable under or with respect to any Security, such mention shall be
deemed to include mention of the payment of Additional Amounts provided for in
this Section 10.23, to the extent that, in such context, Additional Amounts are,
were or would be payable in respect thereof pursuant to the provisions of this
Section 10.23.
SECTION 10.26 WAIVER OF CERTAIN COVENANTS.
The Company or any Restricted Subsidiary may omit in any particular
instance to comply with any term, provision or condition set forth in Sections
10.06 through 10.11, inclusive, and 10.13 through 10.24, inclusive, if before or
after the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities, by Act of such Holders, waive
such compliance in such instance with such term, provision or condition, but no
such waiver shall extend to or affect such term, provision or condition except
to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.01 RIGHT OF REDEMPTION.
(a) The Securities may be redeemed at the option of the Company,
as a whole or from time to time in part, at any time on or after July 15, 2007,
subject to the conditions and at the Redemption Prices specified in the form of
Security attached hereto as Exhibit A, together with accrued interest to the
Redemption Date.
(b) If the Company becomes obligated to pay Additional Amounts as
a result of a change in the laws or regulations of Canada or any Canadian taxing
authority or a change in any official position regarding the application or
interpretation thereof, which is publicly announced or becomes effective on or
after the Closing Date, the Company may, at its option, redeem the Securities,
in whole but not in part, at a redemption price equal to 100% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the Redemption
Date.
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SECTION 11.02 APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company or otherwise,
as permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 11.03 ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities pursuant to
Section 11.01 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 11.04.
SECTION 11.04 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, on a pro rata basis or such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions of the principal of Securities; PROVIDED, HOWEVER, that no such
partial redemption shall reduce the portion of the principal amount of a
Security not redeemed to less than US$1,000.
The Trustee shall promptly notify the Company and the Registrar (if
other than the Company) in writing of the Securities selected for redemption
and, in the case of any Securities selected for partial redemption, the
principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
SECTION 11.05 NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided for in
Section 1.06 not less than 30 nor more than 60 days prior to the Redemption Date
(or, in the case of a redemption pursuant to Section 11.01 (c), not less than 15
nor more than 30 days prior to the Redemption Date), to each Holder of
Securities to be redeemed.
All notices of redemption shall state:
(i) the Redemption Date,
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(ii) the Redemption Price and the amount of accrued
interest to the Redemption Date payable as provided in Section 11.07, if any,
(iii) if less than all Outstanding Securities are to be
redeemed, the identification (and, in the case of a partial redemption, the
principal amounts) of the particular Securities to be redeemed,
(iv) in case any Security is to be redeemed in part only,
the notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the holder will receive,
without charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(v) that on the Redemption Date, the Redemption Price
(and accrued interest, if any, to the Redemption Date payable as provided in
Section 11.07) will become due and payable upon each such Security, or the
portion thereof, to be redeemed, and that interest thereon will cease to accrue
on and after said date,
(vi) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued interest, if any,
and
(vii) the CUSIP or CINS number, as the case may be.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.06 DEPOSIT OF REDEMPTION PRICE.
On or prior to 10:00 a.m. (New York City time) on any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent in immediately
available funds or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 10.03) an amount of money sufficient to
pay the Redemption Price of, and accrued interest on, all the Securities which
are to be redeemed on that date.
SECTION 11.07 SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued interest, if any, to
the Redemption Date), and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest, if any)
such Securities shall cease to bear interest. Upon surrender of any such
Security for redemption in accordance with said notice, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest, if
any, to the Redemption Date; PROVIDED, HOWEVER, that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the
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Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 3.09.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.
SECTION 11.08 SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be surrendered
at the office or agency of the Company maintained for such purpose pursuant to
Section 10.02 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE XII
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 12.01 COMPANY OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may, at its option by Board Resolution at any time, with
respect to the Securities, elect to have either Section 12.02 or Section 12.03
be applied to all Outstanding Securities upon compliance with the conditions set
forth below in this Article XII.
SECTION 12.02 DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 12.01 of the option
applicable to this Section 12.02, the Company, the Guarantors and all parties to
the Collateral Documents shall be deemed to have been discharged from their
obligations with respect to all Outstanding Securities, Guarantees and
Collateral Documents on the date the conditions set forth in Section 12.04 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities, which shall thereafter
be deemed to be "Outstanding" only for the purposes of Section 12.05 and the
other Sections of this Indenture referred to in (A) and (B) below, and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same), and that all
Collateral Documents will be
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deemed to have been released and discharged, except for the following which
shall survive until otherwise terminated or discharged hereunder: (A) the rights
of Holders of Outstanding Securities to receive payments in respect of the
principal of (premium, if any) and interest on such Securities when such
payments are due, (B) the Company's obligations with respect to such Securities
under Sections 3.04, 3.05, 3.08, 10.02 and 10.03, (C) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's
obligations under Section 6.06, (D) this Article XII and (E) the Company's
obligation to pay Additional Amounts under Section 10.23. Subject to compliance
with this Article XII, the Company may exercise its option under this Section
12.02 notwithstanding the prior exercise of its option under Section 12.03 with
respect to the Securities.
SECTION 12.03 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 12.01 of the option
applicable to this Section 12.03, each of the Company and the Restricted
Subsidiaries shall be released from its obligations under any covenant contained
in Section 8.01 and in Sections 10.04 through 10.26 (other than Section 10.08)
with respect to the Outstanding Securities on and after the date the conditions
set forth below are satisfied (hereinafter, "covenant defeasance"), and the
Securities shall thereafter be deemed 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
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Securities, the Company and any Restricted Subsidiary may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Sections 5.01(c), 5.01(d), 5.01(e) and 5.01(f) but, except as specified
above, the remainder of this Indenture and such Securities shall be unaffected
thereby.
SECTION 12.04 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either Section
12.02 or Section 12.03 to the Outstanding Securities:
(a) The Company shall irrevocably have deposited with the Trustee
(or another trustee satisfying the requirements of Section 6.07 who shall agree
to comply with the provisions of this Article XII applicable to it) as trust
funds in trust, for the benefit of the Holders of such Securities, (A) money in
an amount, or (B) U.S. Government Obligations (as defined herein) that through
the scheduled payment of principal and interest thereon will provide money in an
amount, or (C) a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay and discharge the
principal of (premium, if any) and interest on the Outstanding Securities on the
Stated Maturity (or upon Redemption Date, if applicable)
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of such principal (and premium, if any) or installment of interest; PROVIDED
that the Trustee shall have been irrevocably instructed to apply such money or
the proceeds of such U.S. Government Obligations to said payments with respect
to the Securities. Before such a deposit, the Company may give to the Trustee,
in accordance with Section 11.03 hereof, a notice of its election to redeem all
of the Outstanding Securities at a future date in accordance with Article XI
hereof, which notice shall be irrevocable. Such irrevocable redemption notice,
if given, shall be given effect in applying the foregoing. For this purpose,
"U.S. Government Obligations" means securities that are (x) direct obligations
of the United States for the timely payment of which its full faith and credit
is pledged or (y) obligations of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States the timely payment of which
is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian
with respect to any such U.S. Government Obligation or a specific payment of
principal of or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depository receipt, provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depository receipt.
(b) 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
paragraphs (i) and (j) of Section 5.01 hereof are concerned, at any time during
the period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period).
(c) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company or any Guarantor is
a party or by which the Company or any Guarantor is bound.
(d) In the case of an election under Section 12.02, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture, there has been a
change in the applicable United States federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the Holders
of the Outstanding Securities will not recognize income, gain or loss for United
States federal income tax purposes as a result of such defeasance and will be
subject to United States federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such defeasance had
not occurred.
(e) In the case of an election under Section 12.02, the Company
shall have delivered to the Trustee an Opinion of Counsel qualified to practice
in Canada or a
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ruling from Revenue Canada, Taxation to the effect that Holders of the
Securities who are not resident in Canada will not recognize income, gain or
loss for Canadian federal, provincial or territorial income tax or other tax
purposes as a result of such deposit and defeasance and will be subject to any
Canadian federal or provincial income tax and other tax on the same amounts in
the same manner and at the same times as would have been the case had such
deposit and defeasance not occurred.
(f) In the case of an election under Section 12.03, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Securities Outstanding will not recognize income, gain or loss
for federal income tax purposes as a result of such covenant defeasance and will
be subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such covenant defeasance had not
occurred.
(g) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 12.02 or
the covenant defeasance under Section 12.03, as the case may be, have been
complied with.
(h) The Company shall have delivered to the Trustee an Officer's
Certificate stating that the deposit pursuant to Section 12.04 was not made with
the intent of preferring the Holders over any other creditors of the Company or
the Guarantors or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company, the Guarantors, if any, or any
other Person.
SECTION 12.05 DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 10.03, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 12.05, the "Trustee") pursuant to Section 12.04 in respect of the
Outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to Section 12.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Securities.
Anything in this Article XII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any
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money or U.S. Government Obligations (or other property and any proceeds
therefrom) held by it as provided in Section 12.04 which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent defeasance or covenant defeasance, as applicable, in accordance with
this Article.
SECTION 12.06 REINSTATEMENT.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 12.05 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 12.02 or 12.03, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 12.05; PROVIDED, HOWEVER, that if the Company makes any payment of
principal of (premium, if any) or interest on any Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money held by
the Trustee or Paying Agent.
ARTICLE XIII
GUARANTEE
SECTION 13.01 APPLICATION OF ARTICLE XIII
The provisions of this guarantee shall apply to each Restricted
Subsidiary that is required to issue a Guarantee of the Securities after the
Closing Date pursuant to Section 10.21(b) or Section 10.22(b), and shall not
apply in any other circumstance. A Restricted Subsidiary that is required
pursuant to Section 10.21(b) or Section 10.22(b) to issue a Guarantee in form
and substance substantially similar to the guarantee set forth in this Article
XIII may elect to be bound by this guarantee in Article XIII and the
subordination provisions in Article XIV by executing a supplemental indenture.
SECTION 13.02 GUARANTEES.
(a) Each Guarantor hereby jointly and severally, fully,
absolutely, unconditionally and irrevocably guarantees to each Holder of a
Security authenticated and delivered by the Trustee, and to the Trustee in its
individual capacity and on behalf of each Holder, the punctual payment and
performance when due of all Indenture Obligations which, for purposes of its
Guarantee, shall also be deemed to include all commissions, fees, charges, costs
and other expenses (including reasonable legal fees and disbursements of
counsel) arising out of or incurred by the Trustee or the Holders in connection
with the enforcement of any Guarantee and agrees to indemnify and hold harmless
each Holder and the Trustee from all losses, damages, costs, expenses and
liabilities suffered or incurred by the Holders and the Trustee resulting or
arising from or
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relating to any failure by Company to unconditionally and irrevocably pay in
full or fully perform the Indenture Obligations as and when due provided that
the amount of such indemnification shall not exceed the amount of such Indenture
Obligations as described in the preceding sentence. Without limiting the
generality of the foregoing, each Guarantor's liability shall extend to all
amounts that constitute part of the Indenture Obligations and would be owed by
the Company to such Holder or the Trustee under the Securities or this Indenture
but for the fact that they are unenforceable, reduced, limited, suspended or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Company.
(b) Each Guarantor and by its acceptance hereof each Holder hereby
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act of any similar United States or
Canadian federal, provincial or state law or the provisions of its local law
relating to fraudulent transfer or conveyance. To effectuate the foregoing
intention, the Holders and each Guarantor hereby irrevocably agree that the
obligations of such Guarantor under its Guarantee shall be limited to the
maximum amount as shall, after giving effect to all other contingent and fixed
liabilities of such Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant to paragraph
(c) of this Section 13.01, result in the obligations of such Guarantor under its
Guarantee not constituting a fraudulent conveyance or fraudulent transfer under
federal or state law.
(c) In order to provide for just and equitable contribution among
the Guarantors, the Guarantors agree, INTER SE, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its
Guarantee, such Funding Guarantor shall be entitled to a contribution from each
other Guarantor (if any) in a pro rata amount based on the Adjusted Net Assets
of each Guarantor (including the Funding Guarantor) for all payments, damages
and expenses incurred by the Funding Guarantor in discharging the Indenture
Obligations of the Company or any other Guarantor's obligations with respect to
its Guarantee. "Adjusted Net Assets" of such Guarantor at any date shall mean
the lesser of (x) the amount by which the fair value of the property of such
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Guarantee of such Guarantor at such date and (y) the
amount by which the present fair salable value of the assets of such Guarantor
at such date exceeds the amount that shall be required to pay the probable
liability of such Guarantor on its debts (after giving effect to all other fixed
and contingent liabilities incurred or assumed on such date), excluding debt in
respect of the Guarantee, as they become absolute and matured.
SECTION 13.03 GUARANTY ABSOLUTE.
Each Guarantor guarantees that the Securities shall be paid or
performed strictly in accordance with the terms of the Securities and this
Indenture, regardless of
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any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of any Holder with respect thereto.
The obligations of each Guarantor under its Guarantee are independent of the
obligations of the Company under the Securities and this Indenture, and a
separate action or actions may be brought and prosecuted against such Guarantor
to enforce its Guarantee, irrespective of whether any action is brought against
the Company or any other Guarantor or whether the Company or any other Guarantor
is joined in any such action or actions. The liability of each Guarantor under
its Guarantee shall be absolute and unconditional and the liability and
obligations of such Guarantor hereunder shall not be released, discharged,
mitigated, waived, impaired or affected in whole or in part by:
(a) any lack of validity or enforceability of this Indenture or
the Securities with respect to the Company or any Guarantor or any agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Indenture Obligations, or any other
amendment or waiver of or any consent to departure from this Indenture,
including any increase in the Indenture Obligations resulting from the extension
of additional credit to the Company or otherwise;
(c) the failure to give notice to the Guarantor of the occurrence
of a Default under the provisions of this Indenture or the Securities;
(d) any taking, release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the Indenture Obligations;
(e) any failure, omission, delay by or inability on the part of
the Trustee or the Holders to assert or exercise any right, power or remedy
conferred on the Trustee or the Holders in this Indenture or the Securities;
(f) any change in the corporate structure, or termination,
dissolution, amalgamation, consolidation or merger of the Company or any
Guarantor with or into any other Person, the voluntary or involuntary
liquidation, dissolution, sale or other disposition of all or substantially all
the assets of the Company or any Guarantor, the marshalling of the assets and
liabilities of the Company or any Guarantor, the receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition with the creditors, or readjustment of, or other
similar proceedings affecting the Company or any Guarantor, or any of the assets
of any of them;
(g) the assignment of any right, title or interest of the Trustee
or any Holder in this Indenture or the Securities to any other Person; or
(h) any other event or circumstance (including any statute of
limitations), whether foreseen or unforeseen and whether similar or dissimilar
to any of the foregoing, that might otherwise constitute a defense available to,
or a discharge of,
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the Company or a Guarantor, other than payment in full of the Indenture
Obligations; it being the intent of each Guarantor that its obligations
hereunder shall not be discharged except by payment of all amounts owing
pursuant to this Indenture or the Securities.
The Guarantee of each Guarantor shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the Indenture
Obligations is rescinded or must otherwise be returned by any Holder or the
Trustee upon the insolvency, bankruptcy or reorganization of the Company or
otherwise, all as though such payment had not been made. Each Guarantor further
agrees, to the fullest extent that it may lawfully do so, that, as between such
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article V of this Indenture for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (ii) in the
event of any acceleration of such obligations as provided in Article V of this
Indenture, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantor for the purpose of this Guarantee.
SECTION 13.04 WAIVERS.
(a) Each Guarantor hereby expressly waives (to the extent
permitted by law) notice of the acceptance of its Guarantee and notice of the
existence, renewal, extension or the non-performance, non-payment, or
non-observance on the part of the Company of any of the terms, covenants,
conditions and provisions of this Indenture or the Securities or any other
notice whatsoever to or upon the Company or such Guarantor with respect to the
Indenture Obligations. Each Guarantor hereby acknowledges communication to it of
the terms of this Indenture and the Securities and all of the provisions herein
contained and consents to and approves the same. Each Guarantor hereby expressly
waives (to the extent permitted by law) diligence, presentment and protest.
(b) Without prejudice to any of the rights or recourse which the
Trustee or the Holders may have against the Company, each Guarantor hereby
expressly waives (to the extent permitted by law) any right to require the
Trustee or the Holders to:
(1) initiate or exhaust any rights, remedies or recourse
against the Company, any Guarantor or any other Person;
(2) value, realize upon, or dispose of any security of
the Company or any other Person held by the Trustee or the Holders; or
(3) initiate or exhaust any other remedy which the
Trustee or the Holders may have in law or equity;
before requiring, becoming entitled to or demanding payment from such Guarantor
under this Guarantee.
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SECTION 13.05 SUBROGATION.
Each Guarantor shall not exercise any rights that it may acquire by way
of subrogation under this Guarantee, by any payment made hereunder or otherwise,
until all the Indenture Obligations shall have been paid in full. If any amount
shall be paid to any Guarantor on account of any such subrogation rights at any
time when all the Indenture Obligations shall not have been paid in full, such
amount shall be held in trust for the benefit of the Holders and the Trustees
and shall forthwith be paid to the Trustee, on behalf of the Holders, to be
credited and applied to the Indenture Obligations, whether matured or unmatured.
SECTION 13.06 NO WAIVER; REMEDIES.
No failure on the part of any Holder or the Trustee to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 13.07 CONTINUING GUARANTY; NO RIGHT OF SET-OFF; INDEPENDENT
OBLIGATION.
(a) This Guarantee is a continuing guarantee of the payment and
performance of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and all
other amounts payable under this Guarantee and shall apply to and secure any
ultimate balance due or remaining unpaid to the Trustee or the Holders under
this Indenture or the Securities; and this Guarantee shall not be considered as
wholly or partially satisfied by the payment or liquidation at any time or from
time to time of any sum of money for the time being due or remaining unpaid to
the Trustee or the Holders.
(b) Each Guarantor hereby guarantees that the Indenture
Obligations shall be paid to the Trustee without set-off or counterclaim or
other reduction whatsoever (whether for taxes, withholding or otherwise) in
lawful currency of the United States.
(c) Each Guarantor guarantees that the Indenture Obligations shall
be paid strictly in accordance with their terms regardless of any lack of
validity or enforceability of any of such terms or the rights of the Holders
with respect thereto.
(d) Each Guarantor's liability to pay or perform or cause the
performance of the Indenture Obligations under this Guarantee shall arise
forthwith after demand for payment or performance by the Trustee has been given
to such Guarantor in the manner prescribed in this Indenture.
SECTION 13.08 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) Nothing contained in this Indenture or in any of the
Securities shall prevent any amalgamation, consolidation or merger of a
Guarantor with or into the
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Company or another Guarantor or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor, which amalgamation, consolidation, merger, sale or
conveyance is otherwise in accordance with the terms of this Indenture.
(b) Other than as set forth in paragraph (a) of this Section, no
Guarantor may amalgamate, consolidate with or merge with or into (whether or not
such Guarantor is the surviving Person) another Person or convey, sell, assign,
transfer, lease or otherwise dispose of its properties or assets substantially
as an entirety to any other Person whether or not affiliated with such Guarantor
unless: (i) subject to the provisions of Section 13.09, the Person formed by or
surviving such consolidation or merger (if other than such Guarantor) or to
which such properties and assets are transferred assumes all of the obligations
of such Guarantor under this Indenture and its Guarantee, pursuant to a
supplemental indenture in form and substance satisfactory to the Trustee and is
a corporation, partnership, limited liability company or trust duly organized
and validly existing under the laws of Canada or any province thereof or the
United States, any state thereof, or the District of Columbia, (b) immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing and (c) immediately after giving effect to such
transaction, the Person formed by or surviving such amalgamation, consolidation
or merger (if other than such Guarantor) or to which such properties and assets
are transferred could incur at least US$1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to the first paragraph of Section 10.10.
SECTION 13.09 RELEASES.
(a) In the event of (i) a conveyance, sale, assignment, transfer
or other disposition of all of the Capital Stock of a Guarantor to any Person
(by way of amalgamation, merger, consolidation or otherwise) or all or
substantially all of the assets of a Subsidiary Guarantor to any Person (by way
of amalgamation, merger, consolidation or otherwise), (ii) the designation of
such Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the
terms of this Indenture, (iii) the release or discharge of the guarantee that
resulted in the creation of the Guarantee pursuant to Section 10.20, except a
discharge or release by or as a result of payment under such guarantee, or (iv)
a release and discharge of the Guarantor's Guarantee pursuant to Section 4.03,
then such Guarantor (or Person acquiring such assets in the event of a sale or
other disposition of all of the assets of such Guarantor) shall be deemed
automatically and unconditionally released from and discharged from all of its
obligations under this Article XIII and its Guarantee without any further action
required on the part of the Trustee or any Holder; PROVIDED that, in the event
such transaction constitutes an Asset Sale, the Net Cash Proceeds of such
conveyance, sale, assignment, transfer or other disposition are applied in
accordance with Section 10.13 hereof.
(b) Any Guarantor that is designated by the Board of Directors of
the Company as an Unrestricted Subsidiary, or ceases to be a Subsidiary of the
Company in accordance with the terms of this Indenture may, at such time, at the
option of the Board of Directors, be released and relieved of its obligations
under its Guarantee.
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(c) Concurrently with the defeasance of the Securities under
Section 12.02 hereof, the covenant defeasance of the Securities under Section
12.03 hereof, or the release and discharge of this Indenture under Article IV
hereof, the Guarantors shall be released from all their obligations under their
Guarantees under this Article XIII.
(d) The Trustee shall deliver an appropriate instrument evidencing
such release upon receipt of a Company Request accompanied by an Officers'
Certificate certifying as to the compliance with this Section 13.09. Any
Guarantor not so released shall remain liable for the full amount of principal
of and interest on the Securities as provided in its Guarantee.
SECTION 13.10 SEVERABILITY.
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
ARTICLE XIV
SUBORDINATION OF SECURITIES AND GUARANTEES
SECTION 14.01 SECURITIES AND GUARANTEES SUBORDINATE TO SENIOR
INDEBTEDNESS.
(a) The Company covenants and agrees, and each Holder of a
Security, by his acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article XIV, the
indebtedness represented by the Securities and the payment of the principal of
(premium, if any) and interest on each and all of the Securities (but not
amounts owing to the Trustee by the Company pursuant to Section 6.06 hereof) are
hereby expressly made subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness.
(b) The Company further covenants and agrees that it will cause
each Guarantor (if any), upon such Guarantor's issuance of a Guarantee, to
covenant and agree, and each Holder of a Security, by his acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth in this Article XIV, the indebtedness represented by the Guarantee of
such Guarantor is expressly made subordinate and subject in right of payment to
the prior payment in full of all Guarantor Senior Indebtedness of such
Guarantor.
SECTION 14.02 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
In the event of any payment or distribution of assets of the Company or
any Guarantor to creditors upon any liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors, marshaling of assets or
any bankruptcy, insolvency or similar proceedings, whether voluntary or not
(except in connection with a consolidation or merger or liquidation or
dissolution following the conveyance, transfer
104
or lease of the assets and properties of the Company substantially as an
entirety upon the terms and conditions described under Section 8.01) (each such
event, if any, is herein sometimes referred to as a "Proceeding"), of the
Company or any Guarantor (the Company or such Guarantor being the "Affected
Obligor"), then (i) if the Affected Obligor is the Company, the holders of
Senior Indebtedness shall first be entitled to receive payment in full, in cash
or Cash Equivalents, of all amounts due or to become due on or in respect of
such Senior Indebtedness (including interest accruing after the commencement of
any such Proceeding at the rate specified therein whether or not such interest
is an allowed claim in such proceeding) before the Holders of the Securities are
entitled to receive any payment of principal of (premium, if any) and interest
on the Securities or on account of the purchase or redemption or other
acquisition of Securities by the Company or any Subsidiary of the Company and
(ii) if the Affected Obligor is a Guarantor, the holders of Guarantor Senior
Indebtedness of such Guarantor shall first be entitled to receive payment in
full, in cash or Cash Equivalents, of all amounts due or to become due on or in
respect of such Guarantor Senior Indebtedness (including interest accruing after
the commencement of any such Proceeding at the rate specified therein whether or
not such interest in an allowed claim in such proceeding) before the Holders of
the Securities are entitled to receive any payment or distribution of any kind
with respect to the Guarantee of such Guarantor (any payment on or purchase,
redemption or acquisition of the Securities, referred to in clause (i), and any
payment on a Guarantee, referred to in clause (ii), being, individually and
collectively, a "Securities Payment"), and, to that end, if the Affected Obligor
is the Company, the holders of Senior Indebtedness and, if the Affected Obligor
is a Guarantor, the holders of Guarantor Senior Indebtedness of such Guarantor
(such Senior Indebtedness or Guarantor Senior Indebtedness, as the case may be,
being "Affected Obligor Senior Indebtedness" of such Affected Obligor) shall be
entitled to receive, for application to the payment thereof, any payment or
distribution of any kind or character, whether in cash, property or securities
which may be payable or deliverable in respect of the Securities in any such
Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section 14.02, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of an Affected Obligor of any kind or
character, whether in cash, property or securities, before all Affected Obligor
Senior Indebtedness is paid in full, and if such fact shall, at or prior to the
time of such payment, have been known to the Trustee or the Holder, as the case
may be, then such payment or distribution, except for amounts subject to the
claim granted to the Trustee in Section 6.06 hereof, shall be held in trust for
the holders of Affected Obligor Senior Indebtedness and shall be paid over or
delivered forthwith to the trustee in bankruptcy or other Person making payment
or distribution of assets of the Affected Obligor for application to the payment
of all Affected Obligor Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Affected Obligor Senior Indebtedness in full, after giving
effect to any concurrent payment or distribution to or for the holders of the
Affected Obligor Senior Indebtedness.
For purposes of this Article XIV only, the words "any payment or
distribution of any kind or character, cash, property or securities" shall not
be deemed to include a payment or distribution of equity or subordinated
securities of the Affected
105
Obligor provided for by a plan of reorganization or readjustment that, in the
case of subordinated securities, are subordinated in right of payment to all
then outstanding Affected Obligor Senior Indebtedness to at least the same
extent as the Securities or Guarantees, as the case may be, are so subordinated
as provided in this Article XIV.
SECTION 14.03 NO PAYMENT WHEN CERTAIN SENIOR INDEBTEDNESS IN
DEFAULT.
In the event that any Senior Payment Default (as defined below) shall
have occurred and be continuing, then no Securities Payment shall be made unless
and until such Senior Payment Default shall have been cured or waived or shall
have ceased to exist or all amounts then due and payable in respect of the
Designated Senior Indebtedness or other obligations that are the subject of such
Senior Payment Default shall have been paid in full. For purposes hereof,
"Senior Payment Default" means any default in the payment of principal of
(premium, if any) or interest on, Designated Senior Indebtedness or a default in
the payment of any other obligation under the Designated Senior Indebtedness,
when due, whether at the Stated Maturity of any such payment or by declaration
of acceleration, call for redemption or otherwise.
In the event that any Senior Nonmonetary Default (as defined below)
shall have occurred and be continuing, then, upon the receipt by the Company and
the Trustee of written notice of such Senior Nonmonetary Default from the Senior
Credit Facilities Agent or from an authorized representative on behalf of any
holder of Designated Senior Indebtedness, no Securities Payment shall be made
during the period (the "Payment Blockage Period") commencing on the date of
receipt of such written notice (the "Blockage Notice") and ending on the
earliest of (i) the 179th day after the date of such receipt of the Blockage
Notice (the "Initial Period") unless a Senior Payment Default has occurred and
is continuing at the end of such 179-day period, (ii) the date, if any, on which
the Designated Senior Indebtedness to which such default relates is discharged
or such default is waived or otherwise cured and (iii) the date, if any, on
which such Payment Blockage Period shall have been terminated by written notice
to the Company or the Trustee from the Senior Credit Facilities Agent or from
the Person who gave the Blockage Notice. In any event, not more than one Payment
Blockage Period may be commenced during any period of 360 consecutive days, and
there must be a period of at least 181 consecutive days in each period of 360
consecutive days when no Payment Blockage Period is in effect. No Senior
Nonmonetary Default that existed or was continuing on the date of commencement
of any Payment Blockage Period with respect to the Designated Senior
Indebtedness initiating such Payment Blockage Period shall be, or can be, made
the basis for the commencement of a subsequent Payment Blockage Period unless
such Senior Nonmonetary Default shall have been cured or waived for a period of
not less than 90 consecutive days. For purposes hereof, "Senior Nonmonetary
Default" means the occurrence or existence of any event, circumstance, condition
or state of facts that, by the terms of any instrument pursuant to which any
Designated Senior Indebtedness is outstanding, permits one or more holders of
such Designated Senior Indebtedness (or a trustee or agent on behalf of the
holders thereof) to declare such Designated Senior Indebtedness due and payable
prior to the date on which it would
106
otherwise become due and payable, other than a Senior Payment Default.
Notwithstanding the foregoing, the Company and the Guarantors may make
Securities Payments without regard to the foregoing if the Company and the
Trustee receive written notice approving such payment from the Senior Credit
Facility Agent or an authorized representative on behalf of any representative
of each holder of Designated Senior Indebtedness affected by such Senior Payment
Default or Senior Nonmonetary Default.
In the event that, notwithstanding the foregoing, the Company or any
Guarantor shall make any payment to the Trustee or any Holder prohibited by the
foregoing provisions of this Section 14.03, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or the Holder
as the case may be, then such payment shall be held in trust for the holders of
the Affected Obligor Senior Indebtedness and shall be paid over and delivered
forthwith to the holders of the Affected Obligor Senior Indebtedness remaining
unpaid, to the extent necessary to pay in full all the Affected Obligor Senior
Indebtedness.
SECTION 14.04 PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article XIV or elsewhere in this Indenture or
in any of the Securities shall, at any time except during the pendency of any
Proceeding referred to in Section 14.02 or under the conditions described in
Section 14.03, prevent (a) the Company or any Guarantor from making Securities
Payments, or (b) the application by the Trustee of any money deposited with it
hereunder to Securities Payments or the retention of such payment by the
Holders.
SECTION 14.05 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR
INDEBTEDNESS.
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Securities shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of
(premium, if any) and interest on the Securities shall be paid in full. Subject
to the payment in full of all Guarantor Senior Indebtedness, the Holders of the
Securities shall be subrogated to the rights of the holders of such Guarantor
Senior Indebtedness to receive payments and distributions of cash, property and
securities applicable to such Guarantor Senior Indebtedness until the principal
of (premium, if any) and interest on the Securities shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holders of the
Senior Indebtedness or Guarantor Senior Indebtedness of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article XIV, and no payments over
pursuant to the provisions of this Article XIV to the holders of Senior
Indebtedness or Guarantor Senior Indebtedness by Holders of the Securities or
the Trustee, shall, as among the Company, the Guarantors, their respective
creditors (other than holders of Senior Indebtedness and the Guarantor Senior
Indebtedness and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness).
Neither the Holders of the Securities nor the Trustee shall have any claim
against the holders of the Senior Indebtedness or the
107
Guarantor Senior Indebtedness or the Senior Credit Facilities Agent for any
impairment of the subrogation rights herein granted arising out of any release
of Liens securing the Senior Indebtedness or the Guarantor Senior Indebtedness.
SECTION 14.06 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article XIV are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Indebtedness and Guarantor Senior Indebtedness on the other
hand. Nothing contained in this Article XIV or elsewhere in this Indenture or in
the Securities is intended to or shall (a) impair, as among the Company, its
creditors (other than holders of Senior Indebtedness) and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional
(and which, subject to the rights under this Article XIV of the holders of
Senior Indebtedness, is intended to rank equally with all other general
obligations of the Company) to pay to the Holders of the Securities the
principal of (premium, if any) and interest on the Securities as and when the
same shall become due and payable in accordance with their terms; or (b) impair,
as among the Guarantors, their creditors (other than holders of Guarantor Senior
Indebtedness) and the Holders of the Securities, the obligation of the
Guarantors, which is absolute and unconditional (and which, subject to the
rights under this Article XIV of the holders of Guarantor Senior Indebtedness,
is intended to rank equally with all other general obligations of the
Guarantors) to pay to the Holders of the Securities the principal of (premium,
if any) and interest on the Securities as and when the same shall become due and
payable in accordance with their terms; or (c) affect the relative rights
against the Company of the Holders of the Securities and creditors of the
Company (other than the holders of Senior Indebtedness) or the relative rights
against the Guarantors of the Holders of the Securities and creditors of the
Guarantors (other than the Holders of Guarantor Senior Indebtedness); or (d)
prevent the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article XIV of the holders of Senior
Indebtedness and Guarantor Senior Indebtedness to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder. The
holders of the Senior Indebtedness and the Senior Credit Facilities Agent, as
the case may be, shall be entitled to enforce the provisions of this Article XIV
against the Company, the Guarantors, the Holders of the Securities and the
Trustee.
SECTION 14.07 TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article XIV and
appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 14.08 NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Indebtedness or
Guarantor Senior Indebtedness to enforce subordination as herein provided shall
at any
108
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Company or any Guarantor or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by the Company or any
Guarantor with the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness or Guarantor Senior Indebtedness, as the case
may be, may, at any time and from time to time, without the consent of or notice
to the Trustee or the Holders of the Securities, without incurring
responsibility to the Trustee or the Holders of the Securities and without
impairing or releasing the subordination provided in this Article XIV or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness or Guarantor Senior Indebtedness, as the case may be, do any one or
more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Indebtedness or
Guarantor Senior Indebtedness, as the case may be, or otherwise amend or
supplement in any manner Senior Indebtedness or Guarantor Senior Indebtedness,
as the case may be, or any instrument evidencing the same or any agreement under
which Senior Indebtedness or Guarantor Senior Indebtedness, as the case may be,
is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness or any Guarantor
Senior Indebtedness, as the case may be; (iii) release any Person liable in any
manner for the collection of Senior Indebtedness or any Guarantor Senior
Indebtedness, as the case may be; and (iv) exercise or refrain from exercising
any rights against the Company or any Guarantor and any other Person.
SECTION 14.09 NOTICE TO TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.
The Company and each Guarantor shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit the making of any
payment to or by the Trustee in respect of the Securities and of any subsequent
cure or waiver thereof. Notwithstanding the provisions of this Article XIV or
any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Securities, unless and until the
Trustee shall have received written notice thereof from the Company or a holder
of Senior Indebtedness or a holder of Guarantor Senior Indebtedness or from any
trustee or agent therefor; and, prior to the receipt of any such written notice,
the Trustee, shall be entitled in all respects to assume that no such facts
exist, PROVIDED, HOWEVER, that if the Trustee shall not have received the notice
provided for in this Section at least two Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (premium, if
any) or interest on any Security), then, anything herein contained in this
Section 14.09 to the contrary notwithstanding but subject always to Section
14.03, the Trustee shall have full power and authority to receive such money and
to apply the same to the purpose for which such money was received and shall not
be affected by any notice to the contrary which may be received by it within two
Business Days prior to such date.
109
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 Senior
Indebtedness or a holder of Guarantor Senior Indebtedness (or a trustee or agent
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness or a holder of Guarantor Senior Indebtedness (or a trustee or agent
therefor). 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
Senior Indebtedness or a holder of Guarantor Senior Indebtedness, as the case
may be, to participate in any payment or distribution pursuant to this Article
XIV, the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness or Guarantor
Senior Indebtedness, as the case may be, 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 XIV,
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 payment.
The Company will promptly notify each holder of Senior Indebtedness if
payment of the Securities is accelerated pursuant to Section 5.02 as a result of
an Event of Default.
SECTION 14.10 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF
LIQUIDATION AGENT.
Upon any payment or distribution of assets of the Company or any
Guarantor referred to in this Article XIV, the Trustee and the Holders of the
Securities shall be entitled to rely upon any order or decree entered by any
court of competent jurisdiction in a Proceeding, or a certificate of the trustee
in bankruptcy, receiver, liquidating trustee, custodian, assignee for the
benefit of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness, Guarantor Senior
Indebtedness and other indebtedness of the Company and the Guarantors, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article XIV.
SECTION 14.11 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness or Guarantor Senior Indebtedness and shall not be
liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Indebtedness or
Guarantor Senior Indebtedness shall be entitled by virtue of this Article XIV or
otherwise.
110
SECTION 14.12 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS;
PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XIV with respect to any Senior Indebtedness or
Guarantor Senior Indebtedness which may at any time be held by it, to the same
extent as any other holder of Senior Indebtedness or Guarantor Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article XIV shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.06.
SECTION 14.13 APPLICABILITY TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article XIV shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article XIV in addition to or in place of the Trustee; provided,
however, that this Section 14.13 shall not apply to the Company or any Affiliate
of the Company if it or such Affiliate acts as Paying Agent.
SECTION 14.14 DEFEASANCE OF THIS ARTICLE XIV.
The subordination of the Securities and the Guarantees provided by this
Article XIV is expressly made subject to the provisions for defeasance or
covenant defeasance in Article XII hereof and, anything herein to the contrary
notwithstanding, upon the effectiveness of any such defeasance or covenant
defeasance, the Securities and the Guarantees then outstanding shall thereupon
cease to be subordinated pursuant to this Article XIV.
SECTION 14.15 SUBORDINATION PROVISIONS CONTROLLING.
Notwithstanding anything to the contrary contained in this Indenture,
to the extent that any provision contained in Articles I (other than Sections
1.01 and 1.07) through XIII of this Indenture conflicts with any provision
contained in Article XIV (including the definitions of certain terms used in
Article XIV) of this Indenture, the provisions contained in Article XIV of this
Indenture shall govern and control.
SECTION 14.16 SUBORDINATION OF COLLATERAL DOCUMENTS
The Trustee is hereby authorized and directed to enter into the
Collateral Documents Subordination Agreement and the Collateral Documents to
which it is stated to be a party.
* * *
111
This Indenture may be signed in any number of counterparts each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
112
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
BAYTEX ENERGY LTD
By: /s/ Raymond T. Chan
-----------------------------------
Name: Raymond T. Chan
Title: Senior Vice President
and Chief Financial Officer
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK, as Trustee
By: /s/ Warren A. Goshine
-----------------------------------
Name: Warren A. Goshine
Title: Vice President
EXHIBIT A
---------
[FACE OF SECURITY]
BAYTEX ENERGY LTD.
95/8 % [Series B]* * Senior Subordinated Note due 2010
CUSIP ______________
No. _______ US$_________________
Baytex Energy Ltd., a corporation formed under the laws of the Province
of Alberta, Canada (the "Company", which term includes any successor under the
Indenture hereinafter referred to), for value received, promises to pay to
___________, or its registered assigns, the principal sum of
____________________________________ (US$___________), on ____________, 2010.
[Initial Interest Rate: 95/8% per annum.]*
[Interest Rate: 95/8% per annum.]**
Interest Payment Dates: January 15 and July 15 of each year
commencing January 15, 2004
Regular Record Dates: January 1 and July 1 of each year.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
- ----------------
* Include only for Initial Securities.
** Include only for Exchange Securities.
A-1
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
Date: BAYTEX ENERGY LTD.
--------------------
By:
---------------------------------
Name:
Title:
A-2
(Form of Trustee's Certificate of Authentication)
This is one of the 95/8% [Series B] ** Senior Subordinated Notes due
2010 described in the within-mentioned Indenture.
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK, as Trustee
By:
---------------------------
Authorized Signatory
- ----------------------
* Include only for Initial Securities.
** Include only for Exchange Securities.
A-3
[REVERSE SIDE OF SECURITY]
BAYTEX ENERGY LTD.
9 5/8% Senior Subordinated Note due 2010
1. PRINCIPAL AND INTEREST.
The Company will pay the principal of this Security on July 15, 2010.
The Company promises to pay interest on the principal amount of this
Security on each Interest Payment Date, as set forth below, at the rate of
[95/8% per annum (subject to adjustment as provided below)]* [95/8% per annum,
except that interest accrued on this Security pursuant to the penultimate
paragraph of this Section 1 for periods prior to the applicable Exchange Date
(as such term is defined in the Registration Rights Agreement referred to below)
will accrue at the rate or rates borne by the Securities from time to time
during such periods].**
Interest will be payable semiannually (to the holders of record of the
Securities (or any predecessor Securities) at the close of business on the
January 15 or July 15 immediately preceding the Interest Payment Date) on each
Interest Payment Date, commencing .
[The Holder of this Security is entitled to the benefits of the
Registration Rights Agreement, dated July 9, 2003, among the Company and the
Dealer Managers named therein (the "Registration Rights Agreement"). In the
event that either (a) the Canadian Preliminary Prospectus (as such term is
defined in the Registration Rights Agreement) has not been filed with the
Canadian Securities Commissions (as such term is defined in the Registration
Rights Agreement) in each of the Relevant Provinces (as such term is defined in
the Registration Rights Agreement) and a receipt has not been received from the
Canadian Securities Commission in each of the Relevant Provinces in respect of
the Canadian Preliminary Prospectus on or prior to the 90th calendar day
following the Settlement Date (as such term is defined in the Registration
Rights Agreement, (b) if the Company is not entitled to use a registration
statement on a MJDS Form (as such term is defined in the Registration Rights
Agreement) to effect the Registered Exchange Offer (as such term is defined in
the Registration Rights Agreement), the Exchange Offer Registration Statement
(as such term is defined in the Registration Rights Agreement) has not been
filed with the Commission on or prior to the 90th day following the Settlement
Date, (c) the Exchange Offer Registration Statement has not been declared
effective by the Commission on or prior to the 180th calendar day following the
date of original issue of the Securities, (d) the Canadian Final Prospectus (as
such term is defined in the Registration Rights Agreement) has not been filed
with the Canadian Securities
- ----------------------
* Include only for Initial Securities.
** Include only for Exchange Securities.
A-4
Commissions in each of the Relevant Provinces and a receipt has not been
received from the Canadian Securities Commissions in each of the Relevant
Provinces in respect of the Canadian Final Prospectus on or prior to the 180th
calendar day following the Settlement Date, (e) the Registered Exchange Offer in
the United States is not consummated or a Shelf Registration Statement (as such
term is defined in the Registration Rights Agreement) is not declared effective
on or prior to the 210th calendar day following the Settlement Date, (f) in
connection with the Registered Exchange Offer in the Relevant Provinces, the
Exchange Offer is not consummated on or prior to the 60th day after the date on
which the last of the receipts for the Canadian Final Prospectus by the Canadian
Securities Commissions in the Relevant Provinces, (g) any Exchange Registration
Statement or Shelf Registration Statement required by the Registration Rights
Agreement is declared effective but shall thereafter cease to be effective or
usable in connection with the Registered Exchange Offer or resales of the
Securities during a period in which it is required to be effective hereunder
without being succeeded immediately by an additional Registration Statement or
post-effective amendment covering the Securities, which has been filed and
declared effective, or (h) receipts are received from the Canadian Securities
Commissions in respect of the Canadian Final Prospectus but the Canadian Final
Prospectus shall cease to be operative without being succeeded immediately by
any additional amended Canadian Final Prospectus qualifying the Registered
Exchange Offer for which receipts have been issued by the Canadian Securities
Commissions in the Relevant Provinces (each such event referred to in clauses
(a) through (h), a "Registration Default"), the interest rate borne by this
Security shall be increased by 0.25% per annum during the 90-day period
immediately following such first occurrence of a Registration Default and while
any such Registration Default has occurred and is continuing, and shall increase
by 0.25% per annum at the end of each subsequent 90-day period up to a maximum
of 1.50% per annum with respect to all Registration Defaults, until the date on
which each such Registration Default has been cured, on which date the interest
rate on this Security will revert to the interest rate originally borne by such
Security, PROVIDED HOWEVER, that it after such reduction in interest rate, a
different event specified in clause (a) through (h) occurs, the interest rate
will be increased pursuant to the foregoing provisions; PROVIDED, that if the
Company is unable to complete the Registered Exchange Offer in any Relevant
Province, it will still be obligated to complete the Registered Exchange Offer
in the other Relevant Provinces and pay additional interest on this Security in
such Relevant Province with respect to such Registration Default until such time
as the Company shall complete the Registered Exchange Offer in such Relevant
Province.]*
Interest on this Security will accrue from the most recent date to
which interest has been paid [on this Security or the Security surrendered in
exchange herefor]** or, if no interest has been paid, from __________, ____;
PROVIDED THAT, if there is no existing default in the payment of interest and if
this Security is authenticated between a Regular Record Date referred to on the
face hereof and the next succeeding Interest Payment
- ----------------------
* Include only for Initial Securities.
** Include only for Exchange Securities.
A-5
Date, interest shall accrue from such Interest Payment Date. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. For the
purposes of disclosure under the INTEREST ACT (Canada), the yearly rate of
interest to which interest calculated under a Security for any period in any
calendar year (the "calculation period") is equivalent, is the rate payable
under a Security in respect of the calculation period multiplied by a fraction
the numerator of which is the actual number of days in such calendar year and
the denominator of which is the actual number of days in the calculation period.
The Company shall pay interest on overdue principal (premium, if any)
and interest on overdue installments of interest, to the extent lawful, at a
rate per annum equal to the rate of interest applicable to the Securities.
2. METHOD OF PAYMENT.
The Company will pay interest (except defaulted interest) on the
principal amount of the Securities on each January 15 and July 15 to the persons
who are Holders (as reflected in the Security Register at the close of business
on the January 1 and July 1 immediately preceding the Interest Payment Date), in
each case, even if the Security is cancelled on registration of transfer or
registration of exchange after such record date; PROVIDED THAT, with respect to
the payment of principal, the Company will make payment to the Holder that
surrenders this Security to any Paying Agent on or after July 15, 2010.
The Company will pay principal (premium, if any) and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. [Payment of the principal of (premium, if any) and
interest on the Securities will be made at the office or agency of the Company
maintained for that purpose in The City of New York (which shall be the
Corporate Finance Department of the Trustee, unless the Company shall designate
and maintain some other office or agency for such purpose), or at such other
office or agency of the Company as may be maintained for such purpose, in lawful
money of the United States of America, or payment of interest may be made 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; PROVIDED,
HOWEVER, that all payments to Holders who have given wire transfer instructions
to the Company will be made by wire transfer of immediately available funds to
the accounts specified by such Holder.]*** [All payments will be made by wire
transfer of immediately available funds to the accounts specified by the
Holder.]** If a payment date is a date other than a Business Day at a place of
payment, payment may be made at that place on the next succeeding day that is a
Business Day and no interest shall accrue for the intervening period.
3. PAYING AGENT AND REGISTRAR.
- ----------------------
* Include only for Initial Securities.
** Include only for Exchange Securities.
A-6
Initially, the Trustee will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar upon written notice thereto.
The Company, any Subsidiary or any Affiliate of any of them may act as Paying
Agent, Registrar or co-registrar.
4. SUBORDINATION.
This Security and the Guarantees, if any, are subordinated in right of
payment, as set forth in the Indenture, to the prior payment in full of all
existing and future Senior Indebtedness and Guarantor Senior Indebtedness. Each
of the Company and the Guarantors agrees, and each Holder by accepting this
Security agrees, to the subordination provisions set forth in the Indenture,
authorizes the Trustee to give them effect and appoints the Trustee as
attorney-in-fact for such purposes.
5. INDENTURE; LIMITATIONS.
The Company issued the Securities under an Indenture dated as of [July
9, 2003] (the "Indenture"), among the Company, and The Bank of Nova Scotia Trust
Company of New York, as trustee (the "Trustee"). Capitalized terms herein are
used as defined in the Indenture unless otherwise indicated. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act. The Securities are subject to
all such terms, and Holders are referred to the Indenture and the Trust
Indenture Act for a statement of all such terms. To the extent permitted by
applicable law, in the event of any inconsistency between the terms of this
Security and the terms of the Indenture, the terms of the Indenture shall
control.
The Securities are general unsecured obligations of the Company.
6. REDEMPTION.
OPTIONAL REDEMPTION. (a) The Securities may be redeemed at the option
of the Company, in whole or in part, at any time and from time to time on or
after July 15, 2007, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest, if any, to
the Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest Payment Date that is
on or prior to the Redemption Date), if redeemed during the 12-month period
beginning July 15, of each of the years set forth below:
A-7
REDEMPTION
YEAR PRICE
---- ----------
2007................................ 104.813%
2008................................ 102.406%
2009 and thereafter................. 100.000%
(b) If the Company becomes obligated to pay Additional Amounts as
a result of a change in the laws or regulations of Canada or any Canadian taxing
authority, or a change in any official position regarding the application or
interpretation thereof, which is publicly announced or becomes effective on or
after the Closing Date, the Company may, at its option, redeem the Securities,
in whole but not in part, at a redemption price equal to 100% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the Redemption
Date.
(c) Notice of a redemption will be mailed at least 30 days but not
more than 60 days before the Redemption Date (or, in the case of a redemption
pursuant to paragraph (c), not less than 15 but not more than 30 days prior to
the Redemption Date) to each Holder of Securities to be redeemed at such
Holder's last address as it appears in the Security Register. Securities in
original denominations larger than US$1,000 may be redeemed in part in integral
multiples of US$1,000. On and after the Redemption Date, interest ceases to
accrue on Securities or portions of Securities called for redemption, unless the
Company defaults in the payment of the Redemption Price.
7. REPURCHASE UPON A CHANGE IN CONTROL AND ASSET SALES.
(a) Upon the occurrence of a Change of Control, the Company shall
so notify the Trustee and give written notice to the Holders within 30 days,
unless the Change of Control occurred in connection with the Company's
Reorganization. The Company is then obligated, unless the Change of Control
occurred in connection with the Company's Reorganization, to make an offer to
purchase all outstanding Securities at a redemption price of 101% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the date
of purchase and such date shall be not less than 30 days, nor later than 60 days
from the date the Company has mailed notice of the Change of Control to each
holder or such later date as may be required to comply with requirements under
the Exchange Act.
(b) Upon Asset Sales, the Company may be obligated to make offers
to purchase Securities with a portion of the Net Cash Proceeds of such Asset
Sales not otherwise applied within 365 days after the Closing of such Asset Sale
(i) to permanent reduction of amounts outstanding under the Senior Credit
Facilities or repayment of other Senior Indebtedness or (ii) invested in
properties or assets used by the Company or its Restricted
A-8
Subsidiaries in the Oil and Gas Business at a redemption price of 100% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase.
8. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form without coupons, in denominations
of US$1,000 and multiples of US$1,000 in excess thereof. A Holder may register
the transfer or exchange of Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
or exchange of any Securities selected for redemption (except the unredeemed
portion of any Security being redeemed in part). Also, it need not register the
transfer or exchange of any Securities for a period of 15 days before a
selection of Securities to be redeemed is made.
9. PERSONS DEEMED OWNERS.
A Holder may be treated as the owner of a Security for all purposes.
10. UNCLAIMED MONEY.
If money for the payment of principal (premium, if any) or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its request. After that, Holders entitled to the
money must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
11. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
If the Company irrevocably deposits, or causes to be deposited, with
the Trustee money or U.S. Government Obligations sufficient to pay the then
outstanding principal of (premium, if any) and accrued interest on the
Securities to redemption or maturity, the Company will be discharged from the
Indenture and the Securities, except in certain circumstances for certain
sections thereof.
12. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount of the Securities then Outstanding, and any
existing default or compliance with any provision may be waived with the consent
of the Holders of a majority in aggregate principal amount of the Securities
then Outstanding. Without notice to or the consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Securities to, among other
things, cure any ambiguity, defect or inconsistency and make any change that
does not adversely affect the rights of any Holder.
A-9
13. RESTRICTIVE COVENANTS.
The Indenture contains certain covenants, including, without
limitation, covenants with respect to the following matters: (i) Indebtedness;
(ii) Restricted Payments; (iii) certain Asset Sales; (iv) transactions with
Affiliates; (v) dividends and other payment restrictions affecting Restricted
Subsidiaries; (vi) issuances and sale of Capital Stock of Restricted
Subsidiaries; (vii) designation of Unrestricted Subsidiaries; (viii) Liens; and
(ix) merger and certain transfers of assets. Within 120 days after the end of
each fiscal year, the Company must report to the Trustee on compliance with such
limitations. Such covenants do not restrict any matters undertaken in connection
with the Company's Reorganization (as such term is defined in the Indenture).
14. SUCCESSOR PERSONS.
When a successor person or other entity assumes all the obligations of
its predecessor under the Securities and the Indenture, the predecessor person
will be released from those obligations.
15. REMEDIES FOR EVENTS OF DEFAULT.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of not less than 25% in principal amount
of the Securities then Outstanding may declare all the Securities to be
immediately due and payable. If a bankruptcy or insolvency default with respect
to the Company or any of its Significant Subsidiaries occurs and is continuing,
the Securities automatically become immediately due and payable. Holders may not
enforce the Indenture or the Securities except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of at least
a majority in principal amount of the Securities then Outstanding may direct the
Trustee in its exercise of any trust or power.
16. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may make loans to,
accept deposits from, perform services for, and otherwise deal with, the Company
and its Affiliates as if it were not the Trustee.
17. AUTHENTICATION.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
18. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT
A-10
TEN (= joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to Baytex Energy Ltd,
205-5th Avenue S.W., Suite 2200, Calgary, Alberta, Canada T2P 2V7, Attention:
Chief Financial Officer.
A-11
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
INSERT TAXPAYER IDENTIFICATION NO.
(Please print or typewrite name and address including zip code of assignee)
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
attorney to transfer such Security on the books of the Company with full power
of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES EXCEPT
PERMANENT OFFSHORE PHYSICAL CERTIFICATES]
In connection with any transfer of this Security occurring prior to the
date which is the earlier of the date of an effective Registration Statement or
______, 2005 the undersigned confirms that without utilizing any general
solicitation or general advertising that:
[CHECK ONE]
[_] (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder.
OR
[_] (b) this Security is being transferred other than in accordance
with (a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 307 of the Indenture shall have
been satisfied.
A-12
Date: ____________________
NOTICE: The signature to this assignment must correspond with the name
as written upon the face of the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
Signature Guarantee:
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: __________________
NOTICE: To be executed by an executive officer, general partner,
trustee or similar representative.
A-13
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 10.12 or Section 10.13 of the Indenture, check the Box: [ ].
If you wish to have a portion of this Security purchased by the Company
pursuant to Section 10.12 or Section 10.13 of the Indenture, state the amount
(in original principal amount) below:
US$_____________________.
Date:
Your Signature: ________________________________
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee: ____________________________
(Signature must be guaranteed by a member of the New York
Stock Exchange or a commercial bank or trust company)
A-14
EXHIBIT B
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF
TRANSFER FROM RESTRICTED GLOBAL SECURITY TO
REGULATION S GLOBAL SECURITY
The Bank of Nova Scotia
Trust Company of New York
One Liberty Plaza, 23rd Floor
New York, New York 10006
Re: 9 5/8% Senior Subordinated Notes due 2010 of Baytex Energy Ltd.
Reference is hereby made to the Indenture, dated as of July 9, 2003
(the "Indenture"), between Baytex Energy Ltd, as issuer (the "Company") and The
Bank of Nova Scotia Trust Company of New York, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
This letter relates to US$_________ principal amount of Securities
which are evidenced by the Restricted Global Security (CUSIP No._________) and
held with the Depositary in the name of Cede & Co. (the "Transferor"). The
Transferor has requested a transfer of such beneficial interest in the
Securities to a Person who will take delivery thereof in the form of an equal
principal amount of Securities evidenced by the Regulation S Global Security
(CUSIP No. ________).
In connection with such request and in respect of such Securities, the
Transferor hereby certifies that such transfer has been effected in compliance
with the transfer restrictions applicable to the Global Securities and pursuant
to and in accordance with Rule 903, Rule 904 or Rule 144 under the United States
Securities Act of 1933, as amended (the "Securities Act"), and accordingly the
Transferor hereby further certifies that:
(A) if the transfer has been effected pursuant to Rule 903 or
Rule 904:
(1) the offer of the Securities was not made to a person
in the United States;
(2) either:
(a) at the time the buy order was originated, the
transferee was outside the United States or the Transferor and
any person acting on its behalf reasonably believed and
believes that the transferee was outside the United States; or
(b) the transaction was executed in, on or through
the facilities of a designated offshore securities market and
neither the Transferor nor
B-1
any person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act;
(5) if the transfer is being requested prior to
____________, 2001, upon completion of the transaction, the beneficial
interest being transferred as described above is to be held with the
Depositary through CDS, Euroclear or Clearstream Banking or both
(Common Code ____________); and
(B) If the transfer has been effected pursuant to Rule
144, the Securities have been transferred in a transaction permitted by
Rule 144 under the Securities Act.
Upon giving effect to this request to exchange a beneficial interest in
such Restricted Global Security for a beneficial interest in a Regulation S
Global Security, the resulting beneficial interest shall be subject to the
restrictions on transfer applicable to Regulation S Global Security pursuant to
the Indenture and the Securities.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company. Terms used in this certificate and not
otherwise defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
[Insert Name of Transferor]
By: _______________________
Name:
Title:
Dated: ____________, ____ Signature Guarantee
___________________________
B-2
EXHIBIT C
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF
TRANSFER FROM REGULATION S GLOBAL SECURITY TO
RESTRICTED GLOBAL SECURITY
The Bank of Nova Scotia
Trust Company of New York
One Liberty Plaza, 23rd Floor
New York, New York 10006
Re: 9 5/8% Senior Subordinated Notes due 2010 of Baytex Energy Ltd.
Reference is hereby made to the Indenture, dated as of July 9, 2003
(the "Indenture"), between Baytex Energy Ltd, as issuer (the "Company") and The
Bank of Nova Scotia Trust Company of New York, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
This letter relates to US$____________ principal amount of the
Securities which are evidenced by the Regulation S Global Security (CUSIP No.
_________) and held with the Depositary in the name of Cede & Co. (the
"Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Securities to a Person who will take delivery thereof in the
form of an equal principal amount of Securities evidenced by the Restricted
Global Security (CUSIP No. __________), to be held with the Depositary.
In connection with such request and in respect of such Securities, the
Transferor hereby certifies that such transfer is being effected pursuant to and
in accordance with Rule 144A under the United States Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Securities are being transferred to a Person that the
Transferor reasonably believes is purchasing the Securities for its own account,
or for one or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A in a transaction meeting
the requirements of Rule 144A and such Securities are being transferred in
compliance with any applicable blue sky securities laws of any state of the
United States.
Upon giving effect to this request to exchange a beneficial interest in
Regulation S Global Securities for a beneficial interest in the Restricted
Global Security, the resulting beneficial interest shall be subject to the
restrictions on transfer applicable to the U.S. Global Securities pursuant to
the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company. Terms used in this certificate and not
otherwise defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
[Insert Name of Transferor]
C-1
Dated: ____________, ____ Signature Guarantee
___________________________
C-2
EXHIBIT D
FORM OF CERTIFICATE FOR TRANSFER OF U.S. PHYSICAL
SECURITIES TO REGULATION S GLOBAL SECURITY
OR RESTRICTED GLOBAL SECURITY
The Bank of Nova Scotia
Trust Company of New York
One Liberty Plaza, 23rd Floor
New York, New York 10006
Re: 9 5/8% Senior Subordinated Notes due 2010 of Baytex Energy Ltd.
Reference is hereby made to the Indenture, dated as of July 9, 2003
(the "Indenture"), between Baytex Energy Ltd, as issuer (the "Company"), and The
Bank of Nova Scotia Trust Company of New York, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
This letter relates to US$___________ principal amount of Securities
which are evidenced by a definitive Physical Security (Certificate No.
__________, CUSIP No. __________, in the name of _________________) (the
"Transferor"). The Transferor has requested a transfer of such interest in the
Securities to a Person that will take delivery thereof in the form of an equal
principal amount of Securities evidenced by the [Restricted Global Security
CUSIP No. ____________] [Regulation S Global Security (CUSIP No. ___________)].
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that: [if such request is made for transfer to
the Regulation S Global Security: such transfer has been effected pursuant to
and in accordance with Rule 903, Rule 904 or Rule 144 under the United States
Securities Act of 1933, as amended (the "Securities Act") and accordingly the
Transferor does hereby further certify that:
(1) if the transfer has been effected pursuant to Rule
903 or Rule 904:
(A) the offer of the Securities was not made to
a person in the United States;
(B) either:
(i) at the time the buy order was
originated, the transferee was outside the United
States or the Transferor and any person acting on its
behalf reasonably believed that the transferee was
outside the United States, or
D-1
(ii) the transaction was executed in, on or
through the facilities of a designated offshore
securities market and neither the Transferor nor any
person acting on its behalf knows that the
transaction was prearranged with a buyer in the
United States;
(C) no directed selling efforts have been made
in contravention of the requirements of Rule 903(b) or 904(b)
of Regulation S, as applicable; and
(D) the transaction is not part of a plan or
scheme to evade the registration requirements of the
Securities Act.
(2) if the transfer has been effected pursuant to Rule
144, the Securities have been transferred in a transaction permitted by
Rule 144.]
(3) if such request is made for transfer to the
Restricted Global Security: Such transfer is being effected pursuant to
and in accordance with Rule 144A under the Securities Act, and,
accordingly, the Transferor hereby further certifies that the
Securities are being transferred to a person that the Transferor
reasonably believes is purchasing the Securities for its own account,
or for one or more accounts with respect to which such person exercises
sole investment discretion, and such person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company. Terms used in this certificate and not
otherwise defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
D-2
Upon completion of the transaction, the beneficial interest being
transferred as described above is to be held with the Depositary through CDS,
Euroclear or Clearstream Banking or any combination of them (Common Code_____).
[Insert Name of Transferor]
Dated: ____________, ____ Signature Guarantee
___________________________
D-3
EXHIBIT E
FORM OF CERTIFICATE FOR TRANSFER
OR EXCHANGE AFTER TWO YEARS
The Bank of Nova Scotia
Trust Company of New York
One Liberty Plaza, 23rd Floor
New York, New York 10006
Re: 9 5/8% Senior Subordinated Notes due 2010 of Baytex Energy, Ltd.
Reference is hereby made to the Indenture, dated as of July 9, 2003
(the "Indenture"), between Baytex Energy Ltd, as issuer (the "Company") and The
Bank of Nova Scotia Trust Company of New York, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
[For transfers: This letter relates to US$__________ principal amount
of Securities which are evidenced by a [Restricted Global Security (CUSIP No.
_________) and held with the Depositary in the name of Cede & Co.] [a U.S.
Physical Security (CUSIP No. ________________) registered in the name of
_________________] [and held for the benefit of _________________] (the
"Beneficial Owner"). The Beneficial Owner has requested that its beneficial
interest in such Securities be transferred to a Person that will take delivery
thereof in the form of an equal principal amount of Securities evidenced by the
Regulation S Global Security (CUSIP No. _________).
In connection with such request and in respect of such Securities, the
Beneficial Owner does hereby certify that upon such transfer, (a) a period of at
least two years will have elapsed since , 2003, (b) the Beneficial Owner during
the three months preceding the date of such transfer was not an "affiliate" of
the Company (as defined in Rule 144 under the Securities Act), and it was not
acting on behalf of such an affiliate and (c) such Person to whom such transfer
is being made is not an "affiliate" of the Company.]
[For exchanges: This letter relates to US$__________ principal amount
of Securities that are evidenced by a [Restricted Global Security (CUSIP No.
__________) and held with the Depositary in the name of [ ] [and held for the
benefit of ] ] (the "Beneficial Owner"). The Beneficial Owner has requested that
its beneficial interest in such Securities be exchanged for a beneficial
interest in an equal principal amount of Securities evidenced by the Regulation
S Global Security (CUSIP No. __________).
In connection with such request and in respect of such Securities, the
Beneficial Owner does hereby certify that [it is located and acquired such
securities outside the United States (if the Restricted Period has ended) and
that such transfer is being made in accordance with Rule 903 or 904 of
Regulation S promulgated under the U.S. Securities Act of 1933][, upon such
exchange, (a) it will be the beneficial owner of such Securities,
E-1
(b) a period of at least two years will have elapsed since , 2003 and (c) the
Beneficial Owner will not be, and during the three months preceding the date of
such exchange will not have been, an "affiliate" of the Company (as defined in
Rule 144 under the Securities Act), and it is not acting on behalf of such an
affiliate.]
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
Dated: [Insert Name of Beneficial Owner]
By: _____________________________
Name:
Title:
E-2
__________________________
INDENTURE
Dated as of July 9, 2003
__________________________
US$179,699,000
9 5/8% Senior Subordinated Notes due 2010
__________________________
BAYTEX ENERGY LTD.
Issuer,
and
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,
Trustee
Baytex Energy, Ltd.
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of July __, 2003
TRUST INDENTURE ACT SECTION INDENTURE SECTION
Sections 310(a)(1)........................................... 6.07
(a)(2)........................................... 6.07
(b).............................................. 6.08
Sections 312(c).............................................. 7.01
Sections 314(a).............................................. 7.03
(a)(4)........................................... 10.08(a)
(c)(1)........................................... 1.02
(c)(2)........................................... 1.02
(e).............................................. 1.02
Sections 315(b).............................................. 6.01
Sections 316(a) (last sentence).............................. 1.01
("Outstanding")..............................................
(a)(1)(A)........................................ 5.02, 5.12
(a)(1)(B)........................................ 5.13
(b).............................................. 5.08
(c).............................................. 1.05(d)
Sections 317(a)(1)........................................... 5.03
(a)(2)........................................... 5.04
(b).............................................. 10.03
Sections 318(a).............................................. 1.11
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..............1
SECTION 1.01 DEFINITIONS..............................................1
SECTION 1.02 COMPLIANCE CERTIFICATES AND OPINIONS....................28
SECTION 1.03 FORM OF DOCUMENTS DELIVERED TO TRUSTEE..................29
SECTION 1.04 ACTS OF HOLDERS.........................................29
SECTION 1.05 NOTICES, ETC., TO TRUSTEE, COMPANY OR GUARANTORS........31
SECTION 1.06 NOTICE TO HOLDERS, WAIVER...............................31
SECTION 1.07 CONFLICT OF ANY PROVISION OF INDENTURE WITH
TRUST INDENTURE ACT.....................................32
SECTION 1.08 EFFECT OF HEADINGS AND TABLE OF CONTENTS................32
SECTION 1.09 SUCCESSORS AND ASSIGNS..................................32
SECTION 1.10 SEVERABILITY CLAUSE.....................................32
SECTION 1.11 BENEFITS OF INDENTURE...................................32
SECTION 1.12 GOVERNING LAW...........................................32
SECTION 1.13 LEGAL HOLIDAYS..........................................33
SECTION 1.14 RULES OF CONSTRUCTION...................................33
SECTION 1.15 AGENT FOR SERVICE; SUBMISSION TO JURISDICTION;
WAIVER OF IMMUNITIES....................................34
SECTION 1.16 JUDGMENT CURRENCY.......................................34
ARTICLE II SECURITY FORMS.....................................................35
SECTION 2.01 FORMS GENERALLY.........................................35
SECTION 2.02 RESTRICTIVE LEGENDS.....................................36
ARTICLE III THE SECURITIES....................................................38
SECTION 3.01 TITLE AND TERMS.........................................38
SECTION 3.02 DENOMINATIONS...........................................39
SECTION 3.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING..........39
SECTION 3.04 TEMPORARY SECURITIES....................................41
SECTION 3.05 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.....41
SECTION 3.06 BOOK-ENTRY PROVISIONS FOR RESTRICTED GLOBAL SECURITY....43
SECTION 3.07 SPECIAL TRANSFER PROVISIONS.............................45
SECTION 3.08 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES........48
SECTION 3.09 PAYMENT OF PRINCIPAL AND INTEREST;
INTEREST RIGHTS PRESERVED...............................49
SECTION 3.10 PERSONS DEEMED OWNERS...................................50
SECTION 3.11 CANCELLATION............................................50
SECTION 3.12 ISSUANCE OF ADDITIONAL SECURITIES.......................51
SECTION 3.13 CUSIP AND CINS NUMBERS..................................51
- ----------------------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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SECTION 3.14 COMPUTATION OF INTEREST.................................51
ARTICLE IV SATISFACTION AND DISCHARGE.........................................51
SECTION 4.01 SATISFACTION AND DISCHARGE OF INDENTURE.................51
SECTION 4.02 APPLICATION OF TRUST MONEY..............................53
SECTION 4.03 DISCHARGE OF COLLATERAL DOCUMENTS OR GUARANTEES.........53
ARTICLE V REMEDIES 53
SECTION 5.01 EVENTS OF DEFAULT.......................................53
SECTION 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT......55
SECTION 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE..................................56
SECTION 5.04 TRUSTEE MAY FILE PROOFS OF CLAIM........................57
SECTION 5.05 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION
OF SECURITIES...........................................58
SECTION 5.06 APPLICATION OF MONEY COLLECTED..........................58
SECTION 5.07 LIMITATION ON SUITS.....................................58
SECTION 5.08 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST....................................59
SECTION 5.09 RESTORATION OF RIGHTS AND REMEDIES......................59
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE..........................59
SECTION 5.11 DELAY OR OMISSION NOT WAIVER............................60
SECTION 5.12 CONTROL BY HOLDERS......................................60
SECTION 5.13 WAIVER OF PAST DEFAULTS.................................60
SECTION 5.14 WAIVER OF STAY OR EXTENSION LAWS........................61
SECTION 5.15 UNDERTAKING FOR COSTS...................................61
ARTICLE VI THE TRUSTEE........................................................61
SECTION 6.01 NOTICE OF DEFAULTS......................................61
SECTION 6.02 CERTAIN RIGHTS OF TRUSTEE...............................61
SECTION 6.03 TRUSTEE NOT RESPONSIBLE FOR RECITALS
OR ISSUANCE OF SECURITIES...............................63
SECTION 6.04 MAY HOLD SECURITIES.....................................63
SECTION 6.05 MONEY HELD IN TRUST.....................................63
SECTION 6.06 COMPENSATION AND REIMBURSEMENT..........................63
SECTION 6.07 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.................64
SECTION 6.08 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.......65
SECTION 6.09 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR..................66
SECTION 6.10 MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS..................................66
ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE.............................67
SECTION 7.01 CORPORATION TO FURNISH TRUSTEE NAMES AND
ADDRESSES OF HOLDERS....................................67
SECTION 7.02 PRESERVATION OF LIST OF NAMES AND ADDRESSES OF HOLDERS..67
SECTION 7.03 DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS............68
SECTION 7.04 REPORTS BY TRUSTEE......................................68
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ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE............68
SECTION 8.01 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS....68
SECTION 8.02 SUCCESSOR SUBSTITUTED...................................70
ARTICLE IX SUPPLEMENTS AND AMENDMENTS TO INDENTURE, GUARANTEES,
COLLATERAL DOCUMENTS AND COLLATERAL DOCUMENT
SUBORDINATION AGREEMENT.................................70
SECTION 9.01 WITHOUT CONSENT OF HOLDERS..............................70
SECTION 9.02 WITH CONSENT OF HOLDERS.................................71
SECTION 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES....................72
SECTION 9.04 EFFECT OF SUPPLEMENTAL INDENTURES.......................72
SECTION 9.05 CONFORMITY WITH TRUST INDENTURE ACT.....................73
SECTION 9.06 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES......73
SECTION 9.07 NOTICE OF SUPPLEMENTAL INDENTURES.......................73
ARTICLE X COVENANTS 73
SECTION 10.01 PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.....73
SECTION 10.02 MAINTENANCE OF OFFICE OR AGENCY.........................73
SECTION 10.03 MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.........74
SECTION 10.04 CORPORATE EXISTENCE.....................................75
SECTION 10.05 PAYMENT OF TAXES AND OTHER CLAIMS.......................76
SECTION 10.06 MAINTENANCE OF PROPERTIES...............................76
SECTION 10.07 INSURANCE...............................................76
SECTION 10.08 STATEMENT BY OFFICERS AS TO DEFAULT.....................76
SECTION 10.09 PROVISION OF REPORTS AND FINANCIAL STATEMENTS...........77
SECTION 10.10 LIMITATION ON INCURRENCE OF INDEBTEDNESS AND
ISSUANCE OF DISQUALIFIED STOCK..........................77
SECTION 10.11 LIMITATION ON RESTRICTED PAYMENTS.......................78
SECTION 10.12 PURCHASE OF SECURITIES UPON A CHANGE OF CONTROL.........81
SECTION 10.13 LIMITATION ON CERTAIN ASSET SALES.......................82
SECTION 10.14 LIMITATION ON TRANSACTIONS WITH AFFILIATES..............84
SECTION 10.15 LIMITATION ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES..........85
SECTION 10.16 LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK
OF RESTRICTED SUBSIDIARIES..............................85
SECTION 10.17 LIMITATION ON LIENS.....................................86
SECTION 10.18 UNRESTRICTED SUBSIDIARIES...............................86
SECTION 10.19 LIMITATION ON LAYERING INDEBTEDNESS.....................87
SECTION 10.20 GUARANTEES OF INDEBTEDNESS BY RESTRICTED SUBSIDIARIES...87
SECTION 10.21 ADDITIONAL SUBSIDIARIES TO BECOME A PARTY TO
COLLATERAL DOCUMENTS OR TO GUARANTEE THE NOTES..........87
SECTION 10.22 ADDITIONAL COLLATERAL DOCUMENTS AND GUARANTEES
UPON ISSUANCE OF ADDITIONAL SECURITIES..................88
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SECTION 10.23 LIMITATION ON CONDUCT OF BUSINESS.......................89
SECTION 10.24 LIMITATION ON INCURRENCE OF INDEBTEDNESS, LIENS
AND CONDUCT OF BUSINESS FOR BAYTEX MARKETING LTD........89
SECTION 10.25 PAYMENT OF ADDITIONAL AMOUNTS...........................89
SECTION 10.26 WAIVER OF CERTAIN COVENANTS.............................91
ARTICLE XI REDEMPTION OF SECURITIES...........................................91
SECTION 11.01 RIGHT OF REDEMPTION.....................................91
SECTION 11.02 APPLICABILITY OF ARTICLE................................92
SECTION 11.03 ELECTION TO REDEEM; NOTICE TO TRUSTEE...................92
SECTION 11.04 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.......92
SECTION 11.05 NOTICE OF REDEMPTION....................................92
SECTION 11.06 DEPOSIT OF REDEMPTION PRICE.............................93
SECTION 11.07 SECURITIES PAYABLE ON REDEMPTION DATE...................93
SECTION 11.08 SECURITIES REDEEMED IN PART.............................94
ARTICLE XII DEFEASANCE AND COVENANT DEFEASANCE................................94
SECTION 12.01 COMPANY OPTION TO EFFECT DEFEASANCE OR
COVENANT DEFEASANCE.....................................94
SECTION 12.02 DEFEASANCE AND DISCHARGE................................94
SECTION 12.03 COVENANT DEFEASANCE.....................................95
SECTION 12.04 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.........95
SECTION 12.05 DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS
TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.....97
SECTION 12.06 REINSTATEMENT...........................................98
ARTICLE XIII GUARANTEE........................................................98
SECTION 13.01 APPLICATION OF ARTICLE XIII.............................98
SECTION 13.02 GUARANTEES..............................................98
SECTION 13.03 GUARANTY ABSOLUTE.......................................99
SECTION 13.04 WAIVERS................................................101
SECTION 13.05 SUBROGATION............................................102
SECTION 13.06 NO WAIVER; REMEDIES....................................102
SECTION 13.07 CONTINUING GUARANTY; NO RIGHT OF SET-OFF;
INDEPENDENT OBLIGATION.................................102
SECTION 13.08 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.....102
SECTION 13.09 RELEASES...............................................103
SECTION 13.10 SEVERABILITY...........................................104
ARTICLE XIV SUBORDINATION OF SECURITIES AND GUARANTEES.......................104
SECTION 14.01 SECURITIES AND GUARANTEES SUBORDINATE TO
SENIOR INDEBTEDNESS....................................104
SECTION 14.02 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.........104
SECTION 14.03 NO PAYMENT WHEN CERTAIN SENIOR INDEBTEDNESS
IN DEFAULT.............................................106
SECTION 14.04 PAYMENT PERMITTED IF NO DEFAULT........................107
SECTION 14.05 SUBROGATION TO RIGHTS OF HOLDERS OF
SENIOR INDEBTEDNESS....................................107
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SECTION 14.06 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS............108
SECTION 14.07 TRUSTEE TO EFFECTUATE SUBORDINATION....................108
SECTION 14.08 NO WAIVER OF SUBORDINATION PROVISIONS..................108
SECTION 14.09 NOTICE TO TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS......109
SECTION 14.10 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF
LIQUIDATION AGENT......................................110
SECTION 14.11 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF
SENIOR INDEBTEDNESS....................................110
SECTION 14.12 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS;
PRESERVATION OF TRUSTEE'S RIGHTS.......................111
SECTION 14.13 APPLICABILITY TO PAYING AGENTS.........................111
SECTION 14.14 DEFEASANCE OF THIS ARTICLE XIV.........................111
SECTION 14.15 SUBORDINATION PROVISIONS CONTROLLING...................111
SECTION 14.16 SUBORDINATION OF COLLATERAL DOCUMENTS..................111
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EXHIBITS
Exhibit A - Form of Security
Exhibit B - Form of Certificate for Exchange or Registration of Transfer from
Restricted Global Security to Regulation S Global Security
Exhibit C - Form of Certificate for Exchange or Registration of Transfer from
Regulation S Global Security to Restricted Global Security
Exhibit D - Form of Certificate for Transfer of U.S. Physical Securities to
Regulation S Global Security or Restricted Global Security
Exhibit E - Form of Certificate for Transfer or Exchange after Two Years
Exhibit F - Form of Collateral Documents Subordination Agreement
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