<PAGE>
Registration No. 333-16125
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
POST-EFFECTIVE
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
FOREST OIL CORPORATION
(Name of Registrant as specified in its charter)
NEW YORK 25-0484900
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1600 BROADWAY, SUITE 2200
DENVER, COLORADO 80202
(303) 812-1400
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
DANIEL L. MCNAMARA
CORPORATE COUNSEL AND SECRETARY
FOREST OIL CORPORATION
1600 BROADWAY, SUITE 2200
DENVER, COLORADO 80202
(303) 812-1400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
ALAN P. BADEN
VINSON & ELKINS L.L.P.
2300 FIRST CITY TOWER
1001 FANNIN
HOUSTON, TEXAS 77002
----------------------
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /____________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
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<PAGE>
Explanatory Note
This Post-Effective Amendment No. 2 to the Registration Statement
(No. 333-16125) is being filed solely to include additional exhibits.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits:
<TABLE>
<S> <C> <C>
*1.1 -- Form of Underwriting Agreement with respect to Debt
Securities (including form of Terms Agreement).
*1.2 -- Form of Underwriting Agreement with respect to Equity
Securities (including form of Terms Agreement).
**1.3 -- Form of Underwriting Agreement with respect to 10 1/2%
Senior Subordinated Notes due 2006 (including form of
Terms Agreement).
3.1 -- Restated Certificate of Incorporation of Forest Oil
Corporation dated October 14, 1993, incorporated herein
by reference to Exhibit 3(i) to Form 10-Q for Forest Oil
Corporation for the quarter ended September 30, 1993
(File No. 0-4597).
3.2 -- Certificate of Amendment of the Restated Certificate of
Incorporation dated as of July 20, 1995, incorporated
herein by reference to Exhibit 3(i)(a) to Form 10-Q for
Forest Oil Corporation for the quarter ended June 30,
1995 (File No. 0-4597).
3.3 -- Certificate of Amendment of the Certificate of
Incorporation dated as of July 26, 1995, incorporated
herein by reference to Exhibit 3(i)(b) to Form 10-Q for
Forest Oil Corporation for the quarter ended June 30,
1995 (File No. 0-4597).
3.4 -- Restated By-Laws of Forest Oil Corporation as of May 9,
1990, Amendment No. 1 to By-Laws dated as of April 2,
1991. Amendment No. 2 to By-Laws dated as of May 8, 1991,
Amendment No. 3 to By-Laws dated as of July 30, 1991,
Amendment No. 4 to By-Laws dated as of January 17, 1992,
Amendment No. 5 to By-Laws dated as of March 18, 1993 and
Amendment No. 6 to By-Laws dated as of September 14,
1993, incorporated herein by reference to Exhibit 3(ii)
to Form 10-Q for Forest Oil Corporation for the quarter
ended September 30, 1993 (File No. 0-4597).
3.5 -- Amendment No. 7 to By-Laws dated as of December 3, 1993,
incorporated herein by reference to Exhibit 3(ii)(a) to
Form 10-K for Forest Oil Corporation for the year ended
December 31, 1993 (File No. 0-4597).
3.6 -- Amendment No. 8 to By-Laws dated as of February 24, 1994,
incorporated herein by reference to Exhibit 3(ii)(b) to
Form 10-K for Forest Oil Corporation for the year ended
December 31, 1993 (File No. 0-4597).
3.7 -- Amendment No. 9 to By-Laws dated as of May 15, 1995,
incorporated herein by reference to Exhibit 3(ii)(c) to
Form 10-Q for Forest Oil Corporation for the quarter
ended June 30, 1995 (File No. 0-4597).
3.8 -- Amendment No. 10 to By-Laws dated as of July 27, 1995,
incorporated herein by reference to Exhibit 3(ii)(d) to
Form 10-Q for Forest Oil Corporation for the quarter
ended June 30, 1995 (File No. 0-4597).
4.9 -- Rights Agreement between Forest Oil Corporation and
Mellon Securities Trust Company, as Rights Agent dated as
of October 14, 1993, incorporated herein by reference to
Exhibit 4.3 to From 10-Q for Forest Oil Corporation for the
quarter ended September 30, 1993 (File No. 0-4597).
4.10 -- Amendment No. 1 dated as of July 27, 1995 to Rights
Agreement dated as of October 14, 1993 between Forest Oil
Corporation and Mellon Securities Trust Company,
incorporated herein by reference to Exhibit 99.5 of
Form 8-K for Forest Oil Corporation dated October 11, 1995
(File No. 0-4597).
4.11 -- Amendment No. 2 dated as of June 25, 1998 to Rights
Agreement dated as of October 14, 1993 between Forest Oil
Corporation and Mellon Securities Trust Company,
incorporated herein by reference to Exhibit 99.1 of
Form 8-K for Forest Oil Corporation dated June 25, 1998
(File No. 0-4597).
*4.12 -- Form of Indenture for the Senior Debt Securities.
*4.13 -- Form of Senior Debt Security (included in Exhibit No.
4.12).
*4.14 -- Form of Indenture for the Subordinated Debt Securities.
*4.15 -- Form of Subordinated Debt Security (included in Exhibit
No. 4.14).
**4.16 -- Form of Indenture for the 10 1/2% Senior Subordinated
Notes due 2006.
**4.17 -- Form of 10 1/2% Senior Subordinated Notes due 2006
(included in Exhibit 4.16).
*5 -- Opinion of Vinson & Elkins L.L.P., as to the legality of
the securities being registered.
**12 -- Statement regarding ratio of earnings to fixed charges.
*23.1 -- Consent of KPMG Peat Marwick LLP
*23.2 -- Consent of Vinson & Elkins L.L.P. (included in Exhibit
No. 5).
*23.3 -- Consent of Arthur Andersen LLP
*24 -- Powers of Attorney (included on the original signature
pages hereof).
**25.1 -- Statement of Eligibility under the Trust Indenture Act of
1939 of State Street Bank and Trust Company.
</TABLE>
* Previously filed.
**Filed herewith.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, State of Colorado, on
February 3, 1999.
FOREST OIL CORPORATION
(Registrant)
By: /s/ Daniel L. McNamara
-------------------------------
Daniel L. McNamara
Secretary
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
Robert S. Boswell* President and Chief Executive February 3, 1999
(Robert S. Boswell) Officer
David H. Keyte* Executive Vice President and Chief February 3, 1999
(David H. Keyte) Financial Officer (Principal
Financial Officer)
Joan C. Sonnen* Controller (Principal Accounting February 3, 1999
(Joan C. Sonnen) Officer)
Philip F. Anschutz* Director February 3, 1999
(Philip F. Anschutz)
Robert S. Boswell* Director February 3, 1999
(Robert S. Boswell)
- ------------------------ Director
William L. Britton
Cortlandt S. Dietler* Director February 3, 1999
(Cortlandt S. Dietler)
William L. Dorn* Director February 3, 1999
(William L. Dorn)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
James H. Lee* Director February 3, 1999
(James H. Lee)
Director
- -------------------
J.J. Simmons III
Craig D. Slater* Director February 3, 1999
(Craig D.Slater)
Michael B. Yanney* Director February 3, 1999
(Michael B. Yanney)
*By /s/ Daniel L. McNamara February 3, 1999
------------------------------
Daniel L. McNamara
(as attorney-in-fact for
each of the persons indicated)
</TABLE>
II-3
<PAGE>
Forest Oil Corporation
10 1/2% Senior Subordinated Notes Due 2006
Underwriting Agreement
New York, New York
January 29, 1999
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Ladies and Gentlemen:
Forest Oil Corporation, a corporation organized under the laws of
New York (the "Company"), proposes to sell to the several underwriters named
in Schedule II hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives, the principal amount of its
securities identified in Schedule I hereto (the "Securities"), to be issued
under an indenture (the "Indenture") dated as of February 5, 1999, between
the Company and State Street Bank and Trust Company, as trustee (the
"Trustee"). To the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall
mean either the singular or plural as the context requires. Any reference
herein to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange
Act after the Effective Date of the
<PAGE>
2
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be,
deemed to be incorporated therein by reference. Certain terms used herein
are defined in Section 17 hereof.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration statement
(the file number of which is set forth in Schedule I hereto) on Form S-3,
including a related basic prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including a Preliminary Final Prospectus, each of
which has previously been furnished to you. The Company will next file
with the Commission one of the following: (1) after the Effective Date of
such registration statement, a final prospectus supplement relating to the
Securities in accordance with Rules 430A and 424(b), (2) prior to the
Effective Date of such registration statement, an amendment to such
registration statement (including the form of final prospectus supplement)
or (3) a final prospectus in accordance with Rules 415 and 424(b). In the
case of clause (1), the Company has included in such registration
statement, as amended at the Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder to be
included in such registration statement and the Final Prospectus. As
filed, such final prospectus supplement or such amendment and form of final
prospectus supplement shall contain all Rule 430A Information, together
with all other such required information, and, except to the extent the
Representatives shall agree to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or, to
the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in
the Basic Prospectus and any Preliminary Final Prospectus) as the Company
has advised you, prior to the Execution Time, will be
<PAGE>
3
included or made therein. The Registration Statement, at the Execution
Time, meets the requirements set forth in Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or will,
and when the Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein), the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Exchange Act and
the Trust Indenture Act and the respective rules thereunder; on the
Effective Date and at the Execution Time, the Registration Statement did
not or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading; on the Effective Date and on
the Closing Date the Indenture did or will comply in all material respects
with the applicable requirements of the Trust Indenture Act and the rules
thereunder; and, on the Effective Date, the Final Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing pursuant
to Rule 424(b) and on the Closing Date, the Final Prospectus (together with
any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; PROVIDED, HOWEVER, that the Company makes no
representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the Trustee or
(ii) the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any supplement thereto) in reliance
upon and in conformity with information furnished in writing to the Company
by or on behalf of any Underwriter through the Representatives specifically
for inclusion in the Registration Statement or the Final Prospectus (or any
supplement thereto).
<PAGE>
4
(c) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), without taking account of any exemption arising out of the number of
holders of the securities thereof, and after giving effect to the offer and
sale of the Securities and the application of the net proceeds of such
offer and sale as described in the Final Prospectus, will not be an
"investment company" as defined in the Investment Company Act.
(d) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(e) Each of the Company and its Subsidiaries (as defined below) has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered or
organized with full corporate power and authority to own its properties and
conduct its business in a manner consistent with any description thereof in
the Final Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification, except where the failure to be so
qualified and in good standing does not have a material adverse effect on
the condition (financial or otherwise), business, properties, results of
operations or prospects of the Company and its Subsidiaries taken as a
whole, or materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, the Indenture, or the
Securities or to consummate the transactions contemplated hereby and
thereby (a "Material Adverse Effect"). The term "Subsidiary" means each
person of which a majority of the voting equity securities or other
interests is owned, directly or indirectly, by the Company.
(f) All the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in
<PAGE>
5
the Final Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company, either directly or through wholly
owned subsidiaries, free and clear of any perfected security interest or
any other security interests, claims, liens or encumbrances and, except as
set forth in the Final Prospectus, no options, warrants or other rights
to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are outstanding.
(g) Neither the Company nor any Subsidiary thereof is in violation of
its articles or by-laws or in default in the performance of its obligations
under any indenture or other agreement or instrument to which it is a party
or by which it is bound or to which it or any of its properties is subject
which default or defaults individually or in the aggregate would have a
Material Adverse Effect.
(h) (i) The issuance and sale of the Securities to the Representatives
by the Company pursuant to this Agreement, (ii) the execution, delivery and
performance of this Agreement and the Indenture by the Company,
(iii) compliance by the Company with all the provisions hereof and thereof
and (iv) consummation of the transactions contemplated hereby and thereby
by the Company do not require any consent, permission, authorization,
approval or order of, or filing or registration with or notice to, any
court, regulatory body, administrative agency or other governmental body
(except such as may be required under the Act or under blue sky laws of the
various states of the United States and under the Canadian Securities Laws
and those consents, permissions, authorizations, approvals, orders,
filings, registrations or notices which have been obtained or made, as the
case may be) and do not and will not conflict with, or constitute a breach
or a violation of any of the terms or provisions of, or a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or
<PAGE>
6
assets of the Company or any of its Subsidiaries under, (w) its articles,
by-laws or other governing documents, (x) any applicable statute, rule or
regulation or any order of any governmental agency or body or any court
having jurisdiction over the Company and its Subsidiaries or any of their
respective properties, (y) any agreement or instrument relating to
borrowed money to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries is bound or to which
any of their respective properties is subject, or (z) any other material
agreement or instrument to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries is bound
or to which any of their respective properties is subject.
(i) (i) The Company has full corporate power and authority to enter
into this Agreement and the Indenture, and to issue the Securities, as
applicable, and to perform the transactions contemplated hereby and
thereby, and the execution and delivery of this Agreement, the Indenture,
and the consummation of the transactions contemplated herein and therein
have been duly authorized by all necessary corporate action on the part of
the Company; (ii) this Agreement has been duly executed and delivered by
the Company and constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting creditors'
rights generally and to general principles of equity; and (iii) when duly
executed and delivered by the Company and any other parties thereto, the
Indenture will constitute a valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and to general principles of equity.
(j) The Securities have been duly authorized for issuance and sale by
the Company to the Representatives and will, upon execution and delivery of
the Indenture, and when issued, executed and delivered in accordance with
the Indenture and paid for in accordance with the
<PAGE>
7
terms of this Agreement, constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their terms and
be entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights generally and to general principles of equity.
(k) Except as disclosed in the Final Prospectus, there are no legal
or governmental actions, suits or proceedings pending or, to the best of
the Company's knowledge, threatened to which the Company or any of its
Subsidiaries is or is threatened to be made a party or of which property
owned or leased by the Company or any of its Subsidiaries is or is
threatened to be made the subject, which actions, suits or proceedings
could, individually or in the aggregate, have a Material Adverse Effect.
(l) The Company and its Subsidiaries are conducting business in
compliance with all applicable laws, rules and regulations of the
jurisdictions in which they are conducting business, including, without
limitation, the regulations of the United States Mineral Management Service
and all applicable Environmental Laws (as defined below), except where the
failure to be so in compliance would not have a Material Adverse Effect.
As used herein, "Environmental Laws" means any Canadian or U.S. federal,
state, provincial or local law, regulation, permit, rule or order of any
governmental authority, administrative body or court applicable to the
Company's or any of its Subsidiaries' business operations or the ownership
or possession of any of their properties or assets relating to
environmental matters.
(m) There are no defects in title to, or encumbrances upon the
leasehold interests in, the oil and gas producing properties of the Company
and its Subsidiaries or the assets or facilities used by the Company and
its Subsidiaries in the production and
<PAGE>
8
marketing of oil and gas which, individually or in the aggregate, have a
Material Adverse Effect, except any such defects that are customary in the
oil and gas industry and are in the ordinary course of business of the
Company.
(n) The consolidated financial statements (including all notes
thereto) included in the Final Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries as of the dates
shown and their results of operations and cash flows for the periods shown,
and such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis.
The selected financial data and all operating data included in the Final
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited consolidated
financial statements included in the Final Prospectus. The oil and gas
reserve data included in the Final Prospectus have been prepared in
conformity with industry standards and accurately reflect the oil and gas
reserves of the Company and its Subsidiaries as of the dates indicated
therein. Since the date of the latest audited consolidated financial
statements included in the Final Prospectus there has been no change,
development or event not disclosed in the Final Prospectus (exclusive of
any supplement thereto) which could reasonably be expected to have a
Material Adverse Effect.
2. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase
price set forth in Schedule I hereto the principal amount of the Securities
set forth opposite such Underwriter's name in Schedule II hereto.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
Securities shall be made on the date and at the time specified in Schedule I
hereto or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate, which date
and
<PAGE>
9
time may be postponed by agreement between the Representatives and the
Company or as provided in Section 9 hereof (such date and time of delivery
and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the purchase price
thereof to or upon the order of the Company by wire transfer payable in
same-day funds to an account specified by the Company. Delivery of the
Securities shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set
forth in the Final Prospectus.
5. AGREEMENTS. The Company agrees with the several Underwriters
that:
(a) The Company will use its reasonable best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus or any
Preliminary Final Prospectus) to the Basic Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a copy for your
review prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Final Prospectus is otherwise
required under Rule 424(b), the Company will cause the Final Prospectus,
properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within the
time period prescribed and will provide evidence satisfactory to the
Representatives of such
<PAGE>
10
timely filing. The Company will promptly advise the Representatives
(1) when the Registration Statement, if not effective
at the Execution Time, shall have become effective, (2) when the Final
Prospectus, and any supplement thereto, shall have been filed (if required)
with the Commission pursuant to Rule 424(b) or when any Rule 462(b)
Registration Statement shall have been filed with the Commission, (3) when,
prior to termination of the offering of the Securities, any amendment to
the Registration Statement shall have been filed or become effective,
(4) of any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or for
any supplement to the Final Prospectus or for any additional information,
(5) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The Company
will use its reasonable best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued, to
obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, the
Company promptly will (1) notify the Representatives of such event, (2)
prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance and (3) supply
any
<PAGE>
11
supplemented Final Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Representatives an earnings statement or
statements of the Company and its Subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and Cravath,
Swaine & Moore, counsel for the Underwriters, without charge, signed copies
of the Registration Statement (including exhibits thereto) and to each
other Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary Final
Prospectus and the Final Prospectus and any supplement thereto as the
Representatives may reasonably request. The Company will pay the expenses
of printing or other production of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities and will pay any
fee of the National Association of Securities Dealers, Inc., in connection
with its review of the offering; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action that would subject it to
service of process in suits, other than those arising out of the offering
or sale of the Securities, in any jurisdiction where it is not now so
subject.
(f) The Company will not, without the prior written consent of
Salomon Smith Barney Inc., offer, sell, contract to sell, pledge, or
otherwise dispose
<PAGE>
12
of, (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person
in privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish
or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange
Act, any debt securities issued or guaranteed by the Company (other than
the Securities) or publicly announce an intention to effect any such
transaction until the Business Day set forth on Schedule I hereto.
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(h) Prior to the Closing, the Company shall obtain all necessary
amendments to and waivers and consents of the lenders under each of (i) the
Third Amended and Restated Credit Agreement dated as of February 3, 1998,
as amended on April 1, 1997 and August 19, 1997, among the Company, the
lenders named therein and The Chase Manhattan Bank, as agent (the "U.S.
Credit Agreement") and (ii) the Second Amended and Restated Credit
Agreement dated as of April 1, 1997, as amended on August 19, 1997, among
611852 Saskatchewan Ltd., the lenders named therein and The Chase Manhattan
Bank of Canada, as agent (the "Canadian Credit Agreement") to permit the
offering of the Securities and all such amendments, waivers and consents
shall be in full force and effect on the Closing Date.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of
<PAGE>
13
the representations and warranties on the part of the Company contained
herein as of the Execution Time and the Closing Date, to the accuracy of the
statements of the Company made in any certificates pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than
(i) 6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
will be filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused Vinson & Elkins,
L.L.P., counsel for the Company, to have furnished to the Representatives
their opinion, dated the Closing Date and addressed to the Representatives,
to the effect that:
(i) the Company has full corporate right, power and authority to
execute and deliver this Agreement and the Indenture; each of this
Agreement and the Indenture has been duly authorized, executed and
delivered and constitutes a legal, valid and binding agreement of the
Company; the Indenture has been duly qualified under the Trust
Indenture Act; each of this Agreement and the Indenture is enforceable
against
<PAGE>
14
the Company in accordance with its terms (in each case subject, as
to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect); the
Securities are in the form contemplated by the Indenture, have been
duly authorized and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by
the Representatives pursuant to this Agreement, will constitute legal,
valid and binding obligations of the Company entitled to the benefits
of the Indenture; and the statements set forth under the heading
"Description of Notes" in the Final Prospectus, insofar as such
statements purport to summarize certain provisions of the Securities
and the Indenture, provide a fair summary of such provisions;
(ii) the information included or incorporated by reference in
the Final Prospectus under the headings "Risk Factors--Government
Regulation", "Business and Properties--Regulation--United States",
"Legal Proceedings" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Bank Credit Facilities"
fairly summarizes the matters therein described;
(iii) no consent, approval, authorization or order of, or filing
or registration with, any New York or U.S. Federal court or
governmental agency or body is required for the execution, delivery
and performance by the Company of this Agreement and the Indenture and
issuance of the Securities, or for the consummation of the
transactions contemplated herein or therein, except such as have been
obtained under the Act and such as may be required under the blue sky
or securities laws of any U.S. jurisdiction in connection with the
purchase and sale of the Securities by the Underwriters and such other
approvals (specified in such opinion) as have been obtained;
<PAGE>
15
(iv) neither the issue and sale of the Securities by the
Company, the execution and delivery of this Agreement and the
Indenture by the Company, the consummation of the transactions herein
or therein contemplated in accordance with the terms hereof nor the
fulfillment of the terms hereof or thereof will conflict with, result
in a breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its
Subsidiaries pursuant to, or constitute a default under any law of the
United States or the State of New York (provided that such counsel
shall not be required to opine as to the prospective compliance by the
Company with applicable securities laws) or the charter or by-laws of
the Company or any U.S. Subsidiary or the terms of any indenture or
other agreement or instrument known to such counsel and to which the
Company or any U.S. Subsidiary is a party or bound or any judgment,
order or decree known to such counsel to be applicable to the Company
or any of its Subsidiaries of any United States or New York court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of its
Subsidiaries;
(v) the Company is not and, after giving effect to the offering
and sale of the Securities and the application of the net proceeds
therefrom as described in the Final Prospectus, will not be an
"investment company" within the meaning of the Investment Company Act
and the rules and regulations of the Commission thereunder, without
taking account of any exemption arising out of the number of holders
of the securities thereof;
(vi) to the best of such counsel's knowledge, there is no pending
or threatened action or suit or judicial, arbitral or other
administrative proceeding before any United States Federal, state or
local court, regulatory body, administrative
<PAGE>
16
agency, governmental body or arbitrator to which the Company or any
of its Subsidiaries, or its or their property, is the subject, of a
character required to be disclosed in the Registration Statement
which is not adequately disclosed in the Final Prospectus; and
(vii) the Registration Statement has become effective under the
Act; any required filing of the Basic Prospectus, any Preliminary
Final Prospectus and the Final Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened, and the Registration
Statement and the Final Prospectus (other than the financial
statements and other financial information contained therein, as to
which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act, the
Exchange Act and the Trust Indenture Act and the respective rules
thereunder.
Such counsel shall also state that they are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Final Prospectus (except to the extent set
forth in subparagraphs (i) and (ii) above), and have not independently
verified the accuracy, completeness or fairness of such statements (except
as aforesaid). Without limiting the foregoing, such counsel shall assume
no responsibility for and have not independently verified the accuracy,
completeness or fairness of the financial statements, the oil and gas
reserve reports and other financial and reserve data included in the Final
Prospectus and have not examined the financial or reserve records from
which such statements and data are derived. Such counsel shall note that,
although certain portions of the Final Prospectus have been included
therein on the authority of "experts" within the meaning of the Securities
Act, such counsel are not experts with
<PAGE>
17
respect to any portion of the Final Prospectus. Such counsel shall state
that they have participated in conferences with officers and other
representatives of the Company, representatives of the independent
accountants of the Company, and with your representatives and counsel,
at which the contents of the Final Prospectus and related matters were
discussed. Such counsel shall state that they have also reviewed
certain corporate documents furnished to them by the Company and,
based on such participation and review (relying as to materiality to
a certain extent upon the officers and the other representatives of the
Company), and subject to the limitations described above, no information
has come to their attention that caused them to believe that the Final
Prospectus, at the Execution Time or at the Closing Date, included or
includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of New York or the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to
Cravath, Swaine & Moore and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and
public officials.
All references in this paragraph (b) to the Final Prospectus shall be
deemed to include any supplements thereto on or prior to the Closing Date.
(c) The Company shall have furnished to the Representatives the
opinion of Daniel L. McNamara, Esq., Corporate Secretary and Corporate
Counsel of the Company, dated the Closing Date and addressed to the
Representatives, to the effect that:
<PAGE>
18
(i) each of the Company and each Subsidiary of the Company has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation,
with full corporate power and authority to own its properties and
conduct its business as described in the Final Prospectus, and is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or
conducts material business;
(ii) all the outstanding shares of capital stock of the Company
and each Subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Final Prospectus, all outstanding
shares of capital stock of the Subsidiaries of the Company are owned
by the Company either directly or through wholly owned subsidiaries
free and clear of any perfected security interest and any other
security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set
forth in the Final Prospectus;
(iv) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement;
(v) each of this Agreement, the Securities and the Indenture has
been duly authorized, executed and delivered by the Company;
(vi) neither the issue and sale of the Securities by the
Company, the execution and delivery of this Agreement and the
Indenture by the Company, the consummation of any other of the
transactions herein or therein contemplated, nor the fulfillment of
the terms hereof or thereof will conflict with, result in a breach or
<PAGE>
19
violation of or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or its Subsidiaries pursuant to, or
constitute a default under the charter or bylaws of the Company or any
of its Subsidiaries or the terms of any indenture or other agreement
or instrument to which the Company or any of its Subsidiaries is a
party or bound or any judgment, order or decree of any court,
regulatory body, administrative agency, governmental body or
arbitration having jurisdiction over the Company or any of its
Subsidiaries; and
(vii) there is no pending or, to the knowledge of such counsel,
threatened action or suit or judicial, arbitral or other
administrative proceeding before any court, regulatory body,
administrative agency, governmental body or arbitrator to which the
Company or any of its Subsidiaries, or its or their property, is the
subject, of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Final Prospectus,
and there is no franchise, contract or other document of a character
required to be described in the Registration Statement or Final
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required.
Such counsel shall also state that he has no reason to believe that at
the Execution Time the Final Prospectus contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading or that at the Closing Date the Final
Prospectus includes an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of New York or
<PAGE>
20
the United States, to the extent such counsel deems proper and specified
in such opinion, upon the opinion of other counsel of good standing whom
they believe to be reliable and who are satisfactory to Cravath, Swaine
& Moore and (B) as to matters of fact, to the extent they deem proper,
on certificates of responsible officers of the Company and public
officials.
All references in this paragraph (c) to the Final Prospectus shall be
deemed to include any supplements thereto on or prior to the Closing Date.
(d) The Representatives shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Indenture, the Registration
Statement, the Final Prospectus (together with any supplement thereto) and
other related matters as the Representatives may reasonably require, and
the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and Chief Executive Officer and by the Vice President and Chief
Financial Officer of the Company, dated the Closing Date, to the effect
that the signers of such certificate have carefully examined the
Registration Statement, the Final Prospectus, any supplements to the Final
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
<PAGE>
21
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Final Prospectus
(exclusive of any supplement thereto), there has been no material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its Subsidiaries,
taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto).
(f) The Company shall have requested and caused KPMG Peat Marwick LLP
to have furnished to the Representatives, at the Execution Time and at the
Closing Date, letters (which may refer to letters previously delivered to
one or more of the Representatives), dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective applicable
rules and regulations adopted by the Commission thereunder and that they
have performed a review of the unaudited interim financial information of
the Company for the nine-month period ended September 30, 1998, and as at
September 30, 1998, in accordance with Statement on Auditing Standards No.
71, and stating in effect, except as provided in Schedule I hereto, that:
(i) in their opinion the audited financial statements and
financial statement schedules [and pro forma financial statements]
included or incorporated by reference in the Registration Statement
and the Final Prospectus and reported on by them comply as to form in
all material respects with the applicable accounting requirements of
the
<PAGE>
22
Act and the Exchange Act and the related rules and regulations
adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its Subsidiaries; their
limited review, in accordance with standards established under
Statement on Auditing Standards No. 71, of the unaudited interim
financial information for the nine-month period ended September 30,
1998 and as at September 30, 1998; carrying out certain specified
procedures (but not an examination in accordance with generally
accepted auditing standards) which would not necessarily reveal
matters of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the stockholders,
directors and committees of the Company and the Subsidiaries; and
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company and its
Subsidiaries as to transactions and events subsequent to December 31,
1997, nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement and the
Final Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the Act and
with the related rules and regulations adopted by the Commission
with respect to financial statements included or incorporated by
reference in quarterly reports on Form 10-Q under the Exchange
Act; and said unaudited financial statements are not in
conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
financial statements included or incorporated by reference in the
Registration Statement and the Final
<PAGE>
23
Prospectus;
(2) with respect to the period subsequent to September 30,
1998, there were any changes, at a specified date not more than
five days prior to the date of the letter, in the long-term debt,
other liabilities, deferred revenue and deferred income taxes of
the Company and its Subsidiaries or capital stock of the Company
or decreases in the stockholders' equity of the Company or
decreases in net current assets of the Company and its
Subsidiaries, as compared with the amounts shown on the September
30, 1998 consolidated balance sheet included or incorporated by
reference in the Registration Statement and the Final Prospectus,
or for the period from October 1, 1998 to such specified date
there were any decreases, as compared with the corresponding
period in the preceding year in total revenue, earnings before
income taxes, net earnings or EBITDA, as defined in the Final
Prospectus, except in all instances for changes or decreases set
forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Representatives;
(3) the information included or incorporated by reference in
the Registration Statement and Final Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data), Item 302
(Supplementary Financial Information), Item 402 (Executive
Compensation) and Item 503(d) (Ratio of Earnings to Fixed
Charges) is not in conformity with the applicable disclosure
requirements of Regulation S-K; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting,
<PAGE>
24
financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general
accounting records of the Company and its Subsidiaries) set forth
in the Registration Statement and the Final Prospectus and in
Exhibit 12 to the Registration Statement, including the information
set forth under the captions "Prospectus Summary", "The Offering",
"Summary Financial Data", "Risk Factors", "Use of Proceeds",
"Capitalization" and "Description of the Notes" in the Final
Prospectus, the information included or incorporated by reference in
Items 1, 2, 5, 6, 7, 11 and 12 of the Company's Annual Report on
Form 10-K, incorporated by reference in the Registration Statement
and the Final Prospectus, and the information included in the
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q, incorporated by reference
in the Registration Statement and the Final Prospectus, agrees with
the accounting records of the Company and its Subsidiaries,
excluding any questions of legal interpretation.
References to the Final Prospectus in this paragraph (f) include any
supplement thereto at the date of the letter.
(g) The Company shall have requested and caused Arthur Andersen LLP
to have furnished to the Representatives, at the Execution Time and at the
Closing Date, letters (which may refer to letters previously delivered to
one or more of the Representatives), dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective applicable
rules and regulations adopted by the Commission thereunder, and stating in
effect,
<PAGE>
25
except as provided in Schedule I hereto, that:
(i) in their opinion the audited financial statements and
financial statement schedules and pro forma financial statements
included or incorporated by reference in the Registration Statement
and the Final Prospectus and reported on by them comply as to form in
all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related rules and regulations
adopted by the Commission.
References to the Final Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraphs (f) and (g) of this Section
6 or (ii) any change, or any development involving a prospective change, in
or affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its Subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the Representatives,
so material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the Final
Prospectus (exclusive of any supplement thereto).
(i) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized
<PAGE>
26
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act) or any notice given of any intended or potential decrease
in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change.
(j) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
(k) Simultaneously with the closing of the purchase and sale of the
Securities, the net proceeds therefrom will be applied to reduce borrowings
under the Third Amended and Restated Credit Agreement dated as of
February 3, 1998, as amended on April 1, 1997 and August 19, 1997, among
the Company, the lenders named therein and The Chase Manhattan Bank, as
Agent.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of
such cancelation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cravath, Swaine & Moore, counsel for the
Underwriters, at 825 Eighth Avenue, New York, NY 10019, on the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by
<PAGE>
27
any of the Underwriters, the Company will reimburse the Underwriters
severally through Salomon Smith Barney on demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale
of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
<PAGE>
28
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the
statements set forth in the last paragraph of the cover page regarding delivery
of the Securities and under the heading "Underwriting" or "Plan of
Distribution", (i) the list of Underwriters and their respective participation
in the sale of the Securities, (ii) the sentences related to concessions and
reallowances and (iii) the paragraph related to stabilization, syndicate
covering transactions and penalty bids in any Preliminary Final Prospectus and
the Final Prospectus constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in any Preliminary Final
Prospectus or the Final Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above unless
and to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party shall
be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for
<PAGE>
29
the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); PROVIDED, HOWEVER, that such
counsel shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i)
the use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without
the prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out of such
claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably
<PAGE>
30
incurred in connection with investigating or defending same) (collectively
"Losses") to which the Company and one or more of the Underwriters may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and by the Underwriters on the other
from the offering of the Securities; PROVIDED, HOWEVER, that in no case shall
any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for
any amount in excess of the underwriting discount or commission applicable to
the Securities purchased by such Underwriter hereunder. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the Company and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and of the
Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal
to the total net proceeds from the offering (before deducting expenses)
received by it, and benefits received by the Underwriters shall be deemed to
be equal to the total underwriting discounts and commissions, in each case as
set forth on the cover page of the Final Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information provided by the
Company on the one hand or the Underwriters on the other, the intent of the
parties and their relative knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls an Underwriter within the meaning of either the Act
or the Exchange Act and each director, officer, employee and agent of an
Underwriter
<PAGE>
31
shall have the same rights to contribution as such Underwriter, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule II hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; PROVIDED, HOWEVER, that in the event
that the aggregate principal amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate principal amount of Securities set forth in Schedule II hereto,
the remaining Underwriters shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter or the
Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Final Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
<PAGE>
32
10. TERMINATION. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange, the Toronto Stock Exchange or the American Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established on any of such Exchanges, the National Association of Securities
Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Board of
Mercantile Exchange or the Chicago Board of Trade, (ii) a banking moratorium
shall have been declared either by Federal, Canadian or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Prospectus (exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancelation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Salomon Smith Barney Inc. General Counsel (fax
no.: (212) 816-7912) and confirmed to the General Counsel, Salomon Smith Barney
Inc., at 388 Greenwich Street, New York, New York, 10013, Attention: General
Counsel; or,
<PAGE>
33
if sent to the Company, will be mailed, delivered or telefaxed to Forest Oil
Corporation (fax no.: (303) 802-1602) and confirmed to it at 1600 Broadway,
Suite 2200, Denver, CO 80202, Attention: Daniel L. McNamara.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. HEADINGS. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. DEFINITIONS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended and the rules
and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in paragraph
1(a) above contained in the Registration Statement at the Effective Date
including any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
<PAGE>
34
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any
Rule 462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to
the Securities that was first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus,
together with the Basic Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement
<PAGE>
35
when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a) hereof.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended and the rules and regulations of the Commission promulgated
thereunder.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
Forest Oil Corporation
By:
---------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
Salomon Smith Barney Inc.
Morgan Stanley & Co. Incorporated
Warburg Dillon Read LLC
By: Salomon Smith Barney Inc.
By:
------------------------------
Name:
Title:
<PAGE>
36
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
<PAGE>
37
SCHEDULE I
<TABLE>
<S> <C>
Underwriting Agreement dated: January 29, 1999
Registration Statement No.: 333-16125
Representative(s): Salomon Smith Barney Inc.
Title, Purchase Price and Description of Securities:
Title: 10 1/2% Senior Subordinated Notes Due 2006
Principal amount: $100,000,000
Purchase price (include
accrued interest or
amortization, if any): 98.250%
Sinking fund provisions: None
Redemption provisions: Non-call for four years
Reimbursement arrangements (if any) Underwriters to reimburse the
Company $311,000 for certain
expenses in connection with
the offering
Other provisions: As described in Final
Prospectus
Closing Date, Time and Location: February 5, 1999 at
10:00 a.m. at Cravath,
Swaine & Moore, 825
Eighth Avenue, New York,
NY 10019
Type of Offering: Non-delayed
Date referred to in Section 5(f)
after which the Company may
offer or sell debt securities
issued or guaranteed by the
Company without the consent
of the Representative(s): 90 days following the
Closing Date
Modification of items to be
covered by the letters from
<PAGE>
38
KPMG Peat Marwick LLP and
Arthur Andersen delivered
pursuant to Sections 6(f)and
6(g), respectively, at the
Execution Time: None
</TABLE>
<PAGE>
39
SCHEDULE II
<TABLE>
<CAPTION>
Principal Amount
of Securities to
Underwriters be Purchased
------------ ----------------
<S> <C>
Salomon Smith Barney Inc. ............... $50,000,000
Morgan Stanley & Co. Incorporated ....... $25,000,000
Warburg Dillon Read LLC ................. $25,000,000
-------------
Total ......................... $100,000,000
-------------
-------------
</TABLE>
<PAGE>
FOREST OIL CORPORATION
10 1/2% Senior Subordinated Notes due 2006
-----------------------------------------
INDENTURE
Dated as of February 5, 1999
-----------------------------------------
State Street Bank and Trust Company
Trustee
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions 1
SECTION 1.02. Other Definitions 31
SECTION 1.03. Incorporation by Reference
of Trust Indenture Act 32
SECTION 1.04. Rules of Construction 33
ARTICLE II
THE SECURITIES
SECTION 2.01. Amount of Securities; Issuable in Series 33
SECTION 2.02. Form and Dating 35
SECTION 2.03. Execution and Authentication 35
SECTION 2.04. Registrar and Paying Agent 36
SECTION 2.05. Paying Agent To Hold Money in Trust 36
SECTION 2.06. Securityholder Lists 37
SECTION 2.07. Replacement Securities 37
SECTION 2.08. Outstanding Securities 37
SECTION 2.09. Temporary Securities 38
SECTION 2.10. Cancelation 38
SECTION 2.11. Defaulted Interest 38
SECTION 2.12. CUSIP Numbers 39
ARTICLE III
REDEMPTION
SECTION 3.01. Notices to Trustee 39
SECTION 3.02. Selection of Securities To Be Redeemed 39
SECTION 3.03. Notice of Redemption 40
SECTION 3.04. Effect of Notice of Redemption 40
SECTION 3.05. Deposit of Redemption Price 41
SECTION 3.06. Securities Redeemed in Part 41
ARTICLE IV
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
Contents, p.3
<S> <C> <C>
COVENANTS
SECTION 4.01. Payment of Securities 41
SECTION 4.02. SEC Reports 42
SECTION 4.03. Limitation on Indebtedness 42
SECTION 4.04. Limitation on Restricted Payments 42
SECTION 4.05. Limitation on Restrictions on Distributions
from Restricted Subsidiaries 45
SECTION 4.06. Limitation on Asset Sales 46
SECTION 4.07. Limitation on Transactions with Affiliates 50
SECTION 4.08. Limitation on the Issuance and Sale of Capital
Stock of Restricted Subsidiaries 52
SECTION 4.09. Change of Control 53
SECTION 4.10. Limitation on Liens 55
SECTION 4.11. Compliance Certificate 55
SECTION 4.12. Further Instruments and Acts 55
SECTION 4.13. Future Subsidiary Guarantors 55
SECTION 4.14. Incurrence of Layered Indebtedness 56
SECTION 4.15. Restricted and Unrestricted Subsidiaries 56
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.01. When Company May Merge or Transfer Assets 57
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default 59
SECTION 6.02. Acceleration 61
SECTION 6.03. Other Remedies 62
SECTION 6.04. Waiver of Past Defaults 62
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
Contents, p.4
<S> <C> <C>
SECTION 6.05. Control by Majority 62
SECTION 6.06. Limitation on Suits 62
SECTION 6.07. Rights of Holders To Receive Payment 63
SECTION 6.08. Collection Suit by Trustee 63
SECTION 6.09. Trustee May File Proofs of Claim 63
SECTION 6.10. Priorities 64
SECTION 6.11. Undertaking for Costs 64
SECTION 6.12. Waiver of Stay or Extension Laws 65
ARTICLE VII
TRUSTEE
SECTION 7.01. Duties of Trustee 65
SECTION 7.02. Rights of Trustee 66
SECTION 7.03. Individual Rights of Trustee 67
SECTION 7.04. Trustee's Disclaimer 67
SECTION 7.05. Notice of Defaults 67
SECTION 7.06. Reports by Trustee to Holders 67
SECTION 7.07. Compensation and Indemnity 68
SECTION 7.08. Replacement of Trustee 69
SECTION 7.09. Successor Trustee by Merger 70
SECTION 7.10. Eligibility; Disqualification 70
SECTION 7.11. Preferential Collection of Claims Against Company 70
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Securities; Defeasance 71
SECTION 8.02. Conditions to Defeasance 72
SECTION 8.03. Application of Trust Money 73
SECTION 8.04. Repayment to the Company 73
SECTION 8.05. Indemnity for Government Obligations 74
SECTION 8.06. Reinstatement 74
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
Contents, p.5
<S> <C> <C>
ARTICLE IX
AMENDMENTS
SECTION 9.01. Without Consent of Holders 74
SECTION 9.02. With Consent of Holders 75
SECTION 9.03. Compliance with Trust Indenture Act 77
SECTION 9.04. Revocation and Effect of Consents and Waivers 77
SECTION 9.05. Notation on or Exchange of Securities 77
SECTION 9.06. Trustee To Sign Amendments 78
SECTION 9.07. Payment for Consent 78
ARTICLE X
SUBORDINATION
SECTION 10.01. Agreement To Subordinate 78
SECTION 10.02. Liquidation, Dissolution, Bankruptcy 78
SECTION 10.03. Default on Senior Indebtedness 79
SECTION 10.04. Acceleration of Payment of Securities 80
SECTION 10.05. When Distribution Must Be Paid Over 80
SECTION 10.06. Subrogation 80
SECTION 10.07. Relative Rights 81
SECTION 10.08. Subordination May Not Be Impaired by 81
SECTION 10.09. Rights of Trustee and Paying Agent 81
SECTION 10.10. Distribution or Notice to Representative 82
SECTION 10.11. Article X Not To Prevent Events of Default or
Limit Right To Accelerate 82
SECTION 10.12. Trust Moneys Not Subordinated 82
SECTION 10.13. Trustee Entitled To Rely 82
SECTION 10.14. Trustee To Effectuate Subordination 83
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness 83
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions 84
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
Contents, p.6
<S> <C> <C>
ARTICLE XI
SUBSIDIARY GUARANTEES
SECTION 11.01. Subsidiary Guarantee 84
SECTION 11.02. Contribution 86
SECTION 11.03. Successors and Assigns 87
SECTION 11.04. No Waiver 87
SECTION 11.05. Modification 87
SECTION 11.06. Execution of Supplemental Indenture for Future
Subsidiary Guarantors 87
ARTICLE XII
SUBORDINATION OF SUBSIDIARY GUARANTEES
SECTION 12.01. Agreement To Subordinate 88
SECTION 12.02. Liquidation, Dissolution, Bankruptcy 88
SECTION 12.03. Default on Senior Indebtedness 89
SECTION 12.04. Demand for Payment 89
SECTION 12.05. When Distribution Must Be Paid Over 90
SECTION 12.06. Subrogation 90
SECTION 12.07. Relative Rights 90
SECTION 12.08. Subordination May Not Be Impaired by Company 90
SECTION 12.09. Rights of Trustee and Paying Agent 91
SECTION 12.10. Distribution or Notice to Representative 91
SECTION 12.11. Article XII Not To Prevent Defaults Under a
Guarantee or Limit Right To Demand Payment 91
SECTION 12.12. Trustee Entitled To Rely 92
SECTION 12.13. Trustee To Effectuate Subordination 92
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness 93
SECTION 12.15. Reliance by Holders of Senior Indebtedness on
Subordination Provisions 93
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
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Contents, p.7
<S> <C> <C>
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls 93
SECTION 13.02. Notices 94
SECTION 13.03. Communication by Holders with Other Holders 94
SECTION 13.04. Certificate and Opinion as to Conditions Precedent 95
SECTION 13.05. Statements Required in Certificate or Opinion 95
SECTION 13.06. When Securities Disregarded 95
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar 96
SECTION 13.08. Legal Holidays 96
SECTION 13.09. Governing Law 96
SECTION 13.10. No Recourse Against Others 96
SECTION 13.11. Successors 96
SECTION 13.12. Multiple Originals 96
SECTION 13.13. Table of Contents; Headings 96
SECTION 13.14. Consent to Jurisdiction and Service 96
Exhibit A Form of Security
Exhibit B Form of Supplemental Indenture
</TABLE>
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- ------- ---------
<S> <C>
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.08; 7.10
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.06
(b) 13.03
(c) 13.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 13.02
(d) 7.06
314(a) 4.02; 4.11;
13.02
(b) N.A.
(c)(1) 13.04
(c)(2) 13.04
(c)(3) N.A.
(d) N.A.
(e) 13.05
(f) 4.11
315(a) 7.01
(b) 7.05; 13.02
(c) 7.01
(d) 7.01
(e) 6.11
316(a)
(last
sentence) 13.06
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.05
<PAGE>
9
318(a) 13.01
</TABLE>
N.A. Means Not Applicable.
Note: This Cross-Reference Table shall not, for any purposes, be deemed to be
part of this Indenture.
<PAGE>
INDENTURE dated as of February 5, 1999, between FOREST OIL
CORPORATION, a New York corporation (the "COMPANY") and State
Street Bank and Trust Company, as Trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's 10 1/2% Senior
Subordinated Securities due 2006 (the "Securities"), to be issued, from time to
time, in one or more series as in this Indenture provided:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ADDITIONAL ASSETS" means (a) any Property (other than cash,
Permitted Short-Term Investments or securities) used in the Oil and Gas
Business or any business ancillary thereto, (b) Investments in any other
Person engaged in the Oil and Gas Business or any business ancillary thereto
(including the acquisition from third parties of Capital Stock of such
Person) as a result of which such other Person becomes a Restricted
Subsidiary in compliance with Section 4.15, (c) the acquisition from third
parties of Capital Stock of a Restricted Subsidiary or (d) Permitted Business
Investments.
"ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS" means (without
duplication), as of the date of determination, the remainder of:
(a) the sum of (i) discounted future net revenues from proved oil and
gas reserves of the Company and its Restricted Subsidiaries calculated in
accordance with Commission guidelines before any provincial, territorial,
state, Federal or foreign income taxes, as estimated by the Company and
confirmed by a nationally recognized firm of independent petroleum
engineers in a reserve report prepared as of the end of the Company's most
recently completed fiscal year for which audited financial statements are
available, as increased by, as of the date of determination, the estimated
discounted future net revenues from (A) estimated proved oil and gas
reserves acquired since such year-end, which reserves were not reflected in
such year-end reserve
<PAGE>
11
report, and (B) estimated oil and gas reserves attributable to upward
revisions of estimates of proved oil and gas reserves since such
year-end due to exploration, development or exploitation activities, in
each case calculated in accordance with Commission guidelines (utilizing
the prices utilized in such year-end reserve report), and decreased by,
as of the date of determination, the estimated discounted future net
revenues from (C) estimated proved oil and gas reserves produced or
disposed of since such year-end and (D) estimated oil and gas reserves
attributable to downward revisions of estimates of proved oil and gas
reserves since such year-end due to changes in geological conditions or
other factors which would, in accordance with standard industry
practice, cause such revisions, in each case calculated in accordance
with Commission guidelines (utilizing the prices utilized in such
year-end reserve report); PROVIDED that, in the case of each of the
determinations made pursuant to clauses (A) through (D), such increases
and decreases shall be as estimated by the Company's petroleum
engineers, unless there is a Material Change as a result of such
acquisitions, dispositions or revisions, in which event the discounted
future net revenues utilized for purposes of this clause (a)(i) shall be
confirmed in writing by a nationally recognized firm of independent
petroleum engineers, (ii) the capitalized costs that are attributable to
oil and gas properties of the Company and its Restricted Subsidiaries to
which no proved oil and gas reserves are attributable, based on the
Company's books and records as of a date no earlier than the date of the
Company's latest available annual or quarterly financial statements,
(iii) the Net Working Capital on a date no earlier than the date of the
Company's latest annual or quarterly financial statements and (iv) the
greater of (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, without duplication, Investments in
unconsolidated Restricted Subsidiaries) of the Company and its
Restricted Subsidiaries, as of the date no earlier than the date of the
Company's latest audited financial statements, minus (b) the sum of (i)
minority
<PAGE>
12
interests, (ii) any net gas balancing liabilities of the Company and its
Restricted Subsidiaries reflected in the Company's latest audited
financial statements, (iii) to the extent included in (a)(i) above, the
discounted future net revenues, calculated in accordance with Commission
guidelines (utilizing the prices utilized in the Company's year-end
reserve report), attributable to reserves which are required to be
delivered to third parties to fully satisfy the obligations of the
Company and its Restricted Subsidiaries with respect to Volumetric
Production Payments (determined, if applicable, using the schedules
specified with respect thereto) and (iv) the discounted future net
revenues, calculated in accordance with Commission guidelines,
attributable to reserves subject to Dollar-Denominated Production
Payments which, based on the estimates of production and price
assumptions included in determining the discounted future net revenues
specified in (a)(i) above, would be necessary to fully satisfy the
payment obligations of the Company and its Restricted Subsidiaries with
respect to Dollar-Denominated Production Payments (determined, if
applicable, using the schedules specified with respect thereto). 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 ff the Company were still using the full cost method of
accounting.
"AFFILIATE" of any specified Person means any other Person (a)
which directly or indirectly through one or more intermediaries controls, or
is controlled by, or is under common control with, such specified Person or
(b) which beneficially owns or holds directly or indirectly 10% or more of
any class of the Voting Stock of such specified Person or of any Subsidiary
of such specified Person. For the purposes of this definition, "control,"
when used with respect to any specified Person, means the power to direct the
management and policies of such Person directly or indirectly, whether
through the ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
<PAGE>
13
"ASSET SALE" means, with respect to any Person, any transfer,
conveyance, sale, lease or other disposition (collectively, "dispositions,"
and including dispositions pursuant to any consolidation or merger) by such
Person in any single transaction or series of transactions of (a) shares of
Capital Stock or other ownership interests of another Person (including
Capital Stock of Restricted Subsidiaries and Unrestricted Subsidiaries) or
(b) any other Property of such Person; PROVIDED, HOWEVER, that the term
"Asset Sale" shall not include: (i) the disposition of Permitted Short-Term
Investments, inventory, accounts receivable, surplus or obsolete equipment or
other Property (excluding the disposition of oil and gas in place and other
interests in real property unless made in connection with a Permitted
Business Investment) in the ordinary course of business; (ii) the
abandonment, assignment, lease, sublease or farm-out of oil and gas
properties, or the forfeiture or other disposition of such properties
pursuant to standard form operating agreements, in each case in the ordinary
course of business in a manner that is customary in the Oil and Gas Business;
(iii) the disposition of Property received in settlement of debts owing to
such Person as a result of foreclosure, perfection or enforcement of any Lien
or debt, which debts were owing to such Person in the ordinary course of its
business; (iv) any disposition that constitutes a Restricted Payment made in
compliance with Section 4.04; (v) when used with respect to the Company, any
disposition of all or substantially all of the Property of such Person
permitted pursuant to Article V; (vi) the disposition of any Property by such
Person to the Company or a Wholly Owned Subsidiary; (vii) the disposition of
any asset with a Fair Market Value of less than $2,000,000; or (viii) any
Production Payments and Reserve Sales; PROVIDED that any such Production
Payments and Reserve Sales, other than incentive compensation programs on
terms that are reasonably customary in the Oil and Gas Business for
geologists, geophysicists and other providers of technical services to the
Company or a Restricted Subsidiary, shall have been created, Incurred,
issued, assumed or Guaranteed in connection with the financing of, and within
60 days after the acquisition of, the Property that is subject thereto.
"AVERAGE LIFE" means, with respect to any Indebtedness, at any date of
determination, the quotient obtained by dividing (a) the sum of the products of
(i) the number of years (and any portion thereof) from the date of determination
to the date or dates of each successive
<PAGE>
14
scheduled principal payment (including any sinking fund or mandatory
redemption payment requirements) of such Indebtedness multiplied by (ii) the
amount of each such principal payment by (b) the sum of all such principal
payments.
"BANK CREDIT FACILITIES" means, with respect to any Person, one or
more debt facilities or commercial paper facilities with banks or other
institutional lenders (including pursuant to the Third Amended and Restated
Credit Agreement dated as of February 3, 1998, among the Company, the Lenders
named therein and The Chase Manhattan Bank, as agent, and the Second Amended
and Restated Credit Agreement dated as of April 1, 1997, as amended on August
19, 1997, among 611852 Saskatchewan Ltd., the Lenders named therein and The
Chase Manhattan Bank of Canada, as agent) providing for revolving credit
loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow
from such lenders against such receivables) or trade letters of credit,
together with any extensions, revisions, restatements, refinancings or
replacements thereof by a lender or syndicate of lenders; PROVIDED, HOWEVER,
that any Indebtedness which otherwise would come within this definition shall
not constitute Indebtedness under Bank Credit Facilities to the extent that
the Company shall have determined at the time of Incurrence that such
Indebtedness was Incurred pursuant to another provision of Section 4.03.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"BUSINESS DAY" means each day which is not a Legal Holiday.
"CANADIAN FOREST" means Canadian Forest Oil Ltd., an Alberta
corporation.
"CAPITAL LEASE OBLIGATION" means any obligation which is required
to be classified and accounted for as a capital lease obligation in
accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP, and the Stated Maturity thereof shall
<PAGE>
15
be the date of the last payment date of rent or any other amount due in
respect of such obligation.
"CAPITAL STOCK" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however
designated) in such Person and any rights (other than debt securities
convertible into an equity interest), warrants or options to subscribe for or
to acquire an equity interest in such Person; PROVIDED, HOWEVER, that
"Capital Stock" shall not include Redeemable Stock.
"CHANGE OF CONTROL" means the occurrence of any of the following
events:
(a) any "person" or "group" (within the meaning of Sections 13(d)(3)
and 14(d)(2) of the Exchange Act or any successor provision to either of
the foregoing, including any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-5(b)(1)
under the Exchange Act), becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person will be
deemed to have "beneficial ownership" of all shares that any such Person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time) of more than 50% of the total voting power
of all classes of the Voting Stock of the Company or currently exercisable
warrants or options to acquire such Voting Stock;
(b) the sale, lease, conveyance or transfer of all or substantially
all the assets of the Company and the Restricted Subsidiaries taken as a
whole (other than to any Wholly Owned Subsidiary) shall have occurred;
(c) the shareholders of the Company shall have approved any plan of
liquidation or dissolution of the Company;
(d) 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 reclassified into or exchanged for cash, securities or other
property, other than any such transaction where the outstanding Voting
Stock of the
<PAGE>
16
Company is reclassified into or exchanged for Voting Stock of the
surviving corporation that is Capital Stock and 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 corporation immediately after such transaction in substantially
the same proportion as before the transaction; or
(e) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Company's Board of Directors
(together with any new directors whose election or appointment by such
Board or whose nomination for election by the shareholders of the Company
was approved by a vote of a majority of the directors then still in office
who were either directors at the beginning of such period or whose election
or nomination for election was previously so approved) cease for any reason
to constitute a majority of the Company's Board of Directors then in
office.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, as of the date of the
transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date"), the ratio of (a) the aggregate
amount of EBITDA of the Company and its consolidated Restricted Subsidiaries
for the four full fiscal quarters immediately prior to the Transaction Date
for which financial statements are available to (b) the aggregate
Consolidated Interest Expense of the Company and its Restricted Subsidiaries
that is anticipated to accrue during a period consisting of the fiscal
quarter in which the Transaction Date occurs and the three fiscal quarters
immediately subsequent thereto (based upon the pro forma amount and maturity
of, and interest payments in respect of, Indebtedness of the Company and its
Restricted Subsidiaries expected by the Company to be
<PAGE>
17
outstanding on the Transaction Date), assuming for the purposes of this
measurement the continuation of market interest rates prevailing on the
Transaction Date and base interest rates in respect of floating interest rate
obligations equal to the base interest rates on such obligations in effect as
of the Transaction Date; PROVIDED that if the Company or any of its
Restricted Subsidiaries is a party to any Interest Rate Protection Agreement
which would have the effect of changing the interest rate on any Indebtedness
of the Company or any of its Restricted Subsidiaries for such four quarter
period (or a portion thereof), the resulting rate shall be used for such four
quarter period or portion thereof; PROVIDED FURTHER that any Consolidated
Interest Expense with respect to Indebtedness Incurred or retired by the
Company or any of its Restricted Subsidiaries during the fiscal quarter in
which the Transaction Date occurs shall be calculated as if such Indebtedness
was so Incurred or retired on the first day of the fiscal quarter in which
the Transaction Date occurs. In addition, if since the beginning of the four
full fiscal quarter period preceding the Transaction Date, (i) the Company or
any of its Restricted Subsidiaries shall have engaged in any Asset Sale,
EBITDA for such period shall be reduced by an amount equal to the EBITDA (if
positive), or increased by an amount equal to the EBITDA (if negative),
directly attributable to the assets which are the subject of such Asset Sale
for such period calculated on a pro forma basis as if such Asset Sale and any
related retirement of Indebtedness had occurred on the first day of such
period or (ii) the Company or any of its Restricted Subsidiaries shall have
acquired any material assets, EBITDA shall be calculated on a pro forma basis
as if such asset acquisitions had occurred on the first day of such four
fiscal quarter period.
"CONSOLIDATED INTEREST EXPENSE" means with respect to any Person
for any period, without duplication, (a) the sum of (i) the aggregate amount
of cash and noncash interest expense (including capitalized interest) of such
Person and its Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP in respect of Indebtedness
(including (A) any amortization of debt discount, (B) net costs associated
with Interest Rate Protection Agreements (including any amortization of
discounts), (C) the interest portion of any deferred payment
<PAGE>
18
obligation, (D) all accrued interest and (E) all commissions, discounts,
commitment fees, origination fees and other fees and charges owed with
respect to any Bank Credit Facilities and other Indebtedness) paid, accrued
or scheduled to be paid or accrued during such period; (ii) Redeemable Stock
dividends of such Person (and of its Restricted Subsidiaries if paid to a
Person other than such Person or its Restricted Subsidiaries) and Preferred
Stock dividends of such Person's Restricted Subsidiaries if paid to a Person
other than such Person or its other Restricted Subsidiaries; (iii) the
portion of any rental obligation of such Person or its Restricted
Subsidiaries in respect of any Capital Lease Obligation allocable to interest
expense in accordance with GAAP; (iv) the portion of any rental obligation of
such Person or its Restricted Subsidiaries in respect of any Sale and
Leaseback Transaction that is Indebtedness allocable to interest expense
(determined as if such obligation were treated as a Capital Lease
Obligation); and (v) to the extent any Indebtedness of any other Person
(other than Restricted Subsidiaries) is Guaranteed by such Person or any of
its Restricted Subsidiaries, the aggregate amount of interest paid, accrued
or scheduled to be paid or accrued by such other Person during such period
attributable to any such Indebtedness; less (b) to the extent included in (a)
above, amortization or write-off of deferred financing costs of such Person
and its Restricted Subsidiaries during such period; in the case of both (a)
and (b) above, after elimination of intercompany accounts among such Person
and its Restricted Subsidiaries and as determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" of any Person means, for any period, the
aggregate net income (or net loss, as the case may be) of such Person and its
Restricted Subsidiaries for such period on a consolidated basis, determined
in accordance with GAAP; PROVIDED that there shall be excluded therefrom,
without duplication, (a) items classified as extraordinary gains or losses
net of taxes (less all fees and expenses relating thereto), including, with
respect to the Company, any loss realized in connection with the purchase of
the 11-1/4% Notes; (b) any gain or loss net of taxes (less all fees and
expenses relating thereto), realized on the sale or other disposition of
Property, including the Capital Stock of any other Person (but in no event
shall this clause (b) apply to any gains or losses on the sale in the
ordinary course of business of oil, gas or other hydrocarbons produced or
manufactured); (c) the net income of any Restricted Subsidiary of such
specified person
<PAGE>
19
to the extent the transfer to that Person of that income is restricted by
contract or otherwise, except for any cash dividends or cash distributions
actually paid by such Restricted Subsidiary to such Person during such
period; (d) the net income (or loss) of any other Person in which such Person
or any of its Restricted Subsidiaries has an interest (which interest does
not cause the net income of such other Person to be consolidated with the net
income of such Person in accordance with GAAP or is an interest in a
consolidated Unrestricted Subsidiary), except to the extent of the amount of
cash dividends or other cash distributions actually paid to such Person or
its consolidated Restricted Subsidiaries by such other Person during such
period; (e) for the purposes of Section 4.04 only, the net income of any
Person acquired by such Person or any of its Restricted Subsidiaries in a
pooling-of-interests transaction for any period prior to the date of such
acquisition; (f) any gain or loss, net of taxes, realized on the termination
of any employee pension benefit plan; (g) any adjustments of a deferred tax
liability or asset pursuant to Statement of Financial Accounting Standards
No. 109 which result from changes in enacted tax laws or rates; (h) the
cumulative effect of a change in accounting principles; (i) any write-downs
of non-current assets; PROVIDED that any ceiling limitation write-downs under
Commission guidelines shall be treated as capitalized costs, as if such
write-downs had not occurred; and (j) any non-cash compensation expense
realized for grants of performance shares, stock options or stock awards to
officers, directors and employees of such Person or any of its Restricted
Subsidiaries.
"CONSOLIDATED NET WORTH" of any Person means the stockholders'
equity of such Person and its Restricted Subsidiaries, as determined on a
consolidated basis in accordance with GAAP, less (to the extent included in
stockholders' equity) amounts attributable to Redeemable Stock of such Person
or its Restricted Subsidiaries.
"DEFAULT" means any event, act or condition the occurrence of which
is, or after notice or the passage of time or both would be, an Event of
Default.
"DESIGNATED SENIOR INDEBTEDNESS" means (a) Bank Credit Facilities
of the Company and (b) any other Senior Indebtedness of the Company which
has, at the time of
<PAGE>
20
determination, an aggregate principal amount outstanding of at least
$10,000,000 that is specifically designated in the instrument evidencing such
Indebtedness and is designated in a notice delivered by the Company to the
holders or a Representative of the holders of such Senior Indebtedness of the
Company and the Trustee as "Designated Senior Indebtedness."
"DOLLAR-DENOMINATED PRODUCTION PAYMENTS" means production payment
obligations recorded as liabilities in accordance with GAAP, together with
all undertakings and obligations in connection therewith.
"DOMESTIC RESTRICTED SUBSIDIARY" means a Restricted Subsidiary
organized under the laws of the United States of America, any State thereof
or the District of Columbia.
"EBITDA" means, with respect to any Person for any period, an
amount equal to the Consolidated Net Income of such Person for such period,
plus (a) the sum of, to the extent reflected in the consolidated income
statement of such Person and its Restricted Subsidiaries for such period from
which Consolidated Net Income is determined and deducted in the determination
of such Consolidated Net Income, without duplication, (i) income tax expense
(but excluding income tax expense relating to sales or other dispositions of
Property, including the Capital Stock of any other Person, the gains from
which are excluded in the determination of such Consolidated Net Income),
(ii) Consolidated Interest Expense, (iii) depreciation and depletion expense,
(iv) amortization expense, (v) exploration expense (if applicable), and (vi)
any other noncash charges including unrealized foreign exchange losses
(excluding, however, any such other noncash charge which requires an accrual
of or reserve for cash charges for any future period); less (b) the sum of,
to the extent reflected in the consolidated income statement of such Person
and its Restricted Subsidiaries for such period from which Consolidated Net
Income is determined and added in the determination of such Consolidated Net
Income, without duplication (i) income tax recovery (excluding, however,
income tax recovery relating to sales or other dispositions of Property,
including the Capital Stock of any other Person, the losses from which are
excluded in the determination of such Consolidated Net Income) and (ii)
unrealized foreign exchange gains.
<PAGE>
21
"11-1/4% NOTES" means the 11-1/4% Senior Subordinated Notes due
2003 of the Company.
"EQUITY OFFERING" means (a) a bona fide underwritten sale to the
public of common stock of the Company pursuant to a registration statement
(other than a Form S-8 or any other form relating to securities issuable
under any employee benefit plan of the Company) that is declared effective by
the Commission or (b) a bona fide sale of common stock for cash to The Anschutz
Corporation, in either case following the Issue Date.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGED PROPERTIES" means properties used or useful in the Oil
and Gas Business received by the Company or a Restricted Subsidiary in trade
or as a portion of the total consideration for other such properties or
assets.
"EXCHANGE RATE CONTRACT" means, with respect to any Person, any
currency swap agreements, forward exchange rate agreements, foreign currency
futures or options, exchange rate collar agreements, exchange rate insurance
and other agreements or arrangements, or any combination thereof, entered
into by such Person in the ordinary course of its business for the purpose of
limiting or managing exchange rate risks to which such Person is subject.
"FAIR MARKET VALUE" means, with respect to any assets to be
transferred pursuant to any Asset Sale or Sale and Leaseback Transaction or
any noncash consideration or property transferred or received by any Person,
the fair market value of such consideration or other property as determined
by (a) any officer of the Company if such fair market value is less than
$7,500,000 and (b) the Board of Directors of the Company as evidenced by a
certified resolution delivered to the Trustee if such fair market value is
equal to or in excess of $7,500,000.
"GAAP" means United States generally accepted accounting principles
as in effect on the date of this Indenture, unless stated otherwise.
"GOVERNMENT OBLIGATIONS" means securities that are
<PAGE>
22
(a) direct obligations of the United States of America or Canada for the
timely payment of which the full faith and credit of the United States of
America or Canada is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America or Canada, the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America or Canada which, in either case, are not callable or redeemable at
the option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as
custodian, with respect to any such U.S. Government Obligation or a specific
payment of principal of or interest on any such U.S. Government Obligation
held by such custodian for the account of the holder of such depository
receipt; PROVIDED, HOWEVER, 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 Obligation or the specific payment of principal of
or interest on the Government Obligation evidenced by such depository receipt.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, and including any Lien on the
assets of such Person securing obligations to pay Indebtedness of the primary
obligor and any obligation of such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase or payment of) any
security for the payment of such Indebtedness, (b) to purchase Property,
securities or services for the purpose of assuring the holder of such
Indebtedness of the payment of such Indebtedness or (c) to maintain working
capital, equity capital or other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness (and "GUARANTEED", "GUARANTEEING" and "GUARANTOR" shall have
meanings correlative to the foregoing); PROVIDED, HOWEVER, that a Guarantee
by any Person shall not include (i) endorsements by such Person for
collection or deposit, in either case, in the ordinary course of business or
(ii) a contractual commitment by one Person to invest in another Person for
so long as such Investment is reasonably expected to constitute a Permitted
Investment under clause (b) of the
<PAGE>
23
definition of Permitted Investments.
"HOLDER" means the Person in whose name a Note is registered on the
Securities Register.
"INCUR" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume, Guarantee or become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to
GAAP or otherwise, of any such Indebtedness or obligation on the balance
sheet of such Person (and "INCURRENCE", "INCURRED" "INCURRABLE" and
"INCURRING" shall have meanings correlative to the foregoing); PROVIDED,
HOWEVER, that (a) change in GAAP that results in an obligation of such Person
that exists at such time, and is not theretofore classified as Indebtedness,
becoming Indebtedness shall not be deemed an Incurrence of such Indebtedness.
For purposes of this definition, Indebtedness of the Company held by a
Restricted Subsidiary or Indebtedness of a Restricted Subsidiary held by
another Restricted Subsidiary shall be deemed to be Incurred by the issuer of
such Indebtedness in the event the Restricted Subsidiary holding such
Indebtedness ceases to be a Restricted Subsidiary or in the event such
Indebtedness is transferred to a Person other than the Company or a
Restricted Subsidiary. For purposes of this definition, any non-interest
bearing or other Indebtedness shall be deemed to have been Incurred (in an
amount equal to its aggregate principal amount at its Stated Maturity) only
on the date of original issue thereof.
"INDEBTEDNESS" means at any time (without duplication), with
respect to any Person, whether recourse is to all or a portion of the assets
of such Person, and whether or not contingent, (a) any obligation of such
Person for borrowed money, (b) any obligation of such Person evidenced by
bonds, debentures, notes, Guarantees or other similar instruments,
including any such obligations Incurred in connection with the acquisition of
Property, assets or businesses, (c) any reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (d) any obligation of such
Person issued or assumed as the deferred purchase price of Property or
services (other than Trade Accounts Payable), (e) any
<PAGE>
24
Capital Lease Obligation of such Person, (f) the maximum fixed redemption or
repurchase price of Redeemable Stock of such Person at the time of
determination, (g) any payment obligation of such Person under Exchange Rate
Contracts, Interest Rate Protection Agreements, Oil and Gas Hedging Contracts
or under any similar agreements or instruments, (h) any obligation to pay
rent or other payment amounts of such Person with respect to any Sale and
Leaseback Transaction to which such Person is a party and (i) any obligation
of the type referred to in clauses (a) through (h) of this paragraph of
another Person and all dividends of another Person the payment of which, in
either case, such Person has Guaranteed or is responsible or liable, directly
or indirectly, as obligor, Guarantor or otherwise; PROVIDED, HOWEVER, that
Indebtedness shall not include Production Payments and Reserve Sales. For
purposes of this definition, the maximum fixed repurchase price of any
Redeemable Stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Stock as if such
Redeemable Stock were repurchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture; PROVIDED, HOWEVER, that
if such Redeemable Stock is not then permitted to be repurchased, the
repurchase price shall be the book value of such Redeemable Stock. The
amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and
the maximum liability at such date in respect of any contingent obligations
described above.
"INDENTURE" means this Indenture as amended or supplemented from
time to time.
"INTEREST RATE PROTECTION AGREEMENT" means, with respect to any
Person, any interest rate swap agreement, forward rate agreement, interest
rate cap or collar agreement or other financial agreement or arrangement
entered into by such Person in the ordinary course of its business for the
purpose of limiting or managing interest rate risks to which such Person is
subject.
"INVESTMENT" means, with respect to any Person (a) any amount paid
by such Person, directly or indirectly, to any other Person for Capital Stock
or other Property of, or as a capital contribution to, any other Person or
(b) any direct or indirect loan or advance to any other Person (other than
accounts receivable of such Person arising in
<PAGE>
25
the ordinary course of business); PROVIDED, HOWEVER, that Investments
shall not include (i) in the case of clause (a) as used in the definition of
"Restricted Payments" only, any such amount paid through the issuance of
Capital Stock of the Company and (ii) in the case of clause (a) or (b),
extensions of trade credit on commercially reasonable terms in accordance
with normal trade practices and any increase in the equity ownership in any
Person resulting from retained earnings of such Person.
"ISSUE DATE" means the date on which the Original Securities first
were issued under this Indenture.
"LIEN" means, with respect to any Property, any mortgage or deed of
trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien (statutory or other), charge, easement, encumbrance,
preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever on or with respect to such
Property (including any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing). For
purposes of Section 4.10, a Capital Lease Obligation shall be deemed to be
secured by a Lien on the property being leased.
"LIQUID SECURITIES" means securities (a) of an issuer that is not
an Affiliate of the Company, (b) that are publicly traded on the New York
Stock Exchange, the American Stock Exchange, the Toronto Stock Exchange or
the Nasdaq National Market and (c) as to which the Company or the Restricted
Subsidiary holding such securities is not subject to any restrictions on sale
or transfer (including any volume restrictions under Rule 144 under the
Securities Act or any other restrictions imposed by the Securities Act) or as
to which a registration statement under the Securities Act covering the
resale thereof is in effect for as long as the securities are held; PROVIDED
that securities meeting the requirements of clauses (a), (b) and (c) above
shall be treated as Liquid Securities from the date of receipt thereof until
and only until the earlier of (i) the date on which such securities are sold
or exchanged for cash or Permitted Short Term Investments and (ii) 180 days
following the date of receipt of such securities. If such securities are not
sold or exchanged for cash or Permitted Short-Term
<PAGE>
26
Investments within 180 days of receipt thereof, for purposes of determining
whether the transaction pursuant to which the Company or a Restricted
Subsidiary received the securities was in compliance with Section 4.06, such
securities shall be deemed not to have been Liquid Securities at any time.
"MATERIAL CHANGE" means an increase or decrease (except to the
extent resulting from changes in prices) of more than 30% during a fiscal
quarter in the estimated discounted future net revenues from proved oil and
gas reserves of the Company and its Restricted Subsidiaries, calculated in
accordance with clause (a)(i) of the definition of Adjusted Consolidated Net
Tangible Assets; PROVIDED, HOWEVER, that the following will be excluded from
the calculation of Material Change: (a) any acquisitions during the quarter
of oil and gas reserves with respect to which the Company's estimate of the
discounted future net revenues from proved oil and gas reserves has been
confirmed by independent petroleum engineers; and (b) any dispositions of
Properties during such quarter that were disposed of in compliance with
Section 4.06.
"MOODY'S" means Moody's Investors Service, Inc. and its successors.
"NET AVAILABLE CASH" from an Asset Sale means cash proceeds
received therefrom (including (a) any cash proceeds received by way of
deferred payment of principal pursuant to a note or installment receivable or
otherwise, but only as and when received and (b) the Fair Market Value of
Liquid Securities and Permitted Short-Term Investments, and excluding (i) any
other consideration received in the form of assumption by the acquiring
Person of Indebtedness or other obligations relating to the Property that is
the subject of such Asset Sale and (ii) except to the extent subsequently
converted to cash, Liquid Securities or Permitted Short-Term Investments
within 240 days after such Asset Sale, consideration constituting Exchanged
Properties or consideration other than as identified in the immediately
preceding clauses (a) and (b)), in each case net of (A) all legal, title and
recording expenses, commissions and other fees and expenses incurred, and all
federal, state, foreign and local taxes required to be paid or accrued as a
liability under GAAP as a consequence of such Asset Sale, (B) all payments
made on any Indebtedness (but specifically excluding Indebtedness of the
Company and its Restricted Subsidiaries assumed in connection with or in
anticipation of such Asset Sale) which is secured by any assets subject
<PAGE>
27
to such Asset Sale, in accordance with the terms of any Lien upon such
assets, or which must by its terms, or in order to obtain a necessary consent
to such Asset Sale or by applicable law, be repaid out of the proceeds from
such Asset Sale; PROVIDED that such payments are made in a manner that
results in the permanent reduction in the balance of such Indebtedness and,
if applicable, a permanent reduction in any outstanding commitment for future
incurrences of Indebtedness thereunder, (C) all distributions and other
payments required to be made to minority interest holders in Subsidiaries or
joint ventures as a result of such Asset Sale and (D) the deduction of
appropriate amounts to be provided by the seller as a reserve, in accordance
with GAAP, against any liabilities associated with the assets disposed of in
such Asset Sale and retained by the Company or any Restricted Subsidiary
after such Asset Sale; PROVIDED, HOWEVER, that if any consideration for an
Asset Sale (which would otherwise constitute Net Available Cash) is required
to be held in escrow pending determination of whether a purchase price
adjustment will be made, such consideration (or any portion thereof) shall
become Net Available Cash only at such time as it is released to the Company
or any Restricted Subsidiary from escrow.
"NET WORKING CAPITAL" means (a) all current assets of the Company
and its Restricted Subsidiaries, less (b) all current liabilities of the
Company and its Restricted Subsidiaries, except current liabilities included
in Indebtedness, in each case as set forth in consolidated financial
statements of the Company prepared in accordance with GAAP.
"NON-RECOURSE PURCHASE MONEY INDEBTEDNESS" means Indebtedness
(other than Capital Lease Obligations) of the Company or any Restricted
Subsidiary Incurred in connection with the acquisition by the Company or such
Restricted Subsidiary in the ordinary course of business of fixed assets used
in the Oil and Gas Business (including office buildings and other real
property used by the Company or such Restricted Subsidiary in conducting its
operations) with respect to which (a) the holders of such Indebtedness agree
that they will look solely to the fixed assets so acquired which secure such
Indebtedness, and neither the Company nor any Restricted Subsidiary (i) is
directly or indirectly liable for such Indebtedness or (ii) provides
<PAGE>
28
credit support, including any undertaking, Guarantee, agreement or instrument
that would constitute Indebtedness (other than the grant of a Lien on such
acquired fixed assets), and (b) no default or event of default with respect
to such Indebtedness would cause, or permit (after notice or passage of time
or otherwise), any holder of any other Indebtedness of the Company or a
Restricted Subsidiary to declare a default or event of default on such other
Indebtedness or cause the payment, repurchase, redemption, defeasance or
other acquisition or retirement for value thereof to be accelerated or
payable prior to any scheduled principal payment, scheduled sinking fund
payment or maturity.
"OFFICER" means the President, the Chief Executive Officer, the
Chief Financial Officer, the Chief Accounting Officer or the Treasurer or the
Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers
at least one of whom shall be the principal executive officer, principal
accounting officer or principal financial officer of the Company.
"OIL AND GAS BUSINESS" means the business of exploiting, exploring
for, developing, acquiring, operating, producing, processing, gathering,
marketing, storing, selling, hedging, treating, swapping, refining and
transporting hydrocarbons and other related energy businesses.
"OIL AND GAS HEDGING CONTRACT" means, with respect to any Person,
any agreement or arrangement, or any combination thereof, relating to oil and
gas or other hydrocarbon prices, transportation or basis costs or
differentials or other similar financial factors, that is customary in the
Oil and Gas Business and is entered into by such Person in the ordinary
course of its business for the purpose of limiting or managing risks
associated with fluctuations in such prices, costs, differentials or similar
factors.
"OIL AND GAS LIENS" means (a) Liens on any specific property or any
interest therein, construction thereon or improvement thereto to secure all
or any part of the costs incurred for surveying, exploration, drilling,
extraction, development, operation, production, construction, alteration,
repair or improvement of, in, under or on such property and the plugging and
abandonment
<PAGE>
29
of wells located thereon (it being understood that, in the case of oil and
gas producing properties, or any interest therein, costs incurred for
"development" shall include costs incurred for all facilities relating to
such properties or to projects, ventures or other arrangements of which such
properties form a part or which relate to such properties or interests); (b)
Liens on an oil or gas producing property to secure obligations Incurred or
guarantees of obligations Incurred in connection with or necessarily
incidental to commitments for the purchase or sale of, or the transportation
or distribution of, the products derived from such property; (c) Liens
arising under partnership agreements, oil and gas leases, overriding royalty
agreements, net profits agreements, production payment agreements, royalty
trust agreements, incentive compensation programs on terms that are
reasonably customary in the Oil and Gas Business for geologists,
geophysicists and other providers of technical services to the Company or a
Restricted Subsidiary, master limited partnership agreements, farm-out
agreements, farm-in agreements, division orders, contracts for the sale,
purchase, exchange, transportation, gathering or processing of oil, gas or
other hydrocarbons, unitizations and pooling designations, declarations,
orders and agreements, development agreements, operating agreements,
production sales contracts, area of mutual interest agreements, gas balancing
or deferred production agreements, injection, repressuring and recycling
agreements, salt water or other disposal agreements, seismic or geophysical
permits or agreements, and other agreements which are customary in the Oil
and Gas Business; PROVIDED, HOWEVER, in all instances that such Liens are
limited to the assets that are the subject of the relevant agreement,
program, order or contract; (d) Liens arising in connection with Production
Payments and Reserve Sales; and (e) Liens on pipelines or pipeline facilities
that arise by operation of law.
"OPINION OF COUNSEL" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel
to the Company.
"PARI PASSU INDEBTEDNESS" means any Indebtedness of the Company or
a Subsidiary Guarantor that is PARI PASSU in right of payment to the
Securities or a Subsidiary Guarantee, as applicable.
<PAGE>
30
"PARI PASSU OFFER" means an offer by the Company or a Subsidiary
Guarantor to purchase all or a portion of Pari Passu Indebtedness to the
extent required by the indenture or other agreement or instrument pursuant to
which such Pari Passu Indebtedness was issued.
"PERMITTED BUSINESS INVESTMENTS" means Investments and expenditures
made in the ordinary course of, and of a nature that is or shall have become
customary in, the Oil and Gas Business as a means of actively engaging
therein through agreements, transactions, interests or arrangements which
permit one to share risks or costs, comply with regulatory requirements
regarding local ownership or satisfy other objectives customarily achieved
through the conduct of Oil and Gas Business jointly with third parties,
including (a) ownership interests in oil and gas properties or gathering,
transportation, processing, storage or related 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), and
other similar agreements (including for limited liability companies) with
third parties, excluding however, Investments in corporations other than
Restricted Subsidiaries.
"PERMITTED HEDGING AGREEMENTS" means (a) Exchange Rate Contracts
and Oil and Gas Hedging Contracts and (b) Interest Rate Protection Agreements
but only to the extent that the stated aggregate notional amount thereunder
does not exceed 100% of the aggregate principal amount of the Indebtedness of
the Company or a Restricted Subsidiary covered by such Interest Rate
Protection Agreements at the time such agreements were entered into.
"PERMITTED INDEBTEDNESS" means any and all of the following: (i)
Indebtedness arising under this Indenture with respect to the Original
Securities and any Subsidiary Guarantees relating thereto; (ii) Indebtedness
under Bank Credit Facilities; PROVIDED that the aggregate principal amount of
all Indebtedness under Bank Credit Facilities, together with all Indebtedness
Incurred pursuant to clause (x) of this paragraph in respect of Indebtedness
previously Incurred under Bank Credit Facilities, at any one time outstanding
does not exceed the greater of
<PAGE>
31
(a) $300,000,000, which amount shall be permanently reduced by the amount of
Net Available Cash from Asset Sales used to permanently repay Indebtedness
under Bank Credit Facilities and not subsequently reinvested in Additional
Assets or used to permanently reduce other Indebtedness to the extent
permitted pursuant to Section 4.06 and (b) an amount equal to the sum of (1)
$125,000,000 and (2) 25% of Adjusted Consolidated Net Tangible Assets
determined as of the date of the Incurrence of such Indebtedness; (iii)
Indebtedness to the Company or any Restricted Subsidiary by any of its
Restricted Subsidiaries or Indebtedness of the Company to any of its
Restricted Subsidiaries (but only so long as such Indebtedness is held by the
Company or a Restricted Subsidiary); (iv) Indebtedness in respect of bid,
performance, reimbursement or surety obligations issued by or for the account
of the Company or any Restricted Subsidiary in the ordinary course of
business, including Guarantees and letters of credit functioning as or
supporting such bid, performance, reimbursement or surety obligations (in
each case other than for an obligation for money borrowed); (v) Indebtedness
under Permitted Hedging Agreements; (vi) in-kind obligations relating to oil
or gas balancing positions arising in the ordinary course of business; (vii)
Indebtedness outstanding on the Issue Date not otherwise permitted in clauses
(i) through (vi) above; (viii) Non-recourse Purchase Money Indebtedness; (ix)
Indebtedness not otherwise permitted to be Incurred pursuant to this
paragraph (excluding any Indebtedness Incurred pursuant to clause (a) of the
immediately preceding paragraph); PROVIDED that the aggregate principal
amount of all Indebtedness Incurred pursuant to this clause (ix), together
with all Indebtedness Incurred pursuant to clause (x) of this paragraph in
respect of Indebtedness previously Incurred pursuant to this clause (ix), at
any one time outstanding does not exceed $30,000,000; (x) Indebtedness
Incurred in exchange for, or the proceeds of which are used to refinance, (a)
Indebtedness referred to in clauses (i), (ii), (vii), (viii) and (ix) of this
paragraph (including Indebtedness previously Incurred pursuant to this clause
(x)) and (b) Indebtedness Incurred pursuant to clause (a) of the immediately
preceding paragraph; PROVIDED that, in the case of each of the foregoing
clauses (a) and (b), such Indebtedness is Permitted Refinancing Indebtedness
and; (xi) Indebtedness consisting of obligations in respect of purchase price
<PAGE>
32
adjustments, indemnities or Guarantees of the same or similar matters in
connection with the acquisition or disposition of Property. For purposes of
determining compliance with Section 4.03: in the event that an item of
Indebtedness (including Indebtedness Incurred by the Company to banks or
other lenders) could be Incurred pursuant to more than one of the clauses in
this paragraph, the Company, in its sole discretion, will classify such item
of Indebtedness and only be required to include the amount and type of such
Indebtedness in (and to have Incurred such Indebtedness pursuant to) one of
the clauses in this paragraph; and an item of Indebtedness (including
Indebtedness Incurred by the Company to banks or other lenders) may for this
purpose be divided into more than one of the types of Indebtedness described
in this paragraph.
"PERMITTED INVESTMENTS" means any and all of the following: (a)
Permitted Short-Term Investments; (b) Investments in property, plant and
equipment used in the ordinary course of business and Permitted Business
Investments; (c) Investments by any Restricted Subsidiary in the Company; (d)
Investments by the Company or any Restricted Subsidiary in any Restricted
Subsidiary; (e) Investments by the Company or any Restricted Subsidiary in
(i) any Person that will, upon the making of such Investment, become a
Restricted Subsidiary or (ii) any Person if as a result of such Investment
such Person is merged or consolidated with or into, or transfers or conveys
all or substantially all its Property to, the Company or a Restricted
Subsidiary; (f) Investments in the form of securities received from Asset
Sales; PROVIDED that such Asset Sales are made in compliance with Section
4.06; (g) Investments in negotiable instruments held for collection; lease,
utility and other similar deposits; and stock, obligations or other
securities received in settlement of debts (including under any bankruptcy or
other similar proceeding) owing to the Company or any of its Restricted
Subsidiaries as a result of foreclosure, perfection or enforcement of any
Liens or Indebtedness, in each of the foregoing cases in the ordinary course
of business of the Company or such Restricted Subsidiary; (h) relocation
allowances for, and advances and loans to, officers, directors and employees
of the Company or any of its Restricted Subsidiaries; PROVIDED such items do
not exceed in the aggregate $5,000,000 at any one time
<PAGE>
33
outstanding; (i) Investments intended to promote the Company's strategic
objectives in the Oil and Gas Business in an aggregate amount not to exceed
7.5% of the Adjusted Consolidated Net Tangible Assets (determined as of the
date of the making of any such Investment) at any one time outstanding (which
Investments shall be deemed to be no longer outstanding only upon the return
of capital thereof; (j) Investments made for the purpose of acquiring gas
marketing contracts in an aggregate amount not to exceed $10,000,000 at any
one time outstanding; (k) Investments made pursuant to Permitted Hedging
Agreements of the Company and the Restricted Subsidiaries; and (l)
Investments pursuant to any agreement or obligation of the Company or any of
its Restricted Subsidiaries as in effect on the Issue Date (other than
Investments described in clauses (a) through (k) above).
"PERMITTED LIENS" means any and all of the following: (a) Liens
existing as of the Issue Date; (b) Liens securing the Securities, any
Subsidiary Guarantees and other obligations arising under this Indenture; (c)
any Lien existing on any Property of a Person at the time such Person is
merged or consolidated with or into the Company or a Restricted Subsidiary or
becomes a Restricted Subsidiary (and not incurred in anticipation of or in
connection with such transaction); PROVIDED that such Liens are not extended
to other Property of the Company or its Restricted Subsidiaries; (d) any Lien
existing on any Property at the time of the acquisition thereof (and not
incurred in anticipation of or in connection with such transaction); PROVIDED
that such Liens are not extended to other Property of the Company or its
Restricted Subsidiaries; (e) any Lien incurred in the ordinary course of
business incidental to the conduct of the business of the Company or the
Restricted Subsidiaries or the ownership of their Property (including (i)
easements, rights of way and similar encumbrances, (ii) rights or title of
lessors under leases (other than Capital Lease Obligations), (iii) rights of
collecting banks having rights of setoff, revocation, refund or chargeback
with respect to money or instruments of the Company or the Restricted
Subsidiaries on deposit with or in the possession of such banks, (iv) Liens
imposed by law, including Liens under workers' compensation or similar
legislation and mechanics', carriers', warehousemen's, materialmen's,
suppliers' and vendors' Liens, (v) Liens incurred to secure performance of
obligations with respect to statutory or regulatory requirements, performance
or return-of-money bonds, surety bonds or other obligations of a like nature
<PAGE>
34
and incurred in a manner consistent with industry practice and (vi) Oil and
Gas Liens, in each case which are not incurred in connection with the
borrowing of money, the obtaining of advances or credit or the payment of the
deferred purchase price of Property (other than Trade Accounts Payable); (f)
Liens for taxes, assessments and governmental charges not yet due or the
validity of which are being contested in good faith by appropriate
proceedings, promptly instituted and diligently conducted, and for which
adequate reserves have been established to the extent required by GAAP as in
effect at such time; (g) Liens incurred to secure appeal bonds and judgment
and attachment Liens, in each case in connection with litigation or legal
proceedings that are being contested in good faith by appropriate proceedings
so long as reserves have been established to the extent required by GAAP as
in effect at such time and so long as such Liens do not encumber assets by an
aggregate amount (together with the amount of any unstayed judgments against
the Company or any Restricted Subsidiary but excluding any such Liens to the
extent securing insured or indemnified judgments or orders) in excess of
$15,000,000; (h) Liens securing Permitted Hedging Agreements of the Company
and its Restricted Subsidiaries; (i) Liens securing purchase money
Indebtedness or Capital Lease Obligations; PROVIDED that such Liens attach
only to the Property acquired with the proceeds of such purchase money
Indebtedness or the Property which is the subject of such Capital Lease
Obligations; (j) Liens securing Non-recourse Purchase Money Indebtedness
granted in connection with the acquisition by the Company or any Restricted
Subsidiary in the ordinary course of business of fixed assets used in the Oil
and Gas Business (including office buildings and other real property used by
the Company or such Restricted Subsidiary in conducting its operations);
PROVIDED that (i) such Liens attach only to the fixed assets acquired with
the proceeds of such Non-recourse Purchase Money Indebtedness and (b) such
Non-recourse Purchase Money Indebtedness is not in excess of the purchase
price of such fixed assets; (k) Liens resulting from the deposit of funds or
evidences of Indebtedness in trust for the purpose of decreasing or legally
defeasing Indebtedness of the Company or any Restricted Subsidiary so long as
such deposit of funds is permitted under Section 4.04; (l) Liens resulting
from a pledge of Capital Stock of a Person that is not a Restricted
Subsidiary to secure obligations of such Person
<PAGE>
35
and any refinancings thereof; (m) Liens to secure any permitted extension,
renewal, refinancing, refunding or exchange (or successive extensions,
renewals, refinancings, refundings or exchanges) in whole or in part, of or
for any Indebtedness secured by Liens referred to in clauses (a), (b), (c),
(d), (i) and (j) above; PROVIDED, HOWEVER, that (i) such new Lien shall be
limited to all or part of the same Property (including future improvements
thereon and accessions thereto) subject to the original Lien and (ii) the
Indebtedness secured by such Lien at such time is not increased to any amount
greater than the sum of (A) the outstanding principal amount or, if greater,
the committed amount of the Indebtedness secured by such original Lien
immediately prior to such extension, renewal, refinancing, refunding or
exchange and (B) an amount necessary to pay any fees and expenses, including
premiums, related to such refinancing, refunding, extension, renewal or
replacement; (n) Liens in favor of the Company or a Restricted Subsidiary;
and (o) Liens not otherwise permitted by clauses (a) through (n) above
incurred in the ordinary course of business of the Company and its Restricted
Subsidiaries and encumbering Property having an aggregate Fair Market Value
not in excess of $5,000,000 at any one time. Notwithstanding anything in
this paragraph to the contrary, the term "Permitted Liens" shall not include
Liens resulting from the creation, incurrence, issuance, assumption or
Guarantee of any Production Payments and Reserve Sales other than (i) any
such Liens existing as of the Issue Date, (ii) Production Payments and
Reserve Sales in connection with the acquisition of any Property after the
Issue Date; PROVIDED that any such Lien created in connection therewith is
created, incurred, issued, assumed or Guaranteed in connection with the
financing of, and within 60 days after the acquisition of, such Property
(iii) Production Payments and Reserve Sales, other than those described in
clauses (i) and (ii) of this sentence, to the extent such Production Payments
and Reserve Sales constitute Asset Sales made pursuant to and in compliance
with Section 4.06 and (iv) incentive compensation programs for geologists,
geophysicists and other providers of technical services to the Company and
any Restricted Subsidiary; PROVIDED, HOWEVER, that, in the case of the
immediately foregoing clauses (i), (ii), (iii) and (iv), any Lien created in
connection with any such Production Payments and Reserve Sales shall be
limited to the Property that is the subject
<PAGE>
36
of such Production Payments and Reserve Sales.
"PERMITTED REFINANCING INDEBTEDNESS" means Indebtedness ("new
Indebtedness") Incurred in exchange for, or proceeds of which are used to
refinance, other Indebtedness ("old Indebtedness"); PROVIDED, HOWEVER, that
(a) such new Indebtedness is in an aggregate principal amount not in excess
of the sum of (i) the aggregate principal amount then outstanding of the old
Indebtedness (or, if such old Indebtedness provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of determination),
and (ii) an amount necessary to pay any fees and expenses, including
premiums, related to such exchange or refinancing, (b) such new Indebtedness
has a Stated Maturity no earlier than the Stated Maturity of the old
Indebtedness, (c) such new Indebtedness has an Average Life at the time such
new Indebtedness is Incurred that is equal to or greater than the Average
Life of the old Indebtedness at such time, (d) such new Indebtedness is
subordinated in right of payment to the Securities (or, if applicable, the
relevant Subsidiary Guarantee) to at least the same extent, if any, as the
old Indebtedness, (e) if such old Indebtedness is Non-recourse Purchase Money
Indebtedness or Indebtedness that refinanced Non-recourse Purchase Money
Indebtedness, such new Indebtedness satisfies clauses (a) and (b) of the
definition of "Non-recourse Purchase Money Indebtedness" and (f) such new
Indebtedness is not incurred by a Restricted Subsidiary which thereafter will
not be a Subsidiary Guarantor to refinance old Indebtedness of the Company or
a Subsidiary Guarantor.
"PERMITTED SHORT-TERM INVESTMENTS" means (a) Investments in
Government Obligations maturing within one year of the date of acquisition
thereof; (b) Investments in demand accounts, time deposit accounts,
certificates of deposit, bankers' acceptances and money market deposits
maturing within one year of the date of acquisition thereof issued by a bank
or trust company which is organized under the laws of the United States of
America or any State thereof or the District of Columbia or Canada or any
Province thereof that is a member of the Federal Reserve System or comparable
Canadian system and has capital, surplus and undivided profits aggregating in
excess of $500,000,000 and whose long-term Indebtedness is rated "A"
<PAGE>
37
(or such similar equivalent rating), or higher, according to Moody's or
Dominion Bond Rating Service Limited or Canadian Bond Rating Service, Inc.;
(c) Investments in deposits available for withdrawal on demand with any
commercial bank that is organized under the laws of any country in which the
Company or any Restricted Subsidiary maintains an office or is engaged in the
Oil and Gas Business; PROVIDED that (i) all such deposits have been made in
such accounts in the ordinary course of business and (ii) such deposits do
not at any one time exceed $20,000,000 in the aggregate, (d) repurchase and
reverse repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (a) entered into with
a bank meeting the qualifications described in clause (b), (e) Investments in
commercial paper or notes, maturing not more than one year after the date of
acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America or
any State thereof or the District of Columbia, or Canada or any Province
thereof, with a short-term rating at the time as of which any Investment
therein is made of "P-1" (or higher) according to Moody's or "A-1" (or
higher) according to S&P or "R-1" (or higher) by Dominion Bond Rating Service
Limited or Canadian Bond Rating Service, Inc. (in the case of a Canadian
issuer) or a long-term rating at the time as of which any Investment therein
is made of "A3" (or higher) according to Moody's or "A-" (or higher)
according to S&P or such similar equivalent rating (or higher) by Dominion
Bond Rating Service Limited or Canadian Bond Rating Service, Inc. (in the
case of a Canadian issuer), (f) Investments in any money market mutual fund
having assets in excess of $250,000,000 all of which consist of other
obligations of the types described in clauses (a), (b), (d) and (e) hereof
and (g) Investments in asset-backed securities maturing within one year of
the date of acquisition thereof with a long-term rating at the time as of
which any Investment therein is made of "A3" (or higher) according to Moody's
or "A-1" (or higher) according to S&P or such similar equivalent rating (or
higher) by Dominion Bond Rating Service Limited or Canadian Bond Rating
Service, Inc. (in the case of a Canadian issuer).
"PERSON" means any individual, corporation, partnership, joint
venture, limited liability company, unlimited liability company, trust,
estate, unincorporated organization or government or any agency or political
subdivision thereof.
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38
"PREFERRED STOCK" of any Person means Capital Stock of such Person
of any class or classes (however designated) that ranks prior, as to the
payment of dividends or as to the distribution of assets upon any voluntary
or involuntary liquidation, dissolution or winding up of such Person, to
shares of Capital Stock of any other class of such Person; PROVIDED, HOWEVER,
that "Preferred Stock" shall not include Redeemable Stock.
"PRINCIPAL" of any Indebtedness (including the Securities) means
the principal amount of such Indebtedness plus any premium on such
Indebtedness.
"PRODUCTION PAYMENTS AND RESERVE SALES" means the grant or transfer
by the Company or a Restricted Subsidiary to any Person of a royalty,
overriding royalty, net profits interest, production payment (whether
volumetric or dollar denominated), partnership or other interest in oil and
gas properties, reserves or the right to receive all or a portion of the
production or the proceeds from the sale of production attributable to such
properties where the holder of such interest has recourse solely to such
production or proceeds of production, subject to the obligation of the
grantor or transferor to operate and maintain, or cause the subject interests
to be operated and maintained, in a reasonably prudent manner or other
customary standard or subject to the obligation of the grantor or transferor
to indemnify for environmental, title or other matters customary in the Oil
and Gas Business, including any such grants or transfers pursuant to
incentive compensation programs on terms that are reasonably customary in the
Oil and Gas Business for geologists, geophysicists or other providers of
technical services to the Company or a Restricted Subsidiary.
"PROPERTY" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including Capital Stock and other securities issued
by any other Person (but excluding Capital Stock or other securities issued
by such first mentioned Person).
"REDEEMABLE STOCK" of any Person means any equity security of such
Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or otherwise (including on the
happening of an event), is or could become required to be redeemed for cash
or other Property or is or could become redeemable for
<PAGE>
39
cash or other Property at the option of the holder thereof, in whole or in
part, on or prior to the first anniversary of the Stated Maturity of the
Securities; or is or could become exchangeable at the option of the holder
thereof for Indebtedness at any time in whole or in part, on or prior to the
first anniversary of the Stated Maturity of the Securities; PROVIDED,
HOWEVER, that Redeemable Stock shall not include any security by virtue of
the fact that it may be exchanged or converted at the option of the holder
for Capital Stock of the Company having no preference as to dividends or
liquidation over any other Capital Stock of the Company.
"REPRESENTATIVE" means the trustee, agent or representative
expressly authorized to act in such capacity, if any, for an issue of Senior
Indebtedness of the Company.
"RESTRICTED PAYMENT" means (a) a dividend or other distribution
declared or paid on the Capital Stock or Redeemable Stock of the Company or
to the Company's shareholders (other than dividends, distributions or
payments made solely in Capital Stock of the Company or in options, warrants
or other rights to purchase or acquire Capital Stock), or declared and paid
to any Person other than the Company or any of its Restricted Subsidiaries
(and, if such Restricted Subsidiary is not a Wholly Owned Subsidiary, to the
other shareholders of such Restricted Subsidiary on a pro rata basis) on the
Capital Stock or Redeemable Stock of any Restricted Subsidiary, (b) a payment
made by the Company or any of its Restricted Subsidiaries (other than to the
Company or any Restricted Subsidiary) to purchase, redeem, acquire or retire
any Capital Stock or Redeemable Stock, or any options, warrants or other
rights to acquire Capital Stock or Redeemable Stock, of the Company or of a
Restricted Subsidiary, (c) a payment made by the Company or any of its
Restricted Subsidiaries to redeem, repurchase, legally defease or otherwise
acquire or retire for value (including pursuant to mandatory repurchase
covenants), prior to any scheduled maturity, scheduled sinking fund or
scheduled mandatory redemption, any Subordinated Indebtedness, PROVIDED that
this clause (c) shall not include any such payment with respect to (i) any
such Subordinated Indebtedness to the extent of Excess Proceeds remaining
after compliance with Section 4.06 and to the extent required by the
indenture or other agreement or
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40
instrument pursuant to which such Subordinated Indebtedness was issued or
(ii) the purchase, repurchase or other acquisition of any such Subordinated
Indebtedness purchased in anticipation of satisfying a scheduled maturity,
scheduled sinking fund or scheduled mandatory redemption, in each case due
within one year of the date of acquisition, or (d) an Investment (other than
a Permitted Investment) by the Company or a Restricted Subsidiary in any
Person.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company that has
not been designated an Unrestricted Subsidiary pursuant to Section 4.15.
"S&P" means Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc., and its successors.
"SALE AND LEASEBACK TRANSACTION" means, with respect to any Person,
any direct or indirect arrangement (excluding, however, any such arrangement
between such Person and a Wholly Owned Subsidiary of such Person or between one
or more Wholly Owned Subsidiaries of such Person) pursuant to which Property is
sold or transferred by such Person or a Restricted Subsidiary of such Person and
is thereafter leased back from the purchaser or transferee thereof by such
Person or one of its Restricted Subsidiaries.
"SAXON" means Saxon Petroleum Inc., an Alberta corporation.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" has the meaning assigned thereto in the introductory
paragraph to this Indenture.
"SENIOR INDEBTEDNESS OF THE COMPANY" means the obligations of the
Company with respect to Indebtedness of the Company, whether outstanding on the
date hereof or thereafter created, Incurred or assumed, and any renewal,
refunding, refinancing, replacement or extension thereof, unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
<PAGE>
41
Indebtedness shall not be senior in right of payment to the Securities;
PROVIDED, HOWEVER, that Senior Indebtedness of the Company shall not include
(a) Indebtedness of the Company to a Subsidiary of the Company (but only so
long as such Indebtedness is held by such Subsidiary), (b) amounts
owed for goods, materials or services purchased in the ordinary course of
business, (c) Indebtedness Incurred in violation of this Indenture, (d)
amounts payable or any other Indebtedness to employees of the Company or any
Subsidiary of the Company, (e) any liability for federal, state, local or
other taxes owed or owing by the Company, (f) any Indebtedness of the Company
that, when Incurred and without regard to any election under Section 1111(b)
of the United States Bankruptcy Code, was without recourse to the Company,
(g) Pari Passu or Subordinated Indebtedness of the Company, (h) Indebtedness
of the Company that is represented by Redeemable Stock, (i) Indebtedness
evidenced by the Securities and (j) in-kind obligations relating to net oil
and gas balancing positions. "SENIOR INDEBTEDNESS OF ANY SUBSIDIARY
GUARANTOR" has a correlative meaning; PROVIDED that clause (a) above shall be
deemed to refer to Indebtedness of any Subsidiary Guarantor to the Company or
any Subsidiary of the Company.
"SIGNIFICANT SUBSIDIARY" means, at any date of determination, any
Restricted Subsidiary that would be a "Significant Subsidiary" of the Company
within the meaning of Rule 1-02 under Regulation S-X promulgated by the
Commission.
"STATED MATURITY", when used with respect to any security or any
installment of principal thereof or interest thereon, means the date
specified in such security as the fixed date on which the principal of such
security or such installment of principal or interest is due and payable,
including pursuant to any mandatory redemption provision (but excluding any
provision providing for the repurchase of such security at the option of the
holder thereof upon the happening of any contingency unless such contingency
has occurred).
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company or a
Subsidiary Guarantor that is subordinated or junior in right of payment to
the Securities or the relevant Subsidiary Guarantee, as applicable, pursuant
to a written agreement to that effect.
"SUBSIDIARY" of a Person means (a) another Person which is a
corporation a majority of whose Voting Stock is
<PAGE>
42
at the time, directly or indirectly, owned or controlled by (i) the first
Person, (ii) the first Person and one or more of its Subsidiaries or (iii)
one or more of the first Person's Subsidiaries or (b) another Person which is
not a corporation (x) at least 50% of the ownership interest of which and (y)
the power to elect or direct the election of a majority of the directors or
other governing body of which are controlled by Persons referred to in clause
(i), (ii) or (iii) above.
"SUBSIDIARY GUARANTOR" means, unless released from its Subsidiary
Guarantee as permitted by this Indenture, any Restricted Subsidiary that
becomes a Guarantor of the Securities in compliance with the provisions of
this Indenture and executes a supplemental indenture agreeing to be bound by
the terms of this Indenture, until a successor replaces such Restricted
Subsidiary pursuant to the applicable provisions hereof and, thereafter,
means the successor.
"SUBSIDIARY GUARANTEE" means an unconditional, unsecured senior
subordinated Guarantee of Securities given by any Restricted Subsidiary
pursuant to the terms of this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture except as required
by Section 9.03 hereof; PROVIDED that in the event the Trust Indenture Act of
1939 is amended after such date, "TRUST INDENTURE ACT" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939, as so
amended.
"TRADE ACCOUNTS PAYABLE" means accounts payable or other
obligations of the Company or any Restricted Subsidiary to trade creditors
created or assumed by the Company or such Restricted Subsidiary in the
ordinary course of business in connection with the obtaining of goods or
services.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"TRUST OFFICER" means any officer in the Corporate Trust Division
of the Trustee or any other officer or
<PAGE>
43
assistant officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.
"UNIFORM COMMERCIAL CODE" means the New York Uniform Commercial
Code as in effect from time to time.
"UNRESTRICTED SUBSIDIARY" means (a) Saxon and each other Subsidiary
of the Company that the Company has designated pursuant to Section 4.15 as an
Unrestricted Subsidiary; and (b) any Subsidiary of an Unrestricted Subsidiary.
"VOLUMETRIC PRODUCTION PAYMENTS" means production payment
obligations recorded as deferred revenue in accordance with GAAP, together
with all undertakings and obligations in connection therewith.
"VOTING STOCK" of any Person means Capital Stock of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"WHOLLY OWNED SUBSIDIARY" means, at any time, a Restricted
Subsidiary of the Company all the Voting Stock of which (other than
directors' qualifying shares) is at such time owned, directly or indirectly,
by the Company and its other Wholly Owned Subsidiaries.
SECTION 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Defined in
Term Section
---- -----------
<S> <C>
"Bankruptcy Law" 6.01
"Change of Control Offer" 4.09
"Change of Control Payment" 4.09
"Change of Control Payment Date" 4.09
"Claiming Guarantor" 11.02
"Contributing Party" 11.02
"covenant defeasance option" 8.01(b)
"Custodian" 6.01
"Event of Default" 6.01
"Excess Proceeds" 4.06
"Global Security" Exhibit A
"legal defeasance option" 8.01(b)
"Legal Holiday" 13.08
"Obligations" 11.01
"Offer Amount" 4.06
<PAGE>
44
"Offer Period" 4.06
"OID" 2.01
"Original Securities" 2.01
"pay its Subsidiary Guarantee" 12.03
"pay the Securities" 10.03
"Paying Agent" 2.04
"Payment Blockage Notice" 10.03
"Payment Blockage Period" 10.03
"Permitted Consideration" 4.06
"Prepayment Offer" 4.06
"Prepayment Offer Notice" 4.06
"Purchase Date" 4.06
"Registrar" 2.04
"Successor Company" 5.01
</TABLE>
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The
following TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, each
Subsidiary Guarantor and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
<PAGE>
45
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
(e) words in the singular include the plural and words in the plural
include the singular;
(f) unsecured Indebtedness shall not be deemed to be subordinate or
junior to secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(g) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(h) the principal amount of any Preferred Stock shall be the greater
of (i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect to
such Preferred Stock.
ARTICLE II
THE SECURITIES
SECTION 2.01. AMOUNT OF SECURITIES; ISSUABLE IN SERIES. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is $200,000,000. All Securities shall be
identical in all respects other than issue price and issuance dates. The
Securities may be issued in one or more series; PROVIDED, HOWEVER, that any
Securities issued with original issue discount ("OID") for Federal income tax
purposes shall not be issued as part of the same series as any Securities
that are issued with a different amount of OID or are not issued with OID.
All Securities of any one series shall be substantially identical except as
to denomination.
<PAGE>
46
Subject to Section 2.03, the Trustee shall authenticate Securities
for original issue on the Issue Date in the aggregate principal amount of
$100,000,000 (the "Original Securities"). With respect to any Securities
issued after the Issue Date (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Securities pursuant to Section 2.07, 2.08, 2.09 or 3.06), there
shall be established in or pursuant to a resolution of the Board of
Directors of the Company and, subject to Section 2.03, set forth or
determined in the manner provided in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of such
Securities:
(a) whether such Securities shall be issued as part of a new or
existing series of Securities and the title of such Securities (which
shall distinguish the Securities of the series from Securities of any
other series);
(b) the aggregate principal amount of such Securities which may be
authenticated and delivered under this Indenture, which shall be in an
aggregate principal amount not to exceed $100,000,000 (except for
Securities authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of the same series
pursuant to Section 2.07, 2.08, 2.09 or 3.06 and except for Securities
which, pursuant to Section 2.03, are deemed never to have been
authenticated and delivered hereunder);
(c) the issue price and issuance date of such Securities, including
the date from which interest on such Securities shall accrue; and
(d) if applicable, that such Securities shall be issuable in whole or
in part in the form of one or more Global Securities and, in such case, the
respective depositories for such Global Securities, the form of any legend
or legends which shall be borne by any such Global Security in addition to
or in lieu of that set forth in Exhibit A.
<PAGE>
47
If any of the terms of any series are established by action taken
pursuant to a resolution of the Board of Directors of the Company, a copy of
an appropriate record of such action shall be certified by the Secretary or
any Assistant Secretary of the Company and delivered to the Trustee at or
prior to the delivery of the Officers' Certificate or the trust indenture
supplementary thereto setting forth the terms of the series.
Notwithstanding anything to the contrary in this Section or
otherwise in this Indenture, there shall be allowed only one additional
issuance of Securities after the Issue Date, whether such Securities are of
the same or a different series than the Original Securities, and no such
additional issuance shall be permitted after January 15, 2003.
SECTION 2.02. FORM AND DATING. The Global Securities and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A which is hereby incorporated in and expressly made a part of this
Indenture. The Securities of each series may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage; PROVIDED that any such notation, legend
or endorsement is in a form reasonably acceptable to the Company. Each
Security shall be dated the date of its authentication. The terms of the
Securities of each series set forth in Exhibit A are part of the terms of
this Indenture.
SECTION 2.03. EXECUTION AND AUTHENTICATION. Two Officers shall
sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
be valid nevertheless.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series
(including the Original
<PAGE>
48
Securities) executed by the Company to the Trustee for authentication,
together with a written order of the Company in the form of an Officers'
Certificate or an indenture supplemental hereto for the authentication and
delivery of such Securities, and the Trustee in accordance with such written
order of the Company shall authenticate and deliver such Securities.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee or the Company, with notice to the Trustee, may appoint
an authenticating agent reasonably acceptable to the Company to authenticate
the Securities. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do
so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.04. REGISTRAR AND PAYING AGENT. The Company shall
maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the "Registrar") and an office or
agency where Securities may be presented for payment (the "Paying Agent").
The Registrar shall keep a register of the Securities and of their transfer
and exchange. The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. 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 such agent. If the
Company fails to maintain a Registrar or Paying Agent, the Trustee shall act
as such and shall be entitled to appropriate compensation therefor pursuant
to Section 7.07. The Company or any domestically incorporated Wholly Owned
Subsidiary may act as Paying Agent, Registrar, co-registrar or transfer agent.
<PAGE>
49
SECTION 2.05. PAYING AGENT TO HOLD MONEY IN TRUST. Prior to each
due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold
in trust for the benefit of Securityholders or the Trustee all money held by
the Paying Agent for the payment of principal of, premium, if any, or
interest on the Securities and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or a Wholly Owned
Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. 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 by the Paying Agent. Upon complying with
this Section, the Paying Agent shall have no further liability for the money
delivered to the Trustee.
SECTION 2.06. SECURITYHOLDER LISTS. The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not
the Registrar, the Company shall furnish to the Trustee, in writing at least
five 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
Securityholders.
SECTION 2.07. REPLACEMENT SECURITIES. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that such
Security has been lost, destroyed or wrongfully taken, the Company shall
issue and the Trustee shall authenticate a replacement Security if the
requirements of Section 8-405 of the Uniform Commercial Code are met and the
Holder satisfies any other reasonable requirements of the Trustee. If
required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss which any of them may suffer if a Security is
replaced. The Company and the Trustee may charge the Holder for their
expenses in
<PAGE>
50
replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. OUTSTANDING SECURITIES. Securities outstanding at
any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancelation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security. All
Securities issued upon any registration of transfer or exchange of Securities
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient
to pay all principal, premium, if any, and interest payable on that date with
respect to the Securities (or portions thereof) to be redeemed or maturing,
as the case may be, and the Paying Agent is not prohibited from paying such
money to the Securityholders on that date pursuant to the terms of this
Indenture, then on and after that date such Securities (or portions thereof)
cease to be outstanding and interest on them ceases to accrue.
SECTION 2.09. TEMPORARY SECURITIES. Until definitive Securities
are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations
that the Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities and deliver them in exchange for temporary
Securities.
SECTION 2.10. CANCELATION. The Company at any time may deliver
Securities to the Registrar for
<PAGE>
51
cancelation. The Trustee and the Paying Agent shall forward to the Registrar
any Securities surrendered to them for registration of transfer, exchange or
payment. The Registrar and no one else shall cancel and destroy (subject to
the record retention requirements of the Exchange Act) all Securities
surrendered for registration of transfer, exchange, payment or cancelation
and deliver a certificate of such destruction to the Company unless the
Company directs the Registrar to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has
redeemed, paid or delivered to the Registrar for cancelation.
SECTION 2.11. DEFAULTED INTEREST. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted
interest (plus interest on such defaulted interest to the extent lawful) in
any lawful manner. The Company may pay the defaulted interest to the persons
who are Securityholders on a subsequent special record date. The Company
shall fix or cause to be fixed any such special record date and payment date
to the reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP NUMBERS. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience
to Holders; PROVIDED, HOWEVER, that any such notice may state that no
representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers.
ARTICLE III
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem
Securities pursuant to paragraph 5 or 6 of
<PAGE>
52
the Securities, it shall notify the Trustee in writing of the redemption
date, the principal amount of Securities to be redeemed and the paragraph of
the Securities pursuant to which such redemption is being made.
The Company shall give each notice to the Trustee provided for in
this Section at least 45 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an
Officers' Certificate and an Opinion of Counsel from the Company to the
effect that such redemption will comply with the conditions herein.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If less
than all the Securities are to be redeemed at any time, selection of
Securities for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
the Securities are listed, or, if the Securities are not so listed, on a pro
rata basis, by lot or by such other method that the Trustee shall deem fair
and appropriate. The Trustee shall make the selection from outstanding
Securities not previously called for redemption. The Trustee may select for
redemption portions of the principal of Securities that have denominations
larger than $1,000. Securities and portions of them the Trustee selects
shall be in amounts of $1,000 or a whole multiple of $1,000. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company and the Company promptly of the Securities or portions of Securities
to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities
to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
<PAGE>
53
(d) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(e) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to
be redeemed;
(f) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption date;
and
(g) 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
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such
event, the Company shall provide the Trustee with the information required by
this Section.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Securities called for redemption become due and payable
on the redemption date and at the redemption price stated in the notice.
Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price stated in the notice, plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date
that is on or prior to the date of redemption). Failure to give notice or
any defect in the notice to any Holder shall not affect the validity of the
notice to any other Holder.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date that is on
or prior to the
<PAGE>
54
date of redemption) on all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which have been
delivered by the Company to the Trustee for cancelation.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE IV
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly
pay the principal of and interest and Additional Amounts, if any, on the
Securities on the dates and in the manner provided in the Securities and in
this Indenture. Principal and interest shall be considered paid on the date
due if on such date the Trustee or the Paying Agent holds in accordance with
this Indenture money sufficient to pay timely all principal and interest then
due and the Trustee or the Paying Agent, as the case may be, is not
prohibited from paying such money to the Securityholders on that date
pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC REPORTS. Notwithstanding that the Company may
not be required to remain subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, the Company shall file with the SEC and provide
the Trustee and Holders of Securities with the annual reports and the
information, documents and other reports which are specified in Sections 13
and 15(d) of the Exchange Act, and, with respect to the annual consolidated
financial statements only, a report thereon by the Company's independent
auditors; PROVIDED, HOWEVER, that the Company shall not be so obligated to
file such information, documents and reports with the SEC if the SEC does not
permit such filings. The Company shall comply with the other provisions of
Section 314(a) of the Trust Indenture Act.
<PAGE>
55
SECTION 4.03. LIMITATION ON INDEBTEDNESS. The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, Incur any Indebtedness unless, after giving pro forma effect to
the Incurrence of such Indebtedness and the receipt and application of the
proceeds thereof, no Default or Event of Default would occur as a consequence
of, or be continuing following, such Incurrence and application and either
(a) the Consolidated Interest Coverage Ratio would exceed 2.5 to 1.0 or (b)
such Indebtedness is Permitted Indebtedness.
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS. (a) The Company
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, make any Restricted Payment if, at the time of and after giving
effect to the proposed Restricted Payment, (i) any Default or Event of
Default would have occurred and be continuing, (ii) the Company could not
Incur at least $1.00 of additional Indebtedness pursuant to clause (a) of
Section 4.03 or (iii) the aggregate amount expended or declared for all
Restricted Payments from September 29, 1997 would exceed the sum (without
duplication) of the following:
(A) 50% of the aggregate Consolidated Net Income of the Company
accrued on a cumulative basis commencing on the last day of the fiscal
quarter immediately preceding September 29, 1997, and ending on the last
day of the fiscal quarter ending on or immediately preceding the date of
such proposed Restricted Payment (or, if such aggregate Consolidated Net
Income shall be a loss, minus 100% of such loss), plus
(B) the aggregate net cash proceeds, or the Fair Market Value of
Property other than cash, received by the Company on or after September
29, 1997 from the issuance or sale (other than to a Subsidiary of the
Company) of Capital Stock of the Company or any options, warrants or
rights to purchase Capital Stock of the Company, plus
(C) the aggregate net cash proceeds, or the Fair Market Value of
Property other than cash, received by the Company as capital
contributions to the Company
<PAGE>
56
(other than from a Subsidiary of the Company) on or after September 29,
1997, plus
(D) the aggregate net cash proceeds received by the Company from
the issuance or sale (other than to any Subsidiary of the Company) on or
after September 29, 1997 of convertible Indebtedness that has been
converted into or exchanged for Capital Stock of the Company, together
with the aggregate cash received by the Company at the time of such
conversion or exchange or received by the Company from any such
conversion or exchange of convertible Indebtedness issued or sold (other
than to any Subsidiary of the Company) prior to September 29, 1997, plus
(E) to the extent not otherwise included in the Company's
Consolidated Net Income, an amount equal to the net reduction in
Investments made by the Company and its Restricted Subsidiaries
subsequent to September 29, 1997 in any Person resulting from (1)
payments of interest on debt, dividends, repayments of loans or advances
or other transfers or distributions of Property, in each case to the
Company or any Restricted Subsidiary from any Person other than the
Company or a Restricted Subsidiary, and in an amount not to exceed the
book value of such Investments previously made in such Person that were
treated as Restricted Payments, or (2) the designation of any
Unrestricted Subsidiary as a Restricted Subsidiary, and in an amount not
to exceed the lesser of (x) the book value of all Investments previously
made in such Unrestricted Subsidiary that were treated as Restricted
Payments and (y) the Fair Market Value of such Unrestricted Subsidiary,
plus
(F) $25,000,000.
(b) The limitations set forth in paragraph (a) above will not
prevent the following Restricted Payments so long as, at the time thereof, no
Default or Event of Default shall have occurred and be continuing (except in
the case of clause (i) below under which the payment of a dividend is
permitted):
(i) the payment of any dividend on Capital Stock or Redeemable Stock
of the Company or any Restricted Subsidiary within 60 days after the
declaration thereof, if at such declaration date such dividend
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57
could have been paid in compliance with paragraph (a) above;
(ii) the repurchase, redemption or other acquisition or retirement
for value of any Capital Stock of the Company or any of its Subsidiaries
held by any current or former officers, directors or employees of the
Company or any of its Subsidiaries pursuant to the terms of agreements
(including employment agreements) or plans approved by the Company's
Board of Directors, including any such repurchase, redemption,
acquisition or retirement of shares of such Capital Stock that is deemed
to occur upon the exercise of stock options or similar rights if such
shares represent all or a portion of the exercise price or are
surrendered in connection with satisfying United States or Canadian
Federal income tax obligations; PROVIDED, HOWEVER, that the aggregate
amount of such repurchases, redemptions, acquisitions and retirements
shall not exceed the sum of (A) $1,000,000 in any 12-month period and
(B) the aggregate net proceeds, if any, received by the Company during
such 12-month period from any issuance of such Capital Stock pursuant to
such agreements or plans;
(iii) the purchase, redemption or other acquisition or retirement
for value of any Capital Stock or Redeemable Stock of the Company or any
Restricted Subsidiary, in exchange for, or out of the aggregate net cash
proceeds of, a substantially concurrent issuance and sale (other than to
a Subsidiary of the Company or an employee stock ownership plan or trust
established by the Company or any of its Subsidiaries, for the benefit
of their employees) of Capital Stock of the Company;
(iv) the making of any principal payment on or the repurchase,
redemption, legal defeasance or other acquisition or retirement for
value, prior to any scheduled principal payment, scheduled sinking fund
payment or maturity, of any Subordinated Indebtedness (other than
Redeemable Stock) in exchange for, or out of the aggregate net cash
proceeds of, a substantially concurrent issuance and sale (other than to
a Subsidiary of the Company or an employee stock ownership plan or trust
established by the Company or any of its Subsidiaries, for the benefit
of their
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58
employees) of Capital Stock of the Company;
(v) the making of any principal payment on or the repurchase,
redemption, legal defeasance or other acquisition or retirement for
value of Subordinated Indebtedness in exchange for, or out of the
aggregate net cash proceeds of a substantially concurrent Incurrence
(other than a sale to a Subsidiary of the Company) of Subordinated
Indebtedness so long as such new Indebtedness is Permitted Refinancing
Indebtedness and (A) has an Average Life that is longer than the Average
Life of the Securities and (B) has a Stated Maturity for its final
scheduled principal payment that is more than one year after the Stated
Maturity of the final scheduled principal payment of the Securities; and
(vi) loans made to officers, directors or employees of the Company
or any Restricted Subsidiary approved by the Board of Directors (or a
duly authorized officer), the net cash proceeds of which are used solely
(A) to purchase common stock of the Company in connection with a
restricted stock or employee stock purchase plan, or to exercise stock
options received pursuant to an employee or director stock option plan
or other incentive plan, in a principal amount not to exceed the
exercise price of such stock options or (B) to refinance loans, together
with accrued interest thereon, made pursuant to item (A) of this clause
(vi).
The actions described in clauses (i) and (ii) of this paragraph (b) shall be
included in the calculation of the amount of Restricted Payments. The
actions described in clauses (iii), (iv), (v) and (vi) of this paragraph (b)
shall be excluded in the calculation of the amount of Restricted Payments;
PROVIDED that the net cash proceeds from any issuance or sale of Capital
Stock of the Company pursuant to such clauses (iii), (iv) or (vi) shall be
excluded from any calculations pursuant to clauses (B) or (C) under the
immediately preceding paragraph (a).
SECTION 4.05. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. The Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or permit to exist or become effective any consensual encumbrance or
restriction on the legal right of any Restricted Subsidiary to (i) pay
dividends, in cash or
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59
otherwise, or make any other distributions on or in respect of its Capital
Stock or Redeemable Stock, or pay any Indebtedness or other obligation owed,
to the Company or any other Restricted Subsidiary, (ii) make loans or
advances to the Company or any other Restricted Subsidiary or (iii) transfer
any of its Property to the Company or any other Restricted Subsidiary. Such
limitation will not apply (a) with respect to clauses (i), (ii) and (iii), to
encumbrances and restrictions (1) in Bank Credit Facilities and other
agreements and instruments, in each case as in effect on the Issue Date, (2)
relating to Indebtedness of a Restricted Subsidiary and existing at the time
it became a Restricted Subsidiary if such encumbrance or restriction was not
created in anticipation of or in connection with the transactions pursuant to
which such Restricted Subsidiary became a Restricted Subsidiary or (3) which
result from the renewal, refinancing, extension or amendment of an agreement
that is the subject of clause (a) (1) or (2) above or clause (b) (1) or (2)
below; PROVIDED that such encumbrance or restriction is not materially less
favorable to the Holders of Securities than those under or pursuant to the
agreement so renewed, refinanced, extended or amended, and (b) with respect
to clause (iii) only, to (1) any restriction on the sale, transfer or other
disposition of Property relating to Indebtedness that is permitted to be
Incurred and secured under Sections 4.03 and 4.10, (2) any encumbrance or
restriction applicable to Property at the time it is acquired by the Company
or a Restricted Subsidiary, so long as such encumbrance or restriction
relates solely to the Property so acquired and was not created in
anticipation of or in connection with such acquisition, (3) customary
provisions restricting subletting or assignment of leases and customary
provisions in other agreements that restrict assignment of such agreements or
rights thereunder and (4) customary restrictions contained in asset sale
agreements limiting the transfer of such assets pending the closing of such
sale.
SECTION 4.06. LIMITATION ON ASSET SALES. (a) The Company will
not, and will not permit any Restricted Subsidiary to, consummate any 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 of the Property subject to such Asset Sale and (ii) all
of the consideration
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60
paid to the Company or such Restricted Subsidiary in connection with such
Asset Sale is in the form of cash, cash equivalents, Liquid Securities,
Exchanged Properties or the assumption by the purchaser of liabilities of the
Company (other than liabilities of the Company that are by their terms
subordinated to the Securities) or liabilities of any Restricted Subsidiary
that made such Asset Sale (other than liabilities of any Subsidiary Guarantor
that are by their terms subordinated to such Subsidiary Guarantor's
Subsidiary Guarantee), in each case as a result of which the Company and its
remaining Restricted Subsidiaries are no longer liable for such liabilities
("PERMITTED CONSIDERATION"); PROVIDED, HOWEVER, that the Company and its
Restricted Subsidiaries shall be permitted to receive Property other than
Permitted Consideration, so long as the aggregate Fair Market Value of all
such Property other than Permitted Consideration received from Asset Sales
and held by the Company and the Restricted Subsidiaries at any one time shall
not exceed 10.0% of Adjusted Consolidated Net Tangible Assets.
The Net Available Cash from Asset Sales by the Company or a
Restricted Subsidiary may be applied by the Company, such Restricted
Subsidiary or another Restricted Subsidiary, to the extent the Company elects
(or is required by the terms of any Senior Indebtedness of the Company or a
Restricted Subsidiary), to (i) prepay, repay or purchase Senior Indebtedness
of the Company or a Subsidiary Guarantor or any Indebtedness of a Restricted
Subsidiary that is not a Subsidiary Guarantor (in each case excluding
Indebtedness owed to the Company or an Affiliate of the Company); (ii) to
reinvest in Additional Assets (including by means of an Investment in
Additional Assets by a Restricted Subsidiary with Net Available Cash received
by the Company or another Restricted Subsidiary) or (iii) purchase Securities
or purchase both Securities and one or more series or issues of other Pari
Passu Indebtedness on a pro rata basis (excluding Securities and Pari Passu
Indebtedness owned by the Company or an Affiliate of the Company).
(b) Any Net Available Cash from an Asset Sale not applied in
accordance with the preceding paragraph within 365 days from the date of such
Asset Sale will constitute "Excess Proceeds". When the aggregate amount of
Excess Proceeds exceeds $10,000,000, an offer to purchase Securities having
an aggregate principal amount equal to the aggregate amount of Excess
Proceeds (the "PREPAYMENT OFFER") must be made by the Company at a purchase
price equal to
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61
100% of the principal amount of such Securities plus accrued and unpaid
interest, if any, to the Purchase Date (as defined) in accordance with the
procedures (including prorating in the event of oversubscription) set forth
in this Indenture, but, if the terms of any Pari Passu Indebtedness require
that a Pari Passu Offer be made contemporaneously with the Prepayment Offer,
then the Excess Proceeds shall be prorated between the Prepayment Offer and
such Pari Passu Offer in accordance with the aggregate outstanding principal
amounts of the Securities and such Pari Passu Indebtedness, and the aggregate
principal amount of Securities for which the Prepayment Offer is made shall
be reduced accordingly. If the aggregate principal amount of Securities
tendered by Holders thereof exceeds the amount of available Excess Proceeds,
then such Excess Proceeds will be allocated pro rata according to the
principal amount of the Securities tendered and the Trustee will select the
Securities to be purchased in accordance with this Indenture. To the extent
that any portion of the amount of Excess Proceeds remains after compliance
with the second sentence of this paragraph and PROVIDED that all Holders of
Securities have been given the opportunity to tender their Securities for
purchase as described in the following paragraph in accordance with this
Indenture, the Company and its Restricted Subsidiaries may use such remaining
amount for purposes permitted by this Indenture and the amount of Excess
Proceeds will be reset to zero.
(c)(1) Within 30 days after the 365th day following the date of an
Asset Sale, the Company shall, if it is obligated to make an offer to
purchase the Securities pursuant to the preceding paragraph, send a written
Prepayment Offer notice, by first-class mail, to the Holders of the
Securities (the "PREPAYMENT OFFER NOTICE"), accompanied by such information
regarding the Company and its Subsidiaries as the Company believes will
enable such Holders of the Securities to make an informed decision with
respect to the Prepayment Offer (which at a minimum shall include (i) the
most recently filed Annual Report on Form 10-K (including audited
consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q of the Company and any
Current Report on Form 8-K of the Company filed subsequent to such Quarterly
Report, other than Current Reports describing Assets Sales otherwise
described in the offering materials, or
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62
corresponding successor reports (or, during any time that the Company is not
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, corresponding reports prepared pursuant to Section 4.02), (ii) a
description of material developments in the Company's business subsequent to
the date of the latest such reports and (iii) if material, appropriate pro
forma financial information). The Prepayment Offer Notice shall state, among
other things, (i) that the Company is offering to purchase Securities
pursuant to the provisions of this Indenture, (ii) that any Security (or any
portion thereof) accepted for payment (and duly paid on the Purchase Date)
pursuant to the Prepayment Offer shall cease to accrue interest on the
Purchase Date, (iii) that any Securities (or portions thereof) not properly
tendered will continue to accrue interest, (iv) the purchase price and
purchase date, which shall be, subject to any contrary requirements of
applicable law, no less than 30 days nor more than 60 days after the date the
Prepayment Offer Notice is mailed (the "PURCHASE DATE"), (v) the aggregate
principal amount of Securities to be purchased, (vi) a description of the
procedures which Holders of Securities must follow in order to tender their
Securities and the procedures that Holders of Securities must follow in order
to withdraw an election to tender their Securities for payment and (vii) all
other instructions and materials necessary to enable Holders to tender
Securities pursuant to the Prepayment Offer.
(2) Not later than the date upon which written notice of a
Prepayment Offer is delivered to the Trustee as provided above, the Company
shall deliver to the Trustee an Officers' Certificate as to (i) the amount of
the Prepayment Offer (the "OFFER AMOUNT"), (ii) the allocation of the Net
Available Cash from the Asset Sales pursuant to which such Prepayment Offer
is being made and (iii) the compliance of such allocation with the provisions
of Section 4.06(a). On such date, the Company shall also irrevocably deposit
with the Trustee or with the Paying Agent (or, if the Company or a Wholly
Owned Subsidiary is the Paying Agent, shall segregate and hold in trust) in
Permitted Short-Term Investments, maturing on the last day prior to the
Purchase Date or on the Purchase Date if funds are immediately available by
open of business, an amount equal to the Offer Amount to be held for payment
in accordance with the provisions of this Section. Upon the expiration of
the period for which the Prepayment Offer remains open (the "OFFER PERIOD"),
the Company shall deliver to the Trustee for cancelation the Securities or
portions thereof which
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63
have been properly tendered to and are to be accepted by the Company. The
Trustee or Paying Agent, as applicable, shall, on or promptly after the
Purchase Date, mail or deliver payment to each tendering Holder in the amount
of the purchase price. In the event that the aggregate purchase price of the
Securities delivered by the Company to the Trustee is less than the Offer
Amount, the Trustee shall deliver the excess to the Company immediately after
the expiration of the Offer Period for application in accordance with this
Section.
(3) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed,
to the Company at the address specified in the notice at least three
Business Days prior to the Purchase Date. Holders shall be entitled to
withdraw their election if the Trustee, or the Company receives not later
than one Business Day prior to the Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Security which was delivered for purchase by the
Holder and a statement that such Holder is withdrawing his election to have
such Security purchased. If at the expiration of the Offer Period the
aggregate principal amount of Securities surrendered by Holders exceeds the
Offer Amount, the Company shall select the Securities to be purchased on a
pro rata basis (with such adjustments as may be deemed appropriate by the
Company so that only Securities in denominations of $1,000, or integral
multiples thereof, shall be purchased). Holders whose Securities are
purchased only in part shall be issued new Securities equal in principal
amount to the unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section 4.06. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to
the surrendering Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Rule 14e-1 under the
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64
Exchange Act and any other securities laws or regulations thereunder to the
extent such laws and regulations are applicable in connection with the
purchase of Securities as described above. To the extent that the provisions
of any securities laws or regulations conflict with the provisions relating
to the Prepayment Offer, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations described above by virtue thereof.
SECTION 4.07. LIMITATION ON TRANSACTIONS WITH AFFILIATES. The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, conduct any business or enter into any transaction or
series of transactions (including the sale, transfer, disposition, purchase,
exchange or lease of Property, the making of any Investment, the giving of
any Guarantee or the rendering of any service) with or for the benefit of any
Affiliate of the Company (other than the Company or a Restricted Subsidiary),
unless (i) such transaction or series of transactions is on terms no less
favorable to the Company or such Restricted Subsidiary than those that could
be obtained in a comparable arm's-length transaction with a Person that is
not an Affiliate of the Company or such Restricted Subsidiary, and (ii) with
respect to a transaction or series of transactions involving aggregate
payments by or to the Company or such Restricted Subsidiary having a Fair
Market Value equal to or in excess of (a) $1,000,000 but less than
$7,500,000, an Officer of the Company certifies that such transaction or
series of transactions complies with clause (i) of this paragraph, as
evidenced by an Officer's Certificate delivered to the Trustee, (b)
$7,500,000 but less than $30,000,000, the Board of Directors of the Company
(including a majority of the disinterested members of such Board of
Directors) approves such transaction or series of transactions and certifies
that such transaction or series of transactions complies with clause (i) of
this paragraph, as evidenced by a certified resolution delivered to the
Trustee or (c) $30,000,000, (1) the Company receives from an independent,
nationally recognized investment banking firm or appraisal firm, in either
case specializing or having a specialty in the type and subject matter of the
transaction (or series of transactions) at issue, a written opinion that such
transaction (or series of transactions) is fair, from a financial point of
view, to the Company or such Restricted Subsidiary and (2) the Board of
Directors of the Company (including a majority of the disinterested members
of such Board of Directors) approves such transaction or series of
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65
transactions and certifies that such transaction or series of transactions
complies with clause (i) of this paragraph, as evidenced by a certified
resolution delivered to the Trustee.
The limitations of the preceding paragraph do not apply to (i) the
payment of reasonable and customary regular fees to directors of the Company
or any of its Restricted Subsidiaries who are not employees of the Company or
any of its Restricted Subsidiaries, (ii) indemnities of officers and
directors of the Company or any Subsidiary consistent with such Person's
charter, bylaws and applicable statutory provisions, (iii) any issuance of
securities, or other payments, awards or grants in cash, securities or
otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors of the
Company, (iv) loans made (a) to officers, directors or employees of the
Company or any Restricted Subsidiary approved by the Board of Directors (or
by a duly authorized officer) of the Company, the proceeds of which are used
solely to purchase common stock of the Company in connection with a
restricted stock or employee stock purchase plan, or to exercise stock
options received pursuant to an employee or director stock option plan or
other incentive plan, in a principal amount not to exceed the exercise price
of such stock options, or (b) to refinance loans, together with accrued
interest thereon, made pursuant to this clause (iv), (v) advances and loans
to officers, directors and employees of the Company or any Subsidiary;
PROVIDED such loans and advances (excluding loans or advances made pursuant
to the preceding clause (iv)) do not exceed $5,000,000 at any one time
outstanding, (vi) any Restricted Payment permitted to be paid pursuant to
Section 4.04, (vii) any transaction or series of transactions between the
Company and one or more Restricted Subsidiaries or between two or more
Restricted Subsidiaries in the ordinary course of business; PROVIDED that no
more than 10% of the total voting power of the Voting Stock of any such
Restricted Subsidiary is owned by an Affiliate of the Company (other than a
Restricted Subsidiary) or (viii) any transaction or series of transactions
pursuant to any agreement or obligation of the Company or any of its
Restricted Subsidiaries in effect on the Issue Date.
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66
SECTION 4.08. LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK
OF RESTRICTED SUBSIDIARIES. The Company will not (a) permit any Restricted
Subsidiary to issue any Capital Stock or Redeemable Stock other than to the
Company or one of its Wholly Owned Subsidiaries or (b) permit any Person
other than the Company or a Wholly Owned Subsidiary to own any Capital Stock
or Redeemable Stock of any other Restricted Subsidiary (other than directors'
qualifying shares), except, in each case, for (i) the sale of the Capital
Stock or Redeemable Stock of a Restricted Subsidiary owned by the Company or
any other Restricted Subsidiary effected in accordance with Section 4.06;
(ii) the issuance of Capital Stock or Redeemable Stock by a Restricted
Subsidiary to a Person other than the Company or a Restricted Subsidiary and
(iii) the Capital Stock or Redeemable Stock of a Restricted Subsidiary owned
by a Person at the time such Restricted Subsidiary became a Restricted
Subsidiary or acquired by such Person in connection with the formation of the
Restricted Subsidiary, or transfers thereof; PROVIDED that any sale or
issuance of Capital Stock of a Restricted Subsidiary shall be deemed to be an
Asset Sale to the extent the percentage of the total outstanding Voting Stock
of such Restricted Subsidiary owned directly and indirectly by the Company is
reduced as a result of such sale or issuance; PROVIDED FURTHER that if a
Person whose Capital Stock was issued or sold in a transaction described in
this paragraph is, as a result of such transaction, no longer a Restricted
Subsidiary, then the Fair Market Value of Capital Stock of such Person
retained by the Company and the other Restricted Subsidiaries shall be
treated as an Investment for purposes of Section 4.04. In the event of the
consummation of a sale of all the Capital Stock of a Restricted Subsidiary
pursuant to the foregoing clause (i) and the execution and delivery of a
supplemental indenture in form satisfactory to the Trustee, any such
Restricted Subsidiary that is also a Subsidiary Guarantor shall be released
from all its obligations under its Subsidiary Guarantee.
SECTION 4.09. CHANGE OF CONTROL. (a) Upon the occurrence of a
Change of Control, each Holder of Securities shall have the right to require the
Company to repurchase all or any part (equal to $1,000 in principal amount or an
integral multiple thereof) of such Holder's Securities pursuant to the offer
described below (the "CHANGE OF CONTROL OFFER") at a purchase price in cash
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of purchase, subject to the
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67
right of holders of record on the relevant record date to receive interest
due on the relevant interest payment date (the "CHANGE OF CONTROL PAYMENT").
(b) Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder stating, among other things: (i) that a
Change of Control has occurred and a Change of Control Offer is being made
pursuant to this Indenture and that all Securities (or portions thereof)
properly tendered will be accepted for payment; (ii) the purchase price and
the purchase date, which shall be, subject to any contrary requirements of
applicable law, no fewer than 30 days nor more than 60 days from the date the
Company mails such notice (the "CHANGE OF CONTROL PAYMENT DATE"); (iii) that
any Security (or portion thereof) accepted for payment (and duly paid on the
Change of Control Payment Date) pursuant to the Change of Control Offer shall
cease to accrue interest on the Change of Control Payment Date; (iv) that any
Securities (or portions thereof) not properly tendered will continue to
accrue interest; (v) a description of the transaction or transactions
constituting the Change of Control; (vi) the procedures that Holders of
Securities must follow in order to tender their Securities (or portions
thereof) for payment and the procedures that Holders of Securities must
follow in order to withdraw an election to tender Securities (or portions
thereof) for payment; and (vii) all other instructions and materials
necessary to enable Holders to tender Securities pursuant to the Change of
Control Offer. Prior to the mailing of the notice to Holders of Securities
described above, but in any event within 30 days following any Change of
Control, the Company covenants to (A) repay or cause to be repaid in full all
Indebtedness of the Company and any Subsidiary Guarantor that would prohibit
the repurchase of the Securities pursuant to such Change of Control Offer or
(B) obtain any requisite consents under instruments governing any such
Indebtedness of the Company and any Subsidiary Guarantor to permit the
repurchase of the Securities. The Company shall first comply with the
covenant in the preceding sentence before it shall repurchase Securities
pursuant to this covenant.
(c) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed,
to the Company at the address specified in the notice at least three Business
Days prior to the Change of Control Payment Date. Holders shall be entitled
to withdraw their election if the Trustee or the
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68
Company receives not later than one Business Day prior to the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security
which was delivered for purchase by the Holder and a statement that such
Holder is withdrawing his election to have such Security purchased.
(d) On or prior to the Change of Control Payment Date, the Company
shall irrevocably deposit with the Trustee or with the Paying Agent (or, if
the Company or any Wholly Owned Subsidiary is acting as the Paying Agent,
segregate and hold in trust) in cash an amount equal to the Change of Control
Payment payable to the Holders entitled thereto, to be held for payment in
accordance with the provisions of this Section.
(e) On the Change of Control Payment Date, the Company shall
deliver to the Trustee the Securities or portions thereof which have been
properly tendered to and are to be accepted by the Company for payment. The
Trustee or Paying Agent, as applicable, shall, on or promptly after the Change
of Control Payment Date, mail or deliver payment to each tendering Holder of
the Change of Control Payment. In the event that the aggregate Change of
Control Payment delivered by the Company to the Trustee is less than the amount
deposited with the Trustee, the Trustee shall deliver the excess to the Company
immediately after the Change of Control Payment Date.
(f) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party (including the Company or
another Subsidiary of the Company) 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 purchases all Securities validly tendered and not withdrawn under
such Change of Control Offer.
(g) The Company will comply, to the extent applicable, with the
requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the purchase of Securities in connection with a
Change of Control. To the extent that the
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69
provisions of any securities laws or regulations conflict with the provisions
relating to the Change of Control Offer, the Company the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations described above by virtue thereof.
SECTION 4.10. LIMITATION ON LIENS. The Company will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, enter into,
create, Incur, assume or suffer to exist any Lien on or with respect to any
Property of the Company or such Restricted Subsidiary, whether owned on the
Issue Date or acquired thereafter, or any interest therein or any income or
profits therefrom, unless the Securities or any Subsidiary Guarantee of such
Restricted Subsidiary, as applicable, are secured equally and ratably with
(or prior to) any and all other obligations secured by such Lien, except that
the Company and its Restricted Subsidiaries may enter into, create, incur,
assume or suffer to exist Liens securing Senior Indebtedness and Permitted
Liens.
SECTION 4.11. COMPLIANCE CERTIFICATE. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the
Company an Officers' Certificate stating that in the course of the
performance by the signers of their duties as Officers of the Company they
would normally have knowledge of any Default and whether or not the signers
know of any Default that occurred during such period. If they do, the
certificate shall describe the Default, its status and what action the
Company is taking or proposes to take with respect thereto. The Company also
shall comply with TIA Section 314(a)(4).
SECTION 4.12. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company shall execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
SECTION 4.13. FUTURE SUBSIDIARY GUARANTORS. The Company shall
cause each Domestic Restricted Subsidiary having an aggregate of $10,000,000 or
more of Indebtedness and Preferred Stock outstanding at any time to promptly
execute and deliver to the Trustee a Subsidiary Guarantee. In addition, any
Restricted Subsidiary that Guarantees Indebtedness of the Company will be
required to execute and deliver to the Trustee a Subsidiary Guarantee.
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SECTION 4.14. INCURRENCE OF LAYERED INDEBTEDNESS. (a) The Company
will not Incur any Indebtedness which is subordinated or junior in right of
payment to any Senior Indebtedness of the Company unless such Indebtedness
constitutes Indebtedness junior to, or PARI PASSU with, the Securities in
right of payment and (b) no Subsidiary Guarantor will Incur any Indebtedness
that is subordinated or junior in right of payment to any Senior Indebtedness
of such Subsidiary Guarantor unless such Indebtedness constitutes
Indebtedness which is junior to, or PARI PASSU with, such Subsidiary
Guarantor's Subsidiary Guarantee in right of payment.
SECTION 4.15. RESTRICTED AND UNRESTRICTED SUBSIDIARIES. Unless
defined or designated as an Unrestricted Subsidiary, any Person that becomes
a Subsidiary of the Company or any of its Restricted Subsidiaries shall be
classified as a Restricted Subsidiary subject to the provisions of the next
paragraph. The Company may designate a Subsidiary (including a newly formed
or newly acquired Subsidiary) of the Company or any of its Restricted
Subsidiaries as an Unrestricted Subsidiary if (a) such Subsidiary does not at
such time own any Capital Stock or Indebtedness of, or own or hold any Lien
on any Property of, the Company or any other Restricted Subsidiary, (b) such
Subsidiary does not at such time have any Indebtedness or other obligations
which, if in default, would result (with the passage of time or notice or
otherwise) in a default on any Indebtedness of the Company or any Restricted
Subsidiary and (c)(i) such designation is effective immediately upon such
Subsidiary becoming a Subsidiary of the Company or of a Restricted
Subsidiary, (ii) the Subsidiary to be so designated has total assets of
$1,000 or less or (iii) if such Subsidiary has assets greater than $1,000,
then such redesignation as an Unrestricted Subsidiary is deemed to constitute
a Restricted Payment in an amount equal to the Fair Market Value of the
Company's direct and indirect ownership interest in such Subsidiary and such
Restricted Payment would be permitted to be made at the time of such
designation under Section 4.04. Except as provided in the second sentence
of this paragraph, no Restricted Subsidiary may be redesignated as an
Unrestricted Subsidiary. The designation of an Unrestricted Subsidiary or
removal of such designation shall be made by
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the Board of Directors of the Company or a committee thereof pursuant to a
certified resolution delivered to the Trustee and shall be effective as of
the date specified in the applicable certified resolution, which shall not be
prior to the date such certified resolution is delivered to the Trustee.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, take any action or enter into any transaction or series of
transactions that would result in a Person becoming a Restricted Subsidiary
(whether through an acquisition or otherwise) unless, after giving effect to
such action, transaction or series of transactions, on a pro forma basis, (i)
the Company could Incur at least $1.00 of additional Indebtedness pursuant to
clause (a) of Section 4.03 and (ii) no Default or Event of Default would
occur or be continuing.
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. The
Company shall not consolidate with or merge with or into any Person, or
convey, transfer or lease, in one transaction or a series of transactions,
all or substantially all the Property of the Company and its Restricted
Subsidiaries, taken as a whole, unless:
(a) the resulting, surviving or transferee person (the "SUCCESSOR
COMPANY") shall be a Person organized or existing under the laws of (i)
the United States of America, any State thereof or the District of
Columbia or (ii) Canada or any province thereof;
(b) a supplemental indenture is executed and delivered to the
Trustee, in form satisfactory to the Trustee, by the Successor Company
expressly assuming, if the Successor Company is not the Company, the
obligations of the Company to pay the principal of and interest on the
Securities and to perform all the covenants of the Company under this
Indenture in which case the Successor Company shall be considered the
issuer of the Securities;
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(c) each Subsidiary Guarantor shall execute and deliver to the
Trustee a supplemental indenture, in form satisfactory to the Trustee,
confirming the obligation of such Subsidiary Guarantor to pay the
principal of and interest on the Securities pursuant to such Subsidiary
Guarantor's Subsidiary Guarantee;
(d) in the case of a conveyance, transfer or lease of all or
substantially all the Property of the Company and its Restricted
Subsidiaries, taken as a whole, such Property shall have been so
conveyed, transferred or leased as an entirety or virtually as an
entirety to one Person;
(e) immediately after giving effect to such transaction (and
treating, for purposes of this clause (e) and clauses (f) and (g) below,
any Indebtedness which becomes or is anticipated to become an obligation
of the Successor Company or any Restricted Subsidiary as a result of
such transaction as having been Incurred by such Successor Company or
such Restricted Subsidiary at the time of such transaction), no Default
or Event of Default shall have occurred and be continuing;
(f) other than with respect to the consolidation of the Company
with or merger of the Company with or into, or the conveyance, transfer
or lease of all or substantially all the Property of the Company and its
Restricted Subsidiaries, taken as a whole, to a Wholly Owned Subsidiary,
immediately after giving effect to such transaction, the Successor
Company would be able to Incur an additional $1.00 of Indebtedness
pursuant to clause (a) of Section 4.03;
(g) other than with respect to the consolidation of the Company
with or merger of the Company with or into, or the conveyance, transfer
or lease of all or substantially all the Property of the Company and its
Restricted Subsidiaries, taken as a whole, to a Wholly Owned Subsidiary,
immediately after giving effect to such transaction, the Successor
Company shall have Consolidated Net Worth in an amount that is not less
than the Consolidated Net Worth of the Company immediately prior to such
transaction; and
(h) the Company shall have delivered to the
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Trustee an Officer's Certificate, stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with
this Indenture.
The Successor Company shall be the successor to the Company and
shall succeed to, and be substituted for, and may exercise every right and
power of the Company under this Indenture, and, except in the case of the
lease of all or substantially all the Property of the Company and its
Restricted Subsidiaries, taken as a whole, the Company shall be released from
its obligations under this Indenture.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. The following events shall be
"Events of Default":
(a) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, whether or not such payment shall
be prohibited by Article X, and such default continues for a period of
30 days;
(b) the Company defaults in the payment of the principal (and
premium, if any) of any Security when the same becomes due and payable
at its Stated Maturity, upon optional redemption, upon required
repurchase, upon declaration or otherwise, whether or not such payment
shall be prohibited by Article X;
(c) the Company fails to comply with Article V;
(d) default in the performance, or breach, of any covenant or
warranty of the Company or any Subsidiary Guarantor in this Indenture
(other than a covenant or warranty addressed in clauses (a), (b) or (c)
above) and continuance of such default or breach for a period of 60 days
after the notice specified below;
(e) default by the Company or any Restricted Subsidiary under any
Indebtedness for borrowed money (other than Non-recourse Purchase Money
Indebtedness) of the Company or any Restricted Subsidiary which
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results in acceleration of the maturity of such Indebtedness, or the
failure to pay such Indebtedness at maturity, in an amount greater than
$5,000,000 or its foreign currency equivalent at the time if such
Indebtedness is not discharged or such acceleration is not rescinded or
annulled within 10 days after the notice specified below;
(f) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in an
involuntary case;
(iii) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(iv) makes a general assignment for the benefit of its creditors
or files a proposal or other scheme of arrangement involving the
rescheduling or composition of its indebtedness; or
(v) files a petition in bankruptcy or an answer or consent
seeking reorganization or relief or consents to the filing of such
petition in bankruptcy or the appointment of or taking possession
by a Custodian;
or takes any comparable action under any foreign laws relating to
insolvency;
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property;
(iii) orders the winding up or liquidation of the Company or any
Significant Subsidiary; or
(iv) any similar relief is granted under any
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foreign laws;
and in each such case the order or decree remains unstayed and in effect
for 60 days;
(h) one or more final judgments or orders by a court of competent
jurisdiction are entered against the Company or any Restricted
Subsidiary in an uninsured or unindemnified aggregate amount outstanding
at any time in excess of $5,000,000 and such judgments or orders are not
discharged, waived, stayed, satisfied or bonded for a period of 60
consecutive days;
(i) a Subsidiary Guarantee ceases to be in full force and effect
(other than in accordance with the terms of this Indenture and such
Subsidiary Guarantee) or a Subsidiary Guarantor denies or disaffirms its
obligations under its Subsidiary Guarantee.
The foregoing shall constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or
involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
The term "BANKRUPTCY LAW" means Title 11, UNITED STATES CODE, or
any similar Federal or state law for the relief of debtors, or the Bankruptcy
and Insolvency Act (Canada), the Companies' Creditors Arrangements Act
(Canada) or any similar federal or provincial law in Canada for the relief of
debtors. The term "CUSTODIAN" means any receiver, trustee, assignee,
liquidator, custodian or similar official under any Bankruptcy Law.
A Default under clause (d) is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
outstanding Securities notify the Company in writing of such Default and the
Company does not cure such Default within the time specified after receipt of
such notice. Such notice must specify the Default, demand that it be
remedied and state that such notice is a "Notice of Default."
The Company shall deliver to the Trustee, within
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30 days after the occurrence thereof, written notice in the form of an
Officers' Certificate of any Event of Default and any event which with the
giving of notice or the lapse of time would become an Event of Default, its
status and what action the Company is taking or proposes to take with respect
thereto.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in Section 6.01(f) or (g) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or
the Holders of at least 25% in aggregate principal amount of the Securities
by notice to the Company and the Trustee, may declare the principal of the
Securities to be due and payable. Upon such a declaration, such principal
shall be due and payable immediately. If an Event of Default specified in
Section 6.01(f) or (g) with respect to the Company occurs, the principal of
the Securities shall automatically and without any action by the Trustee or
any Holder, become immediately due and payable. The Holders of a majority in
aggregate principal amount of the outstanding Securities by notice to the
Trustee and the Company may rescind any declaration of acceleration if the
rescission would not conflict with any judgment or decree, and if all
existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration.
No such rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Securityholder in exercising any
right or remedy accruing upon an Event of Default shall not impair the right
or remedy or constitute a waiver of or acquiescence in the Event of Default.
No remedy is exclusive of any other remedy. All available remedies are
cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
aggregate principal amount of the
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Securities by notice to the Trustee may waive an existing Default and its
consequences except (a) a Default in the payment of the principal of or
interest on a Security or (b) a Default in respect of a provision that under
Section 9.02 cannot be amended without the consent of each Securityholder
affected. When a Default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other Default or impair any consequent
right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in
aggregate principal amount of the Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
of exercising any trust or power conferred on the Trustee with respect to the
Securities. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or, subject to Section 7.01, that the
Trustee determines is unduly prejudicial to the rights of other
Securityholders or would involve the Trustee in personal liability; PROVIDED,
HOWEVER, that the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to reasonable indemnity
against all losses and expenses caused by taking or not taking such action.
SECTION 6.06. LIMITATION ON SUITS. A Securityholder may not
pursue any remedy with respect to this Indenture or the Securities unless:
(a) such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount of
the Securities then outstanding shall have made a written request, and
such Holder of or Holders shall have offered reasonable indemnity, to
the Trustee to pursue such proceeding as trustee; and
(c) the Trustee has failed to institute such proceeding and has not
received from the Holders of at least a majority in aggregate principal
amount of the Securities outstanding a direction inconsistent with such
request, within 60 days after such notice, request and offer.
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The foregoing limitations on the pursuit of remedies by a
Securityholder shall not apply to a suit instituted by a Holder of Securities
for the enforcement of payment of the principal of or interest on such
Security on or after the applicable due date specified in such Security. A
Securityholder may not use this Indenture to prejudice the rights of another
Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Securities held
by such Holder, on or after the respective due dates expressed in this
Securities, 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 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount then due and owing (together with interest
on any unpaid interest to the extent lawful) and the amounts provided for in
Section 7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may
file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the
Securityholders allowed in any judicial proceedings relative to the Company,
their creditors or their property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee
in bankruptcy or other Person performing similar functions, and any Custodian
in any such judicial proceeding is hereby authorized by each Holder to make
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 it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and its counsel, and any other
amounts due the Trustee under Section 7.07.
SECTION 6.10. PRIORITIES. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property
in the following
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order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness of the Company to the
extent required by Article X and Article XII;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.
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 Trustee, a court
in its discretion may require the filing by any party litigant in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys' fees, against
any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section
does not apply to a suit by the Trustee, a suit by a Holder pursuant to
Section 6.07 or a suit by Holders of more than 10% in aggregate principal
amount of the Securities.
SECTION 6.12. WAIVER OF STAY OR EXTENSION LAWS. The Company (to
the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the
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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 shall not 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 had been enacted.
ARTICLE VII
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture 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, 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 liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless
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it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) 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.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter
stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require the Company to deliver an Officers' Certificate or an Opinion of
Counsel. The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on the Officers' Certificate or Opinion of
Counsel.
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(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture
and the Securities shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent,
Registrar or co-registrar may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in this Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is known to a Trust Officer, the Trustee shall mail to
each Securityholder notice of the Default within 30 days after it is known to
a Trust Officer or written notice of it is received by a Trust Officer.
Except in the case of a Default in payment of principal of or interest on any
Security, the Trustee may withhold the notice if and so long as a committee
of its
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Trust Officers in good faith determines that withholding the notice is in the
interests of Securityholders. Where notice of the occurrence of any Default
is given by the Trustee under this Section and the Default is thereafter
cured, the Trustee, within 30 days after the curing of the Default is known
to a Trust Officer, shall mail to all Securityholders notice that the Default
is no longer continuing.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. As promptly as
practicable after each May 15 beginning with May 15, 1999, and in any event
prior to July 15 in each year, the Trustee shall mail to each Securityholder
a brief report dated as of May 15 each year that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay
to the Trustee from time to time reasonable compensation for its services.
The Trustee's compensation shall not be limited by any law on compensation of
a trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Company shall indemnify the Trustee against any
and all loss, liability or expense (including attorneys' fees) incurred by it
in connection with the acceptance and administration of this trust and the
performance of its duties hereunder. 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
may have separate counsel and the Company shall pay the fees and expenses of
such counsel. The Company need not reimburse any expense or indemnify
against any loss, liability or expense incurred by the Trustee through the
Trustee's own wilful misconduct, negligence or bad faith. The Company need
not pay for any settlement made by the Trustee without
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the Company's consent, such consent not to be unreasonably withheld.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust
to pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(f) or (g), the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. The Trustee may resign at
any time by so notifying the Company. The Holders of a majority in aggregate
principal amount of the Securities may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company, or by the
Holders of a majority in aggregate principal amount of the Securities and
such Holders do not reasonably promptly appoint a successor Trustee, or if a
vacancy exists in the office of Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the Company shall
promptly appoint a successor Trustee. No successor Trustee shall accept its
appointment unless, at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article VII.
A successor Trustee shall deliver a written
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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 Securityholders. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor
Trustee, subject to the lien provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in aggregate principal amount of the Securities may petition
any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts
created by this Indenture any of the Securities shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder
or in the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Securities
or in this Indenture provided
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that the certificate of the Trustee shall have.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in
its most recent published annual report of condition. The Trustee shall
comply with TIA Section 310(b); PROVIDED, HOWEVER, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
If at any time the Trustee shall cease to be eligible in accordance with this
Section, it shall resign promptly in the manner and with the effect specified
in this Article VII.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or
been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.
(a) When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07) for cancelation or
(ii) all outstanding Securities have become due and payable, whether at
maturity or as a result of the mailing of a notice of redemption pursuant to
Article III and the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding Securities,
including interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.07), and if in either case the
Company pays all other sums payable hereunder, then this Indenture shall,
subject to Section 8.01(c), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company
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accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company, as the case may be.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time
may terminate (i) all its obligations under the Securities and this Indenture
("LEGAL DEFEASANCE OPTION") or (ii) its obligations under Sections 4.02,
4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.13, 4.14 and 4.15, the
operation of Sections 6.01(d) (to the extent relating to such other
Sections), 6.01(e), 6.01(f), 6.01(g), 6.01(h), 6.01(i) and 6.01(j), the
obligations under Sections 5.01(f), 5.01(g) and the related operation of
Section 6.01(c) ("COVENANT DEFEASANCE OPTION"). The Company may exercise its
legal defeasance option notwithstanding its prior exercise of its covenant
defeasance option.
If the Company exercises its legal defeasance option, payment of
the Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities
may not be accelerated because of an Event of Default specified in Sections
6.01(c) and 6.01(d) (with respect to the provisions of Articles 4 and 5
referred to in the immediately preceding paragraph) and Sections 6.01(e),
6.01(f), 6.01(g), 6.01(h) and 6.01(i). If the Company exercises its legal
defeasance option or its covenant defeasance option, each Subsidiary
Guarantor, if any, shall be released from all its obligations under its
Subsidiary Guarantee.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the
discharge of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.04, 2.05, 2.06, 2.07, 4.17, 7.07, 7.08, 8.05 and
8.06 shall survive until the Securities have been paid in full. Thereafter,
the Company's obligations in Sections 7.07 and 8.05 shall survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE. The Company may exercise
its legal defeasance option or its covenant defeasance option only if:
(a) the Company irrevocably deposits in trust with
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the Trustee money or U.S. Government Obligations for the payment of
principal of and interest on the Securities to maturity or redemption,
as the case may be;
(b) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and
in such amounts as will be sufficient to pay principal and interest when
due on all the Securities to maturity or redemption, as the case may be;
(c) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(f) or (g) with respect to
the Company occurs which is continuing at the end of the period;
(d) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article X;
(e) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under the
Investment Company Act of 1940;
(f) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (B) since the
date of this Indenture there has been a change in the applicable United
States Federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the
Securityholders will not recognize income, gain or loss for United
States Federal income tax purposes as a result of such defeasance and
will be subject to United States Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such defeasance had not occurred;
(g) in the case of the covenant defeasance option,
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the Company shall have delivered to the Trustee an Opinion of Counsel in
the United States to the effect that the Securityholders will not
recognize income, gain or loss for United States Federal income tax
purposes as a result of such covenant defeasance and will be subject to
United States Federal income tax on the same amount, in the same manner
and at the same times as would have been the case if such covenant
defeasance had not occurred; and
(h) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent to
the defeasance and discharge of the Securities as contemplated by this
Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date
in accordance with Article 3.
SECTION 8.03. APPLICATION OF TRUST MONEY. The Trustee shall hold
in trust money or U.S. Government Obligations deposited with it pursuant to
this Article VIII. It shall apply the deposited money and the money from
U.S. Government Obligations through the Paying Agent and in accordance with
this Indenture to the payment of principal of and interest on the Securities.
Money and securities so held in trust are not subject to Article X.
SECTION 8.04. REPAYMENT TO THE COMPANY. The Trustee and the
Paying Agent shall promptly turn over to the Company upon request any excess
money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to
the Company for payment as general creditors.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Company
shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or
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the principal and interest received on such U.S. Government Obligations.
SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
this Article VIII by reason of any legal proceeding or by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with this Article VIII; PROVIDED,
HOWEVER, that, if the Company has made any payment of interest on or
principal of any Securities because of the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such
Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the
Trustee may amend this Indenture or the Securities without notice to or
consent of any Securityholder:
(a) to cure any ambiguity, omission, defect or inconsistency;
(b) to comply with Article V;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to make any change in Article X or Article XII that would limit
or terminate the benefits available to any holder of Senior Indebtedness
of the Company or any Subsidiary Guarantor (or Representatives therefor)
under Article X or Article XII, respectively;
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(e) to add or to remove Subsidiary Guarantors when permitted by the
terms hereof, or to secure the Securities;
(f) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(g) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under
the TIA; or
(h) to make any change that does not adversely affect the rights of
any Securityholder in any material respect.
An amendment under this Section may not make any change that
adversely affects the rights under Article X or Article XII of any holder of
Designated Senior Indebtedness then outstanding unless the holders of such
Designated Senior Indebtedness (or their Representative) consent in writing
to such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section.
SECTION 9.02. WITH CONSENT OF HOLDERS. The Company and the
Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities. However, without
the consent of each Securityholder affected thereby an amendment or waiver
may not:
(a) reduce the amount of Securities whose Holders must consent to
an amendment or waiver;
(b) reduce the rate of or change the time for payment of interest
on any Security;
(c) reduce the principal of or extend the Stated Maturity of any
Security;
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(d) reduce the premium payable upon the redemption or repurchase of
any Security in accordance with Article III or Section 4.06 or 4.09;
(e) at any time after a Change of Control or an Asset Sale has
occurred, change the time at which the Change of Control Offer or
Prepayment Offer relating thereto must be made or at which the
Securities must be repurchased pursuant to such Change of Control Offer
or Prepayment Offer;
(f) make any Security payable in a currency other than that stated
in the Security;
(g) make any change in Article X or Article XII that adversely affects
the rights of any Securityholder under Article X or Article XII;
(h) make any change in any Subsidiary Guarantee that would
adversely affect the Securityholders;
(i) impair the right of any Holder to institute suit for
enforcement of any payment on or with respect to such Holder's
Securities or any Subsidiary Guarantee;
(j) release any security that may have been granted to the Trustee
in respect of the Securities;
(k) make any change in Section 6.04 or 6.07 or the second sentence
of this Section; and
(l) cause the Company or any Subsidiary Guarantor to be required to
make any deduction or withholding from payments made under or with
respect to the Securities or any Subsidiary Guarantee.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article X or Article XII of any holder of
Designated Senior Indebtedness
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then outstanding unless the holders of such Designated Senior Indebtedness
(or their Representative) consent in writing to such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every
amendment to this Indenture or the Securities shall comply with the TIA as
then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same debt as the consenting Holder's Security,
even if notation of the consent or waiver is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent or
waiver as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date the amendment or waiver
becomes effective. After an amendment or waiver becomes effective, it shall
bind every Securityholder. An amendment or waiver becomes effective upon the
execution of such amendment or waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to
be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such
Persons continue to be Holders after such record date. No such consent shall
be valid or effective for more than 120 days after such record date.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. If an
amendment changes the terms of a Security, the Trustee may require the Holder
of the Security to deliver it to the Trustee. The Trustee may place an
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appropriate notation on the Security regarding the changed terms and return
it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign
any amendment authorized pursuant to this Article 9 if such amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel of the Company stating that such amendment is authorized or permitted
by this Indenture.
SECTION 9.07. PAYMENT FOR CONSENT. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fee or otherwise, to any
Holder for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this Indenture or the Securities unless such
consideration is offered to be paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating
to such consent, waiver or agreement.
ARTICLE X
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE. The Company agrees, and
each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities is subordinated in right of payment, to the
extent and in the manner provided in this Article X, to the payment when due
of all Senior Indebtedness of the Company and that the subordination is for
the benefit of and enforceable by the holders of such Senior Indebtedness of
the Company. The Securities shall in all respects rank PARI PASSU with all
existing and future Pari Passu Indebtedness
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of the Company and senior to any future Subordinated Indebtedness of the
Company, and only Senior Indebtedness of the Company shall rank senior to the
Securities in accordance with the provisions set forth herein. All
provisions of this Article X shall be subject to Section 10.12.
SECTION 10.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any
payment or distribution of the assets of the Company to creditors upon a
total or partial liquidation or a total or partial dissolution of the Company
or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its Property:
(a) holders of Senior Indebtedness of the Company shall be entitled
to receive payment in full in cash of such Senior Indebtedness before
Securityholders shall be entitled to receive any payment of principal of
or interest on the Securities; and
(b) until such Senior Indebtedness is paid in full in cash, any
distribution made by or on behalf of the Company to which
Securityholders would be entitled but for this Article X shall be made
to holders of such Senior Indebtedness as their interests may appear,
except that all Securityholders may receive and retain shares of stock
and any debt securities that are subordinated to all Senior Indebtedness
of the Company to at least the same extent as the Securities.
SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS. The Company may
not pay the principal of or interest on the Securities or make any deposit
pursuant to Section 8.01 and may not repurchase, redeem or otherwise retire
any Securities (collectively, "pay the Securities") if (a) any principal,
interest or other amounts due in respect of any Senior Indebtedness of the
Company is not paid within any applicable grace period (including at
maturity) or (b) any other default on Senior Indebtedness of the Company
occurs and the maturity of such Senior Indebtedness is accelerated in
accordance with its terms unless, in either case, (i) the default has been
cured or waived and any such acceleration has been rescinded or (ii) such
Senior Indebtedness has been paid in full; PROVIDED, HOWEVER, that the
Company may pay the Securities without regard to the foregoing if the Company
and the Trustee receive written notice approving such payment from the
Representative of each issue of
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Designated Senior Indebtedness of the Company. During the continuance of any
default (other than a default described in clause (a) or (b) of the preceding
sentence) with respect to any Designated Senior Indebtedness of the Company
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect such
acceleration), the Company may not pay the Securities for a period (a
"PAYMENT BLOCKAGE PERIOD") commencing upon the receipt by the Company and the
Trustee of written notice of such default from the Representative of the
holders of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period (a "PAYMENT BLOCKAGE NOTICE") and ending 179
days after receipt of such notice by the Company and the Trustee unless
earlier terminated (a) by written notice to the Trustee and the Company from
the Representative who gave such Payment Blockage Notice, (b) because such
Designated Senior Indebtedness has been repaid in full or (c) because the
default giving rise to such Payment Blockage Notice is no longer continuing.
Notwithstanding the provisions described in the immediately preceding
sentence, unless the holders of such Designated Senior Indebtedness or the
Representative of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness and not rescinded such acceleration, the
Company may (unless otherwise prohibited as described in the first sentence
of this paragraph) resume payments on the Securities after such Payment
Blockage Period. No more than one Payment Blockage Notice may be given in any
consecutive 360-day period regardless of the number of defaults with respect
to one or more issues of Senior Indebtedness of the Company.
SECTION 10.04. ACCELERATION OF PAYMENT OF SECURITIES. If payment
of the Securities is accelerated because of an Event of Default, the Company
or the Trustee shall promptly notify the holders of the Designated Senior
Indebtedness of the Company (or their Representatives) of the acceleration.
Failure to give such notice shall not affect the subordination of the
Securities to Senior Indebtedness of the Company or the application of the
other provisions of this Article X.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a
distribution or payment is made to Securityholders, the Trustee or any Paying
Agent that
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because of this Article X should not have been made to them, such
Securityholders, the Trustee or such Paying Agent, as applicable, shall hold
it in trust for holders of Senior Indebtedness of the Company and promptly
pay it over to them as their interests may appear.
SECTION 10.06. SUBROGATION. After all Senior Indebtedness of the
Company is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness.
A distribution made under this Article X to holders of such Senior
Indebtedness of the Company which otherwise would have been made to
Securityholders is not, as between the Company and Securityholders, a payment
by the Company on such Senior Indebtedness.
SECTION 10.07. RELATIVE RIGHTS. This Article X defines the
relative rights of Securityholders and holders of Senior Indebtedness of the
Company. Nothing in this Indenture shall:
(a) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(b) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or an Event of Default, subject to the
rights of holders of Senior Indebtedness of the Company to receive
distributions otherwise payable to Securityholders.
SECTION 10.08. SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY.
No right of any holder of Senior Indebtedness of the Company to enforce the
subordination of the Indebtedness evidenced by the Securities shall be
impaired by any act or failure to act by the Company or by its failure to
comply with this Indenture. The holders of Senior Indebtedness of the
Company may extend, renew, modify or amend the terms of such Senior
Indebtedness or any security therefor and release, sell or exchange such
security and otherwise deal freely with the Company, all without affecting
the liabilities and obligations of the parties to this Indenture or the
Holders.
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98
SECTION 10.09. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding Section 10.03, the Trustee or Paying Agent may continue to
make payments on the Securities and shall not be charged with knowledge of
the existence of facts that would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of such payment, a
Trust Officer receives notice that payments may not be made under this
Article X. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness of the Company may give the
notice; PROVIDED, HOWEVER, that, if an issue of Senior Indebtedness of the
Company has a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness of the Company with the same rights it would have if it were not
Trustee. The Registrar and co-registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth
in this Article X with respect to any Senior Indebtedness of the Company
which may at any time be held by it, to the same extent as any other holder
of such Senior Indebtedness; and nothing in Article VII shall deprive the
Trustee of any of its rights as such holder. Nothing in this Article X shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
7.07.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever
a distribution is to be made or a notice given to holders of Senior
Indebtedness of the Company, the distribution may be made and the notice
given to their Representative (if any).
SECTION 10.11. ARTICLE X NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT
RIGHT TO ACCELERATE. The failure to make a payment pursuant to the
Securities by reason of any provision in this Article 10 shall not be
construed as preventing the occurrence of a Default. Nothing in this Article
10 shall have any effect on the right of the Securityholders or the Trustee
to accelerate the maturity of the Securities.
SECTION 10.12. TRUST MONEYS NOT SUBORDINATED. Notwithstanding
anything contained herein to the contrary, payments from money or the
proceeds of U.S. Government
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Obligations held in trust under Article VIII by the Trustee for the payment
of principal of and interest on the Securities shall not be subordinated to
the prior payment of any Senior Indebtedness of the Company or subject to the
restrictions set forth in this Article X, and none of the Securityholders
shall be obligated to pay over any such amount to the Company or any holder
of Senior Indebtedness of the Company or any other creditor of the Company.
SECTION 10.13. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article X, the Trustee and the Securityholders
shall be entitled to rely (a) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 10.02 are pending, (b) upon a certificate of the liquidating trustee
or agent or other Person making such payment or distribution to the Trustee
or to the Securityholders or (c) upon the Representatives for the holders of
Senior Indebtedness of the Company for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders
of such Senior Indebtedness and other Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article X. In the event
that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness of the
Company to participate in any payment or distribution pursuant to this
Article X, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and other facts pertinent to
the rights of such Person under this Article X, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article X.
SECTION 10.14. TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Securityholder by accepting a Security authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Securityholders and
the holders of Senior Indebtedness of
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the Company as provided in this Article X and appoints the Trustee as
attorney-in-fact for any and all such purposes, including in the event of any
bankruptcy, insolvency or similar proceeding with respect to the Company, the
timely filing of a claim for the unpaid balance of his Securities in the form
required in said proceeding and the causing of such claim to be approved. If
the Trustee shall not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior
Indebtedness of the Company or their Representative shall have the right to
file an appropriate claim for and on behalf of the Holders. Nothing herein
contained shall be deemed to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder, or to
authorize the Trustee or any holder of Senior Indebtedness of the Company or
their Representative to vote in respect of the claim of any Holder in any
such proceeding.
SECTION 10.15. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness of the Company and shall not be liable to
any such holders if it shall mistakenly pay over or distribute to
Securityholders, the Company or any other Person, money or assets to which
any holders of Senior Indebtedness of the Company shall be entitled by virtue
of this Article X or otherwise. Nothing in this Article X shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.07.
SECTION 10.16. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
SUBORDINATION PROVISIONS. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness of the Company, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Securities, to
acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of such Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to
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hold, or in continuing to hold, such Senior Indebtedness.
ARTICLE XI
SUBSIDIARY GUARANTEES
SECTION 11.01. SUBSIDIARY GUARANTEE. Each Subsidiary Guarantor
hereby unconditionally guarantees, jointly and severally, to each Holder and
to the Trustee and its successors and assigns, (a) the full and punctual
payment of principal of and interest on the Securities when due, whether at
maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Company under this Indenture and the Securities and (b)
the full and punctual performance within applicable grace periods of all
other obligations of the Company under this Indenture and the Securities (all
the foregoing being hereinafter collectively called the "Obligations"). Each
Subsidiary Guarantor further agrees that the Obligations may be extended or
renewed, in whole or in part, without notice or further assent from such
Subsidiary Guarantor and that such Subsidiary Guarantor will remain bound
under this Article XI notwithstanding any extension or renewal of any
Obligation.
Each Subsidiary Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives
notice of any default under the Securities or the Obligations. The
obligations of each Subsidiary Guarantor hereunder shall not be affected by
(i) the failure of any Holder or the Trustee to assert any claim or demand or
to enforce any right or remedy against the Company or any other Person under
this Indenture, the Securities or any other agreement or otherwise; (ii) any
extension or renewal of any thereof; (iii) any rescission, waiver, amendment
or modification of any of the terms or provisions of this Indenture, the
Securities or any other agreement; (iv) the release of any security held by
any Holder or the Trustee for the Obligations or any of them; (v) the failure
of any Holder or the Trustee to exercise any right or remedy against any
other guarantor of the Obligations; or (vi) any change in the ownership of
such Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein constitutes a guarantee of payment, performance and compliance when due
(and not a
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guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Obligations.
Each Subsidiary Guarantee is, to the extent and in the manner set
forth in Article XII, subordinated and subject in right of payment to the
prior payment in full of all Senior Indebtedness of the Subsidiary Guarantor
giving such Subsidiary Guarantee and each Subsidiary Guarantee is made
subject to such provisions of this Indenture.
Except as expressly set forth in Sections 8.01(b), 11.03 and 11.07,
the obligations of each Subsidiary Guarantor hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to any defense of setoff, counterclaim, recoupment
or termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Subsidiary Guarantor
herein shall not be discharged or impaired or otherwise affected by the
failure of any Holder or the Trustee to assert any claim or demand or to
enforce any remedy under this Indenture, the Securities or any other
agreement, by any waiver or modification of any thereof, by any default,
failure or delay, willful or otherwise, in the performance of the
obligations, or by any other act or thing or omission or delay to do any
other act or thing which may or might in any manner or to any extent vary the
risk of such Subsidiary Guarantor or would otherwise operate as a discharge
of such Subsidiary Guarantor as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guarantee herein shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of principal of or
interest on any Obligation is rescinded or must otherwise be restored by any
Holder or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary
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Guarantor by virtue hereof, upon the failure of the Company to pay the
principal of or interest on any Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Obligation, each Subsidiary Guarantor hereby
promises to and will, upon receipt of written demand by the Trustee,
forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an
amount equal to the sum of (A) the unpaid amount of such Obligations, (B)
accrued and unpaid interest on such Obligations (but only to the extent not
prohibited by law) and (C) all other monetary Obligations of the Company to
the Holders and the Trustee.
Each Subsidiary Guarantor agrees that it shall not be entitled to
any right of subrogation in respect of any Obligations guaranteed hereby
until payment in full in cash of all Obligations and all obligations to which
the Obligations are subordinated as provided in Article XII. Each Subsidiary
Guarantor further agrees that, as between it, on the one hand, and the
Holders and the Trustee, on the other hand, (1) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article VI
for the purposes of such Subsidiary Guarantor's Subsidiary Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (2) in the
event of any declaration of acceleration of such obligations as provided in
Article VI, such Obligations (whether or not due and payable) shall forthwith
become due and payable by such Subsidiary Guarantor for the purposes of this
Section.
Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or
any Holder in enforcing any rights under this Section.
SECTION 11.02. CONTRIBUTION. Each of the Company and any
Subsidiary Guarantor (each a "CONTRIBUTING PARTY") agrees (subject to
Articles X and XII) that, in the event a payment shall be made by any
Subsidiary Guarantor under its Subsidiary Guarantee (the "CLAIMING
GUARANTOR"), each Contributing Party shall indemnify the Claiming Guarantor
in an amount equal to the amount of such payment multiplied by a fraction,
the numerator of which shall be the net worth of the Contributing Party on
the date hereof and the denominator of which shall be the aggregate net worth
of the Company and all the Subsidiary Guarantors on the date hereof (or, in
the case of any Subsidiary Guarantor becoming a
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party hereto pursuant to Section 9.01, the date of the amendment hereto
executed and delivered by such Subsidiary Guarantor).
SECTION 11.03. SUCCESSORS AND ASSIGNS. This Article XI shall be
binding upon the Company and each Subsidiary Guarantor and each of their
respective successors and assigns and shall enure 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 upon that party in this Indenture and in the
Securities shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.
SECTION 11.04. NO WAIVER. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article XI shall operate as a waiver thereof, nor shall
a single or partial exercise thereof preclude any other or further exercise
of any right, power or privilege. The rights, remedies and benefits of the
Trustee and the Holders herein expressly specified are cumulative and not
exclusive of any other rights, remedies or benefits which either may have
under this Article XI at law, in equity, by statute or otherwise.
SECTION 11.05. MODIFICATION. No modification, amendment or waiver
of any provision of this Article XI, nor the consent to any departure by the
Company or any Subsidiary Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Trustee, and
then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice to or demand on the Company
or any Subsidiary Guarantor in any case shall entitle the Company or such
Subsidiary Guarantor to any other or further notice or demand in the same,
similar or other circumstances.
SECTION 11.06. EXECUTION OF SUPPLEMENTAL INDENTURE FOR FUTURE
SUBSIDIARY GUARANTORS. Each Subsidiary which is required to become a Subsidiary
Guarantor pursuant to Section 4.13 shall promptly execute and deliver to the
Trustee a supplemental indenture in the form of Exhibit B
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hereto pursuant to which such Subsidiary shall become a Subsidiary Guarantor
under this Article XI and shall guarantee the Obligations. Concurrently with
the execution and delivery of such supplemental indenture, the Company shall
deliver to the Trustee an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized, executed and delivered by
such Subsidiary and that, subject to the application of bankruptcy,
insolvency, moratorium, fraudulent conveyance or transfer and other similar
laws relating to creditors' rights generally and to the principles of equity,
whether considered in a proceeding at law or in equity, the Subsidiary
Guarantee of such Subsidiary Guarantor is a legal, valid and binding
obligation of such Subsidiary Guarantor, enforceable against such Subsidiary
Guarantor in accordance with its terms.
ARTICLE XII
SUBORDINATION OF SUBSIDIARY GUARANTEES
SECTION 12.01. AGREEMENT TO SUBORDINATE. Each Subsidiary
Guarantor agrees, and each Securityholder by accepting a Security agrees,
that the Obligations of such Subsidiary Guarantor are subordinated in right
of payment, to the extent and in the manner provided in this Article XII, to
the payment when due of all Senior Indebtedness of such Subsidiary Guarantor
and that the subordination is for the benefit of and enforceable by the
holders of such Senior Indebtedness. The Obligations of each Subsidiary
Guarantor shall in all respects rank PARI PASSU with any Pari Passu
Indebtedness of such Subsidiary Guarantor and senior to any Subordinated
Indebtedness of such Subsidiary Guarantor and only Senior Indebtedness of
such Subsidiary Guarantor (including such Subsidiary Guarantor's Guarantee of
Senior Indebtedness of the Company) shall rank senior to the Obligations of
such Subsidiary Guarantor in accordance with the provisions set forth herein.
SECTION 12.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any
payment or distribution of the assets of any Subsidiary Guarantor to
creditors upon a total or partial liquidation or a total or partial
dissolution of such Subsidiary Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to such Subsidiary
Guarantor or its property:
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(a) holders of Senior Indebtedness of such Subsidiary Guarantor shall
be entitled to receive payment in full in cash of such Senior Indebtedness
before Securityholders shall be entitled to receive any payment pursuant to
any Obligations of such Subsidiary Guarantor; and
(b) until the Senior Indebtedness of any Subsidiary Guarantor is paid
in full in cash, any distribution made by or on behalf of such Subsidiary
Guarantor to which Securityholders would be entitled but for this
Article XII shall be made to holders of such Senior Indebtedness as their
interests may appear, except that Securityholders may receive shares of
stock and any debt securities of such Subsidiary Guarantor that are
subordinated to Senior Indebtedness of the Company or such Subsidiary
Guarantor, as applicable, to at least the same extent as the Obligations of
such Subsidiary Guarantor are subordinated to Senior Indebtedness of such
Subsidiary Guarantor.
SECTION 12.03. DEFAULT ON SENIOR INDEBTEDNESS. No Subsidiary
Guarantor may make any payment pursuant to any of its Obligations or
repurchase, redeem or otherwise retire or defease any Securities or other
Obligations (collectively, "pay its Guarantee") if (a) any Senior
Indebtedness of such Subsidiary Guarantor is not paid within any applicable
grace period (including at maturity) or (b) any other default on Senior
Indebtedness of such Subsidiary Guarantor occurs and the maturity of such
Senior Indebtedness is accelerated in accordance with its terms unless, in
either case, (i) the default has been cured or waived and any such
acceleration has been rescinded or (ii) such Senior Indebtedness has been
paid in full; PROVIDED, HOWEVER, that any Subsidiary Guarantor may pay its
Guarantee without regard to the foregoing if such Subsidiary Guarantor and
the Trustee receive written notice approving such payment from the
Representatives of each issue of Senior Indebtedness of such Subsidiary
Guarantor, as applicable. No Subsidiary Guarantor may pay its Guarantee
during the continuance of any Payment Blockage Period after receipt by the
Company and the Trustee of a Payment Blockage Notice under Section 10.03.
Notwithstanding the provisions described in the immediately preceding
sentence, unless the
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holders of Designated Senior Indebtedness giving such Payment Blockage Notice
or the Representative of such holders shall have accelerated the maturity of
such Designated Senior Indebtedness and not rescinded such acceleration, any
Subsidiary Guarantor may resume (unless otherwise prohibited as described in
the first sentence of this paragraph) payments pursuant to its Guarantee
after such Payment Blockage Period.
SECTION 12.04. DEMAND FOR PAYMENT. If a demand for payment is
made on a Subsidiary Guarantor pursuant to Section 11.01, the Company or,
upon notice to a Trust Officer of such demand, the Trustee shall promptly
notify the holders of the Designated Senior Indebtedness (or their
Representatives) of such demand. Failure to give such notice shall not affect
the subordination of any Subsidiary Guarantee to Senior Indebtedness of the
applicable Subsidiary Guarantor or the application of the other provisions of
this Article XII.
SECTION 12.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a
distribution or payment is made to Securityholders, the Trustee or any Paying
Agent that because of this Article XII should not have been made to them,
such Securityholders, the Trustee or such Paying Agent, as applicable, shall
hold it in trust for holders of the relevant Senior Indebtedness and promptly
pay it over to them or their Representatives as their interests may appear.
SECTION 12.06. SUBROGATION. After all Senior Indebtedness of a
Subsidiary Guarantor is paid in full and until the Securities are paid in
full, Securityholders shall be subrogated to the rights of holders of such
Senior Indebtedness to receive distributions applicable to such Senior
Indebtedness. A distribution made under this Article XII to holders of such
Senior Indebtedness which otherwise would have been made to Securityholders
is not, as between the relevant Subsidiary Guarantor and Securityholders, a
payment by such Subsidiary Guarantor on such Senior Indebtedness.
SECTION 12.07. RELATIVE RIGHTS. This Article XII defines the
relative rights of Securityholders and holders of Senior Indebtedness of a
Subsidiary Guarantor. Nothing in this Indenture shall:
(a) impair, as between a Subsidiary Guarantor and Securityholders, the
obligation of such Subsidiary
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Guarantor, which is absolute and unconditional, to pay the Obligations to
the extent set forth in Article XI or the relevant Subsidiary Guarantee; or
(b) prevent the Trustee or any Securityholder from exercising its
available remedies upon a default by such Subsidiary Guarantor under the
Obligations, subject to the rights of holders of Senior Indebtedness of
such Subsidiary Guarantor to receive distributions otherwise payable to
Securityholders.
SECTION 12.08. SUBORDINATION MAY NOT BE IMPAIRED BY SUBSIDIARY
GUARANTOR. No right of any holder of Senior Indebtedness of any Subsidiary
Guarantor to enforce the subordination of the Obligations of such Subsidiary
Guarantor shall be impaired by any act or failure to act by such Subsidiary
Guarantor or by its failure to comply with this Indenture. The holders of
Senior Indebtedness of any Subsidiary Guarantor may extend, renew, modify or
amend the terms of such Senior Indebtedness or any security therefor and
release, sell or exchange such security and otherwise deal freely with such
Subsidiary Guarantor, all without affecting the liabilities and obligations
of the parties to this Indenture or the Holders.
SECTION 12.09. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding Section 12.03, the Trustee or Paying Agent may continue to
make payments on any Subsidiary Guarantee and shall not be charged with
knowledge of the existence of facts that would prohibit the making of any
such payments unless, not less than two Business Days prior to the date of
such payment, a Trust Officer receives written notice that payments may not
be made under this Article XII. The Company, the relevant Subsidiary
Guarantor, the Registrar or co-registrar, the Paying Agent, a Representative
or a holder of Senior Indebtedness of any Subsidiary Guarantor may give the
notice; PROVIDED, HOWEVER, that, if an issue of Senior Indebtedness of any
Subsidiary Guarantor has a Representative, only the Representative may give
the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness of any Subsidiary Guarantor with the same rights it would have if
it were not
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the Trustee. The Registrar and co-registrar and the Paying Agent may do the
same with like rights. The Trustee shall be entitled to all the rights set
forth in this Article XII with respect to any Senior Indebtedness of any
Subsidiary Guarantor which may at any time be held by it, to the same extent
as any other holder of such Senior Indebtedness; and nothing in Article VII
shall deprive the Trustee of any of its rights as such holder. Nothing in
this Article XII shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 7.07.
SECTION 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever
a distribution is to be made or a notice given to holders of Senior
Indebtedness of any Subsidiary Guarantor, the distribution may be made and
the notice given to their Representative (if any).
SECTION 12.11. ARTICLE XII NOT TO PREVENT DEFAULTS UNDER A
GUARANTEE OR LIMIT RIGHT TO DEMAND PAYMENT. The failure to make a payment
pursuant to a Subsidiary Guarantee by reason of any provision in this Article
XII shall not be construed as preventing the occurrence of a default under
such Subsidiary Guarantee. Nothing in this Article XII shall have any effect
on the right of the Securityholders or the Trustee to make a demand for
payment on any Subsidiary Guarantor pursuant to Article XI or the relevant
Subsidiary Guarantee.
SECTION 12.12. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article XII, the Trustee and the Securityholders
shall be entitled to rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (b) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the
Securityholders or (c) upon the Representatives for the holders of Senior
Indebtedness of any Subsidiary Guarantor for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
such Senior Indebtedness and other indebtedness of such Subsidiary Guarantor,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article XII. In the
event that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness of any
Subsidiary Guarantor to participate in any payment or distribution
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pursuant to this Article XII, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness of such Subsidiary Guarantor held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under
this Article XII, and, if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment. The provisions of Sections
7.01 and 7.02 shall be applicable to all actions or omissions of actions by
the Trustee pursuant to this Article XII.
SECTION 12.13. TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Securityholder by accepting a Security authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Securityholders and
the holders of Senior Indebtedness of the Company and any Subsidiary
Guarantor as provided in this Article XII and appoints the Trustee as
attorney-in-fact for any and all such purposes, including in the event of any
bankruptcy, insolvency or similar proceeding with respect to Subsidiary
Guarantor, the timely filing of a claim for the unpaid balance of his
Securities in the form required in said proceeding and the causing of such
claim to be approved. If the Trustee shall not file a proper claim or proof
of debt in the form required in such proceeding prior to 30 days before the
expiration of the time to file such claim or claims, then the holders of the
Senior Indebtedness of any Subsidiary Guarantor or their Representative shall
have the right to file an appropriate claim for and on behalf of the Holders.
Nothing herein contained shall be deemed to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights
of any Holder, or to authorize the Trustee or any holder of Senior
Indebtedness of any Subsidiary Guarantor or their Representative to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 12.14. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness
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of any Subsidiary Guarantor and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Securityholders or the Company or
any other Person, money or assets to which any holders of such Senior
Indebtedness shall be entitled by virtue of this Article XII or otherwise.
SECTION 12.15. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
SUBORDINATION PROVISIONS. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness of any Subsidiary Guarantor, whether such Senior
Indebtedness was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such
Senior Indebtedness and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. TRUST INDENTURE ACT CONTROLS. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. NOTICES. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail or sent by
facsimile (with a hard copy delivered in person or by mail promptly
thereafter) and addressed as follows:
if to the Company or any Subsidiary Guarantor:
Forest Oil Corporation
1600 Broadway
Denver, CO 80202-4722
Telecopy No: (303) 812-1602
Attention of Daniel L. McNamara
if to the Trustee:
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112
State Street Bank and
Trust Company
Goodwin Square
225 Asylum Street; 23rd Floor
Hartford, CT 06103
Attention of Corporate Trust Department
The Company or any Subsidiary Guarantor, on the one hand, or the
Trustee, on the other hand, by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be
mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA Section 312(c).
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take or
refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
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(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(a) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. WHEN SECURITIES DISREGARDED. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the
Company or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned shall be so disregarded. Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.
SECTION 13.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, the Paying Agent and any co-registrar may
make reasonable rules
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for their functions.
SECTION 13.08. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in
the State of New York or the city in which the Trustee's office which
administers the Indenture is located. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION 13.09. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
WOULD BE REQUIRED THEREBY.
SECTION 13.10. NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Company or any Subsidiary Guarantor
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 13.11. SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind their successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 13.12. MULTIPLE ORIGINALS. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement. One signed copy is
enough to prove this Indenture.
SECTION 13.13. TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be
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considered a part hereof and shall not modify or restrict any of the terms or
provisions hereof.
SECTION 13.14. CONSENT TO JURISDICTION AND SERVICE. The Company
irrevocably submits to the jurisdiction of any United States federal or state
court located in the Borough of Manhattan in The City of New York, New York
over any suit, action or proceeding arising out of or relating to this
Indenture or any Security. The Company irrevocably waives, to the fullest
extent permitted by law, any objection which it may have to the laying of the
venue of any such suit, action or proceeding brought in such a court and any
claim that any suit, action or proceeding brought in such a court has been
brought in an inconvenient forum. The Company agrees that final judgment in
any such suit, action or proceeding brought in such a court shall be
conclusive and binding upon the Company and may be enforced in any courts to
the jurisdiction of which the Company is subject by a suit upon such
judgment, PROVIDED that service of process is effected upon the Company in
the manner specified in Section 13.14(b) hereof or as otherwise permitted by
law.
(b) As long as any of the Securities remain outstanding, the
Company will at all times have an authorized agent in the Borough of
Manhattan, The City of New York, New York upon whom process may be served in
any legal action or proceeding arising out of or relating to this Indenture
or any Security. Service of process upon such agent shall be deemed in every
respect effective service of process upon the Company in any such legal
action or proceeding. The Company hereby irrevocably appoints CT Corporation
System, whose address is, as of the date hereof, 1633 Broadway, New York, New
York 10019, as its agent for such purpose and covenants and agrees that
service of process in any such legal action or proceeding may be made upon it
at the office of such agent at said address (or at such other address in the
Borough of Manhattan, The City of New York, New York as the Company may
designate by written notice to the Trustee).
(c) The Company hereby consents to process being served in any suit,
action or proceeding of the nature referred to in Section 13.14(a) and
Section 13.14(b) hereof by service upon such agent. The Company irrevocably
waives, to the fullest extent permitted by law, all claim of error by reason of
any such service and agrees that such service (i) shall be deemed in every
respect effective service of
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process upon the Company in any such suit, action or proceeding and (ii)
shall, to the fullest extent permitted by law, be taken and held to be valid
personal service.
(d) Nothing in this Section shall affect the right of the Trustee
or any Holder to serve process in any manner permitted by law or limit the
right of the Trustee to bring proceedings against the Company in the courts
of any jurisdiction or jurisdictions.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
FOREST OIL CORPORATION,
by
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as Trustee
by
Name:
Title:
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EXHIBIT A
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), NEW YORK, NEW YORK, 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 IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
<PAGE>
119
CUSIP No. 346091 AL5
No. 001 $100,000,000
10 1/2% Senior Subordinated Note due 2006
FOREST OIL CORPORATION, a New York corporation, promises to pay to
Cede & Co., or registered assigns, the principal sum of ONE HUNDRED MILLION
Dollars on January 15, 2006.
Interest Payment Dates: January 15 and July 15.
Record Dates: January 1 and July 1.
Additional provisions of this Security are set forth on the other side of this
Security.
Dated: February 5, 1999
Forest Oil Corporation,
by
-----------------------
Name:
Title:
-----------------------
Name:
Title:
CORPORATE SEAL
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
STATE STREET BANK AND
TRUST COMPANY,
as Trustee, certifies
that this is one of the Securities
referred to in the Indenture.
by
Authorized Signatory
<PAGE>
120
SEAL
<PAGE>
121
10 1/2% Senior Subordinated Note Due 2006
1. INTEREST
Forest Oil Corporation, a New York corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called the "Company"), promises to pay interest on the principal
amount of this Security at the rate per annum shown above. The Company will
pay interest semiannually on January 15 and July 15 of each year beginning on
July 15, 1999. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
February 5, 1999. Interest will be computed on the basis of a 360-day year
of twelve 30-day months. The Company shall pay interest on overdue principal
at the rate borne by the Securities plus 1% per annum, and it shall pay
interest on overdue installments of interest at the same rate to the extent
lawful.
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the
close of business on the January 1 or July 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal
and interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts. Payments in respect of
Securities (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by the
holders thereof or, if no U.S. dollar account maintained by the payee with a
bank in the United States is designated by any holder to the Trustee or the
Paying Agent at least 30 days prior to the relevant due date for payment (or
such other date as the Trustee may accept in its discretion), by mailing a
check to the registered address of such holder.
<PAGE>
122
3. PAYING AGENT AND REGISTRAR
Initially, Marine Midland Bank will act as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent, Registrar or
co-registrar without notice. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as of
February 5, 1999 ("Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to
all such terms, and Securityholders are referred to the Indenture and the Act
for a statement of those terms.
The Securities are general unsecured obligations of the Company
limited to $200,000,000 aggregate principal amount at any one time
outstanding (subject to Sections 2.01 and 2.08 of the Indenture). This
Security is one of the Original Securities referred to in the Indenture
issued in an aggregate principal amount of $100,000,000. The Indenture will
contain certain covenants that, among other things, will limit (i) the
incurrence of additional indebtedness by the Company and its Restricted
Subsidiaries (as defined), (ii) the payment of dividends and other restricted
payments by the Company and its Restricted Subsidiaries, (iii) the creation
of restrictions on distributions from Restricted Subsidiaries, (iv) asset
sales, (v) transactions with affiliates, (vi) sales or issuances of
Restricted Subsidiary capital stock, (vii) the incurrence of liens and (viii)
mergers and consolidations. All such limitations and prohibitions, however,
are subject to a number of important qualifications and exceptions.
To guarantee the due and punctual payment of the principal and
interest, if any, on the Securities and all
<PAGE>
123
other amounts payable by the Company under the Indenture and the Securities
when and as the same shall be due and payable, whether at maturity, by
acceleration or otherwise, according to the terms of the Securities and the
Indenture, the Subsidiary Guarantors will guarantee the Obligations on a
senior subordinated basis pursuant to the terms of the Indenture.
5. OPTIONAL REDEMPTION
The Securities may not be redeemed by the Company prior to January
15, 2003. On and after that date, the Company may redeem the Securities in
whole at any time or in part from time to time at the following redemption
prices (expressed in percentages of principal amount), plus accrued interest
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the related interest payment
date):
if redeemed during the 12-month period beginning January 15,
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2003 105.250%
2004 102.625%
2005 and thereafter 100.000%
</TABLE>
Notwithstanding the foregoing, prior to February 1, 2002, the
Company may redeem, at any time or from time to time, up to 33 1/3% of the
aggregate principal amount of Securities originally issued, at a redemption
price of 110.50% of the principal amount thereof plus accrued and unpaid
interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date that is on or prior to the date of redemption) with the
net proceeds of one or more Equity Offerings of the Company, PROVIDED that at
least 66 2/3% of the aggregate principal amount of the Securities originally
issued remains outstanding after the occurrence of such redemption and
PROVIDED, FURTHER, that such redemption shall occur not later than 90 days
after the date of the closing of any such Equity Offering.
6. NOTICE OF REDEMPTION
<PAGE>
124
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If
money sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to
accrue on such Securities (or such portions thereof) called for redemption.
7. SUBORDINATION
The Securities are subordinated to Senior Indebtedness of the
Company. To the extent provided in the Indenture, Senior Indebtedness of the
Company must be paid before the Securities may be paid. In addition, each
Subsidiary Guarantee is subordinated to Senior Indebtedness of the relevant
Subsidiary Guarantor. The Company and each Subsidiary Guarantor agrees, and
each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give it
effect and appoints the Trustee as attorney-in-fact for such purpose.
8. PUT PROVISIONS
Upon a Change of Control, any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder at a repurchase price equal to 101% of the principal amount of
the Securities to be repurchased plus accrued and unpaid interest to the date
of repurchase (subject to the right of holders of record on the relevant
record date to receive interest due on the related interest payment date) as
provided in, and subject to the terms of, the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without
<PAGE>
125
coupons in denominations of $1,000 and whole multiples of $1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the
transfer of or exchange any Securities selected for redemption (except, in
the case of a Security to be redeemed in part, the portion of the Security
not to be redeemed) or any Securities for a period of 15 days before a
selection of Securities to be redeemed or 15 days before an interest payment
date.
10. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner
of it for all purposes.
11. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
12. DISCHARGE AND DEFEASANCE
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money
or U.S. Government Obligations for the payment of principal and interest on
the Securities to redemption or maturity, as the case may be.
13. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the
Securities and (ii) any default or noncompliance with any provision may
<PAGE>
126
be waived with the written consent of the Holders of a majority in principal
amount outstanding of the Securities. Subject to certain exceptions set
forth in the Indenture, without the consent of any Securityholder, the
Company and the Trustee may amend the Indenture or the Securities to cure any
ambiguity, omission, defect or inconsistency, or to comply with Article V of
the Indenture, or to provide for uncertificated Securities in addition to or
in place of certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the Indenture under the Act,
or to make any change that does not adversely affect the rights of any
Securityholder.
14. DEFAULTS AND REMEDIES
The Securities shall be subject to the Events of Default set forth
in Article VI of the Indenture.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or
security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust
or power.
15. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the TIA, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise
deal with the Company or its Affiliates with the same rights it would have if
it were not Trustee.
<PAGE>
127
16. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the
Company or any Subsidiary Guarantor shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases
all such liability. The waiver and release are part of the consideration for
the issue of the Securities.
17. AUTHENTICATION
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by
the entireties), JT TEN (=joint tenants with rights of survivorship and not
as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
19. 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 Securities and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Securityholders.
No representation is made as to the accuracy of such numbers either as
printed on the Securities or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed
thereon.
19. GOVERNING LAW.
<PAGE>
128
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH HAS IN
IT THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
ATTENTION OF: Forest Oil Corporation
1600 Broadway, Suite 2200
Denver, CO 80202-4722
<PAGE>
129
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ___________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to
act for him.
- ----------------------------------------------------------------------------
Date: Your Signature:
--------------------- --------------------------------
- ----------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
<PAGE>
130
OPTION OF HOLDER TO ELECT
PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS SECURITY PURCHASED BY THE COMPANY
PURSUANT TO SECTION 4.06 OR 4.09 OF THE INDENTURE, CHECK THE BOX:
IF YOU WANT TO ELECT TO HAVE ONLY PART OF THIS SECURITY PURCHASED
BY THE COMPANY PURSUANT TO SECTION 4.06 OR 4.09 OF THE INDENTURE, STATE THE
AMOUNT: $
DATE: _____________ YOUR SIGNATURE:
(SIGN EXACTLY AS YOUR NAME APPEARS ON THE OTHER SIDE OF THE
SECURITY)
SIGNATURE GUARANTEE:
(SIGNATURE MUST BE GUARANTEED BY A MEMBER FIRM OF THE NEW
YORK STOCK EXCHANGE OR A COMMERCIAL BANK OR TRUST COMPANY)
<PAGE>
131
EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated
as of ____________________, among [SUBSIDIARY GUARANTOR] (the
"New Subsidiary Guarantor"), a subsidiary of Forest Oil
Corporation (or its successor), a New York corporation (the
"Company"), FOREST OIL CORPORATION, on behalf of itself and the
Subsidiary Guarantors (the "Existing Subsidiary Guarantors")
under the Indenture referred to below, and STATE STREET BANK AND
TRUST COMPANY, as trustee under the indenture referred to below
(the "Trustee").
W I T N E S S E T H :
WHEREAS the Company has heretofore executed and delivered to the
Trustee an Indenture (the "Indenture") dated as of February 5, 1999,
providing for the issuance of an aggregate principal amount of up to
$200,000,000 of 10 1/2% Senior Subordinated Notes due 2006 (the "Securities");
WHEREAS Section 4.13 of the Indenture provides that under certain
circumstances the Company is required to cause the New Subsidiary Guarantor
to execute and deliver to the Trustee a supplemental indenture pursuant to
which the New Subsidiary Guarantor shall unconditionally guarantee all the
Company's obligations under the Securities pursuant to a Subsidiary Guarantee
on the terms and conditions set forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the
Company and the Existing Subsidiary Guarantors are authorized to execute and
deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
New Subsidiary Guarantor, the Company, the Existing Subsidiary Guarantors and
the Trustee mutually covenant and agree for the equal and ratable benefit of
the holders of the Securities as follows:
<PAGE>
132
1. AGREEMENT TO GUARANTEE. The New Subsidiary Guarantor hereby
agrees, jointly and severally with all other Subsidiary Guarantors, to
unconditionally guarantee the Company's obligations under the Securities on
the terms and subject to the conditions set forth in Article XI of the
Indenture and to be bound by all other applicable provisions of the
Indenture.
2. RATIFICATION OF INDENTURE; SUPPLEMENTAL INDENTURES PART OF
INDENTURE. Except as expressly amended hereby, the Indenture is in all
respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This Supplemental Indenture
shall form a part of the Indenture for all purposes, and every holder of
Securities heretofore or hereafter authenticated and delivered shall be bound
hereby.
3. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
4. TRUSTEE MAKES NO REPRESENTATION. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental
Indenture.
5. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all
of them together represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.
[NEW SUBSIDIARY GUARANTOR],
by
------------------------------------
Name:
<PAGE>
133
Title:
FOREST OIL CORPORATION,
by
------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as
Trustee,
by
------------------------------------
Name:
Title:
<PAGE>
Exhibit 12
RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Years Ended December 31,
------------------------------- --------------------------------------
Pro forma Pro forma
1998 1998 1997 1997 1997 1996 1995
---------- --------- ------ --------- ------ ------ --------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
Earnings (loss) before minority interest, income
taxes, and extraordinary item ($146,584) (146,584) 5,806 6,490 6,490 6,571 (18,003)
Add fixed charges (excluding portion capitalized) 32,235 29,380 16,537 26,592 22,786 24,419 26,499
---------- --------- ------ ------ ------ ------ --------
---------- --------- ------ ------ ------ ------ --------
Earnings (loss) available for fixed charges ($114,349) (117,204) 22,343 33,082 29,276 30,990 8,496
---------- --------- ------ ------ ------ ------ --------
---------- --------- ------ ------ ------ ------ --------
FIXED CHARGES
Interest cost and amortization of debt discount $31,284 28,429 15,652 25,209 21,403 23,307 25,323
Portion of rental cost equivalent to interest
(estimated to be one-third of rental cost) 1,240 1,240 1,910 1,756 1,756 1,462 1,500
---------- --------- ------ ------ ------ ------ --------
---------- --------- ------ ------ ------ ------ --------
Total fixed charges $32,524 29,669 17,562 26,965 23,159 24,769 26,823
---------- --------- ------ ------ ------ ------ --------
---------- --------- ------ ------ ------ ------ --------
Ratio of earnings to fixed charges (1) (1) 1.3 1.2 1.3 1.3 (1)
---------- --------- ------ ------ ------ ------ --------
---------- --------- ------ ------ ------ ------ --------
</TABLE>
(1) The pro forma earnings for the nine months ended September 30, 1998, the
historical earnings for the nine months ended September 30, 1998 and the
year ended December 31, 1995 were inadequate to cover fixed charges. The
coverage deficiencies were $81,826,000, $87,535,000 and $18,327,000,
respectively.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
---------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
STATE STREET BANK AND TRUST COMPANY
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
Massachusetts 04-1867445
(JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER
ORGANIZATION IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
225 Franklin Street, Boston, Massachusetts 02110
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
FOREST OIL CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
NEW YORK 25-0484900
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1600 BROADWAY, SUITE 2200
DENVER, CO 80202
(Address of principal executive offices) (Zip Code)
__% SENIOR SUBORDINATED NOTES
(TITLE OF INDENTURE SECURITIES)
<PAGE>
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO
WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its
parent, State Street Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN EFFECT.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as Exhibit 1
to Amendment No. 1 to the Statement of Eligibility and Qualification of
Trustee (Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to commence
business was necessary or issued is on file with the Securities and
Exchange Commission as Exhibit 2 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE TRUST
POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS SPECIFIED
IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise corporate trust
powers is on file with the Securities and Exchange Commission as
Exhibit 3 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and is incorporated
herein by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is on file
with the Securities and Exchange Commission as Exhibit 4 to the
Statement of Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Eastern Edison Company (File No.
33-37823) and is incorporated herein by reference thereto.
1
<PAGE>
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS IN
DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING
AUTHORITY.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter of the
obligor, the trustee has relied upon the information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer to Item 2. of this statement will be amended, if necessary, to
reflect any facts which differ from those stated and which would have been
required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation duly
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 25TH DAY OF JANUARY, 1999.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Kathy A. Larimore
-------------------------------------------
NAME KATHY A. LARIMORE
TITLE ASSISTANT VICE PRESIDENT
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by FOREST
OIL CORPORATION of its __% SENIOR SUBORDINATED NOTES we hereby consent that
reports of examination by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Kathy A. Larimore
-------------------------------------------
NAME KATHY A. LARIMORE
TITLE ASSISTANT VICE PRESIDENT
DATED: JANUARY 25, 1999
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this
commonwealth and a member of the Federal Reserve System, at the close of
business JUNE 30, 1998, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act and in accordance with a call made by the Commissioner of
Banks under General Laws, Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin .................................... 1,553,703
Interest-bearing balances ............................................................. 12,440,716
Securities ................................................................................. 9,436,138
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................................... 8,785,353
Loans and lease financing receivables:
Loans and leases, net of unearned income .............................................. 6,633,608
Allowance for loan and lease losses ................................................... 92,999
Allocated transfer risk reserve........................................................ 0
Loans and leases, net of unearned income and allowances ............................... 6,540,609
Assets held in trading accounts ............................................................ 1,267,679
Premises and fixed assets .................................................................. 491,928
Other real estate owned .................................................................... 100
Investments in unconsolidated subsidiaries ................................................. 1,278
Customers' liability to this bank on acceptances outstanding ............................... 68,312
Intangible assets .......................................................................... 231,294
Other assets................................................................................ 1,667,282
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Total assets ............................................................................... 42,484,392
----------
----------
LIABILITIES
Deposits:
In domestic offices ................................................................... 12,553,371
Noninterest-bearing .............................................................. 10,204,405
Interest-bearing ................................................................. 2,348,966
In foreign offices and Edge subsidiary ................................................ 16,961,571
Noninterest-bearing .............................................................. 154,792
Interest-bearing ................................................................. 16,806,779
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................................... 8,182,794
Demand notes issued to the U.S. Treasury and Trading Liabilities ........................... 0
Trading liabilities......................................................................... 883,096
Other borrowed money........................................................................ 361,141
Subordinated notes and debentures .......................................................... 0
Bank's liability on acceptances executed and outstanding ................................... 68,289
Other liabilities........................................................................... 1,017,284
Total liabilities .......................................................................... 40,027,546
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EQUITY CAPITAL
Perpetual preferred stock and related surplus............................................... 0
Common stock ............................................................................... 29,931
Surplus .................................................................................... 455,288
Undivided profits and capital reserves/Net unrealized holding gains (losses) ............... 1,964,924
Net unrealized holding gains (losses) on available-for-sale securities...................... 15,557
Cumulative foreign currency translation adjustments ....................................... (8,854)
Total equity capital ....................................................................... 2,456,846
----------
Total liabilities and equity capital ....................................................... 42,484,392
----------
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true
and correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
