SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT MARCH 10, 1998
(Date of earliest event reported) FEBRUARY 24, 1998
RAM ENERGY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 333-42641 52-1535102
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
5100 EAST SKELLY DRIVE, SUITE 650
TULSA, OKLAHOMA 74135
(Address of principal executive offices) (Zip Code)
(918) 663-2800
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On February 24, 1998, Ram Energy, Inc. (the "Company") acquired
Carlton Resources Corporation, a Delaware corporation engaged in the
exploration, development and production of oil and gas properties primarily
in the mid-continent area and, to a lesser extent, in the Permian Basin and
other oil and gas producing regions ("Carlton"). The acquisition was
effectuated pursuant to a stock purchase agreement entered into on December
16, 1997. The purchase price of $43 million was funded with proceeds
received from the sale of $115 million principal amount of the Company's
11-1/2% Senior Notes due 2008 (the "Notes"). An indepth discussion of the
Carlton acquisition is set forth in the Company's prospectus dated February
19, 1998 (the "Prospectus"), as contained in the Company's registration
statement on Form S-1 (Registration No. 333-42641) (the "Registration
Statement").
Item 5. OTHER EVENTS
In connection with the closing of the sale of the Notes, an
indenture dated February 24, 1998 (the "Indenture") was executed by and
among the Company, RB Operating Company, a Delaware corporation, RLP Gulf
States, L.L.C., an Oklahoma limited liability company (RB Operating Company
and RLP Gulf States, L.L.C. being collectively known as the "Subsidiary
Guarantors"), and the United States Trust Company of New York, as trustee
(the "Trustee"). The Indenture contains certain covenants including, but
not limited to, covenants that limit (i) incurrences of additional
indebtedness and issuances of disqualified capital stock, (ii) restricted
payments, (iii) dividends and other payments affecting subsidiaries, (iv)
transactions with affiliates and outside directors' fees, (v) asset sales,
(vi) liens, (vii) lines of business, (viii) merger, sale or consolidated
and (ix) non-refundable acquisition deposits. The Indenture also contains
covenants regarding the designation of unrestricted subsidiaries, ownership
of Subsidiary Guarantors and issuance of reports. An indepth discussion of
the Indenture is set forth in the Company's final Prospectus filed on
February 21, 1998 pursuant to Rule 424(b)(4).
Upon consummation of the Carlton acquisition, the Subsidiaries of
Carlton (as defined in the Indenture) became Restricted Subsidiaries of the
Company (as defined in the Indenture). On February 24, 1998, Carlton, the
Carlton Subsidiaries, the Company, the Subsidiary Guarantors and the
Trustee executed a supplemental indenture ("Supplemental Indenture").
Carlton and the Subsidiaries of Carlton (Magic Circle Energy Corporation, a
Delaware corporation, Carmen Development Corporation, an Oklahoma
corporation, Magic Circle Acquisition Corporaiton, an Oklahoma corporation,
Onyx Properties Corporation, an Oklahoma corporation, MCENA, Inc., an
Oklahoma corporation, and Carmen Field Limited Partnership, an Oklahoma
limited partnership) are collectively known as the "Additional Guarantors."
The parties signatory to the Supplemental Indenture were bound by the same
terms and conditions as the Indenture.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired
Financial statements of Carlton Resources Corporation and its
subsidiaries for the year ended December 31, 1997, will be filed
in accordance with Item 7(a)(4).
(b) Pro Forma Financial Information
Proforma financial statements to give effect to the Registrant's
acquisition of Carlton Resources Corporation will be filed in
accordance with Item 7(b)(2).
(c) Exhibits
The following exhibits are filed as a part of this report:
EXHIBIT
NO. DESCRIPTION
1 Form of Underwriting Agreement among the Registrant,
Jefferies & Company, Inc. and the Subsidiary Guarantors,
incorporated herein by reference to Exhibit 1 to the
Registrant's registration statement on Form S-1 (No. 333-
42641)
2 Stock Purchase Agreement dated December 16, 1997 among Rolf
N. Hufnagel and Robert E. Davis, Jr. and the Registrant with
respect to the acquisition of Carlton Resources Corporation,
incorporated herein by reference to Exhibit 2 to the
Registrant's registration statement on Form S-1 (No. 333-
42641)
4.1 Indenture entered into February 24, 1998 by the Registrant,
the Subsidiary Guarantors, and United States Trust Company
of New York, as Trustee
4.2 Supplemental Indenture entered into February 24, 1998 by the
Registrant, the Subsidiary Guarantors, the Additional
Guarantors and United States Trust Company of New York, as
Trustee
99 Press release dated February 25, 1998 announcing the closing
of the sale of the Registrant's 11 1/2% Senior Notes due
2008 and the Registrant's acquisition of Carlton Resources
Corporation
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: March 10, 1998 RAM Energy, Inc.
By JOHN M. LONGMIRE
John M. Longmire, Senior Vice
President, Secretary, Treasurer
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION METHOD OF FILING
<S> <C> <C>
1 Form of Underwriting Agreement Incorporated herein by reference
among the Registrant, Jefferies &
Company, Inc. and the Subsidiary
Guarantors
2 Stock Purchase Agreement dated Incorporated herein by reference
December 16, 1997 among Rolf
N. Hufnagel and Robert E. Davis, Jr.
and the Registrant with respect to the
acquisition of Carlton Resources
Corporation,
4.1 Indenture entered into February 24, 1998 Filed herewith electronically
by the Registrant, the Subsidiary
Guarantors, and United States Trust
Company of New York, as Trustee
4.2 Supplemental Indenture entered into Filed herewith electronically
February 24, 1998 by the Registrant,
the Subsidiary Guarantors, the
Additional Guarantors and United
States Trust Company of New York, as
Trustee
99 Press release dated February 25, 1998 Filed herewith electronically
announcing the closing of the sale of
the Registrant's 11-1/2% Senior Notes
due 2008 and the Registrant's
acquisition of Carlton Resources
Corporation
</TABLE>
RAM ENERGY, INC.
AND
SUBSIDIARY GUARANTORS
INDENTURE
Dated as of February 24, 1998
UNITED STATES TRUST COMPANY OF NEW YORK
Trustee
11-1/2% SENIOR NOTES DUE 2008
<PAGE>
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS
SECTION 1.2 OTHER DEFINITIONS
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
SECTION 1.4 RULES OF CONSTRUCTION
ARTICLE 2
THE NOTES
SECTION 2.1 FORM AND DATING
SECTION 2.2 EXECUTION AND AUTHENTICATION
SECTION 2.3 REGISTRAR AND PAYING AGENT; DEPOSITORY APPOINTMENT
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST
SECTION 2.5 HOLDER LISTS
SECTION 2.6 TRANSFER AND EXCHANGE
SECTION 2.7 REPLACEMENT NOTES
SECTION 2.8 OUTSTANDING NOTES
SECTION 2.9 TREASURY NOTES
SECTION 2.10 TEMPORARY NOTES
SECTION 2.11 CANCELLATION
SECTION 2.12 DEFAULTED INTEREST
SECTION 2.13 CUSIP NUMBERS
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.1 NOTICES TO TRUSTEE
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED
SECTION 3.3 NOTICE OF REDEMPTION
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE
SECTION 3.6 NOTES REDEEMED IN PART
SECTION 3.7 OPTIONAL REDEMPTION
SECTION 3.8 MANDATORY REDEMPTION
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS CASH
ARTICLE 4
COVENANTS
SECTION 4.1 PAYMENT OF NOTES
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY
SECTION 4.3 REPORTS
SECTION 4.4 COMPLIANCE CERTIFICATE
SECTION 4.5 TAXES; CORPORATE EXISTENCE
SECTION 4.6 STAY, EXTENSION AND USURY LAWS
SECTION 4.7 LIMITATION ON INCURRENCES OF ADDITIONAL INDEBTEDNESS
AND ISSUANCES OF DISQUALIFIED CAPITAL STOCK
SECTION 4.8 LIMITATION ON RESTRICTED PAYMENTS
SECTION 4.9 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES OF THE COMPANY
SECTION 4.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES
SECTION 4.11 LIMITATION ON ASSET SALES
SECTION 4.12 LIMITATION ON LIENS
SECTION 4.13 LIMITATION ON LINE OF BUSINESS
SECTION 4.14 DESIGNATION OF UNRESTRICTED SUBSIDIARIES
SECTION 4.15 LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK
OF RESTRICTED SUBSIDIARIES OF THE COMPANY
SECTION 4.16 OWNERSHIP AND RECOGNITION OF SUBSIDIARIES; FUTURE
GUARANTORS
SECTION 4.17 OFFER TO REPURCHASE UPON CHANGE OF CONTROL
SECTION 4.18 DISCHARGE OF CERTAIN PREFERRED STOCK
ARTICLE 5
SUCCESSORS
SECTION 5.1 LIMITATION ON MERGER OR SALE OR CONSOLIDATION
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT
SECTION 6.2 ACCELERATION
SECTION 6.3 OTHER REMEDIES
SECTION 6.4 WAIVER OF PAST DEFAULTS
SECTION 6.5 CONTROL BY TWO-THIRDS CONSENT
SECTION 6.6 LIMITATION ON SUITS
SECTION 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT
SECTION 6.8 COLLECTION SUIT BY TRUSTEE
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM
SECTION 6.10 PRIORITIES
SECTION 6.11 UNDERTAKING FOR COSTS
ARTICLE 7
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE
SECTION 7.2 RIGHTS OF TRUSTEE
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE
SECTION 7.4 TRUSTEE'S DISCLAIMER
SECTION 7.5 NOTICE OF DEFAULT
SECTION 7.6 REPORT BY TRUSTEE TO HOLDERS OF THE NOTES
SECTION 7.7 COMPENSATION AND INDEMNITY
SECTION 7.8 REPLACEMENT OF TRUSTEE
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE; SATISFACTION AND DISCHARGE
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE
SECTION 8.3 COVENANT DEFEASANCE
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD
IN TRUST; OTHER MISCELLANEOUS PROVISIONS
SECTION 8.6 REPAYMENT TO THE COMPANY
SECTION 8.7 REINSTATEMENT
SECTION 8.8 SATISFACTION AND DISCHARGE OF INDENTURE
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES
SECTION 9.6 TRUSTEE TO SIGN AMENDMENT ETC
ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.1 SUBSIDIARY GUARANTEES
SECTION 10.2 ADDITIONAL SUBSIDIARY GUARANTEES
SECTION 10.3 LIMITATION OF SUBSIDIARY GUARANTORS' LIABILITY
SECTION 10.4 SUBSIDIARY GUARANTORS MAY CONSOLIDATE ETC., ON
CERTAIN TERMS
SECTION 10.5 RELEASES OF SUBSIDIARY GUARANTORS
SECTION 10.6 "TRUSTEE" TO INCLUDE PAYING AGENT
SECTION 10.7 CONTRIBUTION
SECTION 10.8 EXECUTION OF SUBSIDIARY GUARANTEES
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS
SECTION 11.2 NOTICES
SECTION 11.3 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS
OF NOTES
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
SECTION 11.6 RULES BY TRUSTEE AND AGENTS
SECTION 11.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND SHAREHOLDERS
SECTION 11.8 GOVERNING LAW
SECTION 11.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
SECTION 11.10 SUCCESSORS
SECTION 11.11 SEVERABILITY
SECTION 11.12 COUNTERPART ORIGINALS
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC
<PAGE>
INDENTURE dated as of February 24, 1998, by and among RAM ENERGY, INC.,
a Delaware corporation (the "Company"), the Subsidiary Guarantors (as
defined herein) and UNITED STATES TRUST COMPANY OF NEW YORK, as trustee
(the "Trustee").
The Company, the Subsidiary Guarantors and the Trustee agree as follows
for the benefit of one another and for the equal and ratable benefit of the
Holders of the 11-1/2% Senior Notes due 2008 of the Company (the
"Notes"), without preference of any issuance of Notes under this Indenture
over another:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"Adjusted Consolidated Net Income" of the Company for any period means
the Net Income of the Company and the Subsidiary Guarantors for such
period, determined in accordance with GAAP, excluding (i) the Net Income of
any Unrestricted Subsidiary of the Company which is a consolidated
Subsidiary of the Company for such period and (ii) the amount of the
deduction from Net Income of the Company attributable to the minority
interest in any Unrestricted Subsidiary of the Company which is a
consolidated Subsidiary of the Company for such period.
"Adjusted Consolidated Net Tangible Assets" means (without
duplication), as of the date of determination, (i) the sum of
(a) discounted future net revenue from proved oil and gas reserves of the
Company and the Subsidiary Guarantors calculated in accordance with
Commission guidelines before any state or federal income taxes, as
estimated or audited by independent petroleum engineers in one or more
Reserve Reports prepared as of the end of the Company's most recently
completed fiscal year as increased by, as of the date of determination, the
discounted future net revenue of (A) estimated proved oil and gas reserves
of the Company and the Subsidiary Guarantors attributable to any
acquisition consummated since the effective date of such year-end Reserve
Reports and (B) estimated oil and gas reserves of the Company and the
Subsidiary Guarantors attributable to extensions, discoveries and other
additions and upward revisions of estimates of proved oil and gas reserves
due to exploration, development or exploitation, production or other
activities conducted or otherwise occurring since the effective date of
such year-end Reserve Reports which, in the case of the preceding
sub-clauses (A) and (B), would, in accordance with standard industry
practice, result in such increases, in each case calculated in accordance
with Commission guidelines (utilizing the prices utilized in such year-end
Reserve Reports), and decreased by, as of the date of determination, the
discounted future net revenue of (C) estimated proved oil and gas reserves
of the Company and the Subsidiary Guarantors produced or disposed of since
the effective date of such year-end Reserve Reports and (D) reductions in
the estimated oil and gas reserves of the Company and the Subsidiary
Guarantors since the effective date of such year-end Reserve Reports
attributable to downward revisions of estimates of proved oil and gas
reserves due to exploration, development or exploitation, production or
other activities conducted or otherwise occurring since the effective date
of such year-end Reserve Reports which would, in accordance with standard
industry practice, result in such revisions, in each case calculated in
accordance with Commission guidelines (utilizing the prices utilized in
such year-end Reserve Reports); provided that, in the case of each of the
determinations made pursuant to the preceding sub-clauses (A) through (D),
such increases and decreases shall be as estimated by the Company's
engineers, except that if there is a Material Change and in connection with
the Incurrence of Indebtedness for which the Consolidated Fixed Charge
Coverage Ratio must be determined, all or any part of an increase in
discounted future net revenue resulting from the matters described in the
preceding sub-clauses (A) and (B) is needed to permit the Incurrence of
such Indebtedness, then the discounted future net revenue utilized for
purposes of clause (i)(a) of this definition shall be confirmed in writing
by independent petroleum engineers, provided further that, if the events
referred to in the preceding sub-clauses (C) and (D), when taken alone,
would not cause a Material Change, then such written confirmation need only
cover the incremental additions to discounted future net revenue resulting
from the determinations made pursuant to the preceding sub-clauses (A) and
(B) to the extent needed to permit the Incurrence of such Indebtedness,
(b) the capitalized costs that are attributable to oil and gas properties
of the Company and the Subsidiary Guarantors to which no proved oil and gas
reserves are attributed, 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 (A) the net book value on a date no earlier than the
date of the Company's latest annual or quarterly financial statements and
(B) the appraised value, as estimated by independent appraisers, of other
tangible assets (including the amount of Investments in unconsolidated
Subsidiaries) of the Company and the Subsidiary Guarantors, as of a date no
earlier than the date of the Company's latest audited financial statements,
minus (ii) the sum of (a) minority interests, (b) any non-current portion
of gas balancing liabilities of the Company and the Subsidiary Guarantors
reflected in the Company's latest annual or quarterly financial statements,
(c) the discounted future net revenue, calculated in accordance with
Commission guidelines (utilizing the prices utilized in the Company's
year-end Reserve Reports), attributable to reserves which are required to
be delivered to third parties to fully satisfy the obligations of the
Company and the Subsidiary Guarantors with respect to Production Payments
on the schedules specified with respect thereto, (d) the discounted future
net revenue, calculated in accordance with Commission guidelines (utilizing
the same prices utilized in the Company's year-end Reserve Reports),
attributable to reserves subject to participation interests, overriding
royalty interests or other interests of third parties, pursuant to
participation, partnership, vendor financing or other agreements then in
effect, or which otherwise are required to be delivered to third parties
and (e) the amount of environmental liabilities payable by the Company or
any Subsidiary Guarantor. If the Company changes its method of accounting
from the full cost method to the successful efforts method or a similar
method of accounting, Adjusted Consolidated Net Tangible Assets will
continue to be calculated as if the Company was still using the full cost
method of accounting.
"Affiliate" means (i) any Person, directly or indirectly, controlling
or controlled by or under direct or indirect common control with the
Company or any Subsidiary of the Company or any officer, director, or
employee of the Company or any Subsidiary of the Company or of such Person,
(ii) the spouse, any immediate family member, or any other relative who has
the same principal residence of any Person described in clause (i) above,
and any Person, directly or indirectly, controlling or controlled by or
under direct or indirect common control with, such spouse, family member or
other relative, and (iii) any trust in which any Person described in clause
(i) or (ii) of this definition is a fiduciary or has a beneficial interest.
For purposes of this definition, the term "control" means (a) the power to
direct the management and policies of a Person, directly or through one or
more intermediaries, whether through the ownership of voting securities, by
contract, or otherwise, or (b) the beneficial ownership of 10% or more of
the Voting Stock of such Person (on a fully diluted basis) or of warrants
or other rights to acquire such equity (whether or not presently
exercisable).
"Agent" means any Registrar, Paying Agent or as appointed hereunder,
any co-registrar or authenticating agent.
"Asset Sale" means (i) any direct or indirect conveyance, sale,
transfer or other disposition (including through damage or destruction for
which Insurance Proceeds are paid or by condemnation), in one transaction
or a series of related transactions, of any of the properties, businesses
or assets of the Company or any of its Restricted Subsidiaries, whether
owned on the Issue Date or thereafter acquired or (ii) any sale or other
disposition by the Company of any Capital Stock of any Affiliate,
Unrestricted Subsidiary or any Restricted Subsidiary of the Company.
Notwithstanding the foregoing, the following will not be deemed to be an
Asset Sale: (a) the conveyance, sale, lease, transfer or other disposition
by any Restricted Subsidiary of the Company of any or all of its assets
(upon voluntary liquidation or otherwise) to the Company; (b) the
conveyance, sale, lease, transfer or other disposition by any Restricted
Subsidiary of any or all of its assets (upon voluntary liquidation or
otherwise) to another Restricted Subsidiary of the Company;
(c) non-material dispositions of assets in the ordinary course of business;
(d) Asset Sales not otherwise included by clauses (a) through (c) or
(f) and (g) of this definition, provided that the aggregate proceeds from
all such Asset Sales do not exceed $1,000,000 in any twelve-month period;
(e) the disposition of all or substantially all of the assets of (A) the
Company and the Subsidiary Guarantors, taken as a whole, or (B) the
Company, if such disposition is governed by the provisions of Section 4.17
or 5.01; (f) a conveyance, sale, assignment, lease, license, transfer,
abandonment or other disposal by the Company and the Subsidiary Guarantors
of (A) damaged, worn out, unserviceable or other obsolete property in the
ordinary course of business or (B) other property no longer necessary for
the proper conduct of their business; and (g) the conveyance, sale,
transfer or other disposition by the Company and its Restricted
Subsidiaries of crude oil and natural gas production and refined products
in the ordinary course of business of the Oil and Gas Business.
"Attributable Indebtedness" in respect of a Sale and Leaseback
Transaction means, at the time of determination, the present value
(discounted at the rate of interest implicit in such transaction,
determined in accordance with GAAP or, in the event that such rate of
interest is not reasonably determinable, discounted at the rate of interest
borne by the Notes) of the obligation of the lessee for net rental payments
during the remaining term of the lease included in such Sale and Leaseback
Transaction (including any period for which such lease has been extended or
may, at the option of the lessor, be extended).
"Bankruptcy Custodian" means any receiver, trustee, assignee,
liquidator or similar officer under any Bankruptcy Law.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law of any jurisdiction, domestic or foreign to the United States of
America or any of its states, for the relief of debtors.
"Board of Directors" means, with respect to a Person, the board of
directors of such Person or if not a board of directors, a comparable
governing body of such Person, or any authorized committee of such board or
governing body, as applicable.
"Board Resolution" means, with respect to a Person, a copy of a
resolution certified by (i) the secretary or an assistant secretary of such
Person and (ii) the principal financial officer of such Person to have been
duly adopted by the Board of Directors of such Person and to be in full
force and effect on the date of such certification.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in the City of New York, New York are
required or authorized by law or other governmental action to be closed.
"Capital Expenditures" of a Person means expenditures (whether paid in
cash or accrued as a liability) by such Person or any of its Subsidiaries
that, in conformity with GAAP, are or would be included in "capital
expenditures," "additions to property, plant, or equipment" or comparable
items in the consolidated financial statements of such Person consistent
with prior accounting practices.
"Capital Stock" means, with respect to any Person, (i) any capital
stock of such Person and shares, interests, participations or other
ownership interests (however designated) of such Person, including without
limitation, each class of common stock and preferred stock of such Person,
if such Person is a corporation, (ii) each general or limited partnership
interest of such Person, if such Person is a partnership, (iii) each
membership or similar interest of such Person, if such Person is a limited
liability company and (iv) each other interest or participation that
confers on a Person the right to receive a share of the profits or losses
of, or distributions of assets of, the issuing Person, in each case,
including any rights (other than debt securities convertible into any such
interests), warrants or options to purchase any of the foregoing.
"Capitalized Lease Obligation" means obligations under a lease that are
required to be capitalized for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by such obligations
shall be the capitalized amount of such obligations, as determined in
accordance with GAAP.
"Carlton" means Carlton Resources Corporation, a Delaware corporation.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of
not more than one year from the date of acquisition, (iii) certificates of
deposit with maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year, and overnight
bank deposits, in each case, with any Eligible Institution, (iv) repurchase
obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) of this
definition entered into with any Eligible Institution, (v) commercial paper
rated "P-l," "A-l" or the equivalent thereof by Moody's or Standard &
Poor's, respectively, and in each case maturing within 180 days after the
date of acquisition, (vi) shares of money market funds, including those of
the Trustee, that invest solely in United States dollars and securities of
the types described in clauses (i) through (v) of this definition, and
(vii) demand and time deposits and certificates of deposit with an Eligible
Institution or with commercial banks insured by the Federal Deposit
Insurance Corporation.
"Change of Control" means the occurrence of (i) the sale, lease,
transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all of the assets of the Company to
any person (as such term is used in Section 13(d)(3) of the Exchange Act)
other than to a Subsidiary Guarantor, (ii) the Company consolidates with or
merges into another Person or any Person consolidates with, or merges into,
the Company, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is changed into or exchanged for
cash, securities or other property, other than any such transaction where
(a) the outstanding Voting Stock of the Company is changed into or
exchanged for Voting Stock of the surviving or resulting Person that is
Qualified Capital Stock and (b) the holders of the Voting Stock of the
Company immediately prior to such transaction own, directly or indirectly,
not less than a majority of the Voting Stock of the surviving or resulting
Person immediately after such transaction, (iii) the adoption of a plan
relating to the liquidation or dissolution of the Company not involving a
merger or consolidation or a sale or other disposition of assets described
in clause (i) of this definition, (iv) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of
which is that any person (as defined above), excluding the Permitted
Holders, becomes the "beneficial owner" (as that term is used in
Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of
more than 50% of the total voting power of the Company's then outstanding
Voting Stock; provided that the sale of Voting Stock of the Company to a
Person or Persons acting as underwriters in connection with a firm
commitment underwriting shall not constitute a Change of Control, or
(v) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors (other than by action
of the Permitted Holders). For purposes of this definition, any transfer of
an equity interest of an entity that was formed for the purpose of
acquiring Voting Stock of the Company will be deemed to be a transfer of
such portion of such Voting Stock as corresponds to the portion of the
equity of such entity that has been so transferred.
"Commission" means the Securities and Exchange Commission.
"Consolidated Fixed Charge Coverage Ratio" on any date means, with
respect to the Company, the ratio, on a pro forma basis, of (i) the
aggregate amount of EBITDA attributable to continuing operations and
businesses (exclusive of the amounts attributable to operations and
businesses discontinued or disposed of, on a pro forma basis as if such
operations and businesses were discontinued or disposed of on the first day
of the Reference Period) for the Reference Period to (ii) the aggregate
Consolidated Interest Expense (exclusive of amounts attributable to
discontinued operations and businesses on a pro forma basis as if such
operations and businesses were discontinued or disposed of on the first day
of the Reference Period, but only to the extent that the obligations giving
rise to such Consolidated Interest Expense would no longer be obligations
contributing to Consolidated Interest Expense subsequent to the date of
discontinuation or disposal) during the Reference Period; provided that,
for purposes of such computation, in calculating EBITDA and Consolidated
Interest Expense, (a) the transaction giving rise to the need to calculate
the Consolidated Fixed Charge Coverage Ratio shall be assumed to have
occurred on the first day of the Reference Period, (b) the Incurrence of
any Indebtedness or issuance of Disqualified Capital Stock or the
retirement of any Indebtedness or Capital Stock during the Reference Period
or subsequent thereto shall be assumed to have occurred on the first day of
such Reference Period, and (c) Consolidated Interest Expense attributable
to any Indebtedness (whether existing or being Incurred) bearing a floating
interest rate shall be computed as if the rate in effect on the date of
determination had been the applicable rate for the entire period, unless
the Company or any Subsidiary Guarantor is a party to a Swap Obligation
(that remains in effect for the 12-month period after the date of
determination) that has the effect of fixing the interest rate on the date
of computation, in which case such rate (whether higher or lower) shall be
used.
"Consolidated Interest Expense" means, for any period, the aggregate
interest expense (without duplication) during such period in respect of all
Indebtedness of the Company and the Subsidiary Guarantors (including all
commissions, discounts, other fees and charges owed with respect to letters
of credit and banker's acceptance financing and costs associated with Swap
Obligations) determined on a consolidated basis in accordance with GAAP.
For purposes of this definition, (i) interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably
determined to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board),
and (ii) Consolidated Interest Expense attributable to any Indebtedness
guaranteed by the Company or a Subsidiary Guarantor, other than with
respect to Indebtedness of the Company or a Subsidiary Guarantor, shall be
deemed to be the interest expense attributable to the item guaranteed.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of
such Board of Directors on the Issue Date or (ii) was nominated for
election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be the address of the
Trustee specified in Section 11.2 or such other address as to which the Trustee
may give notice to the Company.
"Default" means an event or condition, the occurrence of which is, or
with the lapse of time or giving of notice or both would be, an Event of
Default.
"Definitive Notes" means Notes that are in the form of the Note
attached hereto as Exhibit A, excluding the paragraphs referred to in
footnotes 1 and 2 thereto and the schedule referred to in footnote 3
thereto, but including the modification referred to in footnote a.
"Depository" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.3 as the
Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such
successor.
"Disinterested Director" means, with respect to any transaction or
series of related transactions in respect of which the Board of Directors
is required to deliver a Board Resolution of such Board of Directors under
this Indenture, a member of such Board of Directors who does not have any
material direct or indirect financial interest (other than an interest
arising solely from the beneficial ownership of Capital Stock of the
Company) in or with respect to such transaction or series of transactions.
"Disqualified Capital Stock" means, with respect to any Person, any
Capital Stock of such Person or its Subsidiaries that, by its terms or by
the terms of any security into which it is convertible or exchangeable, is,
or upon the happening of an event or the passage of time would be, required
to be redeemed or repurchased by such Person or its Subsidiaries, including
at the option of the holder, in whole or in part, or has, or upon the
happening of an event or passage of time would have, a redemption or
similar payment due, on or prior to the Stated Maturity Date.
"EBITDA" means, for any period, (i) the sum of the Adjusted
Consolidated Net Income for such period, plus (ii) the sum, without
duplication (and only to the extent such amounts are deducted from net
revenues in determining such Adjusted Consolidated Net Income), of (a) the
provision for federal and state income taxes for such period,
(b) depreciation, depletion, and amortization for such period,
(c) Consolidated Interest Expense for such period, determined on a
consolidated basis for the Company and the Subsidiary Guarantors in
accordance with GAAP, (d) any charge associated solely with the prepayment
of any Indebtedness (provided that neither the Incurrence of such
Indebtedness nor the making of such prepayment occurred in violation of any
provision of this Indenture) and (e) any other non-cash charges.
"Eligible Institution" means a commercial banking institution that has
combined capital and surplus of not less than $500,000,000 and that is
rated "A" (or higher) according to Moody's or Standard & Poor's at the time
as of which any investment or rollover therein is made.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the Commission thereunder.
"Exchange Assets" means assets acquired by the Company or any
Subsidiary Guarantor in exchange for assets of the Company or any
Subsidiary Guarantor in connection with an Asset Sale, which acquired
assets include proved reserves with a value that, together with the cash or
Cash Equivalents received therefor by the Company or such Subsidiary
Guarantor, is equal to or greater than the value of the proved reserves
included in the assets disposed of by the Company or such Subsidiary
Guarantor in connection with such Asset Sale; provided, that (i) ownership
of such assets does not violate the provisions of Section 4.13 and
(ii) during any fiscal year, the Company and the Subsidiary Guarantors can
collectively acquire assets (other than proved reserves, cash or Cash
Equivalents) with a fair market value of up to $500,000 in exchange for
assets of the Company and the Subsidiary Guarantors.
"GAAP" means generally accepted accounting principles as in effect in
the United States on the Issue Date applied on a basis consistent with that
used in the preparation of the audited financial statements of the Company
included in the Prospectus.
"Global Note" means a Note that is in the form of the Note attached
hereto as Exhibit A, including the paragraphs referred to in footnotes 1
and 2 thereto and the schedule referred to in footnote 3 thereto, but
excluding, to the extent therein referenced, the text referred to in
footnote a thereto.
"Government Securities" means securities that are (i) direct
obligations of the United States of America for the timely payment of which
its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of
the United States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation of the United States of
America, which, in either case, are not callable or redeemable as the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as
custodian with respect to any such Government Security or a specific
payment of principal of or interest on any such Government Security held by
such custodian for the account of the holder of such depository receipt;
provided, that (except as required by law) such custodian is not authorized
to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of
the Government Security or the specific payment of principal of or interest
on the Government Security evidenced by such depository receipt.
The term "guarantee" means, as applied to any Indebtedness or other
obligation, (i) a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner, of any part or all of such Indebtedness or other
obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the
payment or performance (or payment of damages in the event of
nonperformance) of all or any part of such Indebtedness or other
obligation, including, without limiting the foregoing, the payment of
amounts drawn down under letters of credit. When used as a verb,
"guarantee" has a corresponding meaning.
"Hedging Contract" means an oil, gas or oil and gas purchase or hedging
agreement, and other agreement or arrangements, in each case, that is
designed to provide protection against fluctuations in the prices of oil or
gas, or both.
"Holder" means any Person from time to time in whose name any Note is
registered on the Note Register.
"Hydrocarbons" means oil, natural gas, condensate, and natural gas
liquids.
"Incur" means, with respect to any Indebtedness, to create, incur,
assume, guarantee or otherwise become liable for, contingently or
otherwise, any Indebtedness, and the term "Incurrence" when used as a noun
shall have a correlative meaning. Neither the accrual of interest nor the
accretion of original issue discount, nor the accretion of principal of a
non-interest bearing or other discount security shall be deemed the
Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person, without duplication
(i) all liabilities, contingent or otherwise, of such Person (a) for
borrowed money (whether or not the recourse of the lender is to the whole
of the assets of such Person or only to a portion thereof), (b) evidenced
by bonds, notes, debentures, or similar instruments or letters of credit or
representing the balance deferred and unpaid of the purchase price of any
property acquired by such Person or services received by such Person, but
excluding trade account payables and accrued liabilities arising in the
ordinary course of business that are not overdue by 90 days or being
contested in good faith by appropriate proceedings, promptly instituted and
diligently pursued, (c) evidenced by bankers' acceptances or similar
instruments issued or accepted by banks or Swap Obligations, (d) for the
payment of money relating to a Capitalized Lease Obligation, (e) for the
Attributable Indebtedness associated with any Sale and Leaseback
Transaction or (f) for Production Payments, (ii) reimbursement obligations
of such Person with respect to letters of credit, (iii) all liabilities of
others of the kind described in clause (i) or (ii) of this definition that
such Person has guaranteed or that is otherwise its legal liability (to the
extent of such guarantee or other legal liability) other than for
endorsements, with recourse, of negotiable instruments in the ordinary
course of business, and (iv) all obligations secured by a Lien (other than
Permitted Liens, except to the extent the obligations secured by such
Permitted Liens are otherwise included in clause (i), (ii) or (iii) of this
definition and are obligations of such Person) to which the property or
assets (including, without limitation, leasehold interests and any other
tangible or intangible property rights) of such Person are subject,
regardless of whether the obligations secured thereby shall have been
assumed by or shall otherwise be such Person's legal liability (but, if
such obligations are not assumed by such Person or are not otherwise such
Person's legal liability, the amount of such Indebtedness shall be deemed
to be limited to the fair market value of such property or assets
determined as of the end of the preceding fiscal quarter).
"Indenture" means this indenture, as amended or supplemented from time
to time.
"Insurance Proceeds" means the interest in and to all proceeds (net of
costs of collection, including attorneys' fees) which now or hereafter may
be paid under any insurance policies now or hereafter obtained by or on
behalf of the Company or any Subsidiary Guarantor in connection with any
assets thereof, together with interest payable thereon and the right to
collect and receive the same, including, without limitation, proceeds of
casualty insurance, title insurance, business interruption insurance and
any other insurance now or hereafter maintained with respect to such
assets.
"Interest Rate or Currency Agreement" of any Person means any forward
contract, futures contract, swap, option or other financial agreement or
arrangement (including, without limitation, caps, floors, collars, puts and
similar agreements) relating to, or the value of which is dependent upon,
interest rates or currency exchange rates.
"Investment" by any Person in any other Person means (i) the
acquisition (whether for cash, property, services, securities or otherwise)
of Capital Stock, bonds, notes, debentures, partnership, or other ownership
interests or other securities of such other Person or any agreement to make
any such acquisition, (ii) the making by such Person of any deposit with,
or advance, loan or other extension of credit to, such other Person
(including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such
property to such other Person) and (without duplication) any amount
committed to be advanced, loaned or extended to such other Person,
(iii) the entering into of any guarantee of, or other contingent obligation
with respect to, Indebtedness or other liability of such other Person,
(iv) the entering into of any Swap Obligation with such other Person, or
(v) the making of any capital contribution by such Person to such other
Person.
"Investment Grade Rating" means with respect to any Person or issue of
debt securities or preferred stock, a rating in one of the four highest
letter rating categories (without regard to "+" or "-" or other modifiers)
by any Rating Agency or if any such Rating Agency has ceased using letter
rating categories or the four highest of such letter rating categories are
not considered to represent "investment grade" ratings, then the comparable
"investment grade" ratings (as designated by any such Rating Agency).
"Issue Date" means the first date on which the Notes are issued under
this Indenture.
"Lien" means any mortgage, lien, pledge, charge, security interest, or
other encumbrance of any kind, regardless of whether filed, recorded, or
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement and any lease deemed to constitute a
security interest and any option or other agreement to give any security
interest).
"Material Change" means an increase or decrease (excluding changes that
result solely from changes in prices) of more than either (i) 10% from the
end of the immediately preceding fiscal quarter in the estimated discounted
future net revenue from proved oil and gas reserves of the Company and its
Restricted Subsidiaries, or (ii) 20% from the end of the immediately
preceding year in the estimated discounted future net revenue from proved
oil and gas reserves of the Company and its Restricted Subsidiaries, in
each case calculated in accordance with clause (i)(a) of the definition of
"Adjusted Consolidated Net Tangible Assets"; provided, however, that the
following will be excluded from the calculation of Material Change: (a) any
acquisitions of oil and gas reserves made after the end of the immediately
preceding year for which the discounted future net revenues have been
estimated by independent petroleum engineers since the end of the preceding
year and on which a Reserve Report or Reserve Reports exist and (b) any
disposition of properties existing at the beginning of the current quarter
or current year, as the case may be, for purposes of clause (i) or clause
(ii) of this definition, that have been disposed of in accordance with the
provisions of Section 4.11.
"Moody's" means Moody's Investors Service, Inc. and any successor to
the rating agency business thereof.
"Net Cash Proceeds" means an amount equal to (i) the aggregate amount
of cash and Cash Equivalents received by the Company or any Restricted
Subsidiary of the Company in respect of an Asset Sale, less (ii) the sum of
(a) all reasonable out-of-pocket fees, commissions, and other expenses
incurred in connection with such Asset Sale, including the amount
(estimated in good faith by the Company) of income, franchise, sales and
other applicable taxes to be paid, payable or accrued by the Company or
such Restricted Subsidiary (in each case as estimated in good faith by the
Company without giving effect to tax attributes unrelated to such Asset
Sale) in connection with such Asset Sale, and (b) the aggregate amount of
cash and Cash Equivalents so received which is used to retire any then
existing Indebtedness of the Company or any Subsidiary Guarantor (other
than the Notes), as the case may be, which is secured by a Lien on the
property which is the subject of the Asset Sale or which is required by the
terms of such Indebtedness to be repaid in connection with such Asset Sale.
"Net Income" of any Person for any period means the net income (loss)
of such Person for such period, determined on a consolidated basis in
accordance with GAAP, excluding (without duplication) (i) all
extraordinary, unusual and nonrecurring gains, (ii) the net income, if
positive, of any other Person, in which such Person or any of its
consolidated Subsidiaries has an interest, except to the extent of the
amount of any dividends or distributions actually paid in cash to such
Person or a consolidated Subsidiary of such Person during such period,
(iii) the net income, if positive, of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
and (iv) the net income, if positive, of any Subsidiary of such Person to
the extent that the declaration or payment of dividends or similar
distributions is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute,
rule, or governmental regulation applicable to such Subsidiary.
"Net Proceeds" means (i) in the case of any sale by a Person of
Qualified Capital Stock or other securities, the aggregate net cash
proceeds received by such Person from the sale of such securities (if such
Person is the Company, other than to a Restricted Subsidiary of the
Company, and if such Person is not the Company, other than to any of its
consolidated Subsidiaries) after payment of reasonable out-of-pocket
expenses, commissions and discounts incurred in connection therewith, and
(ii) in the case of any exchange, exercise, conversion or surrender of any
outstanding securities or Indebtedness of such Person for or into shares of
Qualified Capital Stock of such Person, the net book value of such
outstanding securities as adjusted on the books of such Person or
Indebtedness of such Person to the extent recorded in accordance with GAAP,
in each case, on the date of such exchange, exercise, conversion or
surrender (plus any additional amount required to be paid by the holder of
such Indebtedness or securities to such Person upon such exchange,
exercise, conversion or surrender and less (a) any and all payments made to
the holders of such Indebtedness or securities and (b) all other expenses
incurred by such Person in connection therewith, in each case, in so far as
such payments or expenses are incident to such exchange, exercise,
conversion, or surrender).
"Net Working Capital" of any Person means (i) all current assets of
such Person and, if such Person is the Company, the Subsidiary Guarantors,
and if such Person is not the Company, its Restricted Subsidiaries, minus
(ii) all current liabilities of such Person and its consolidated
Subsidiaries other than the current portion of long term Indebtedness, each
item to be determined on a consolidated basis in conformity with GAAP.
"Net Worth" of any Person means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly
or annual consolidated balance sheet of such Person and, if such Person is
the Company, the Subsidiary Guarantors, and if such Person is not the
Company, its Restricted Subsidiaries (which balance sheet shall be as of a
date not more than 90 days prior to the date of such computation), less any
amounts included therein attributable to Disqualified Capital Stock or any
equity security convertible into or exchangeable for Indebtedness, the cost
of treasury stock (not otherwise deducted from stockholders' equity), and
the principal amount of any promissory notes receivable from the sale of
the Capital Stock of such Person or, if such Person is the Company, any of
the Subsidiary Guarantor, and if such Person is not the Company, its
Restricted Subsidiaries, each item to be determined in conformity with
GAAP.
"Note Custodian" means the Trustee, as custodian with respect to the
Global Notes, or any successor entity thereto.
"Note Register" means the register maintained by or for the Company in
which the Company shall provide for the registration of the Notes and the
transfer of the Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable
under the documentation governing any Indebtedness.
"Offering" has the meaning assigned to such term in the Prospectus.
"Officer" means, with respect to any Person, its chief or principal
executive officer, president, chief or principal financial officer,
principal accounting officer, treasurer, secretary or any vice president of
such Person.
"Officers' Certificate" means a certificate signed by two Officers of
the Company, at least one of whom shall be the principal executive officer,
principal accounting officer or principal financial officer of the Company,
that meets the requirements of Section 11.5.
"Oil and Gas Assets" means assets and properties used in the Oil and
Gas Business.
"Oil and Gas Business" means the business of acquiring, holding,
leasing, selling, exploring and developing oil and gas assets and
properties, including the exploration for, and exploitation, development,
production, processing (but not refining), purchasing, marketing and
transportation of, Hydrocarbons and other related oil and gas businesses.
"Oil and Gas Securities" means the Voting Stock of a Person engaged in
the Oil and Gas Business, provided that such Voting Stock shall constitute
a majority of the Voting Stock of such Person in the event that such Voting
Stock is not subject to the reporting requirements of the Exchange Act.
"Opinion of Counsel" means a written opinion of legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of
Section 11.5. The counsel may be an employee of or counsel to the Company.
"Opinion of Independent Counsel" means a written opinion of legal
counsel which is issued by a Person who is not an employee, director or
consultant (other than non-employee legal counsel) of the Company or any of
its Subsidiaries, who may be outside counsel to the Company and who shall
be reasonably acceptable to the Trustee.
"Permitted Bank Credit Facility" means, with respect to any Person, a
term, revolving credit or letter of credit facility, or any combination of
such facilities, with a commercial banking institution, the proceeds of
which are used to acquire Oil and Gas Securities or Oil and Gas Assets, for
working capital and other general corporate purposes, as the same may be
amended, extended or refinanced from time to time.
"Permitted Hedging Transactions" means non-speculative transactions in
futures, forwards, swaps or option contracts (including both physical and
financial settlement transactions) engaged in by the Company and the
Subsidiary Guarantors as part of their normal business operations as a
risk-management strategy or hedge against adverse changes in the prices of
natural gas, feedstock or refined products which arise in the ordinary
course of business of the Company and the Subsidiary Guarantors; provided,
that such transactions do not in the case of the Company and the Subsidiary
Guarantors, on a monthly basis, relate to more than 90% of their combined
average net natural oil and gas production per month for the most recent
3-month period measured at the time of such transaction; provided, further,
that, at the time of such transaction (i) the counterparty to any such
transaction is an Eligible Institution or a Person that has an Investment
Grade Rating or has an issue of debt securities or preferred stock
outstanding with an Investment Grade Rating or (ii) such counterparty's
obligation pursuant to such transaction is unconditionally guaranteed in
full by, or secured by a letter of credit issued by, an Eligible
Institution or a Person that has an Investment Grade Rating or that has an
issue of debt securities or preferred stock outstanding with an Investment
Grade Rating.
"Permitted Holders" means Dr. William W. Talley II, Larry E. Lee,
William Stuart Price and M. Helen Bennett (or (i) their heirs, their
estates or any trusts in which they or any of their immediate family
members own, directly or indirectly, a beneficial interest in excess of 50%
or (ii) any corporation, partnership or other legal entity in which they
own, directly or indirectly, a beneficial interest in excess of 50%).
"Permitted Indebtedness" means, without duplication, (i) the
Indebtedness evidenced by the Original Notes or the Subsidiary Guarantees,
(ii) Indebtedness owed by any Subsidiary Guarantor to the Company or any
other Subsidiary Guarantor or Indebtedness owed by the Company to any
Subsidiary Guarantor; provided that in each case, (a) such Indebtedness is
Subordinated Indebtedness, and (b) upon any subsequent issuance or transfer
of any Capital Stock or any other event that results in any such Subsidiary
Guarantor ceasing to be a Subsidiary Guarantor or any other subsequent
transfer of any such Indebtedness (except to the Company or a Subsidiary
Guarantor), such Indebtedness shall be deemed to be Incurred and shall be
treated as an Incurrence of Indebtedness for purposes of the provisions of
Section 4.7 at the time the Subsidiary Guarantor in question ceased to be a
Subsidiary Guarantor or the time such subsequent transfer occurred,
(iii) Indebtedness outstanding under a Permitted Bank Credit Facility so
long as the aggregate principal amount of all Indebtedness outstanding
under all Permitted Bank Credit Facilities for the Company and the
Subsidiary Guarantors does not exceed $25,000,000 less the amount of Net
Cash Proceeds from any Asset Sale applied pursuant to the provisions of
Section 4.11 to repay or prepay such Indebtedness that results in a
permanent reduction relating thereto, (iv) Swap Obligations of the Company
or the Subsidiary Guarantors, (v) Indebtedness outstanding on the Issue
Date (and not repaid with the proceeds of the Offering), (vi) Indebtedness
owed by the Company or the Subsidiary Guarantors in an aggregate principal
amount outstanding not to exceed $5,000,000 at any one time, whether of the
same type as permitted by clauses (i) through (v) and (vii) of this
definition or otherwise, and (vii) Permitted Refinancing Indebtedness of
the Company and the Subsidiary Guarantors.
"Permitted Investment" means, when used with reference to the Company
or any Subsidiary Guarantor, (i) trade credit extended to Persons in the
ordinary course of business, (ii) purchases of Cash Equivalents,
(iii) Investments by the Company or the Subsidiary Guarantors in Persons
which are or which will, contemporaneously with the making of such
Investment, become Wholly Owned Subsidiary Guarantors and are engaged in
the Oil and Gas Business, (iv) Investments in Oil and Gas Assets,
(v) Investments in any Person the sole consideration for which consists of
Qualified Capital Stock of the Company, (vi) Interest Rate and Currency
Agreements with respect to Permitted Bank Credit Facilities entered into
with one or more financial institutions that are lender parties thereto in
the ordinary course of business and not for purposes of speculation and
that are designed to protect the Company against risks or fluctuations in
interest rates related to payment obligations existing and arising under
such Permitted Bank Credit Facilities and Swap Obligations, (vii) advances
to officers and employees of the Company or any Subsidiary Guarantor in
connection with the performance of their duties in the ordinary course of
business in an amount not to exceed $250,000 in the aggregate outstanding
at any time, (viii) margin deposits in connection with Permitted Hedging
Transactions, (ix) Investments and expenditures made in the ordinary course
of business by the Company or the Subsidiary Guarantors, and of a nature
that is or shall have become customary in, the Oil and Gas Business as a
means of actively exploiting, exploring for, acquiring, developing,
enhanced recovery of, processing, gathering, purchasing, selling, marketing
or transporting oil or gas through agreements, transactions, interests or
arrangements, including arrangements which permit a Person to share risks
or costs, comply with regulatory requirements regarding local ownership or
satisfy other objectives customarily achieved through the conduct of the
Oil and Gas Business jointly with third parties, including, without
limitation, (a) ownership interests in Oil and Gas Assets or gathering
systems and (b) Investments and expenditures in the form of or pursuant to
operating agreements, processing agreements, farm-in agreements, farm-out
agreements, development agreements, area of mutual interest agreements,
unitization agreements, pooling arrangements, joint bidding agreements,
service contracts, joint venture agreements, partnership agreements
(whether general or limited), subscription agreements, stock purchase
agreements and other similar agreements with third parties; provided that
in the case of any joint venture engaged in processing, gathering,
marketing or transporting oil or gas (1) all Indebtedness of such joint
venture (other than a joint venture that is an Unrestricted Subsidiary of
the Company) that would not otherwise constitute Indebtedness of the
Company or a Subsidiary Guarantor shall be deemed Indebtedness of such
Person in proportion to its direct or indirect ownership interest in such
joint venture and (2) such joint venture shall be reasonably calculated to
enhance the value of the reserves of such Person or marketability of
production from such reserves, (x) other Investments not in excess of
$2,500,000 at any time outstanding, and (xi) loans made to officers,
directors and employees of the Company or any Subsidiary Guarantor approved
by the applicable Board of Directors (or by an authorized officer), the
proceeds of which are used solely to purchase stock or to exercise stock
options received pursuant to an employee stock option plan or other
incentive plan, in a principal amount not to exceed the purchase price of
such stock or the exercise price of such stock options, as applicable.
"Permitted Liens" with respect to any Person means (i) Liens imposed by
governmental authorities for taxes, assessments, or other charges not yet
due or which are being contested in good faith and by appropriate
proceedings, if adequate reserves with respect thereto are maintained on
the books of any such Person in accordance with GAAP, (ii) statutory Liens
of landlords, carriers, warehousemen, mechanics, materialmen, repairmen,
vendors, mineral interest owners, or other like Liens arising by operation
of law in the ordinary course of business provided that (a) the underlying
obligations are not overdue for a period of more than 60 days, or (b) such
Liens are being contested in good faith and by appropriate proceedings and
adequate reserves with respect thereto are maintained on the books of any
such Person in accordance with GAAP, (iii) deposits of cash or Cash
Equivalents to secure the performance of bids, trade contracts (other than
borrowed money), leases, statutory obligations, surety bonds, performance
bonds, and other obligations of a like nature incurred in the ordinary
course of business (or to secure reimbursement obligations or letters of
credit issued to secure such performance or other obligations),
(iv) easements, rights-of-way, zoning, similar restrictions and other
similar encumbrances or title defects incurred in the ordinary course of
business which, in the aggregate, are not material in amount and which do
not, in any case, materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business
of such Person, (v) Liens securing the Notes, any Subsidiary Guarantee or
any Permitted Bank Credit Facility, (vi) pledges or deposits made in the
ordinary course of business in connection with worker's compensation,
unemployment insurance, other types of social security legislation,
property insurance and liability insurance, (vii) Liens on the assets of
any Person existing at the time such assets are acquired by such Person,
whether by merger, consolidation, purchase of assets or otherwise so long
as such Liens (a) are not created, incurred or assumed in contemplation of
such assets being acquired by such Person and (b) do not extend to any
other assets of such Person, (viii) leases or subleases granted to others
(to the extent of any such lessee's normal and customary usage rights
thereunder) or obtained from others (to the extent of any such lessor's
title thereunder), in either case, that do not materially interfere with
the ordinary course of business of any of such Person, (ix) Liens
ordinarily and customarily arising under operating agreements, and (x) any
extension, renewal or replacement of the Liens created pursuant to any of
clauses (i) through (ix) of this definition, provided that such Liens would
have otherwise been permitted under such clauses, and provided further that
the Liens permitted by this clause (x) do not secure any additional
Indebtedness or encumber any additional property.
"Permitted Refinancing Indebtedness" means any Indebtedness of a Person
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund, other Indebtedness of such
Person; provided that (i) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) then outstanding of the
Indebtedness for which the exchange is made or so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable
expenses incurred in connection therewith), (ii) such Permitted Refinancing
Indebtedness (other than Indebtedness under Permitted Bank Credit
Facilities) has a final maturity date later than the final maturity date
of, and has a weighted average life equal to or greater than the weighted
average life of, the Indebtedness for which the exchange is made or being
extended, refinanced, renewed, replaced, defeased or refunded, (iii) if the
Indebtedness for which the exchange is made or being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment
to the Notes or any Subsidiary Guarantee (as the case may be) such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the
Notes or any Subsidiary Guarantee (as the case may be), on terms at least
as favorable to the Holders of Notes or any Subsidiary Guarantee (as the
case may be) as those contained in the documentation governing the
Indebtedness for which the exchange is made or being extended, refinanced,
renewed, replaced, defeased or refunded, and (iv) with respect to any such
Indebtedness of the Company for which the exchange is made or being
extended, refinanced, renewed, replaced, defeased or refunded, such
Permitted Refinancing Indebtedness shall not be Incurred by any Subsidiary
Guarantor.
"Person" means any corporation, individual, joint stock company, joint
venture, partnership, limited liability company, unincorporated
association, governmental regulatory entity, country, state, or political
subdivision thereof, trust, municipality, or other entity.
"Preferred Stock" means, with respect to any Person, any class or
classes (however designated) of Capital Stock of such Person that is
preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person over shares of Capital Stock of any other class of such Person.
"Production Payment" means any volumetric or dollar-denominated
production payment or other similar burden on the property of the Company
or any Subsidiary Guarantor.
"Prospectus" means the "Prospectus" regarding the issuance of the
Notes, which is included as a part of the Company's Registration Statement
on Form S-1, as amended (Registration No. 333-42641), which was filed with
the Commission on December 18, 1997 and declared effective by the
Commission on February 12, 1998.
"Public Equity Offering" means an underwritten public offering,
subsequent to the Issue Date, by a nationally recognized member of the
National Association of Securities Dealers, Inc. of Qualified Capital Stock
of the Company pursuant to an effective registration statement filed with
the Commission pursuant to the Securities Act.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Rating Agencies" means Standard and Poor's and Moody's, or any
successor to the respective rating agency businesses thereof.
"Reference Period" with regard to any Person means the four full fiscal
quarters of such Person ended on or immediately preceding any date upon
which any determination is to be made pursuant to the terms of the Notes or
this Indenture.
"Reserve Report" means a report prepared by independent petroleum
engineers with respect to Hydrocarbon reserves in accordance with
guidelines published by the Commission.
"Responsible Officer", when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee (or any
successor group of the Trustee) with the direct responsibility for the
administration of this Indenture and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the
particular subject.
"Restricted Investment" means (i) the designation of a Subsidiary as an
Unrestricted Subsidiary in the manner described in the definition of
"Unrestricted Subsidiary" and (ii) any Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary of such Person.
"Sale and Leaseback Transaction" means an arrangement relating to
property owned on the Issue Date or thereafter acquired whereby a Person or
a Subsidiary of such Person transfers such property to another Person and
leases it back from such other Person.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Standard and Poor's" means Standard and Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., and any successor to the
rating agency business thereof.
"Stated Maturity Date" means February 15, 2008.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Subsidiary Guarantor that (i) requires no payment of principal prior to or
on the Stated Maturity Date and (ii) is expressly subordinate and junior in
right of payment to the Notes or the Subsidiary Guarantees, as the case may
be.
"Subsidiary" with respect to any Person means, as of each relevant
time, (i) a corporation with respect to which such Person or its
Subsidiaries (or any combination thereof) own or control , directly or
indirectly, at least 50% of such corporation's Voting Stock, (ii) a
partnership in which such Person or a Subsidiary of such Person is, at the
time, a general partner of such partnership and has more than 50% of the
total voting power of partnership interests, provided, however,
notwithstanding the foregoing, none of (a) Olympia 1987A Private Drilling
Program Limited Partnership, an Oklahoma limited partnership, (b) Magic
Circle 1988 Private Drilling Program Limited Partnership, an Oklahoma
limited partnership or (c) Magic Circle 1989 Private Drilling Program
Limited Partnership, an Oklahoma limited partnership, shall be considered a
"Subsidiary" of the Company for any purpose of this Indenture unless and
until, in each case, it elects to become a "Subsidiary" of the Company and
executes and delivers to the Trustee a supplemental indenture to the effect
that it is a "Subsidiary" of the Company, or (iii) any other Person (other
than a corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person, or such Person and one or more Subsidiaries of
such Person, directly or indirectly, has (a) at least a 50% ownership
interest or (b) the power to elect or direct the election of the directors
or other governing body of such other Person.
"Subsidiary Guarantee" means any guarantee of the Notes by any
Subsidiary Guarantor pursuant to the provisions of this Indenture.
"Subsidiary Guarantors" means (i) RB Operating Company, a Delaware
corporation, (ii) RLP Gulf States, L.L.C., an Oklahoma limited liability
company, and (iii) each other Person that guarantees the payment and
performance of the Notes in accordance with the provisions of this
Indenture, in each case, until any such Person shall be released and
relieved of its obligations as a Subsidiary Guarantor pursuant to the
provisions of this Indenture.
"Swap Obligation" of any Person means any Interest Rate or Currency
Agreement or Hedging Contract entered into with one or more financial
institutions or one or more futures exchanges in the ordinary course of
business and not for purposes of speculation that is designed to protect
such Person against risks or fluctuations that arise in the ordinary course
of business of the Company and the Subsidiary Guarantors in (i) interest
rates related to payment obligations on Indebtedness (other than Permitted
Indebtedness) permitted to be Incurred pursuant to the provisions of
Section 4.7(a) and which shall have a notional amount no greater than 100%
of the principal amount of such Indebtedness being hedged thereby, (ii)
currency exchange rate fluctuations related to the payment obligations on
Indebtedness (other than Permitted Indebtedness) permitted to be Incurred
pursuant to the provisions of Section 4.7(a) or to the foreign currency
cash flows reasonably expected to be generated by the Company and the
Subsidiary Guarantors and the notional principal amount of such currency
exchange obligations does not exceed the amount of such foreign currency
cash flows to which they relate, or (iii) fluctuations in oil and gas
prices.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date on which this
Indenture is qualified under the TIA, except as provided in Section 9.3;
provided, however, that, in the event the Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act" means, to the extent
required by such amendments, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture
and thereafter means the successor serving hereunder.
"Unrestricted Non-Recourse Indebtedness" of any Unrestricted Subsidiary
means (i) Indebtedness of such Person that is secured solely (other than
with respect to clause (ii) below) by a Lien upon the stock of an
Unrestricted Subsidiary of such Person and as to which there is no recourse
(other than with respect to clause (ii) below) against such Person or any
of its assets other than against such stock (and the dollar amount of any
Indebtedness of such Person as described in this clause (i) shall be deemed
to be zero for purposes of all other provisions of this Indenture) and
(ii) guarantees of the Indebtedness of Unrestricted Subsidiaries of such
Person.
"Unrestricted Subsidiary" means, in respect of any Person, any other
Person ("Other Person") that would, but for this definition of
"Unrestricted Subsidiary", be a Restricted Subsidiary of such Person
organized or acquired after the Issue Date as to which all of the following
conditions apply: (i) neither such Person nor any of its other Subsidiaries
provides, or is obligated to provide, any credit support of any
Indebtedness, or other financial support, of such Other Person (including
any undertaking, agreement or instrument evidencing such Indebtedness or
maintenance or preservation of such Other Person's financial condition or
to cause such Other Person to achieve any specified levels of operating
results); (ii) such Other Person is not liable, directly or indirectly,
with respect to any Indebtedness other than Unrestricted Subsidiary
Indebtedness and does not own any Capital Stock of, or own or hold any Lien
on any property of, such Person or any of its other Restricted
Subsidiaries; (iii) neither such Person nor any of its Restricted
Subsidiaries has made an Investment in such Other Person unless such
Investment was permitted by the provisions of Section 4.8, and neither such
Person nor any of its Restricted Subsidiaries has any obligations to make
any Investment in such Other Person; (iv) such Other Person, either alone
or in the aggregate with all other Unrestricted Subsidiaries, does not
operate or own, directly or indirectly, any significant portion of the
assets or business of such Person and its other Subsidiaries; and (v) the
Board of Directors of such Person, as provided below, shall have designated
such Other Person to be an Unrestricted Subsidiary on or prior to the date
of organization or acquisition of such Other Person. Any such designation
by the Board of Directors of such Person shall be evidenced to the Trustee
by delivering to the Trustee a Board Resolution thereof giving effect to
such designation and an Officers' Certificate certifying that such
designation complies with the foregoing conditions and was permitted by the
provision of Section 4.8.
"Unrestricted Subsidiary Indebtedness" means, as to any Unrestricted
Subsidiary of any Person, Indebtedness of such Unrestricted Subsidiary
(i) as to which neither such Person nor any Subsidiary of such Person
(a) is directly or indirectly liable (by virtue of such Person or any such
Subsidiary being the primary obligor on, guarantor of, general partner of,
or otherwise liable in any respect to, such Indebtedness), or
(b) constitutes a lender, (ii) no default with respect to which would
permit any holder of any Indebtedness of such Person or any Subsidiary of
such Person to declare a default on such Indebtedness of such Person or any
Subsidiary of such Person or cause the payment thereof to be accelerated or
payable prior to its stated maturity, and (iii) as to which the lenders
have been notified in writing that they will not have any recourse to the
stock or assets of such Person or any of its Subsidiaries.
"Voting Stock" means Capital Stock of a Person entitled (without regard
to the occurrence of any contingency) to vote in the election of the
directors, managers, trustees or similar Persons of such Person.
"Wholly Owned Subsidiary" means any Subsidiary to the extent (i) all of
the Capital Stock or other ownership interests in such Subsidiary, other
than any directors' qualifying shares mandated by applicable law and
redeemable preferred stock of Carlton (as referred in Section 4.8(b)(4))
which is outstanding on the Issue Date but is fully and finally redeemed
and discharged no later than as provided in Sections 4.8(b)(4) and 4.18, is
owned directly or indirectly by the Company or (ii) such Subsidiary is
organized in a foreign jurisdiction and is required by the applicable laws
and regulations of such foreign jurisdiction to be partially owned by the
government of such foreign jurisdiction or individual or corporate citizens
of such foreign jurisdiction or another foreign jurisdiction in order for
such Subsidiary to transact business in such foreign jurisdiction, provided
that the Company, directly or indirectly, owns the remaining Capital Stock
or ownership interests in such Subsidiary and, by contract or otherwise,
controls the management and business of such Subsidiary and derives the
economic benefits of ownership of such Subsidiary to substantially the same
extent as if such Subsidiary were a wholly owned Subsidiary.
"Wholly Owned Subsidiary Guarantor" means any Subsidiary Guarantor to
the extent (i) all of the Capital Stock or other ownership interests in
such Subsidiary Guarantor, other than any directors' qualifying shares
mandated by applicable law and redeemable preferred stock of Carlton (as
referred in Section 4.8(b)(4)) which is outstanding on the Issue Date but
is fully and finally redeemed and discharged no later than as provided in
Sections 4.8(b)(4) and 4.18, is owned directly or indirectly by the Company
or (ii) such Subsidiary Guarantor is organized in a foreign jurisdiction
and is required by the applicable laws and regulations of such foreign
jurisdiction to be partially owned by the government of such jurisdiction
or individual or corporate citizens of such foreign jurisdiction or another
foreign jurisdiction in order for such Subsidiary Guarantor to transact
business in such foreign jurisdiction, provided that the Company, directly
or indirectly, owns the remaining Capital Stock or ownership interests in
such Subsidiary Guarantor and, by contract or otherwise, controls the
management and business of such Subsidiary Guarantor and derives the
economic benefits of ownership of such Subsidiary Guarantor to
substantially the same extent as if such Subsidiary Guarantor were a Wholly
Owned Subsidiary of the Company.
SECTION 1.2 OTHER DEFINITIONS.
Defined in
Term Section
"Adjusted Net Assets" 10.7
"Agent Members" 2.1
"Benefitted Party" 10.1
"Change of Control Offer" 4.17
"Change of Control Payment Date" 4.17
"Change of Control Purchase Price" 4.17
"Covenant Defeasance" 8.3
"DTC" 2.3
"Event of Default" 6.1
"Excess Cash" 4.11
"Excess Cash Acceptance Amount 4.11
"Excess Cash Offer" 4.11
"Excess Cash Offer Amount" 4.11
"Excess Cash Offer Price" 4.11
"Excess Cash Offer Trigger Date" 4.11
"Excess Cash Purchase Date" 4.11
"Funding Guarantor" 10.7
"Interest Payment Date" Exhibit A
"Legal Defeasance" 8.2
"Offer Period" 3.9
"Original Notes" 2.2
"Paying Agent" 2.3
"Registrar" 2.3
"Restricted Payment" 4.8
"Subsidiary Guarantee" 10.1
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this
Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes and the Subsidiary Guarantees;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, any Subsidiary Guarantor and
any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule
under the TIA have the meanings so assigned to them.
SECTION 1.4 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive, and "including" means "including
without limitation", "including but not limited to" or words of
similar import;
(iv) words in the singular include the plural, and in the
plural include the singular;
(v) 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;
(vi) all references herein to particular Articles, Sections,
clauses or subclauses of Sections and Exhibits refer to this Indenture
unless expressly otherwise as indicated;
(vii) provisions apply to successive events and transactions;
and
(viii) references to sections of or rules under the Securities
Act or the Exchange Act shall be deemed to include substitute,
replacement of successor sections or rules adopted by the Commission
from time to time.
ARTICLE 2
THE NOTES
SECTION 2.1 FORM AND DATING.
(a) General. The Notes, the notation thereon relating to the
Subsidiary Guarantees and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage.
Each Note shall be issued in fully-registered form, without coupon, in
minimum denominations of $1,000 and integral multiples thereof, and shall
be dated the date of its authentication.
All Notes issued pursuant to this Indenture shall be considered
collectively to be a single class for all purposes of this Indenture,
including, waivers, amendments, redemptions and offers to purchase.
The terms and provisions contained in the form of the Notes and the
notation thereon relating to the Subsidiary Guarantees annexed hereto as
Exhibit A and the Subsidiary Guarantees shall constitute, and are hereby
expressly made, a part of this Indenture, and the Company, the Subsidiary
Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound
thereby.
(b) Global Notes.
(i) Generally. The Notes initially offered and sold pursuant to
the Prospectus shall be issued in the form of one or more permanent global
notes and shall be substantially in the form of Exhibit A (including the
text referred to in footnotes 1 and 2 thereto and the schedule referred to
in footnote 3 thereto, but excluding, to the extent therein referenced, the
text referred to in footnote a thereto). Each Global Note shall be
deposited on behalf of the purchasers of the Notes represented thereby
with, or on behalf of, the Depository, registered in the name of the
Depository or its designated nominee, duly executed by the Company and
authenticated by the Trustee as herein provided. Each Global Note shall
represent such of the outstanding Notes as shall be specified therein, and
each shall provide that it shall represent the aggregate amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
amount of outstanding Notes represented thereby may from time to time be
increased, subject to the limitation set forth in Section 2.2, or
decreased, by adjustments made on the records of the Trustee and the
Depository or its nominee as herein provided. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Note Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.6. The
Notes shall remain in the form of Global Notes until the occurrence of
either of the events specified in clause (y) or (z) of Section 2.6(b)(ii)
and the completion of the cancellation and reissuance procedures therein
provided.
(ii) Book-Entry Provisions. The Company shall execute and the
Trustee shall, in accordance with Section 2.2, authenticate and deliver
each Global Note that shall be (i) registered in the name of the Depository
or its nominee and (ii) delivered by the Trustee to the Depository or
pursuant to the Depository's instructions or held by the Trustee as Note
Custodian for the Depository. With respect to the Notes that are
represented by a Global Note, the Company authorizes the execution and
delivery by the Trustee of a letter of representation or other similar
agreement or instrument in the form customarily provided by the Depository
appointed with respect to such Global Note.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights either under this Indenture with respect to any Global Note
held on their behalf by the Depository (or its nominee), or the Note
Custodian as its custodian, or under such Global Note, and the Depository
may be treated by the Company, the Subsidiary Guarantors, the Trustee and
any agent of the Company, the Subsidiary Guarantors or the Trustee as the
absolute owner and Holder of such Global Note for all purposes whatsoever,
including the Person (i) through whom all rights of ownership may be
exercised, (ii) to whom all notices are required to be made, and (iii)
entitled to receive payments from or at the direction of the Company with
respect to the Notes. Notwithstanding the foregoing, (y) the registered
Holder of a Global Note may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take action that a Holder is entitled to take under this
Indenture or the Notes and (z) nothing herein shall prevent the Company,
the Subsidiary Guarantors, the Trustee or any agent of the Company, the
Subsidiary Guarantors or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
shall impair, as between the Depository and its Agent Members, the
operation of customary practices and procedures of such Depository
governing the exercise of the rights of an owner of a beneficial interest
of any Note.
(c) Definitive Notes. Notes shall be issued in definitive form upon
either of the occurrences specified in clause (y) or (z) of Section
2.6(b)(ii), and when so issued, shall be substantially in the form of
Exhibit A (including the modification provided for in footnote a thereto,
but excluding the text referred to in footnotes 1 and 2 thereto and the
schedule referred to in footnote 3 thereto) and executed, authenticated and
delivered as provided for in, or referred to by, Section 2.6(b)(ii).
SECTION 2.2 EXECUTION AND AUTHENTICATION.
One Officer shall sign the Notes for the Company by manual or
facsimile signature. If an Officer whose signature is on a Note no longer
holds that office at the time the Trustee authenticates the Note, the Note
shall nevertheless be valid. Each Subsidiary Guarantor shall execute its
Subsidiary Guarantee in the manner set forth in Section 10.8.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note
has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be
substantially as set forth in Exhibit A.
The Trustee shall authenticate (i) the Notes for original issue on the
Issue Date in the aggregate principal amount of $115,000,000 (the "Original
Notes") and (ii) additional Notes for original issue from time to time
after the Issue Date in such principal amount as may be set forth in a
written order of the Company delivered to the Trustee, which written order
shall specify (a) the amount of Notes to be authenticated and the date of
original issue thereof and (b) the amount of Notes to be issued in global
form or definitive form. The aggregate principal amount of Notes
outstanding at any time may not exceed $115,000,000 plus such additional
principal amounts as may be issued and authenticated pursuant to clause
(ii) of this paragraph, except as provided in Section 2.8.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
At any time and from time to time after the execution of this
Indenture, the Trustee or an authenticating agent shall upon receipt of a
written order of the Company signed by two Officers or by an Officer and
either an assistant secretary or an assistant treasurer of the Company
authenticate for original issue Notes in the aggregate principal amount
specified in such order; provided that 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
Notes. Such order shall specify the amount of Notes to be authenticated,
the date on which the original issue of Notes is to be authenticated and
the aggregate principal amount of Notes then authorized.
SECTION 2.3 REGISTRAR AND PAYING AGENT; DEPOSITORY APPOINTMENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or
more additional paying agents. The term "Registrar" includes any co-
registrar and the term "Paying Agent" includes any additional paying agent.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company shall notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture. If the Company fails
to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any domestically incorporated
Wholly Owned Subsidiary Guarantor may act as Paying Agent, Registrar or
co-registrar. The Company shall enter into an appropriate agency agreement
with any Registrar or Paying Agent not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to
such Agent. The Company shall notify the Trustee of the name and address
of any Agent not a party to this Indenture.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depository with respect to the Global Notes.
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent (other than the Trustee)
to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for
the payment of principal, of premium, if any, or interest on the Notes and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee and to account for
any funds disbursed. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee and to account for any funds
disbursed. Upon payment over to the Trustee and upon accounting for all
funds disbursed, the Paying Agent (if other than the Company or a
Subsidiary thereof) shall have no further liability for the money. If the
Company or a Subsidiary thereof acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money
held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying
Agent for the Notes. Each Paying Agent shall otherwise comply with TIA
Section 317(b).
SECTION 2.5 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of all Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company shall furnish to the Trustee
at least seven Business Days before each Interest Payment Date and at such
other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes, and the Company shall otherwise comply
with TIA Section 312(a).
SECTION 2.6 TRANSFER AND EXCHANGE.
(a) Transfer and Exchange Notes - Generally. When a Note is
presented by a Holder to the Registrar or co-registrar with a request:
(y) to register the transfer of the Note; or
(z) to exchange such Note for an equal principal amount of
Notes of other authorized denominations,
the Registrar or a co-registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met;
provided, however, that each Note presented or surrendered for register of
transfer or exchange shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar or a
co-registrar duly executed by such Holder or by its attorney, duly
authorized in writing.
To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Notes at the Registrar's or a
co-registrar's request and upon surrender and submission of the applicable
Note or Notes. No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 3.7, 3.9, 4.11, 4.17 and 9.5). Neither the Registrar nor a
co-registrar shall be required to register the transfer or exchange of (i)
any Note selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part, or (ii) any Note the transfer
of which is not required by the Company pursuant to this Section 2.6(a).
All Notes issued upon any registration of transfer or exchange pursuant to
the applicable terms of this Indenture shall be the valid obligations of
the Company, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Notes surrendered upon such registration of
transfer or exchange.
The Company shall not be required:
(w) to issue, to register the transfer or exchange of,
or to exchange, Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
redemption under Section 3.2 or repurchase under Section 3.9,
4.11 or 4.17, and ending at the close of business on the day of
selection;
(x) to register the transfer or exchange of or to
exchange any Note so selected for redemption or repurchase in
whole or in part, except the unredeemed or unpurchased portion of
any Note being redeemed or repurchased in part;
(y) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest payment
date; or
(z) to register the transfer of or to exchange a Note
other than in amounts of $1,000 or integral multiples thereof.
Prior to due presentment for the registration of a transfer or
exchange of any Note, the Trustee, any Agent and the Company may deem and
treat the Person in whose name any Note is registered as the absolute owner
of such Note for the purpose of receiving payment of principal of and
premium (if any) and interest on such Note and for all other purposes
whatsoever (whether or not the Note is overdue), and neither the Trustee,
any Agent nor the Company shall be affected by notice to the contrary.
(b) Transfer and Exchange of Global Notes.
(i) Generally. Notwithstanding anything to the contrary
contained in Section 2.6(a), transfers of Global Notes shall be limited to
transfers thereof in whole, but not in part, and may be transferred as a
whole only by the Depository to a nominee of the Depository or by a nominee
of the Depository to the Depository or another nominee of the Depository or
by the Depository or any such nominee to a successor Depository or a
nominee of such successor Depository; provided, that each such transfer is
effected through the Depository, its applicable rules and procedures and
otherwise in accordance with this Indenture. The transfer and exchange of
beneficial interests in the Global Notes shall be effected through the
Depository, in accordance with this Indenture and the rules and procedures
of the Depository that apply to such transfer or exchange.
(ii) Exchange of Global Notes for Definitive Notes;
Authentication of Definitive Notes. Definitive Notes shall be transferred
to all beneficial owners of Global Notes in exchange for their beneficial
interest in such Global Notes if, and only if, either (y) the Company
notifies the Trustee in writing that the Depository has notified it that
the Depository is unwilling or unable to continue as Depository for the
Global Notes and a qualified successor Depository for the Global Notes is
not appointed by the Company within 90 days after delivery of such notice;
or (z) the Company, at its option, notifies the Trustee in writing that it
elects to cause the issuance of Definitive Notes under this Indenture.
Then, upon surrender of the Global Notes by the Depository or on behalf of
the Depository by its nominee or the Note Custodian, the Company shall
execute, and the Trustee shall, upon receipt of an authentication order in
accordance with Section 2.2, authenticate and deliver, Definitive Notes to
the Persons that the Depository and, if applicable, its nominee identify as
being the owners of the respective beneficial interests in the Global
Notes, in an aggregate principal amount equal to the principal amount of
the Global Notes in exchange for such Global Notes. Neither the Company
nor the Trustee will be liable for any delay by the Holder of a Global Note
or the Depository or any Agent Member in identifying the beneficial owners
of the Notes, and the Company and the Trustee may rely on, and will be
protected in relying on, instructions from, or pursuant to proxies or
similar instruments granted by, the Holder of a Global Note or the
Depository for all such purposes.
(iii) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in Global Notes have been exchanged for
Definitive Notes, redeemed, repurchased or canceled, all Global Notes shall
be surrendered to or retained and cancelled by the Trustee in accordance
with Section 2.11. At any time prior to such cancellation, if any
beneficial interest in a Global Note is redeemed, repurchased or cancelled,
the principal amount of Notes represented by such Global Note shall be
reduced accordingly by adjustments made on the records of the Trustee and
the Depository and further reflected by an endorsement made on a schedule
to such Global Note by the Trustee or the Note Custodian, at the direction
of the Trustee, to reflect such reduction.
SECTION 2.7 REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Company,
and the Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, the Company shall issue and the Trustee shall
authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied
by the Holder that is sufficient in the judgment of the Trustee and the
Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.8 OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those redeemed, those repurchased pursuant to Section 3.9,
4.11 or 4.17, those reductions in the interest in a Global Note effected by
the Trustee in accordance with the provisions hereof and those described in
this Section as not outstanding. Except as set forth in Section 2.9, a
Note does not cease to be outstanding because the Company, any of the
Subsidiary Guarantors or any Affiliate of the Company or any of the
Subsidiary Guarantors holds the Note.
If a Note is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.1 and the Paying Agent is not prohibited from paying such money
to the Holders on the date due for the payment of such money, it ceases to
be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date,
money sufficient to pay Notes payable on that date, then on and after that
date such Notes shall be deemed to be no longer outstanding and shall cease
to accrue interest.
SECTION 2.9 TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by
the Company, any of the Subsidiary Guarantors or any Affiliate of the
Company or any of the Subsidiary Guarantors, shall be considered as though
not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or
consent, only Notes as to which either (i) a Responsible Officer actually
knows are so owned, or (ii) written notice of such ownership has been given
to the Trustee by the Company, the Depository or the Registrar, shall be so
disregarded.
SECTION 2.10 TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon a written order of
the Company signed by two Officers thereof. Temporary Notes shall be
substantially in the form of Global Notes or Definitive Notes, as
applicable, but may have variations that the Company considers appropriate
for temporary Notes and as shall be reasonably acceptable to the Trustee.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate Definitive Notes or the Global Note, as applicable, in
exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11 CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Notes surrendered
for registration of transfer, exchange, payment, redemption, repurchase,
replacement or cancellation and shall destroy (subject to record retention
requirements of the Exchange Act) such cancelled Notes. The Trustee shall
provide a certificate of destruction to the Company from time to time, at
the written request of the Company. The Company may not issue new Notes to
replace Notes that it has redeemed, repurchased, paid or that have been
delivered to the Trustee for cancellation. If the Company or any
Subsidiary Guarantor shall acquire any of the Notes (other than pursuant to
Section 3.9, 4.11 or 4.17), such acquisition shall not operate as a
redemption, repurchase or satisfaction of the Indebtedness represented by
such Notes unless and until the same are surrendered to the Trustee for
cancellation pursuant to this Section 2.11.
SECTION 2.12 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.1. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid
on each Note and the date of the proposed payment. The Company shall fix
or cause to be fixed each such special record date and payment date,
provided that no such special record date shall be less than 10 days prior
to the related payment date for such defaulted interest. At least 15 days
before the special record date, the Company (or, upon the written request
of the Company, the Trustee in the name and at the expense of the Company)
shall mail or cause to be mailed to Holders a notice that states the
special record date, the related payment date and the amount of such
interest to be paid.
SECTION 2.13 CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP numbers in
notices of redemption or repurchase (as applicable) 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 Notes
or as contained in any notice of a redemption or repurchase (as applicable)
and that reliance may be placed only on the other identification numbers
printed on the Notes, and any such redemption or repurchase (as applicable)
shall not be affected by any defect in or omission of such numbers. The
Company shall promptly notify the Trustee of any change in the CUSIP
numbers.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.1 NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7, it shall furnish to the Trustee, at
least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture
pursuant to which the redemption shall occur, (ii) the redemption date,
(iii) the principal amount of Notes to be redeemed and (iv) the redemption
price.
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the
Notes in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or, if the Notes
are not so listed, on a pro rata basis, by lot or in accordance with any
other method the Trustee considers fair and appropriate; provided that no
Note of $1,000 or less will be redeemed in part. In the event that less
than all of the Notes are to be redeemed by lot, the particular Notes to be
redeemed shall be selected, unless otherwise provided herein, not less than
30 nor more than 60 days prior to the redemption date by the Trustee from
the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples
of $1,000; except that if all of the Notes of a Holder are to be redeemed,
the entire outstanding amount of Notes held by such Holder shall be
redeemed. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Notes called for redemption also apply to portions
of Notes called for redemption.
The provisions of the two preceding paragraphs of this Section 3.2
shall not apply with respect to any redemption affecting only a Global
Note, whether such Global Note is to be redeemed in whole or in part. In
case of any such redemption in part, the unredeemed portion of the
principal amount of the Global Note shall be in an authorized denomination.
SECTION 3.3 NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.9, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address. Failure to
receive such notice or any defect in the notice to any such Holder shall
not affect the validity of the proceedings for the redemption of any other
Notes or portion thereof.
The notice shall identify the Notes to be redeemed (including CUSIP
number) and shall state:
(i) the redemption date;
(ii) the redemption price;
(iii) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(vi) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(vii) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(viii) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
If any of the Notes to be redeemed is in the form of a Global Note,
then the Company shall modify such notice to the extent necessary to accord
with the procedures of the Depository applicable to redemption.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however,
that the Company shall have delivered to the Trustee, at least 45 days
(unless the Trustee and the Company agree to a shorter period) prior to the
redemption date, an Officers' Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice
as provided in the preceding paragraph.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3,
Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.
On or prior to the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 2.4) money
sufficient to pay the redemption price of and accrued interest on all Notes
to be redeemed on that date. The Trustee or the Paying Agent shall
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue
on the Notes or the portions of Notes called for redemption. If a Note is
redeemed on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid
to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption shall not
be so paid upon surrender for redemption because of the failure of the
Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Note and in
Section 4.1.
SECTION 3.6 NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of
the Company a new Note equal in principal amount to the unredeemed portion
of the Note surrendered.
SECTION 3.7 OPTIONAL REDEMPTION.
(a) The Notes will not be redeemable at the Company's option prior to
February 15, 2005. Thereafter, the Notes will be subject to redemption at
the option of the Company, in whole or in part, upon not less than 30 nor
more than 60 days' written notice, at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest thereon, if any, to the applicable redemption date, if redeemed
during the 12-month period beginning on February 15 of the years indicated
below:
Year Percentage
2005 111.50%
2006 107.67%
2007and thereafter, but not including,
the Stated Maturity 103.84%
(b) Notwithstanding the foregoing, at any time on or prior to
February 15, 2001, the Company may redeem up to an aggregate of $15,000,000
principal amount of Notes originally issued, in cash, at a redemption price
of 115.00% of the principal amount thereof, together with accrued and
unpaid interest thereon to the redemption date, with the net proceeds of
one or more Public Equity Offerings; provided that (i) at least
$100,000,000 aggregate principal amount of the Original Notes originally
issued remains outstanding immediately after the occurrence of each such
redemption and (ii) each such redemption shall occur within 60 days of the
date of the closing of each such Public Equity Offering.
(c) Any redemption pursuant to this Section 3.7 shall be made pursuant
to the provisions of Sections 3.1 through 3.6.
SECTION 3.8 MANDATORY REDEMPTION.
Except as set forth under Sections 4.11 and 4.17, the Company shall
not be required to make mandatory redemption payments or sinking fund
payments with respect to the Notes.
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS CASH.
(a) In the event that, pursuant to Section 4.11, the Company shall be
required to commence an Excess Cash Offer, it shall follow the procedures
specified below.
(i) The Excess Cash Offer shall be made to all Holders and shall
remain open for a period of at least 20 Business Days following its
commencement and no longer than 30 Business Days thereafter, except to
the extent that a longer period is required by applicable law (the
"Offer Period").
(ii) If the Excess Cash Purchase Date is on or after an interest
record date and on or before the related interest payment date, any
accrued and unpaid interest thereon, if any, shall be paid to the
Person in whose name a Note is registered at the close of business on
such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Excess Cash Offer.
(iii) Within 10 days following any Excess Cash Offer Trigger
Date, the Company shall send, by first class mail, a notice to each of
the Holders at such Holder's registered address, with a copy to the
Trustee. The notice, which shall govern the terms of the Excess Cash
Offer, shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Excess Cash Offer,
and shall state:
(A) that the Excess Cash Offer Trigger Date has
occurred pursuant to Section 4.11 and that the Company is
offering to purchase Notes in the aggregate principal amount of
the Excess Cash Offer Amount, in cash, at the corresponding
Excess Cash Offer Price, together with accrued and unpaid
interest thereon, if any, to the Excess Cash Purchase Date, which
shall be a Business Day that is not earlier than 30 days nor
later than 60 days from the date such notice is mailed;
(B) the amount of accrued and unpaid interest, if any,
as of the Excess Cash Offer Purchase Date;
(C) that any Note subject to the Excess Cash Offer not
tendered shall continue to accrue interest;
(D) that, unless the Company defaults in the payment of
the purchase price for the Notes payable pursuant to the Excess
Cash Offer, any such Notes accepted for payment pursuant to the
Excess Cash Offer shall cease to accrue interest after the Excess
Cash Offer Purchase Date;
(E) that Holders electing to have a Note purchased
pursuant to an Excess Cash Offer may only elect to have all of
such Note purchased (subject to the provisions of
Section 3.9(a)(iii)(H)) and may not elect to have only a portion
of such Note purchased;
(F) that Holders electing to have a Note purchased
pursuant to any Excess Cash Offer shall be required to surrender
the Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed to the Company or
a Paying Agent at the address specified in the notice at least
three Business Days before the Excess Cash Purchase Date;
(G) any Holder shall be entitled to withdraw its
election if the Company or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing its
election to have such Note purchased;
(H) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Excess Cash Offer Amount or
less than all of the Notes tendered pursuant to the Excess Cash
Offer are accepted for payment by the Company for any reason
consistent with this Indenture, the Trustee shall select the
Notes to be purchased in compliance with the requirements of the
principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not so listed, on a pro
rata basis, by lot or by such method as the Trustee deems fair
and appropriate; provided that Notes accepted for payment in part
will only be purchased in integral multiples of $1,000; and
(I) that Holders whose Notes were purchased only in
part shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.
If any of the Notes subject to an Excess Cash Offer is in the form of
a Global Note, then the Company shall modify such notice to the extent
necessary to accord with the procedures of the Depository applicable to
repurchases.
(b) On or before an Excess Cash Purchase Date, the Company shall
comply with each of the matters set forth in clauses (i) through (iii) of
Section 4.11(f). The Paying Agent shall promptly mail to Holders of Notes
so accepted payment in an amount equal to the Excess Cash Offer Price, plus
accrued and unpaid interest thereon to the Excess Cash Purchase Date. The
Trustee shall promptly cancel all Notes accepted by the Company pursuant to
the Excess Cash Offer and authenticate and mail to the Holders of Notes so
accepted new Notes equal to the principal amount of any unpurchased portion
of the Notes surrendered. Any Notes not so accepted shall be promptly
mailed by the Company to the Holders thereof.
(c) Other than as specifically provided in this Section 3.9, any
purchase pursuant to this Section 3.9 shall be made pursuant to the
provisions of Sections 3.1 through 3.6.
ARTICLE 4
COVENANTS
SECTION 4.1 PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Notes on the dates and in the manner provided
in the Notes. Principal, premium, if any, and interest shall be considered
paid on the date due if the Paying Agent, if other than the Company or a
Subsidiary Guarantor, holds as of 11:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal and premium,
if any, at the rate that is 1% per annum in excess of the then applicable
interest rate on the Notes to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy
Law) on overdue installments of interest (without regard to any applicable
grace period) at the same rate to the extent lawful.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
presented for payment, surrendered for registration of transfer or for
exchange and where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, the City of New York for such purposes.
The Company shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such
other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with
Section 2.3.
SECTION 4.3 REPORTS.
(a) Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Company shall furnish
to the Trustee and the Holders of Notes (i) either the actual Forms 10-Q
and 10-K filed with the Commission within 15 days following the filing
thereof, or all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and
10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the consolidated financial condition and results
of operations of the Company and, with respect to the annual information
only, a report thereon by the Company's certified independent accountants,
in each case, within 15 days following the date such filing would be
required to be filed with the Commission, and (ii) either any actual
Form 8-K filed with the Commission within 15 days following the filing
thereof, or all information that would be required to be contained in a
filing with the Commission on Form 8-K if the Company were required to file
such Form, in each case, within 15 days following the date such filing
would be required to be filed with the Commission. In addition, whether or
not required by the rules and regulations of the Commission, the Company
shall file a copy of all such information and reports with the Commission
for public availability (unless the Commission will not accept such a
filing) and make such information available to securities analysts and
prospective investors upon request. The Company shall at all times comply
with TIA Section 314(a).
(b) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company' compliance with any of the covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 4.4 COMPLIANCE CERTIFICATE.
(a) The Company and each Subsidiary Guarantor shall deliver to the
Trustee, together with, and at the same time as the delivery of, the
filings, reports and information referred to in Section 4.3(a)(i), an
Officers' Certificate stating that a review of the activities of the
Company, the Subsidiary Guarantors and their respective Subsidiaries during
the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether each of the Company and
the Subsidiary Guarantors has kept, observed, performed and fulfilled its
covenants and obligations under this Indenture, and further stating, as to
each such Officer signing such certificate, that to the best of his or her
knowledge, each of the Company and the Subsidiary Guarantors has kept,
observed, performed and fulfilled each and every covenant and obligation
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture
(or, if a Default or Event of Default shall have occurred and is
continuing, describing all such Defaults or Events of Default of which he
or she may have knowledge and what action each of the Company and the
Subsidiary Guarantors (as applicable) is taking or proposes to take with
respect thereto) and that to the best of his or her knowledge, no event has
occurred and remains in existence by reason of which payments on account of
the principal of or premium, if any, or interest on the Notes are
prohibited or if such event has occurred, a description of the event and
what action the Company is taking or proposes to take with respect thereto.
In addition, the Company shall notify the Trustee of each change in the
composition of the Board of Directors of the Company and each of the
Subsidiary Guarantors and of each amendment to the charter or bylaws of the
Company or each of the Subsidiary Guarantors, in each case, such
notification being made in writing to the Trustee promptly following the
occurrence of each such change in composition or amendment.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end
financial statements delivered pursuant to Section 4.3 shall be accompanied
by a written statement of the Company's independent public accountants (who
shall be a firm of established national reputation) that in making the
examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that
the Company has violated any provisions of Article 4 or Article 5 or, if
any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or
proposes to take with respect thereto.
SECTION 4.5 TAXES; CORPORATE EXISTENCE.
(a) The Company shall pay, and shall cause each of its Restricted
Subsidiaries to pay, prior to delinquency, all material taxes, assessments,
and governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
(b) Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence, and subject to Article 10 hereof, the corporate,
partnership or other existence of each of its Restricted Subsidiaries, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Company or any such Restricted
Subsidiary; provided, however, that the Company shall not be required to
preserve the existence of any of its Restricted Subsidiaries, if the Board
of Directors of the Company shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and
its Restricted Subsidiaries, taken as a whole, and that the loss thereof is
not, and foreseeably will not be, adverse to the payment and performance of
the obligations under the Notes and otherwise under this Indenture.
SECTION 4.6 STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect
the covenants or the performance of this Indenture; and 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 shall not, by resort to
any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every
such power as though no such law has been enacted.
SECTION 4.7 LIMITATION ON INCURRENCES OF ADDITIONAL INDEBTEDNESS
AND ISSUANCES OF DISQUALIFIED CAPITAL STOCK.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, Incur any Indebtedness or issue
any Disqualified Capital Stock, except that the Company or a Subsidiary
Guarantor may Incur Indebtedness and the Company may issue shares of
Disqualified Capital Stock if, on a pro forma basis, after giving effect to
such Incurrence or issuance, as the case may be, and the application of the
proceeds therefrom, all of the following tests have been satisfied:
(i) the Consolidated Fixed Charge Coverage Ratio for the Company's
Reference Period for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is
Incurred or such Disqualified Capital Stock is issued would have been
(A) at least 2.25 to 1.0 if such additional Indebtedness is Incurred or
such Disqualified Capital Stock is issued during the period commencing on
the Issue Date and ending on December 31, 1998, (B) at least 2.50 to 1.0
if such additional Indebtedness is Incurred or such Disqualified Capital
Stock is issued during the period commencing on January 1, 1999 and ending
on December 31, 2000, (C) at least 2.75 to 1.0 if such additional
Indebtedness is Incurred or such Disqualified Capital Stock is issued
during the period commencing on January 1, 2001 and ending on December 31,
2002, or (D) at least 3.0 to 1.0 if such additional Indebtedness is
Incurred or such Disqualified Capital Stock is issued at any time
thereafter;
(ii) no Default or Event of Default shall have occurred and be
continuing at the time such additional Indebtedness is Incurred or such
Disqualified Capital Stock is issued or would occur as the result of such
Incurrence of such additional Indebtedness or the issuance of such
Disqualified Capital Stock; and
(iii) the Company's Adjusted Consolidated Net Tangible Assets as of
the last day of the applicable Reference Period are equal to or greater
than 150% of the consolidated Indebtedness of the Company and the
Subsidiary Guarantors.
(b) Notwithstanding the foregoing, if no Default or Event of Default
shall have occurred and be continuing at the time or as a consequence of
the Incurrence of such Indebtedness, the Company and any Subsidiary
Guarantor may Incur Permitted Indebtedness.
(c) Any Indebtedness Incurred or Disqualified Capital Stock issued by
any Person that is not a Subsidiary of the Company or a Restricted
Subsidiary of the Company, which Indebtedness or Disqualified Capital Stock
is outstanding at the time such Person becomes a Restricted Subsidiary of,
or is merged into, or consolidated with the Company or such Restricted
Subsidiary, as the case may be, shall be deemed to have been Incurred or
issued, as the case may be, at the time such Person becomes a Restricted
Subsidiary of, or is merged into, or consolidated with the Company or a
Subsidiary Guarantor; provided however, any Indebtedness of Carlton and its
Subsidiaries outstanding on the Issue Date shall be deemed Indebtedness of
the Company and its Subsidiaries outstanding on the Issue Date.
SECTION 4.8 LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend
on, or make any other distribution to holders of, any shares of Capital
Stock of the Company or any Restricted Subsidiary of the Company (other
than dividends or distributions payable solely in shares of Qualified
Capital Stock of the Company or any Restricted Subsidiary of the Company or
dividends or distributions payable to the Company or any Wholly Owned
Subsidiary Guarantor or warrants, rights or options to acquire Qualified
Capital Stock of the Company or any Restricted Subsidiary of the Company),
(ii) purchase, redeem or otherwise acquire or retire for value any such
shares of Capital Stock of the Company or any Affiliate (other than any
Capital Stock owned by the Company or any of its Wholly Owned Subsidiary
Guarantors), or any options, warrants or other rights to acquire such
Capital Stock, (iii) make any principal payment on or repurchase, redeem,
defease or otherwise acquire or retire for value any Subordinated
Indebtedness, prior to any scheduled principal payment, scheduled sinking
fund payment or maturity, or (iv) make any Restricted Investment (such
payments or other actions described in clauses (i) through (iv) being
collectively referred to as a "Restricted Payment"), unless at the time of
and after giving effect to the proposed Restricted Payment (the amount of
any such Restricted Payment, if other than cash, shall be the amount
determined by the Board of Directors of the Company, whose determination
shall be conclusive and evidenced by a Board Resolution, a copy of which
Board Resolution shall be delivered to the Trustee),
(1) no Default or Event of Default shall have occurred and be
continuing,
(2) the Company could Incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in accordance with the provisions
of Section 4.7(a), and
(3) the aggregate amount of all Restricted Payments declared or
made after the Issue Date shall not exceed the sum (without
duplication) of the following:
(A) 50% of the Adjusted Consolidated Net Income of the
Company accrued on a cumulative basis during the period
commencing with the first full quarter after the Issue Date and
ending on the last day of the Company's last fiscal quarter
ending prior to the date of such proposed Restricted Payment (or
if Adjusted Consolidated Net Income is a loss, minus 100% of such
loss), plus
(B) the aggregate Net Proceeds received after the Issue Date
by the Company from the issuance or sale (other than with respect
to the Offering and other than to any Restricted Subsidiary of
the Company) of shares of Qualified Capital Stock of the Company
or any options, warrants or rights to purchase such shares of
Qualified Capital Stock of the Company, plus
(C) the aggregate Net Proceeds received after the Issue Date
by the Company (other than from any Restricted Subsidiary of the
Company) upon the exercise of any options, warrants or rights to
purchase shares of Qualified Capital Stock of the Company, plus
(D) the aggregate Net Proceeds received after the Issue Date
by the Company from the issuance or sale (other than to any
Restricted Subsidiary of the Company) of Indebtedness or shares
of Disqualified Capital Stock that have been converted into or
exchanged for Qualified Capital Stock of the Company, together
with the aggregate cash received by the Company at the time of
such conversion or exchange, minus
(E) the amount of any write-downs or writeoffs, other
negative revaluations, and other negative extraordinary charges
not otherwise reflected in Adjusted Consolidated Net Income of
the Company during such period.
(b) Notwithstanding Section 4.8(a), the Company and the Subsidiary
Guarantors may take the following actions so long as (in the case of
clauses (2) and (3) immediately below) no Default or Event of Default shall
have occurred and be continuing:
(1) the payment of any dividend on Capital Stock of the Company
or any Subsidiary Guarantor within 60 days after the date of
declaration thereof, if at such declaration date such declaration
complied with the provisions of Section 4.8(a) above;
(2) the repurchase, redemption or other acquisition or retirement
of any shares of any class of Capital Stock of the Company or any
Subsidiary Guarantor, in exchange for, or out of the aggregate Net
Proceeds from, a substantially concurrent issue and sale (other than
to a Subsidiary Guarantor) of shares of Qualified Capital Stock of the
Company;
(3) the repurchase, redemption, repayment, defeasance or other
acquisition or retirement for value of any Subordinated Indebtedness
in exchange for, or out of the aggregate Net Proceeds from, a
substantially concurrent issue and sale (other than to a Subsidiary
Guarantor) of (i) Subordinated Indebtedness (provided such
Indebtedness is on terms no less favorable to the Holders of the Notes
than the terms of the Subordinated Indebtedness being redeemed) or
(ii) shares of Qualified Capital Stock of the Company; and
(4) the redemption of 12 shares of Carlton's outstanding
redeemable preferred stock pursuant to the termination of all rights
in respect of such shares, except the right to receive the redemption
price payable on the scheduled redemption thereof as prescribed in
Carlton's certificate of incorporation, which redemption must occur no
later than the earlier of (i) the third anniversary of the issuance of
such stock and (ii) April 10, 1998.
The actions described in clause (1) of this Section 4.8(b) shall be
Restricted Payments that shall be permitted to be made in accordance with
this Section 4.8(b) but shall reduce the amount that would otherwise be
available for Restricted Payments under clause (3) of Section 4.8(a),
provided that any dividend paid pursuant to clause (1) of this
Section 4.8(b) shall reduce the amount that would otherwise be available
under clause (3) of Section 4.8(a) when declared, but not also when
subsequently paid pursuant to clause (1) of this Section 4.8(b), and
provided that any Net Proceeds received under clauses (2) or (3)(ii) of
this Section 4.8(b) shall not be included in subclauses (B) or (C) of
clause (3) of Section 4.8(a).
SECTION 4.9 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES OF THE COMPANY.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, or permit or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (i) pay dividends or
make other distributions on its Capital Stock to the Company or any other
Restricted Subsidiary of the Company, (ii) make loans or advances or pay
any Indebtedness or other obligations owed to the Company or to any other
Restricted Subsidiary of the Company, or (iii) transfer any of its
properties or assets to the Company or to any other Restricted Subsidiary
of the Company, except encumbrances and restrictions existing under (a)
this Indenture, any Permitted Bank Credit Facility as in effect on the
Issue Date and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof,
provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are no
more restrictive with respect to such dividend and other payment or
transfer restrictions than those contained in the Permitted Bank Credit
Facility as in effect on the Issue Date and (b) any agreement of a Person
acquired by the Company or a Restricted Subsidiary of the Company, which
restrictions existed at the time of acquisition, were not put in place in
anticipation of such acquisition, and are not applicable to any Person or
property, other than the Person or any property of the Person so acquired.
SECTION 4.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter directly or indirectly into, or permit to exist, any
transaction or series of related transactions with or for the benefit of
any Affiliate except for transactions made in good faith, the terms of
which are fair and reasonable to the Company or such Restricted Subsidiary,
as the case may be, and are at least as favorable as the terms which could
be obtained by the Company or such Restricted Subsidiary, as the case may
be, in a comparable transaction made on an arm's length basis with Persons
who are not Affiliates and the Company delivers to the Trustee (i) with
respect to any transaction or series of related transactions with an
Affiliate involving aggregate consideration in excess of $1,000,000, an
Officers' Certificate certifying that such transaction or transactions
comply with this covenant, (ii) with respect to any transaction or series
of related transactions with an Affiliate involving aggregate consideration
in excess of $2,000,000, a Board Resolution of the Board of Directors of
the Company set forth in an Officers' Certificate certifying that such
transaction or transactions comply with this covenant and that such
transaction or transactions have been approved in good faith by a majority
of the Disinterested Directors of such Board of Directors (which Board
Resolution shall be conclusive evidence of compliance with this provision),
provided that if there is not a majority of Disinterested Directors able to
approve such transaction, the Company shall also deliver an opinion as to
the fairness, from a financial point of view, to the Company or such
Restricted Subsidiary of such transaction or transactions issued by an
investment banking firm of recognized national standing, which opinion
shall be conclusive evidence of compliance with this provision, and
(iii) with respect to any transaction or series of related transactions
with an Affiliate involving aggregate consideration in excess of
$5,000,000, a Board Resolution of the Board of Directors of the Company set
forth in an Officers' Certificate as described in
subclause (ii) immediately above and an opinion as to the fairness, from a
financial point of view, to the Company or such Restricted Subsidiary of
such transaction or transactions issued by an investment banking firm of
recognized national standing, which Board Resolution and opinion shall be
conclusive evidence of compliance with this provision; provided, however,
that this covenant will not restrict (a) transactions between the Company
and any Subsidiary Guarantor or transactions between Subsidiary Guarantors,
(b) Restricted Payments permitted by the provisions of Section 4.8, (c) any
employee compensation arrangement by the Company or any of its Restricted
Subsidiaries which has been approved by a majority of the Company's
Disinterested Directors and found in good faith by such directors to be in
the best interests of the Company or such Restricted Subsidiary, as the
case may be, and (d) customary directors' fees and indemnification and
similar arrangements.
Notwithstanding the foregoing, the Company will not and will not
permit any of its Subsidiaries to, directly or indirectly, remunerate or be
or become directly or indirectly liable or obligated for the remuneration
of, director's or similar fees to any person solely by reason of serving as
a director of the Board of Directors of any of them in an amount for any
fiscal year of the Company which, when aggregated with all other such fees
paid or payable to such person by the Company and its Subsidiaries (as
applicable) during such period solely by reason of serving as a director of
all or any of them, exceeds $30,000, regardless of the number of entities
for which such person served as a director; and for purposes of computing
the $30,000 limitation in such annual fees, the fair market value of all
property transferred and services provided to such person, without payment
therefor, in cash, by such person at the same fair market value of such
property or services (as applicable), or other than in exchange for, or
incidental to, the performance of services to the Company or any Subsidiary
by such person as an employee of any of them, will be added to all cash
payments of such fees; provided that the value of Capital Stock issued to a
director as a director's fee or similar fee shall not be subject to such
$30,000 limitation.
SECTION 4.11 LIMITATION ON ASSET SALES.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the
time of such Asset Sale at least equal to the fair market value (as
determined in good faith by a Board Resolution of the Board of Directors of
the Company set forth in an Officers' Certificate delivered to the Trustee,
which determination shall be conclusive evidence of compliance with this
provision) of the assets or Capital Stock being sold or issued or otherwise
disposed of, and (ii) at least 85% of the value of the consideration for
such Asset Sale consists of cash, Cash Equivalents or Exchange Assets or
any combination thereof; provided that the amount of any liabilities (as
shown on the Company's or such Restricted Subsidiary's most recent balance
sheet) of the Company or such Restricted Subsidiary (other than contingent
liabilities and liabilities that are Subordinated Indebtedness or otherwise
by their terms subordinated to the Notes or the Subsidiary Guarantees) that
are assumed by the transferee of such assets pursuant to a customary
novation agreement that releases the Company and such Restricted Subsidiary
from further liability shall also be deemed to be cash for purposes of this
provision.
(b) Within 365 days after the receipt of any Net Cash Proceeds from
an Asset Sale, the Company or such Restricted Subsidiary may apply such Net
Cash Proceeds, at its option, in any order or combination (i) to repay and
permanently reduce Indebtedness outstanding under any Permitted Bank Credit
Facility to which it or any Subsidiary Guarantor is a party, (ii) to make
Capital Expenditures or (iii) to make other acquisitions of assets to be
used in the Company's and the Subsidiary Guarantors' Oil and Gas Business.
Pending the final application of any such Net Cash Proceeds, the Company or
such Restricted Subsidiary may temporarily invest such Net Cash Proceeds in
any manner that is not prohibited by the terms of this Indenture or
temporarily reduce outstanding revolving credit borrowings under Permitted
Bank Credit Facilities. Any Net Cash Proceeds from Asset Sales that are
not applied as provided in clauses (i) through (iii) of the first sentence
of this Section 4.11(b) will (after expiration of the relevant periods) be
deemed to constitute "Excess Cash".
(c) When the amount of Excess Cash exceeds $10,000,000 (the date of
such occurrence, the "Excess Cash Offer Trigger Date"), the Company will
make an irrevocable, unconditional offer (an "Excess Cash Offer") to the
Holders to purchase the maximum amount of Notes which could be acquired by
application of such amount of Excess Cash as described herein (the "Excess
Cash Offer Amount"), in cash at the purchase price equal to 100% of the
principal amount thereof (the "Excess Cash Offer Price"), together with
accrued and unpaid interest to the Excess Cash Purchase Date. Such Excess
Cash Offer shall be effected pursuant to the provisions of Section 3.9 and
this Section 4.11.
(d) Notice of an Excess Cash Offer will be sent at least 30 and not
more than 60 days prior to the date on which the Notes tendered shall be
accepted (the "Excess Cash Purchase Date"), by first-class mail, by the
Company to each Holder at the address on the Note Register, with a copy to
the Trustee. Such notice will set forth the Excess Cash Purchase Date and
the Excess Cash Offer shall remain open for at least 20 Business Days and
close no later than 30 Business Days after the date such notice is given.
The notice to the Holders will contain all information, instructions and
materials required by applicable law or otherwise material to such Holders'
decision to tender Notes pursuant to the Excess Cash Offer.
(e) To the extent applicable and if required by law, the Company will
comply with Section 14 of the Exchange Act, the provisions of Regulation
14E and any other tender offer rules under the Exchange Act and other
securities laws, rules and regulations which may then be applicable to any
Excess Cash Offer by the Company; and, if such laws, rules and regulations
require or prohibit any action inconsistent with the foregoing, compliance
by the Company with such laws, rules and regulations will not constitute a
breach of its obligations with respect to the foregoing.
(f) On or before an Excess Cash Purchase Date, the Company shall
(i) accept for payment Notes or portions thereof properly tendered pursuant
to the Excess Cash Offer, (ii) deposit with the Paying Agent money
sufficient to pay the Excess Cash Offer Price, plus accrued and unpaid
interest thereon to the Excess Cash Purchase Date of all Notes or portions
thereof so accepted, and (iii) deliver to the Trustee all Notes so accepted
together with an Officers' Certificate listing the Notes or portions
thereof being purchased by the Company. The Company will publicly announce
the results of the Excess Cash Offer on or as soon as practicable after the
Excess Cash Purchase Date.
(g) If the amount required to acquire all Notes tendered by Holders
pursuant to the Excess Cash Offer (the "Excess Cash Acceptance Amount")
shall be less than the aggregate Excess Cash Offer Amount, then the excess
of the Excess Cash Offer Amount over the Excess Cash Acceptance Amount may
be used by the Company or any Subsidiary Guarantor for any of their
respective general corporate purposes, provided that no such purpose is
prohibited or restricted by this Indenture. Upon consummation of any
Excess Cash Offer made in accordance with the terms of this Indenture, the
amount of Excess Cash will be reduced to zero.
SECTION 4.12 LIMITATION ON LIENS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, incur or suffer to exist any Lien upon any of
their respective properties or assets, whether now owned or acquired after
the Issue Date, or any income, profits or proceeds therefrom, other than
Permitted Liens.
SECTION 4.13 LIMITATION ON LINE OF BUSINESS.
The Company shall not engage, and shall not permit any of its
Restricted Subsidiaries to engage, in any line of business other than the
Oil and Gas Business. The Company will not and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, remit or pay or become
obligated to remit or pay any funds, or transfer or become obligated to
transfer any property (whether by absolute remittance, payment or transfer
or by collateral remittance, payment of transfer), which in the aggregate
(inclusive of the then fair market value of any such transferred property)
exceeds $10,000,000, as a non-refundable deposit or similar non-refundable
payment made incidental, related or pursuant to a transaction or series of
related transactions for the acquisition (whether by merger, consolidation,
acquisition or otherwise) of any Person (or interest therein) or property,
or to serve as payment or security for the payment of any matters related
to, or to be performed or obligations, indemnities or similar undertakings
agreed to be performed or undertaken by, any of them, which are incidental,
related or pursuant to such transaction or transactions; and for purposes
of determining the fair market value of any affected property, the Company
shall deliver to the Trustee such Board Resolution and Officers'
Certificate regarding such valuation as if it was subject to the
determination to be made pursuant to clause (ii) of the first paragraph of
Section 4.10.
SECTION 4.14 DESIGNATION OF UNRESTRICTED SUBSIDIARIES.
(a) The Board of Directors of the Company may designate any
Subsidiary of the Company to be an Unrestricted Subsidiary of the Company
if such designation would not cause a Default or an Event of Default and
following such designation, the Company could Incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to
Section 4.7(a). For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries in the
Subsidiary so designated which have not been repaid in cash will be deemed
to be Restricted Payments at the time of such designation and will reduce
the amount available for Restricted Payments under clause (3) of
Section 4.8(a). All such outstanding Investments will be deemed to
constitute Restricted Investments in an amount equal to the greater of the
fair market value or book value of such Investments at the time of such
designation. Such designation will only be permitted if such Restricted
Payment would be permitted at such time and if such Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary. In addition, the
definition of "Unrestricted Subsidiary" set forth in Section 1.1 describes
additional requirements that a Subsidiary of the Company must satisfy
before it may be designated as an Unrestricted Subsidiary of the Company by
the Board of Directors of the Company.
(b) Neither the Company nor any Restricted Subsidiary of the Company
nor any Unrestricted Subsidiary of the Company may take any action or omit
to take any action which would cause any requirement in the definition of
"Unrestricted Subsidiary" set forth in Section 1.1 not to be at all times
satisfied with respect to any Unrestricted Subsidiary of the Company, other
than pursuant to a designation or redesignation (as applicable) as provided
in Section 4.14(c). If, at any time subsequent to the designation of a
Person as an Unrestricted Subsidiary of the Company and prior to a
corresponding redesignation as provided in Section 4.14(c), any requirement
in the definition of "Unrestricted Subsidiary" set forth in Section 1.1 is
not met with respect to such Unrestricted Subsidiary, then such
Unrestricted Subsidiary shall thereafter cease to be an Unrestricted
Subsidiary of the Company for purposes of this Indenture, and any
Indebtedness of such Subsidiary shall be deemed Incurred as of such date.
(c) The Board of Directors of the Company may designate or
redesignate (as applicable) any Unrestricted Subsidiary of the Company as a
Restricted Subsidiary of the Company; provided that, (i) if such
Unrestricted Subsidiary has any Indebtedness outstanding or is otherwise
liable for any Indebtedness or has a negative Net Worth, then immediately
after giving pro forma effect to such designation or redesignation, as
applicable, the Company could Incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to the provisions
of Section 4.7(a) (assuming, for purposes of this calculation, that each
dollar of negative Net Worth is equal to one dollar of Indebtedness),
(ii) all Indebtedness of such Unrestricted Subsidiary shall be deemed to be
Incurred by a Restricted Subsidiary of the Company on the date such
Unrestricted Subsidiary becomes a Restricted Subsidiary, and (iii) no
Default or Event of Default would occur or be continuing after giving
effect to such designation or redesignation, as applicable. Any Subsidiary
of an Unrestricted Subsidiary shall be an Unrestricted Subsidiary for
purposes of this Indenture.
SECTION 4.15 LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES OF THE COMPANY.
The Company shall not, directly or indirectly, sell or otherwise
dispose of any shares of Capital Stock of any of its Restricted
Subsidiaries and shall not permit any of its Restricted Subsidiaries,
directly or indirectly, to issue or sell or otherwise dispose of any of its
Capital Stock except (i) to the Company or a Wholly Owned Subsidiary
Guarantor, or (ii) if all shares of Capital Stock of such Restricted
Subsidiary are sold or otherwise disposed of. In connection with any sale
or disposition of Capital Stock of any Restricted Subsidiary of the
Company, the Company shall comply with the provisions of Section 4.11.
SECTION 4.16 OWNERSHIP AND RECOGNITION OF SUBSIDIARIES; FUTURE
GUARANTORS.
The Company shall at all times own, directly or indirectly, all of the
Capital Stock of each of its Restricted Subsidiaries, except for the
redeemable preferred stock referred to in Section 4.8(b)(4), which
preferred stock shall be fully and finally redeemed and discharged in the
manner and at such dates as provided in Section 4.8(b)(4) and 4.18. The
Company and each Subsidiary of the Company recognize and agree that all
Persons (other than an Unrestricted Subsidiary of the Company) now or
hereafter becoming a Subsidiary of the Company (whether by formation,
acquisition or otherwise) shall be, and shall be recognized as, a
Subsidiary Guarantor for all purposes of this Indenture. In furtherance
(but not in limitation) of the foregoing, simultaneously with the
acquisition (by merger, consolidation, acquisition of assets, stock or
properties or otherwise) or formation of a Person which, directly or
indirectly, becomes a Subsidiary of the Company, or the occurrence of any
other event, circumstance or transaction pursuant to which, directly or
indirectly, a Person becomes a Subsidiary of the Company (in each case,
other than a Person then designated an Unrestricted Subsidiary of the
Company in accordance with Section 4.14), the Company shall cause such
Person to become a Subsidiary Guarantor pursuant to Section 10.2.
SECTION 4.17 OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall
make an irrevocable, unconditional offer to repurchase (a "Change of
Control Offer") and shall, subject to the provisions of this Section 4.17
described below, repurchase on a Business Day not more than 60 nor less
than 30 days following the occurrence of such Change of Control (the date
on which the repurchase is effected being referred to herein as the "Change
of Control Payment Date"), all of the then outstanding Notes validly
tendered pursuant to such Change of Control Offer, at a cash purchase price
equal to 101% of the principal amount thereof (the "Change of Control
Purchase Price"), plus accrued and unpaid interest thereon to the Change of
Control Payment Date. The Change of Control Offer shall remain open for at
least 20 Business Days and until the close of business of the fifth
Business Day prior to the Change of Control Purchase Date.
(b) To effect such Change of Control Offer, the Company (i) shall,
not later than 5 Business Days after the occurrence of the Change of
Control, notify the Trustee and (ii) shall, not later than 20 Business Days
after the occurrence of the Change of Control, make a Change of Control
Offer to the Holders of all of the then outstanding Notes, by sending
written notice of a Change of Control Offer, by first class mail, to each
Holder at its registered address, with a copy to the Trustee. The notice to
Holders shall contain all instructions and materials required by applicable
law, shall contain or make available to Holders other information material
to such Holders' decision to tender Notes pursuant to the Change of Control
Offer and shall otherwise govern the terms of the Change of Control Offer.
(c) On or before the Change of Control Payment Date, the Company
shall, to the extent lawful, (i) accept for payment Notes or portions
thereof properly tendered pursuant to the Change of Control Offer,
(ii) deposit with the Paying Agent an amount sufficient to pay the Change
of Control Purchase Price of all Notes so tendered, and (iii) deliver or
cause to be delivered to the Trustee all Notes so accepted, together with
an Officers' Certificate listing the Notes or portions thereof being
purchased by the Company. The Paying Agent will promptly mail to the
Holders of Notes so accepted payment in an amount equal to the Change of
Control Purchase Price for such Notes, plus accrued and unpaid interest
thereon to the Change of Control Payment Date, and the Trustee will
promptly cancel all Notes so accepted by the Company pursuant to the Change
of Control Offer and authenticate and mail (or cause to be transferred by
book entry) to such Holders new Notes equal in principal amount, as
applicable, to any unpurchased portion of the Notes surrendered. Any Notes
not so accepted will be promptly mailed by the Company to the Holders
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control
Payment Date.
(d) The Change of Control provisions of this Section 4.17 described
above shall be applicable whether or not any other provisions of this
Indenture are applicable.
(e) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control
Offer made by the Company and repurchases all Notes validly tendered and
not withdrawn under such Change of Control Offer.
(f) To the extent applicable and if required by law, the Company
shall comply with Section 14 of the Exchange Act, the provisions of
Regulation 14E and any other tender offer rules under the Exchange Act and
other securities laws, rules and regulations which may then be applicable
to any offer by the Company to repurchase the Notes at the option of
Holders upon a Change of Control; and, if such laws, rules and regulations
require or prohibit any action inconsistent with the foregoing, compliance
by the Company with such laws, rules, and regulations will not constitute a
breach of the Company's obligations with respect to the foregoing.
SECTION 4.18 DISCHARGE OF CERTAIN PREFERRED STOCK.
On or before April 10, 1998, the Company shall fully and finally pay
and discharge, or cause to be fully and finally paid and discharged, the
redemption price referred to in Section 4.8(b)(4), and, if applicable, any
interest on such redemption price accruing from the third anniversary of
the issuance of the redeemable preferred stock referred to in such Section
and until the earlier of such date of payment and April 10, 1998.
Contemporaneous with the receipt of net proceeds from the Offering, the
Company shall deposit in a segregated bank account, an amount of cash equal
to the sum of the redemption price and maximum accrued interest referred to
in the preceding sentence, and neither the Company nor any Restricted
Subsidiary of the Company shall utilize any such deposited amount for any
purpose other than the payment and discharge of such redemption price and
related accrued interest.
ARTICLE 5
SUCCESSORS
SECTION 5.1 LIMITATION ON MERGER OR SALE OR CONSOLIDATION.
The Company shall not consolidate with or merge with or into any other
Person, or, directly or indirectly, sell, lease, assign, transfer or convey
all or substantially all of its assets (computed on a consolidated basis)
to another Person or group of Persons acting in concert, whether in a
single transaction or through a series of related transactions, unless
(i) either (a) the Company is the continuing Person or (b) the resulting,
surviving or transferee entity is a corporation organized under the laws of
the United States, any state thereof or the District of Columbia, and shall
expressly assume all of the obligations of the Company under this Indenture
and the Notes by a supplemental indenture, executed and delivered to the
Trustee on or prior to the consummation of such transaction, in form
satisfactory to the Trustee, (ii) no Default or Event of Default shall
exist or shall occur immediately after giving effect to such transaction,
(iii) immediately after giving effect to such transaction on a pro forma
basis, the Net Worth of the resulting, surviving or transferee entity is at
least equal to the Net Worth of the Company immediately prior to such
transaction, (iv) except for a merger of the Company with or into any
Wholly Owned Subsidiary Guarantor, the resulting, surviving or transferee
entity would, at the time of such transaction and after giving effect
thereto, be permitted to Incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) pursuant to Section 4.7(a), (v) each
Subsidiary Guarantor shall have executed and delivered to the Trustee, in
form satisfactory to the Trustee, a supplemental indenture confirming such
Subsidiary Guarantor's obligations to pay the principal of and interest on
the Notes pursuant to its Subsidiary Guarantee, and (vi) the Trustee shall
have received, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or sale, conveyance or other transfer and
each supplemental indenture in respect thereto comply with this provision
and that all conditions precedent in this Indenture relating to such
transaction have been complied with.
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with
Section 5.1, the successor Person formed by such consolidation or merger or
the Person to whom such transfer is made, shall succeed to, and be
substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor corporation
had been named as the Company therein, but the Company in the case of a
conveyance, transfer or lease of all or substantially all of the assets of
the Company in accordance with Section 5.1 shall not be released from the
obligation to pay principal of, premium (if any) and interest on the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
An "Event of Default" occurs upon:
(i) the failure to pay interest on any Note when the same
becomes due and payable and such failure continues for a period of 30
days;
(ii) the failure to pay, when due, the principal of, or
premium, if any, on, any Note whether the same becomes due and payable
at maturity, upon redemption, by acceleration or otherwise (including
the failure to make a payment to purchase Notes tendered pursuant to a
Change of Control Offer or an Excess Cash Offer);
(iii) a default in the performance or breach of the provisions
of Section 4.11, 4.17 or 5.1 hereof;
(iv) a default in the observance or performance of any
covenant or agreement contained in this Indenture, the Notes or any
Subsidiary Guarantee (other than a covenant or agreement referred to
in any of the preceding clauses (i), (ii) or (iii)), which default
continues for 30 days after written notice thereof is given to the
Company by the Trustee or to the Company and the Trustee by Holders of
at least 25% of the principal amount of the Notes then outstanding;
(v) a default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any
Restricted Subsidiary of the Company (or the payment of which is
guaranteed by the Company or any Restricted Subsidiary of the Company)
whether such Indebtedness or guarantee now exists, or is created after
the Issue Date, which default (A) extends beyond any stated period of
grace applicable thereto (including any extensions thereof) or (B) is
caused by a failure to pay principal of or premium, if any, or
interest on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default, and,
in each case, the outstanding principal amount of any such
Indebtedness of the Company or such Restricted Subsidiary aggregates
in excess of $1,000,000, and provided, further, that if any such
default is waived by all lenders, holders or obligees (as applicable)
of such Indebtedness, then such Event of Default under this
Section 6.1(v) shall be deemed waived and any consequential acceleration
of the Notes shall be automatically rescinded, so long as such
rescission does not conflict with any judgment or decree;
(vi) a final judgment or final judgments for the payment of
money in excess of $1,000,000 are entered by a court or courts of
competent jurisdiction against the Company or any Restricted
Subsidiary of the Company, and such judgment or judgments remain
unpaid and undischarged for a period (during which execution shall not
be effectively stayed) of 60 consecutive days, provided that the
aggregate of all such unpaid and undischarged judgments exceed
applicable and in force insurance contracts (as to which all coverage
corresponding to the claim or claims made a basis of such judgment or
judgments have been acknowledged and confirmed for timely payment on
such judgment or judgments by the respective insurers of then
financial standing capable of paying such amount or amounts) by at
least $1,000,000;
(vii) any of this Indenture, the Notes or the Subsidiary
Guarantees shall for any reason cease to be, or be asserted by the
Company or any Subsidiary Guarantor, as applicable, not to be, in full
force and effect (except pursuant to the release of any Subsidiary
Guarantee in accordance with this Indenture) or shall be declared null
and void or unenforceable, or the validity or enforceability thereof
shall be denied or contested by the Company, any Affiliate or any
other Person;
(viii) the Company or any Subsidiary Guarantor, pursuant to or
within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Bankruptcy
Custodian of it or for all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors, or
(E) generally is not paying its debts as they become
due; or
(ix) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief, in an involuntary case, against the
Company or any Subsidiary Guarantor;
(B) appoints a Bankruptcy Custodian of the Company or
any Subsidiary Guarantor, for all or substantially all of the
property of the Company or any Subsidiary Guarantor; or
(C) orders the liquidation of the Company or any
Subsidiary Guarantor, for all of substantially all of the
property of the Company or any Subsidiary Guarantor;
and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 6.2 ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (viii) or (ix) of Section 6.1) occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes by written notice to the Company (and to the Trustee if
given by such Holders) may declare all principal of, premium, if any, and
accrued interest on the Notes to be due and payable immediately. Upon any
such declaration, such principal, premium and accrued interest on the Notes
shall become due and payable immediately. If an Event of Default specified
in clause (viii) or (ix) of Section 6.1 hereof occurs, all principal, premium,
if any, and accrued interest on the Notes will be immediately due and
payable on all outstanding Notes without further declaration or other act
on the part of any Person.
The Holders of not less than 66-2/3% in aggregate principal amount of
the then outstanding Notes by written notice to the Trustee may on behalf
of all of the Holders rescind any such acceleration and its consequences if
(i) any existing Events of Default, other than the non-payment of the
principal, premium, if any, or interest on the Notes which have become due
solely by such acceleration, have been cured or waived in compliance with
applicable provisions of this Indenture and (ii) the rescission would not
conflict with any judgment or decree.
SECTION 6.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium,
if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default.
All remedies are cumulative to the extent permitted by law.
SECTION 6.4 WAIVER OF PAST DEFAULTS.
Prior to the declaration of acceleration of the Notes, the Holders of
not less than 66-2/3% in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may waive on behalf of the
Holders of all of the Notes an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in
the payment of principal of, or premium (if any) or interest on, any Note
not yet cured (including in connection with a redemption or an offer to
purchase pursuant to Sections 3.7, 3.9, 4.11 or 4.17) or a Default or Event
of Default with respect to any covenant or provision which cannot be
modified or amended without the consent of the Holders of all the Notes.
Upon any such waiver, such Default or Event of 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.
SECTION 6.5 CONTROL BY TWO-THIRDS CONSENT.
The Holders of 66-2/3% in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture,
that the Trustee determines may be unduly prejudicial to the rights of
other Holders of Notes or that may involve the Trustee in personal
liability.
SECTION 6.6 LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Note only if:
(i) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes make a written request to the
Trustee to pursue the remedy;
(iii) such Holder or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(v) during such 60-day period the Holders of 66-2/3% in
aggregate principal amount of the then outstanding Notes do not give
the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
SECTION 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium, if any, and
interest on the Note, on or after the respective due dates expressed in the
Note (including in connection with a redemption or an offer to purchase
pursuant to Sections 3.7, 3.9, 4.11 or 4.17), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(i) or (ii) occurs and
is continuing, the Trustee is authorized to recover judgment in its own
name and as trustee of an express trust against the Company for the whole
amount of principal of, premium, if any, and interest remaining unpaid on
the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due to the Trustee under Section 7.7.
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due to the Trustee under Section 7.7) and
the Holders of the Notes allowed in any judicial proceedings relative to
the Company (or any other obligor upon the Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such
claims and any custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the
event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.7. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section 7.7
out of the estate in any such proceeding shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out
of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement
or otherwise. Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.7, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium, if any, and interest,
respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or
omitted by it as a trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard for the merits and good faith of
the claims or defenses made by the party litigant. This Section 6.11 does
not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant
to Section 6.6, or a suit by Holders of more than 10% in aggregate
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(iii) this paragraph does not limit the effect of
paragraph (b) of this Section 7.1;
(iv) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it
is proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(v) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with
a direction received by it pursuant to Section 6.5.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.1.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have
offered to the Trustee security and indemnity satisfactory to it against
any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.2 RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith
in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel of its selection and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or
agent appointed with due care.
(d) 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.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient
if signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(g) The Trustee shall not be charged with knowledge of any Default or
Event of Default with respect to the Notes of any series for which it is
acting as Trustee unless either (1) a Responsible Officer shall have actual
knowledge of such Default or Event of Default or (2) written notice of such
Default or Event of Default shall have been given to the Trustee by the
Company or any other obligor on such Notes or by any Holder of such Notes.
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any "conflicting
interest" (within the meaning of Section 3.10(b) of the TIA), it must
eliminate such conflict within 90 days, apply to the Commission for
permission to continue as trustee or resign. Any Agent may do the same
with like rights and duties. The Trustee is also subject to Sections 7.1
and 7.11.
SECTION 7.4 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not
be accountable for the Company's use of the proceeds from the Notes or any
money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the
Trustee, and it shall not be responsible for any statement or recital
herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULT.
If an Event of Default occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Event of Default within 90 days after it occurs; provided that, except in
the case of a default in payment of principal of, premium, if any, or
interest on any Notes, the Trustee may withhold, and shall be protected in
withholding, the notice if and so long as a committee of its Responsible
Officers in good faith determines that the withholding of such notice is in
the interest of the Holders of the Notes.
SECTION 7.6 REPORT BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding,
the Trustee shall mail to the Holders of the Notes a brief report dated as
of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the 12 months
preceding the reporting date, no report need be transmitted). The Trustee
also shall comply with TIA Section 313(b)(2) and Section 313(b)(1).
The Trustee shall also transmit by mail all reports as required by TIA
Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA
Section 313(d). The Company shall promptly notify the Trustee when the
Notes are listed on any stock exchange.
SECTION 7.7 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation as shall be agreed between the Company and the Trustee for its
acceptance of this Indenture and services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee
of an express trust. The Company shall reimburse the Trustee promptly upon
request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses
shall include the reasonable compensation, disbursements and expenses of
the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and any successor
Trustee against any and all losses, liabilities, damages, claims or
expenses, including taxes (other than taxes based on the income of the
Trustee), incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including
the costs and expenses of enforcing this Indenture against the Company
(including this Section 7.7) and defending itself against any claim
(whether asserted by the Company or any Holder or any other Person) or
liability in connection with the exercise or performance of any of its
powers or duties hereunder, except to the extent any such loss, liability
or expense may be attributable to its negligence or bad faith. The Trustee
shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend
the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company shall pay the reasonable fees and
expenses of much counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.7 shall survive
the resignation or removal of the Trustee and the satisfaction and
discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal,
premium, if any, and interest on particular Notes. Such Lien shall survive
the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(viii) or (ix) occurs, the expenses and the
compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law. The Trustee shall also be entitled to receive
compensation for extraordinary services in default administration.
The Trustee shall comply with the provisions of TIA Section 313
(b)(2) to the extent applicable.
SECTION 7.8 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance
of appointment as provided in this Section 7.8.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes
of 66-2/3% in aggregate principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(iii) a Bankruptcy Custodian or public officer takes charge of
the Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes
office, the Holders of 66-2/3% in aggregate principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company
or the Holders of Notes of at least 10% in aggregate principal amount of
the then outstanding Notes may petition any court of competent jurisdiction
for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to Holders of the Notes. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor
Trustee, provided all sums owing to the Trustee hereunder have been paid
and subject to the Lien provided for in Section 7.7. Notwithstanding
replacement of the Trustee pursuant to this Section 7.8, the Company's
obligations under Section 7.7 shall continue for the benefit of the
retiring Trustee.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to another
corporation, the successor corporation without any further act shall be the
successor Trustee. As soon as practicable, the successor Trustee shall
mail a notice of its succession to the Company and the Holders of the
Notes.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America
or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has (together with its parent bank
holding company, if any) a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is
subject to TIA Section 310(b).
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or
been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE; SATISFACTION AND
DISCHARGE
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by
a Board Resolution set forth in an Officers' Certificate delivered to the
Trustee, at any time, elect to have either Section 8.2 or 8.3 applied to
all outstanding Notes upon compliance with the conditions set forth below
in this Article 8.
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 of the option applicable
to this Section 8.2, the Company and each Subsidiary Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.4 and
continuance of certain provisions hereinafter referenced, be deemed to have
been discharged from their respective obligations with respect to all
outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company and each Subsidiary Guarantor shall be deemed to
have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.5 and the other Sections of this
Indenture referred to in clauses (i) and (ii) of this Section 8.2, and the
Company and each Subsidiary Guarantor shall be deemed to have satisfied all
of their respective other obligations under such Notes or any Subsidiary
Guarantee (as applicable) and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions, which shall
survive until otherwise terminated or discharged hereunder: (i) the rights
of Holders of outstanding Notes to receive solely from the trust fund
described in Section 8.4, and as more fully set forth in such Section,
payments in respect of the principal of, premium, if any, and interest on
such Notes when such payments are due; (ii) the Company's obligations with
respect to such Notes under Sections 2.3, 2.4, 2.6, 2.7 and 2.10 and
Section 4.2; (iii) the rights, powers, trusts, duties, obligations and
immunities of the Trustee hereunder, including the Trustee's rights under
Section 7.7, and the Company's obligations in connection therewith;
(iv) Sections 10.3 and 10.7; and (v) this Article 8. Subject to compliance
with this Article 8, the Company may exercise its option under this
Section 8.2 notwithstanding the prior exercise of its option under
Section 8.3.
SECTION 8.3 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.4, be released from
its obligations under the covenants contained in Sections 4.5(a), 4.7, 4.8,
4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 5.1(ii) and 10.2
hereof with respect to the outstanding Notes on and after the date the
conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and such Notes shall thereafter be deemed not "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 (it being understood that such Notes shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, (i) the
Company and each Subsidiary Guarantor may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth
in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any
reference in any such covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.1(iii) or Section 6.1(iv) (as
applicable), and (ii) Sections 6.1(v) and Section 6.1(vi) shall not
constitute Events of Default but, except as specified above, the remainder
of this Indenture and such Notes shall be unaffected thereby.
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Sections 8.2 or 8.3 to the outstanding Notes:
(a) the Company shall irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, (i) cash in United States dollars,
(ii) Government Securities which through the payment of interest and
principal will provide, no later than one day before the due date of
payment in respect of such Notes, cash in United States dollars in an
amount, or (iii) or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay and discharge the principal of, premium, if any,
and interest on the outstanding Notes on the stated date for payment
thereof or on the applicable redemption date, as the case may be, and the
Company must specify whether the Notes are being defeased to maturity or to
a particular redemption date;
(b) in the case of an election under Section 8.2, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the
United States 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 federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Independent Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Legal Defeasance had
not occurred;
(c) in the case of an election under Section 8.3, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the
United States stating that the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result
of such Covenant Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Section 6.1(viii) or
6.1(ix) is concerned, at any time in the period ending on the 91st day (or,
if such irrevocable deposit may be subject to set aside or avoidance under
then applicable bankruptcy or insolvency laws for a period of time longer
than 90 days, then one day after the conclusion of such longer period of
time) after the date of the irrevocable deposit referred to in
Section 8.4(a) (it being agreed and understood that this condition shall
not be satisfied until the expiration of such period);
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Independent Counsel to the effect that, as of the date such opinion,
(i) such Legal Defeasance or Covenant Defeasance shall not result in the
Company, any Subsidiary Guarantor, the trust arising from the irrevocable
deposit referred to in Section 8.4(a) or the Trustee being subject to
regulation under, or constituting an investment company within the meaning
of, the Investment Company Act of 1940, as amended, and (ii) assuming no
intervening bankruptcy of the Company between the date of deposit and the
91st day following the deposit or if a longer period, the day following the
end of such other preference period in effect at the time of such opinion,
as applicable, following the deposit, the trust funds irrevocably deposited
pursuant to Section 8.4(a) will not be subject to the effects of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally under any applicable United States or state
law;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the irrevocable deposit referred in Section 8.4(a)
was not made by the Company with the intent of preferring the Holders of
Notes over any other creditors of the Company or any Subsidiary Guarantor
with the intent of defeating, hindering, delaying or defrauding creditors
of the Company, any Subsidiary Guarantor or others;
(h) no event or condition shall exist that would prevent the Company
from making payments of the principal of, or premium, if any, or interest
on, the Notes on the date of the irrevocable deposit referred to in
Section 8.4(a) or at any time during and ending on the 91st day (or such
longer period as referred to in Sections 8.4(d) and (f)(ii)) after the date
of such deposit; and
(i) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, which, taken together, state that
all conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with.
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6, all money and Government Securities (including
the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.5, the "Trustee")
pursuant to Section 8.4 in respect of the outstanding Notes shall be held
in trust and applied by the Trustee, in accordance with the provisions of
such Notes and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest,
but such money need not be segregated from other funds except to the extent
required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or Government
Securities deposited pursuant to Section 8.4 or the principal and interest
received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or Government Securities held by it as
provided in Section 8.4 that, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.4(a)), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
SECTION 8.6 REPAYMENT TO THE COMPANY.
Subject to the applicable escheat and abandoned property laws, any
money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable
shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Notes
shall thereafter, as a secured creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in The New York Times
and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not
be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the
Company.
SECTION 8.7 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or Government Securities in accordance with Section 8.5 by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Notes and the Subsidiary
Guarantors' obligations under this Indenture and the Subsidiary Guarantees
shall be revived and reinstated as though no deposit had occurred pursuant
to Sections 8.2 or 8.3 until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.5; provided,
however, that, if the Company makes any payment of principal of, premium,
if any, or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders
of such Notes to receive such payment from the money held by the Trustee or
Paying Agent.
SECTION 8.8 SATISFACTION AND DISCHARGE OF INDENTURE.
In addition to the options to effect Legal Defeasance and Covenant
Defeasance, and the effects thereof, this Indenture shall cease to be of
further effect (subject to Section 8.7) when all outstanding Notes
theretofore authenticated and issued hereunder have been delivered (other
than any Notes which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Section 2.7) to the Trustee
for cancellation and the Company has paid or caused to be paid all sums
payable hereunder and under the Notes. Notwithstanding the satisfaction
and discharge referred to in this Section 8.8, the provisions of this
Indenture referred to at clauses (i) through (v) of Section 8.2 shall
survive until otherwise terminated or discharged hereunder. For the
avoidance of doubt, in addition to and distinct from this Section 8.8, the
Company may elect Legal Defeasance or Covenant Defeasance (or both) as
provided for in Section 8.1 through 8.4.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES.
(a) Notwithstanding Section 9.2, the Company, the Subsidiary
Guarantors and the Trustee may amend or supplement this Indenture or the
Notes without the consent of any Holder of a Note:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(iii) to provide for the assumption of the Company's obligations
to the Holders of the Notes pursuant to Article 5 or Section 10.4(b);
(iv) to secure the Notes;
(v) to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not adversely
affect the legal rights under this Indenture of any such Holder;
(vi) to add any Restricted Subsidiary as an additional Subsidiary
Guarantor as provided in Section 10.2 or to evidence the succession of
another Person to any Subsidiary Guarantor pursuant to Section 10.4 and
the assumption by any such successor of the covenants and agreements
of such Subsidiary Guarantor contained herein and in the Subsidiary
Guarantee of such Subsidiary Guarantor;
(vii) to release a Subsidiary Guarantor from its obligations
under this Indenture and its Subsidiary Guarantee pursuant to
Section 10.5, or
(viii) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA.
(b) Upon the request of the Company accompanied by a Board Resolution
of its Board of Directors authorizing the execution of any such amendment
or supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 9.6, the Trustee shall join with the Company and the
Subsidiary Guarantors in the execution of any amended or supplemental
Indenture authorized or permitted by the terms of this Indenture and to
make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.2, the Company and the
Trustee may amend or supplement this Indenture, the Subsidiary Guarantees
or the Notes with the consent of the Holders of at least 66-2/3% in
aggregate principal amount of the Notes then outstanding (including,
without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, Notes) and, subject to Sections 6.4 and
6.7, any existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium, if any, or
interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of
this Indenture or the Notes may be waived with the consent of the Holders
of 66-2/3% in aggregate principal amount of the then outstanding Notes
(including consents obtained in connection with a purchase of, tender offer
or exchange offer for Notes).
Upon the request of the Company accompanied by a Board Resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as
herein provided, and upon receipt by the Trustee of the documents described
in Section 9.6, the Trustee shall join with the Company and the Subsidiary
Guarantors in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental Indenture.
Subject to Sections 6.4 and 6.7, the Holders of 66-2/3% in aggregate
principal amount of the Notes then outstanding may waive compliance in a
particular instance by the Company and the Subsidiary Guarantors with any
provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver may not (with respect to any
Notes held by a non-consenting Holder):
(i) change the Stated Maturity Date or the date specified in any
Note as the fixed date on which any principal thereof, or any
installment of interest thereon, is due and payable, or change to an
earlier date any redemption date of, or waive a default in the payment
of the principal or interest on, any such Note or reduce the principal
amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or change the coin or currency in which
the principal of any Note or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity Date or the date
specified in any Note as the fixed date on which any principal thereof
or any installment of interest thereon is due and payable (or, in the
case of redemption, on or after the redemption date);
(ii) after the date upon which a Change of Control Offer or
Excess Cash Offer, as the case may be, is required to be made, amend,
change or modify the obligation of the Company to make and consummate
an Excess Cash Offer with respect to any Asset Sale in accordance with
Section 4.11 or the obligation of the Company to make and consummate a
Change of Control Offer in the event of a Change of Control in
accordance with Section 4.17, including, in each case, amending,
changing or modifying any provisions of such Sections or any
definitions relating thereto;
(iii) reduce the percentage in principal amount of the
outstanding Notes, the consent of whose Holders is required for any
such amendment, supplemental indenture, or the consent of whose
Holders is required for any waiver or compliance with certain
provisions of this Indenture;
(iv) modify any of the provisions of this Section 9.2 or
Section 6.4, except to increase the percentage of such outstanding
Notes required for any such actions or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each such Note affected thereby;
(v) except as otherwise permitted under Article Five and
Article Ten, consent to the assignment or transfer by the Company or
any Subsidiary Guarantor of any of its rights and obligations
hereunder;
(vi) alter, modify or change the ranking of any of the Notes or
any Subsidiary Guarantee relative to the payment of other Indebtedness
or obligations of the Company or any Subsidiary Guarantor, or
otherwise adversely affect the ranking of the Notes or Subsidiary
Guarantees; or
(vii) release any Subsidiary Guarantee in any manner otherwise
than in accordance with the terms of this Indenture, or amend, modify
or change any provision of this Indenture (including the Subsidiary
Guarantee) which provides for the release of any Subsidiary Guarantee.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.2 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver.
Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amended or supplemental Indenture or waiver.
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the
TIA as then in effect.
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note
and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the
consent is not made on any Note. However, any such Holder of a Note or
subsequent Holder of a Note may revoke the consent as to its Note if the
Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or
waiver becomes effective in accordance with its terms and thereafter binds
every Holder.
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new
Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.6 TRUSTEE TO SIGN AMENDMENT ETC.
The Trustee shall sign any amendment or supplemental indenture to this
Indenture authorized pursuant to this Article 9 if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Company may not sign an amendment or
supplemental indenture to this Indenture until its Board of Directors
approves it. In executing any amendment or supplemental indenture to this
Indenture, the Trustee shall be entitled to receive, and (subject to
Section 7.1) shall be fully protected in relying upon, in addition to the
documents required by Section 11.4, Officers' Certificates and Opinions of
Counsel stating that the execution of such amendment or supplemental
indenture to this Indenture is authorized or permitted by this Indenture.
ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.1 SUBSIDIARY GUARANTEES.
(a) Each of the Subsidiary Guarantors and each Subsidiary of the
Company that in accordance with Section 10.2 is required to guarantee the
obligations of the Company under the Notes and this Indenture hereby
jointly and severally and unconditionally guarantee, on a senior basis
(each such guarantee being a "Subsidiary Guarantee"), to each Holder of a
Note authenticated and delivered by the Trustee irrespective of the
validity or enforceability of this Indenture, the Notes or the obligations
of the Company under this Indenture or the Notes, that: (i) the principal
of, premium, if any, and interest on the Notes shall be paid in full when
due, whether at the maturity or interest payment or optional or mandatory
redemption date, by acceleration, call for redemption or otherwise, and
interest on the overdue principal and interest, if any, of the Notes and
all other obligations of the Company to the Holders or the Trustee under
this Indenture or the Notes shall be promptly paid in full or performed,
all in accordance with the terms of this Indenture and the Notes and
(ii) in case of any extension of time of payment or renewal of any Notes or
any of such other obligations, they shall be paid in full when due or
performed in accordance with the terms of the extension or renewal, whether
at maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed for whatever reason, each Subsidiary Guarantor shall
be obligated to pay the same whether or not such failure to pay has become
an Event of Default that could cause acceleration pursuant to Section 6.2.
Each Subsidiary Guarantor agrees that this is a guarantee of payment not a
guarantee of collection.
(b) Each Subsidiary Guarantor hereby agrees that its obligations with
regard to its Subsidiary Guarantee shall be unconditional, irrespective of
the validity or enforceability of the Notes or the obligations of the
Company under this Indenture, the absence of any action to enforce the
same, the recovery of any judgment against the Company or any other obligor
with respect to this Indenture, the Notes or the obligations of the Company
under this Indenture or the Notes, any action to enforce the same or any
other circumstances (other than complete performance) that might otherwise
constitute a legal or equitable discharge or defense of a Subsidiary
Guarantor. Each Subsidiary Guarantor further, to the extent permitted by
law, waives and relinquishes all claims, rights and remedies accorded by
applicable law to guarantors and agrees not to assert or take advantage of
any such claims, rights or remedies, including but not limited to: (i) any
right to require the Trustee, the Holders or the Company (each, a
"Benefitted Party") to proceed against the Company or any other Person or
to proceed against or exhaust any security held by a Benefitted Party at
any time or to pursue any other remedy in any Benefitted Party's power
before proceeding against such Subsidiary Guarantor; (ii) the defense of
the statute of limitations in any action hereunder or in any action for the
collection of any Indebtedness or the performance of any obligation hereby
guaranteed; (iii) any defense that may arise by reason of the incapacity,
lack of authority, death or disability of any other Person or the failure
of a Benefitted Party to file or enforce a claim against the estate (in
administration, bankruptcy or any other proceeding) of any other Person;
(iv) demand, protest and notice of any kind, including but not limited to,
notice of the existence, creation or incurring of any new or additional
Indebtedness or obligation or of any action or non-action on the part of
such Subsidiary Guarantor, the Company, any Benefitted Party, any creditor
of such Subsidiary Guarantor, the Company or on the part of any other
Person whomsoever in connection with any Indebtedness or obligations hereby
guaranteed; (v) any defense based upon an election of remedies by a
Benefitted Party, including but not limited to, an election to proceed
against such Subsidiary Guarantor for reimbursement; (vi) any defense based
upon any statute or rule of law that provides that the obligation of a
surety must be neither larger in amount nor in other respects more
burdensome than that of the principal; (vii) any defense arising because of
a Benefitted Party's election, in any proceeding instituted under any
Bankruptcy Law, of the application of Section 1111(b)(2) under the
Bankruptcy Law; (viii) any defense based on any borrowing or grant of a
security interest under Section 364 under the Bankruptcy Law or (ix) any
right to require a proceeding first against the Company, protest, notice
and all demands whatsoever. Each Subsidiary Guarantor hereby covenants
that its Subsidiary Guarantee will not be discharged except by complete
performance of all of the obligations contained in its Subsidiary
Guarantee, the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Subsidiary Guarantor, or
any custodian, trustee, or similar official acting in relation to either
the Company or such Subsidiary Guarantor, any amount paid by the Company or
such Subsidiary Guarantor to the Trustee or such Holder, the applicable
Subsidiary Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Subsidiary Guarantor agrees that
it will not be entitled to any right of subrogation in relation to the
Holders in respect of any obligations guaranteed hereby until payment in
full of all obligations guaranteed hereby.
(d) Each Subsidiary Guarantor further agrees that, as between such
Subsidiary 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 Section 6.2 for the purposes of this
Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration as to the Company or any other
obligor on the Notes of the obligations guaranteed hereby and (ii) in the
event of any declaration of acceleration of those obligations as provided
in Section 6.2, those obligations (whether or not due and payable) will
forthwith become due and payable by such Subsidiary Guarantor for the
purpose of this Subsidiary Guarantee.
SECTION 10.2 ADDITIONAL SUBSIDIARY GUARANTEES.
(a) Simultaneously with (i) the acquisition (by merger,
consolidation, acquisition of assets, stock or properties or otherwise) or
formation of a Person which, directly or indirectly, becomes a Subsidiary
of the Company, or (ii) the occurrence of any other event, circumstance or
transaction pursuant to which, directly or indirectly, a Person becomes a
Subsidiary of the Company, in each case referred to in the immediately
preceding clauses (i) and (ii), other than a Person then designated an
Unrestricted Subsidiary of the Company in accordance with Section 4.14, the
Company then shall (y) cause such Person to execute a supplemental
indenture to this Indenture agreeing to be bound by its terms applicable to
a Subsidiary Guarantor and providing for a Subsidiary Guarantee of the
Notes by such Person, in accordance with the terms of this Indenture and
(z) deliver such supplemental indenture to the Trustee, accompanied by the
Opinion of Counsel and Officers' Certificate required pursuant to
Section 9.6.
(b) In furtherance of Section 10.2(a), but in no regard diminishing
the immediacy of its requirement that upon a Person becoming a Subsidiary
it simultaneously becomes a Subsidiary Guarantor, in no event whatsoever
shall the Company permit any of its Restricted Subsidiaries, other than a
Subsidiary Guarantor, directly or indirectly, to (i) incur any Indebtedness
or guarantee or secure through the granting of Liens the payment of any
Indebtedness of the Company or any other Restricted Subsidiary or
(ii) pledge any intercompany notes representing obligations of any of its
Restricted Subsidiaries to secure the payment of its or any of the
Company's or other Restricted Subsidiary's Indebtedness, in each case,
unless the Company shall (y) cause such Restricted Subsidiary to execute a
supplemental indenture to this Indenture agreeing to be bound by its terms
applicable to a Subsidiary Guarantor and providing for a Subsidiary
Guarantee of the Notes by such Person in accordance with the terms of this
Indenture and (z) deliver such supplemental indenture to the Trustee,
accompanied by the Opinion of Counsel and an Officers' Certificate required
pursuant to Section 9.6.
SECTION 10.3 LIMITATION OF SUBSIDIARY GUARANTORS' LIABILITY.
(a) Each Subsidiary Guarantor and by its acceptance hereof, each
beneficiary hereof, hereby confirm that it is its intention that the
Subsidiary Guarantee by such Subsidiary Guarantor not constitute a
fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law to the extent applicable to any of the
Subsidiary Guarantees. To effectuate the foregoing intention, each such
Person hereby irrevocably agrees that the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee under this Article 10 shall be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor and after
giving effect to any collections from or payments made by or on behalf of
any other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its
contribution obligations under this Indenture, result in the obligations of
such Subsidiary Guarantor under the Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law.
(b) For purposes of such limitations and the applicable fraudulent
conveyance laws, any indebtedness of a Subsidiary Guarantor incurred from
time to time pursuant to a Permitted Bank Credit Facility and secured by a
perfected Lien on the assets of such Subsidiary Guarantor (assuming, for
purposes of such determination, that the incurrence of any such
indebtedness and the granting of any such security interest did not violate
any such fraudulent conveyance laws) shall be deemed, to the extent of the
value of the assets subject to such Lien, to have been incurred prior to
the incurrence by such Subsidiary Guarantor of liability under its
Subsidiary Guarantee.
(c) Each beneficiary under the Subsidiary Guarantees, by accepting
the benefits hereof, confirms its intention that, in the event of a
bankruptcy, reorganization or other similar proceeding of the Company or
any Subsidiary Guarantor in which concurrent claims are made upon such
Subsidiary Guarantor hereunder, to the extent such claims will not be fully
satisfied, each claimant with a valid claim against the Company shall be
entitled to a ratable share of all payments by such Subsidiary Guarantor in
respect of such concurrent claims.
SECTION 10.4 SUBSIDIARY GUARANTORS MAY CONSOLIDATE ETC., ON CERTAIN
TERMS.
(a) No Subsidiary Guarantor may consolidate with or merge with or
into (whether or not such Subsidiary Guarantor is the surviving Person)
another Person or, subject to Section 10.5, sell, convey or otherwise
transfer all or substantially all of its assets to another Person or group,
unless (i) subject to the provisions of the following paragraph, the Person
formed by or surviving any such consolidation or merger (if other than such
Subsidiary Guarantor) (A) is a corporation organized and existing under the
laws of the United States of America, any state thereof or the District of
Columbia, and (B) expressly assumes all the obligations of such Subsidiary
Guarantor by executing and delivering a supplemental indenture to this
Indenture to the Trustee agreeing to be bound by its terms applicable to a
Subsidiary Guarantor and providing for a Subsidiary Guarantee of the Notes
by such Person, in accordance with the terms of this Indenture;
(ii) immediately before and after giving effect to such transaction, no
Default or Event of Default exists and immediately after giving effect to
such transaction, the resulting, surviving or transferee entity could Incur
$1.00 of additional Indebtedness pursuant to Section 4.7(a); and (iii) such
Subsidiary Guarantor, or any Person formed by or surviving any such
consolidation or merger, would have a Net Worth (immediately after giving
effect to such transaction), equal to or greater than the Net Worth of such
Subsidiary Guarantor immediately preceding the transaction. In connection
with any consolidation, merger or sale, conveyance or other transfer
contemplated by this provision, the Subsidiary Guarantor shall deliver, or
cause 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 consolidation, merger or sale, conveyance
or other transfer and the supplemental indenture in respect thereto comply
with this provision and that all conditions precedent in this Indenture
provided for relating to such transaction or transactions have been
complied with.
(b) Notwithstanding the foregoing, (i) a Subsidiary Guarantor may
consolidate with or merge with or into, or sell, convey or otherwise
transfer all or substantially all of its assets to, the Company, provided
that the surviving corporation (if other than the Company) shall expressly
assume by supplemental indenture complying with the requirements of this
Indenture, the due and punctual payment of the principal of, premium, if
any, and interest on all of the Notes, and the due and punctual performance
and observance of all the covenants and conditions of this Indenture to be
performed by the Company and (ii) a Subsidiary Guarantor may consolidate
with or merge with or into, or sell, convey or otherwise transfer all or
substantially all of its assets to, any other Subsidiary Guarantor.
SECTION 10.5 RELEASES OF SUBSIDIARY GUARANTORS.
In the event of (i) the designation of any Subsidiary Guarantor as an
Unrestricted Subsidiary of the Company pursuant to the provisions of
Section 4.14 or (ii) a sale, conveyance, transfer or other disposition of
all or substantially all of the properties or assets of any Subsidiary
Guarantor to a Person other than the Company or any other Subsidiary
Guarantor or an Unrestricted Subsidiary of the Company, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the
Capital Stock of any Subsidiary Guarantor, in either case, in a transaction
or manner that does not violate any of the covenants or other provision of
this Indenture, then such Subsidiary Guarantor (in the event of such a
designation or a sale, conveyance, transfer or other disposition (other
than a lease), by way of such a merger, consolidation or otherwise, or a
disposition of all of the Capital Stock of such Subsidiary Guarantor) or
the Person acquiring such properties or assets (in the event of a sale,
conveyance, transfer or other disposition (other than a lease) of all or
substantially all of the properties or assets of such Subsidiary Guarantor)
will be released from and relieved of any obligations under this Indenture
and its Subsidiary Guarantee, provided that (y) any Net Cash Proceeds of
such sale or other disposition are applied in accordance with Section 4.11
as evidenced by an Officers' Certificate to such effect, and (z) all
obligations of such Subsidiary Guarantor under all of its guarantees of,
and under all of its pledges of assets or other security interests that
secure, any other Indebtedness of the Company or its Restricted
Subsidiaries shall also terminate upon such release, sale or disposition.
SECTION 10.6 "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 10 shall in such case (unless the context
shall otherwise require) be construed as extending to and including such
Paying Agent within its meaning as fully and for all intents and purposes
as if such Paying Agent were named in this Article 10 in place of the
Trustee.
SECTION 10.7 CONTRIBUTION.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in
the event any payment or distribution is made by any Subsidiary Guarantor
(a "Funding Guarantor") under a Subsidiary Guarantee, such Funding
Guarantor shall be entitled to a contribution from all other Subsidiary
Guarantors in a pro rata amount based on the Adjusted Net Assets (as
defined below) of each Subsidiary Guarantor (including the Funding
Guarantor) for all payments, damages and expenses incurred by that Funding
Guarantor in discharging the Company's obligations with respect to the
Notes or any other Subsidiary Guarantor's obligations with respect to such
Subsidiary Guarantee. "Adjusted Net Assets" of such Subsidiary Guarantor
at any date shall mean the lesser of the amount by which (x) the fair value
of the property of such Subsidiary Guarantor exceeds the total amount of
liabilities, including, without limitation, contingent liabilities, but
excluding liabilities under the Subsidiary Guarantee of such Subsidiary
Guarantor at such date and (y) the present fair salable value of the assets
of such Subsidiary Guarantor at such date exceeds the amount that will be
required to pay the probable liability of such Subsidiary Guarantor on its
debts (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date and after giving effect to any collection
from any Subsidiary of such Subsidiary Guarantor in respect of the
obligations of such Subsidiary under the Subsidiary Guarantees), excluding
debt in respect of the Subsidiary Guarantees, as they become absolute and
matured.
SECTION 10.8 EXECUTION OF SUBSIDIARY GUARANTEES.
To evidence its guarantee to each Holder of Notes, each of the
Subsidiary Guarantors hereby agrees to execute its Subsidiary Guarantee in
substantially the form of Exhibit A recited to be endorsed on each Note
ordered to be authenticated and delivered by the Trustee. Each Subsidiary
Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 10.1 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
Each such Subsidiary Guarantee shall be signed on behalf of each Subsidiary
Guarantor by one Officer of such Subsidiary Guarantor who shall have been
duly authorized by all requisite corporate actions, and the delivery of
such Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Subsidiary Guarantee on behalf of such
Subsidiary Guarantor. Such signatures upon the Subsidiary Guarantee may be
by manual or facsimile signature of such Officer and may be imprinted or
otherwise reproduced on the Subsidiary Guarantee, and in case any such
Officer who shall have signed the Subsidiary Guarantee shall cease to be
such Officer before the Note on which such Subsidiary Guarantee is endorsed
shall have been authenticated and delivered by the Trustee or disposed of
by the Company, such Note nevertheless may be authenticated and delivered
or disposed of as though the person who signed the Subsidiary Guarantee had
not ceased to be such officer of the Subsidiary Guarantor.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall
control.
SECTION 11.2 NOTICES.
Any notice or communication by the Company, any of the Subsidiary
Guarantors or the Trustee to any of the others is duly given if in writing
and delivered in person or mailed by first class mail (registered or
certified, return receipt requested), facsimile or overnight air courier
guaranteeing next-day delivery, to such other's address:
If to the Company or any Subsidiary Guarantor:
RAM Energy, Inc.
5100 East Skelly Drive, Suite 650
Tulsa, Oklahoma 74135
Facsimile No.: (918) 663-9214
Attention: Mr. Larry E. Lee
with, in any notice required to be given to the Company pursuant to
Article 6 and, of resignation, pursuant to Section 7.8, a copy to:
C. David Stinson, Esq.
McAfee & Taft
211 North Robinson, Suite 1000
Oklahoma City, Oklahoma 73102
provided, however, the failure to provide or any delay in providing
any "with a copy to" notice or communication shall not impair the
effect and validity of any notice or communication made to the
Company, in person, by first class mail, facsimile or overnight air
courier, in each case as provided in this Section 11.2, at its address
above or otherwise designated pursuant to the provisions of this
Section 11.2.
If to the Trustee:
United States Trust Company of New York
114 West 47th Street
25th Floor
New York, New York 10036
Facsimile No.: (212) 852-1626
Attention:Corporate Trust Department
Ms. Patricia Stermer
The Company, any of the Subsidiary Guarantors or the Trustee, by
notice to the others, may designate additional or different addresses for
subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; 5 Business Days after being deposited in the United
States mail, postage prepaid, if mailed; when receipt acknowledged, if sent
by facsimile; the next Business Day after timely delivery to the courier,
if sent for overnight delivery by a courier guaranteeing next-day delivery;
and the second Business Day after timely delivery to the courier, if sent
for second-day delivery by a courier guaranteeing second-day delivery.
Any notice or communication to a Holder shall be mailed by first class
U.S. mail to its address shown on the register kept by the Registrar. Any
notice or communication shall also be so mailed to any Person described in
TIA Section 313(c), to the extent required by the TIA. Failure to mail a
notice or communication to a Holder or any defect in it shall not affect
its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.3 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS
OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes.
The Company, the Subsidiary Guarantors, the Trustee, the Registrar and
anyone else shall have the protection of TIA Section 312(c).
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, such requesting entity shall furnish to
the Trustee:
(i) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.5) stating that, in the opinion of
the signers, all conditions precedent and covenants, if any, provided
for in this Indenture relating to the proposed action have been
satisfied; and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.5) stating that, in the opinion of such counsel,
all such conditions precedent and covenants have been satisfied.
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply with
the provisions of TIA Section 314(e) and shall include:
(i) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(ii) 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;
(iii) a statement that, in the opinion of such Person, he or
she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been satisfied; and
(iv) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied; provided that,
with respect to matters of fact, an Opinion of Counsel may rely on an
Officers' Certificate and certificates of public officials.
SECTION 11.6 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND SHAREHOLDERS.
NO STOCKHOLDER, OFFICER OR DIRECTOR, AS SUCH, PAST, PRESENT OR FUTURE,
OF THE COMPANY OR ANY SUBSIDIARY GUARANTOR, SHALL HAVE ANY PERSONAL
LIABILITY FOR ANY OBLIGATIONS OF THE COMPANY OR SUCH SUBSIDIARY GUARANTOR
UNDER THE NOTES, THIS INDENTURE OR THE SUBSIDIARY GUARANTEES, AS THE CASE
MAY BE, BY REASON OF HIS OR HER OR ITS STATUS AS SUCH STOCKHOLDER, OFFICER
OR DIRECTOR. EACH HOLDER BY ACCEPTING A NOTE WAIVES AND RELEASES ALL SUCH
LIABILITY. THE WAIVER AND RELEASE ARE PART OF THE CONSIDERATION FOR
ISSUANCE OF THE NOTES AND THE SUBSIDIARY GUARANTEES. SUCH WAIVER MAY NOT
BE EFFECTIVE TO WAIVE LIABILITIES UNDER THE FEDERAL SECURITIES LAWS, AND IT
IS THE VIEW OF THE COMMISSION THAT SUCH A WAIVER IS AGAINST PUBLIC POLICY.
SECTION 11.8 GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
SECTION 11.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 11.10 SUCCESSORS.
All agreements of the Company or any Subsidiary Guarantor in this
Indenture, the Subsidiary Guarantees and the Notes shall bind its
successors and as provided herein, its assigns. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.11 SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.12 COUNTERPART ORIGINALS.
The parties hereto may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent
the same agreement.
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and
shall in no way modify or restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Indenture as
of the date first written above.
"COMPANY"
RAM ENERGY, INC.,
a Delaware corporation
By LARRY E. LEE
Name: Larry E. Lee
Title: President
"SUBSIDIARY GUARANTORS"
RB OPERATING COMPANY,
a Delaware corporation
By LARRY E. LEE
Name: Larry E. Lee
Title: President
RLP GULF STATES, L.L.C.,
an Oklahoma limited liability company
By: RAM Energy, Inc.,
Manager
By LARRY E. LEE
Name: Larry E. Lee
Title: President
"TRUSTEE"
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By PATRICIA STERMER
Name: Patricia Stermer
Title: Assistant Vice President
<PAGE>
EXHIBIT A
[FORM OF NOTE]
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY
TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET,
NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO, HAS AN INTEREST HEREIN.{1}
11-1/2% Senior Notes due 2008
REGISTERED CUSIP: ____________
No. $
RAM Energy, Inc., a Delaware corporation (the "Company", which term
includes any successor Person under the Indenture hereinafter referred to),
for value received, promises to pay to ____________ ___________________ or
registered assigns, the principal sum of _____________________ Dollars [or
such lesser amount as may be set forth in Appendix 1 hereto in accordance
with the Indenture]{2} on __________, 2008.
Interest Payment Dates: February 15 and August 15
Record Dates: February 1 and August 1
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Dated: _________________ RAM ENERGY, INC.
By
Name:
Title:
Trustee's Certificate of Authentication:
This is one of the 11-1/2% Senior Notes due 2008 referred to in the
within-mentioned Indenture:
Dated:
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:
Authorized Signatory
**FOOTNOTES**
{1} This paragraph should be included in the Note only if issued in
global form.
{2} This bracketed clause should be included in the Note only if
issued in global form.
<PAGE>
[Reverse of Note]
RAM Energy, Inc.
11-1/2% Senior Notes due 2008
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. RAM Energy, Inc., a Delaware corporation (the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), promises to pay interest on the principal amount
of this Note at 11-1/2% per annum from February 24, 1998, until maturity.
The Company shall pay interest semi-annually on February 15 and August 15
of each year (each, an "Interest Payment Date"), or if any such day is not
a Business Day, on the next succeeding Business Day, commencing August 15,
1998. Interest on the Notes shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the
date of original issuance. The Company shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at a rate that
is 1% per annum in excess of the rate then in effect on this Note to the
extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of
interest (without regard to any applicable grace periods) from time to time
on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of
Notes at the close of business on the February 1 or August 1 next preceding
the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided
in Section 2.12 of the Indenture with respect to defaulted interest. The Notes
will be payable as to principal, premium and interest at the office or
agency of the Company maintained for such purpose within or without the
City and State of New York, [or, at the option of the Company, payment of
interest may be made by wire transfer or check mailed to the Holders at
their addresses set forth in the register of Holders,]{`} and provided that
payment by wire transfer of immediately available funds will be required
with respect to principal of, and interest and premium on, all Global Notes
and all other Notes the Holders of which shall have provided written wire
transfer instructions to the Company or the Paying Agent at least 10
Business Days prior to the applicable payment date. Such payment shall be
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, United States Trust
Company of New York, the Trustee under the Indenture, will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company or any domestically incorporated
Wholly Owned Subsidiary Guarantor may act in any such capacity.
4. Indenture and Subsidiary Guarantees. The Company issued the
Notes under an Indenture dated as of February 24, 1998 (the "Indenture"),
among the Company, the Subsidiary Guarantors and the Trustee. The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Notes are general unsecured obligations of
the Company limited to $115,000,000 in aggregate principal amount in the
case of Notes issued on the Issue Date. Payment on each Note is guaranteed
on a senior unsecured basis, jointly and severally, by the Subsidiary
Guarantors pursuant to Article of the Indenture.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5,
the Company shall not have the option to redeem the Notes prior to
February 15, 2005. Thereafter, the Company shall have the option to redeem
the Notes, in whole or in part, upon not less than 30 nor more than 60
days' written notice, at the redemption prices (expressed as percentages of
principal amount) set forth below, plus accrued and unpaid interest
thereon, if any, to the applicable redemption date, if redeemed during the
12-month period beginning on February 15 of the years indicated below:
Year Percentage
2005 111.50%
2006 107.67%
2007and thereafter to, but not including,
the Stated Maturity Date 103.84%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time on or prior to February 15, 2001, the Company may
redeem up to an aggregate of $15,000,000 principal amount of Notes
originally issued, in cash, at a redemption price of 115.00% of the
principal amount thereof, together with accrued and unpaid interest thereon
to the redemption date, with the net proceeds of one or more Public Equity
Offerings; provided that (i) at least $100,000,000 aggregate principal
amount of the Original Notes originally issued remains outstanding
immediately after the occurrence of each such redemption and (ii) each such
redemption shall occur within 60 days of the date of the closing of each
such Public Equity Offering.
6. Mandatory Redemption. The Company shall not be required to make
mandatory redemption payments or sinking fund payments with respect to the
Notes.
7. Repurchase at Option of Holder.
(a) Upon the occurrence of a Change of Control, the Company
shall be required to make an offer (a "Change of Control Offer") to
repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of each Holder's Notes at a purchase price equal to 101% of the
aggregate principal amount thereof, plus accrued and any unpaid interest
thereon, if any, to the Change of Control Payment Date. Within 5 Business
Days after the occurrence of a Change of Control, the Company shall notify
the Trustee in writing of such occurrence and shall, not later than 20
Business Days after the occurrence of the Change of Control, make a Change
of Control Offer to the Holders of all of the outstanding Notes by sending
written notice to each Holder at its registered address setting forth the
procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sale, within 10 days following each Excess Cash Offer Trigger Date,
the Company shall commence an offer to all Holders of Notes (an "Excess
Cash Offer") pursuant to Sections and 4.11 of the Indenture to purchase
the maximum principal amount of Notes that may be purchased out of the
Excess Cash at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest thereon, if any,
to the Excess Cash Purchase Date in accordance with the procedures set
forth in the Indenture. To the extent that the aggregate principal amount
of Notes tendered pursuant to an Excess Cash Offer is less than the Excess
Cash, the Company (or any Subsidiary Guarantor) may use such excess for any
of their respective general corporate purposes provided that no such
purpose is prohibited or restricted by the Indenture. Holders of Notes
that are the subject of an offer to purchase will receive an Excess Cash
Offer from the Company prior to any related purchase date and may elect to
have such Notes purchased by completing the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before a redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on
Notes or portions thereof called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged
as provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture. The Company need
not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes
to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent
of the Holders of at least 66-2/3% in aggregate principal amount of the
then outstanding Notes, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of
the Holders of 66-2/3% in aggregate principal amount of the then
outstanding Notes. Without the consent of any Holder of a Note, the
Indenture or the Notes may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the
assumption of the Company's obligations to Holders of the Notes in case of
a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder,
to secure the Notes, to add or release any Subsidiary Guarantor pursuant to
the terms of the Indenture or to comply with the requirements of the
Commission in order to effect or maintain the qualification of the
Indenture under the TIA.
12. Defaults and Remedies. Events of Default include: (i) default
for 30 days in the payment when due of interest on the Notes; (ii) default
in payment when due of principal of or premium, if any, on the Notes
whether the same becomes due and payable at maturity, upon redemption, by
acceleration or otherwise (including in connection with an offer to
purchase); (iii) a default in the performance or breach of Section 4.11,
4.17 or 5.1 of the Indenture; (iv) a default in the observance or
performance of any other covenant or agreement, which default continues for
30 days after written notice thereof to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding; (v) default under certain
other agreements relating to Indebtedness of the Company or any Restricted
Subsidiary of the Company, which default (A) extends beyond a stated period
of grace applicable thereto (including any extensions thereof) or (B) is
caused by a failure to pay principal of or premium, if any, or interest on
such Indebtedness prior to the expiration of the grace period provided in
such Indebtedness on the date of such default, and in each case, the
outstanding principal amount of such Indebtedness aggregates in excess of
$1,000,000, and provided, further, that if any such default is waived by
all obligees thereof, then such Event of Default under the Indenture shall
be deemed waived and any consequential acceleration of the Notes shall be
automatically rescinded, so long as such rescission does not conflict with
any judgment or decree; (vi) certain final judgments for the payment of
money that remain undischarged for a period of 60 consecutive days;
(vii) any of the Indenture, the Notes or the Subsidiary Guarantees shall
for any reason cease to be, or be asserted by the Company or any Subsidiary
Guarantor, as applicable, not to be, in full force and effect (except
pursuant to the release of any Subsidiary Guarantee in accordance with the
Indenture),or shall be declared null and void or unenforceable, or the
validity or enforceability thereof shall be denied or contested; and
(viii) certain events of bankruptcy or insolvency with respect to the
Company or any Subsidiary Guarantor. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate
principal amount of the then outstanding Notes may declare all the Notes to
be due and payable immediately. Notwithstanding the foregoing, in the case
of an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company or any Subsidiary Guarantor, all
outstanding Notes will become due and payable without further action or
notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of
66-2/3% in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of 66-2/3% in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may on behalf of the
Holders of all of the Notes waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the
Notes. The Company is required to deliver to the Trustee quarterly (other
than for the final quarter of its fiscal year) and annually a statement
regarding compliance with the Indenture, and the Company is required, upon
becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
13. Discharge and Defeasance. Subject to the continuance of certain
administrative obligations with respect to the Notes, the Indenture
(including the Subsidiary Guarantees) shall be discharged and cancelled
upon the payment of all of the Notes. Further, subject to certain
conditions of the Indenture, the Company and the Subsidiary Guarantors may
be discharged from all of their respective obligations under the Indenture,
the Notes and the Subsidiary Guarantees, except for the continuance of
certain administrative obligations with respect to the Notes, or may be
released from the compliance with restrictive covenants of the Indenture,
upon the irrevocable deposit with the Trustee of funds or Government
Securities sufficient for payment.
14. Trustee Dealings with the Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. NO PAST, PRESENT OR FUTURE
STOCKHOLDER, OFFICER OR DIRECTOR OF THE COMPANY OR ANY SUBSIDIARY
GUARANTOR, AS SUCH, SHALL HAVE ANY PERSONAL LIABILITY FOR ANY OBLIGATIONS
OF THE COMPANY OR SUCH SUBSIDIARY GUARANTOR UNDER THE NOTES, THE INDENTURE
OR THE SUBSIDIARY GUARANTEES, AS THE CASE MAY BE, BY REASON OF HIS OR HER
OR ITS STATUS AS SUCH STOCKHOLDER, OFFICER OR DIRECTOR. EACH HOLDER BY
ACCEPTING THIS NOTE WAIVES AND RELEASES ALL SUCH LIABILITY. THE WAIVER AND
RELEASE ARE PART OF THE CONSIDERATION FOR THE ISSUANCE OF THE NOTES AND THE
SUBSIDIARY GUARANTEES. SUCH WAIVER MAY NOT BE EFFECTIVE TO WAIVE
LIABILITIES UNDER THE FEDERAL SECURITIES LAWS, AND IT IS THE VIEW OF THE
COMMISSION THAT SUCH A WAIVER IS AGAINST PUBLIC POLICY.
16 Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee.
17. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A
(= Uniform Gifts to Minors Act).
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed
on the Notes or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.
19. Governing Law. THIS NOTE AND THE GUARANTEE NOTATION HEREON SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
RAM Energy, Inc.
5100 East Shelly Drive, Suite 650
Tulsa, Oklahoma 74135
Facsimile No.: (918) 663-9214
Attention: Mr. Larry E. Lee
**FOOTNOTES**
{a} This bracketed clause will be inserted in Notes in the
event the Notes do not remain in global form, and in such
instance, the proviso completing this sentence will, to
the extent it refers to Global Notes, be deleted.
<PAGE>
[FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEES]
For value received, each of the undersigned hereby, jointly and
severally, unconditionally guarantees to the Holder of this Note the
payment of all principal of, premium, if any, and interest on this Note,
upon which this Subsidiary Guarantee is endorsed, in the amounts and at the
time when due and payable, whether at the maturity or interest payment or
mandatory redemption date, by acceleration, call for redemption or
repurchase or otherwise, and interest on the overdue principal and
interest, if any, of this Note, if lawful, and all other obligations of the
Company to the Holders or the Trustee under the Indenture, all in
accordance with, and subject to the terms and limitations of, this Note and
Article 10 of the Indenture. Each Subsidiary Guarantor agrees that this is
a guarantee of payment, not a guarantee of collection. Capitalized terms
used herein have the meanings assigned to them in the Indenture unless
otherwise indicated. The Subsidiary Guarantees shall not be valid or
obligatory for any purpose until the certificate of authentication on this
Note on which this Subsidiary Guarantee is noted shall have been executed
by the Trustee. THIS SUBSIDIARY GUARANTEE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF. The Indebtedness evidenced
by this Subsidiary Guarantee is, to the extent and in the manner provided
in the Indenture, the senior unsecured obligation of each Subsidiary
Guarantor.
By each of the following, and any other Subsidiary Guarantor as may be
added or substituted from time to time, as Subsidiary Guarantors:
SUBSIDIARY GUARANTORS:
By
Name:
Title:
(for each of the above-listed Subsidiary
Guarantors)
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
___________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
___________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________
to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:
Your Signature:
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.11 or 4.17 of the Indenture, check the box below:
_____ Section 4.11 ______ Section 4.17
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.11 or Section 4.17 of the Indenture, state
the amount you elect to have purchased:
$____________ (Must be in $1,000 Denominations)
Date: ________________
Your Signature:
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee:
<PAGE>
APPENDIX 1
<TABLE>
SCHEDULE OF ADJUSTMENTS TO GLOBAL NOTE<F1>
The following increases or decreases in the principal amount of this
Global Note in accordance with the Indenture have been made:
<CAPTION>
<S> <C> <C> <C> <C>
Amount of Signature of
decrease in Principal Amount of authorized
Principal Amount of increase this Global Note signatory of
Date of Amount of this in Principal Amount following such Trustee or Note
Exchange Global Note of this Global Note decrease(or increase) Custodian
- -----------------------------------------------------------------------------------------
<FN>
<F1>
This schedule should be included only if the Note is issued in global form.
</FN>
</TABLE>
RAM Energy, Inc.,
and
Subsidiary Guarantors
and
United States Trust Company of New York,
Trustee
_________________________
SUPPLEMENTAL INDENTURE
Dated as of February 24, 1998
_________________________
11-1/2% Senior Notes Due 2008
<PAGE>
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") is dated and
effective as of February 24, 1998, and is by and among RAM Energy, Inc., a
Delaware corporation (the "Company"), United States Trust Company of New York,
as Trustee (the "Trustee"), and Carlton Resources Corporation, a Delaware
corporation, ("Carlton"), Magic Circle Energy Corporation, a Delaware
corporation ("Magic Circle"), Carmen Development Corporation, an Oklahoma
corporation ("CDC"), Magic Circle Acquisition Corporation, an Oklahoma
corporation ("Acquisition"), Onyx Properties Corporation, an Oklahoma
corporation ("Onyx"), MCENA, Inc., an Oklahoma corporation ("MCENA"), and
Carmen Field Limited Partnership, an Oklahoma limited partnership ("Carmen LP",
and together with Carlton, Magic Circle, CDC, Acquisition, Onyx and MCENA,
collectively, the "Additional Guarantors").
W I T N E S S E T H:
WHEREAS, the Company, the Subsidiary Guarantors originally parties
thereto (the "Original Subsidiary Guarantors") and the Trustee, executed and
delivered that certain Indenture dated as of February 24, 1998 (the
"Indenture"), pursuant to which the Company originally issued $115,000,000 in
principal amount of 11-1/2% Senior Notes due 2008;
WHEREAS, Section 9.1(a)(vi) of the Indenture provides that the Company,
the Subsidiary Guarantors and the Trustee may, among other things, supplement
the Indenture in order to add a Restricted Subsidiary as an additional
Subsidiary Guarantor in compliance with Section 10.2 thereof, without the
consent of the Holders of the Notes;
WHEREAS, each of the Additional Guarantors has become a Restricted
Subsidiary of the Company as of the date hereof;
WHEREAS, this Supplemental Indenture is executed and delivered to the
Trustee pursuant to Sections 4.16 and 10.2(a) of the Indenture;
WHEREAS, the Company, the Original Subsidiary Guarantors, the Additional
Guarantors and the Trustee desire to enter into this Supplemental Indenture to
provide for each Additional Guarantor's guarantee in respect of the Notes on
the same terms and conditions as the Subsidiary Guarantees by the Original
Subsidiary Guarantors; and
WHEREAS, all acts and things prescribed by the Indenture, by law and by
the charter and bylaws of the Company, of each Subsidiary Guarantor, of each
party becoming a Subsidiary Guarantor and of the Trustee necessary to make this
Supplemental Indenture a valid instrument legally binding on the each of them,
in accordance with its terms, have been duly done and performed;
NOW, THEREFORE, to comply with the Indenture and in consideration of the
premises herein contained, and for reasonably equivalent value and other good
and valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the Company, the Additional Guarantors and the Trustee have
joined in the execution and delivery of this Supplemental Indenture.
SECTION 1. INCORPORATION OF INDENTURE; DEFINITIONS
1.01. INCORPORATION OF INDENTURE. This Supplemental Indenture con-
stitutes a supplement to the Indenture, and the Indenture and this
Supplemental Indenture shall be read together and shall have effect so far as
practicable as though all of the provisions thereof and hereof are contained in
one instrument.
1.02. DEFINITIONS. All capitalized terms used herein and not other-
wise defined herein shall have the respective meanings assigned to such
terms in the Indenture.
SECTION 2. AMENDING AND MODIFYING PROVISIONS
2.01. UNCONDITIONAL GUARANTEE. Each Additional Guarantor (hereinafter
referred to as a "Subsidiary Guarantor") hereby, jointly and severally,
agrees as follows:
(a) Each of the Subsidiary Guarantors hereby jointly and severally and
unconditionally guarantees, on a senior basis (each such guarantee being a
"Subsidiary Guarantee"), to each Holder of a Note authenticated and delivered
by the Trustee irrespective of the validity or enforceability of the Indenture,
the Notes or the obligations of the Company under the Indenture or the Notes,
that: (i) the principal of, premium, if any, and interest on the Notes shall be
paid in full when due, whether at the maturity or interest payment or optional
or mandatory redemption date, by acceleration, call for redemption or
otherwise, and interest on the overdue principal and interest, if any, of the
Notes and all other obligations of the Company to the Holders or the Trustee
under the Indenture or the Notes shall be promptly paid in full or performed,
all in accordance with the terms of the Indenture and the Notes and (ii) in
case of any extension of time of payment or renewal of any Notes or any of such
other obligations, they shall be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, each Subsidiary Guarantor shall be obligated to
pay the same whether or not such failure to pay has become an Event of Default
that could cause acceleration pursuant to Section 6.2 of the Indenture. Each
Subsidiary Guarantor agrees that this is a guarantee of payment not a guarantee
of collection.
(b) Each Subsidiary Guarantor hereby agrees that its obligations with
regard to its Subsidiary Guarantee shall be unconditional, irrespective of the
validity or enforceability of the Notes or the obligations of the Company under
the Indenture, the absence of any action to enforce the same, the recovery of
any judgment against the Company or any other obligor with respect to the
Indenture, the Notes or the obligations of the Company under the Indenture or
the Notes, any action to enforce the same or any other circumstances (other
than complete performance) that might otherwise constitute a legal or equitable
discharge or defense of a Subsidiary Guarantor. Each Subsidiary Guarantor
further, to the extent permitted by law, waives and relinquishes all claims,
rights and remedies accorded by applicable law to guarantors and agrees not to
assert or take advantage of any such claims, rights or remedies, including but
not limited to: (i) any right to require the Trustee, the Holders or the
Company (each, a "Benefitted Party") to proceed against the Company or any
other Person or to proceed against or exhaust any security held by a Benefitted
Party at any time or to pursue any other remedy in any Benefitted Party's power
before proceeding against such Subsidiary Guarantor; (ii) the defense of the
statute of limitations in any action hereunder or in any action for the
collection of any Indebtedness or the performance of any obligation hereby
guaranteed; (iii) any defense that may arise by reason of the incapacity, lack
of authority, death or disability of any other Person or the failure of a
Benefitted Party to file or enforce a claim against the estate (in
administration, bankruptcy or any other proceeding) of any other Person;
(iv) demand, protest and notice of any kind, including but not limited to,
notice of the existence, creation or incurring of any new or additional
Indebtedness or obligation or of any action or non-action on the part of such
Subsidiary Guarantor, the Company, any Benefitted Party, any creditor of such
Subsidiary Guarantor, the Company or on the part of any other Person whomsoever
in connection with any Indebtedness or obligations hereby guaranteed; (v) any
defense based upon an election of remedies by a Benefitted Party, including but
not limited to, an election to proceed against such Subsidiary Guarantor for
reimbursement; (vi) any defense based upon any statute or rule of law that
provides that the obligation of a surety must be neither larger in amount nor
in other respects more burdensome than that of the principal; (vii) any defense
arising because of a Benefitted Party's election, in any proceeding instituted
under any Bankruptcy Law, of the application of Section 1111(b)(2) under the
Bankruptcy Law; (viii) any defense based on any borrowing or grant of a
security interest under Section 364 under the Bankruptcy Law or (ix) any right
to require a proceeding first against the Company, protest, notice and all
demands whatsoever. Each Subsidiary Guarantor hereby covenants that its
Subsidiary Guarantee will not be discharged except by complete performance of
all of the obligations contained in its Subsidiary Guarantee, the Notes and the
Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise
to return to either the Company or any Subsidiary Guarantor, or any custodian,
trustee, or similar official acting in relation to either the Company or such
Subsidiary Guarantor, any amount paid by the Company or such Subsidiary
Guarantor to the Trustee or such Holder, the applicable Subsidiary Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and
effect. Each Subsidiary Guarantor agrees that it will not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
(d) Each Subsidiary Guarantor further agrees that, as between such
Subsidiary 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 Section 6.2 of the Indenture for the purposes of
this Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration as to the Company or any other obligor
on the Notes of the obligations guaranteed hereby and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.2 of
the Indenture, those obligations (whether or not due and payable) will
forthwith become due and payable by such Subsidiary Guarantor for the purpose
of this Subsidiary Guarantee.
(e) Each Subsidiary Guarantor and by its acceptance hereof, each
beneficiary hereof, hereby confirm that it is its intention that the Subsidiary
Guarantee by such Subsidiary Guarantor not constitute a fraudulent transfer or
conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law to the extent applicable to any of the Subsidiary Guarantees. To
effectuate the foregoing intention, each such Person hereby irrevocably agrees
that the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee under Article 10 of the Indenture shall be limited to the maximum
amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor
under its Subsidiary Guarantee or pursuant to its contribution obligations
under the Indenture, result in the obligations of such Subsidiary Guarantor
under the Subsidiary Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under federal or state law.
(f) For purposes of the limitations and the applicable fraudulent
conveyance laws referred to in the preceding clause (e), any indebtedness of a
Subsidiary Guarantor incurred from time to time pursuant to a Permitted Bank
Credit Facility and secured by a perfected Lien on the assets of such
Subsidiary Guarantor (assuming, for purposes of such determination, that the
incurrence of any such indebtedness and the granting of any such security
interest did not violate any such fraudulent conveyance laws) shall be deemed,
to the extent of the value of the assets subject to such Lien, to have been
incurred prior to the incurrence by such Subsidiary Guarantor of liability
under its Subsidiary Guarantee.
(g) Each beneficiary under the Subsidiary Guarantees, by accepting the
benefits hereof, confirms its intention that, in the event of a bankruptcy,
reorganization or other similar proceeding of the Company or any Subsidiary
Guarantor in which concurrent claims are made upon such Subsidiary Guarantor
hereunder, to the extent such claims will not be fully satisfied, each claimant
with a valid claim against the Company shall be entitled to a ratable share of
all payments by such Subsidiary Guarantor in respect of such concurrent claims.
(h) In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, INTER SE, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under a Subsidiary Guarantee, such Funding Guarantor shall
be entitled to a contribution from all other Subsidiary Guarantors in a pro
rata amount based on the Adjusted Net Assets (as defined below) of each
Subsidiary Guarantor (including the Funding Guarantor) for all payments,
damages and expenses incurred by that Funding Guarantor in discharging the
Company's obligations with respect to the Notes or any other Subsidiary
Guarantor's obligations with respect to such Subsidiary Guarantee. "Adjusted
Net Assets" of such Subsidiary Guarantor at any date shall mean the lesser of
the amount by which (x) the fair value of the property of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities, but excluding liabilities under the
Subsidiary Guarantee of such Subsidiary Guarantor at such date and (y) the
present fair salable value of the assets of such Subsidiary Guarantor at such
date exceeds the amount that will be required to pay the probable liability of
such Subsidiary Guarantor on its debts (after giving effect to all other fixed
and contingent liabilities incurred or assumed on such date and after giving
effect to any collection from any Subsidiary of such Subsidiary Guarantor in
respect of the obligations of such Subsidiary under the Subsidiary Guarantees),
excluding debt in respect of the Subsidiary Guarantees, as they become absolute
and matured.
(i) The obligations of the Subsidiary Guarantors to the Holders and the
Trustee pursuant to the Subsidiary Guarantees and the Indenture are otherwise
expressly set forth in Article 10 of the Indenture, and reference is hereby
made to such Indenture for the precise terms thereof and incorporation herein
for all intents and purposes. The Subsidiary Guarantees are subject to release
as and to the extent provided in Section 10.5 of the Indenture. Each
Subsidiary Guarantee is a continuing guarantee and shall remain in full force
and in effect and shall be binding upon each Subsidiary Guarantor and its
respective successors and assigns to the extent set forth in the Indenture
until full and final payment of all of the Company's obligations under the
Notes and the Indenture and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
conferred in the Indenture upon that party shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof. Each Subsidiary Guarantee is a guarantee of payment and not a
guarantee of collection.
SECTION 3: MISCELLANEOUS
3.01 FULL FORCE AND EFFECT. The Indenture, as supplemented by this
Supplemental Indenture, remains in full force and effect and is hereby ratified
and confirmed as the valid and binding obligations of the parties hereto.
3.02 TRUSTEE. Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed, by the Trustee by reason of this Supplemental Indenture. This
Supplemental Indenture is executed and accepted by the Trustee subject to the
terms and conditions set forth in the Indenture with the same force and effect
as if those terms and conditions were repeated at length herein and applicable
to the Trustee with respect hereto. The Trustee shall not be responsible in
any manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Company.
3.03. MULTIPLE COUNTERPARTS. This Supplemental Indenture may be executed
in multiple counterparts, and by each party hereto on separate counterparts,
each of which shall be deemed an original, but all of which taken together
shall constitute one and the same instrument.
3.04. HEADINGS FOR CONVENIENCE ONLY. The headings of the Sections of
this Supplemental Indenture are used for convenience of reference only and
shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
3.05. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be executed and delivered effective as of the date first mentioned
hereinabove.
RAM Energy, Inc.
By LARRY E. LEE
Larry E. Lee,
President
RB Operating Company,
a Delaware corporation
By LARRY E. LEE
Larry E. Lee,
President
RLP Gulf States, L.L.C.,
an Oklahoma limited liability company
By: RAM Energy, Inc., Manager
By LARRY E. LEE
Larry E. Lee, President
United States Trust Company of New York,
Trustee
By: PATRICIA STERMER
Name: Patricia Stermer
Title: Assistant Vice President
Carlton Resources Corporation
By: JOHN M. LONGMIRE
Name: John M. Longmire
Title: Senior Vice President
Magic Circle Energy Corporation
By: JOHN M. LONGMIRE
Name: John M. Longmire
Title: Senior Vice President
Carmen Development Corporation
By: JOHN M. LONGMIRE
Name: John M. Longmire
Title: Senior Vice President
Magic Circle Acquisition Corporation
By: JOHN M. LONGMIRE
Name: John M. Longmire
Title: Senior Vice President
Onyx Properties Corporation
By: JOHN M. LONGMIRE
Name: John M. Longmire
Title: Senior Vice President
MCENA, INC.
By: JOHN M. LONGMIRE
Name: John M. Longmire
Title: Senior Vice President
Carmen Field Limited Partnership
By: Carmen Development Corporation,
its General Partner
By: JOHN M. LONGMIRE
Name: John M. Longmire
Title: Senior Vice President
RAM ENERGY COMPLETES
$115 MILLION OFFERING OF SENIOR NOTES
COMPANY ACQUIRES
CARLTON RESOURCES CORPORATION
For Immediate Release Contact:
February 25, 1998 Brent Gooden, (405) 524-3131
TULSA, OK -- RAM Energy, Inc. has successfully completed a public offering of
$115 million 10-year senior unsecured notes, reported Larry E. Lee, company
President and Chief Executive Officer. Jefferies & Company, Inc. successfully
underwrote the offering. RAM also simultaneously executed a new $50 million
revolving bank credit line with Union Bank of California, N. A.
"The $165 million financial package provides the financial facility flexibility
necessary to underwrite our plans for acquisition opportunities and the
continued development and production of oil and gas properties located
primarily in Oklahoma, Texas and New Mexico," Lee said.
The offering marks the first time the 11-year-old company has tapped the public
markets to raise funds for business expansion. "We are encouraged by the
strong positive response of the public markets to our business plans. This
offering represents an important precursor to the possibility of an Initial
Public Offering within the next couple of years," Lee stated.
Proceeds from the successful offering are being used to complete the $43
million acquisition of Carlton Resources Corporation of Tulsa, Oklahoma and
repay the company's existing revolving bank line of credit. This acquisition
will increase RAM's asset base from $6.5 million in 1995 to $147 million in
1998. RAM purchased $60 million of oil and gas assets from New York Life
Insurance Company in 1996 and closed an $11 million acquisition from Quarles
Drilling Corporation in 1997.
The Carlton Resources acquisition is a strategic match for RAM. It enables RAM
to extend its presence and activity in the Mid-Continent area where the
company already has strong proven developed and undeveloped reserves, as well
as an historically high 95% drilling success rate. "It's an area we know quite
well and a place where we have enjoyed sustained success," Lee commented. "In
addition, the improved operating efficiencies gained through the Carlton
Resources acquisition will enhance the company's operational margins and
increase cash flow."
Carlton Resources' net proven oil and gas reserves of 36.8 billion cubic feet
equivalent (Bcfe) will increase RAM's total proven reserve base in the region
to 140 Bcfe. RAM also acquires Carlton Resources' 165-mile oil and gas
gathering system and a salt-water disposal operation. Both operations are
located in north central Oklahoma.
Both Moody's and Standard & Poors rated the debt of RAM Energy, Inc. Moody's
assigned a B3 rating to RAM's $115 million senior unsecured notes due 2008 and
a B2 rating to the $50 million senior secured revolving credit maturing in
2003. S&P assigned a B minus rating to the $115 million senior unsecured
notes, as well as a B rating to the $50 million secured revolving bank credit
facility. Both rating services reported RAM's outlook as stable.
"The ratings reflect overall confidence in our ability to grow our company.
Our demonstrated operational success over the past ten years in the Mid-
Continent and Permian regions and the strong infrastructure we already have in
place were key factors in securing the respectable ratings," Lee said.
Over the next year the company intends to significantly increase its drilling
activity in the Mid-Continent and Permian regions. The company has budgeted
just over $20 million for development projects and exploration activities in
1998.
RAM Energy, Inc. is an independent oil and gas exploration and production
company based in Tulsa, Oklahoma, founded in 1986 with a business strategy of
acquiring and developing diversified, long-lived, proven oil and gas reserves
with a concentration in natural gas and preferably located in the Mid-Continent
and Permian regions.
This release contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The forward-looking statements
contained in this release are statements that involve risks and uncertainties
including, but not limited to, market demand, the effect of economic
conditions, the result of financing efforts and risks detailed in RAM's
Securities and Exchange Commission Filing.
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