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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT - DECEMBER 11, 1998
(DATE OF EARLIEST EVENT REPORTED)
HS RESOURCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COMMISSION FILE NO. 0-18886
DELAWARE 94-303-6864
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
ONE MARITIME PLAZA, 15TH FLOOR, SAN FRANCISCO, CALIFORNIA 94111
(ADDRESS OF PRINCIPAL (ZIP CODE)
EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (415) 433-5795
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ITEM 7(C). Exhibits
Exhibit No. Description
- ----------- -----------
1.1 Underwriting Agreement dated December 4, 1998 among HS
Resources, Inc. and Chase Securities Inc., Lehman
Brothers Inc. and Morgan Stanley & Co. Incorporated.
4.1 Indenture dated December 11, 1998 between HS Resources,
Inc. and Harris Trust and Savings Bank.
25.1 Form T-1 Statement of Eligibility of Harris Trust and
Savings Bank to act as trustee under the Indenture.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
HS RESOURCES, INC.
By: /s/ JAMES M. PICCONE
---------------------------
James M. Piccone
Vice President
Dated: December 11, 1998.
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
1.1 Underwriting Agreement dated December 4, 1998 among HS
Resources, Inc. and Chase Securities Inc., Lehman
Brothers Inc. and Morgan Stanley & Co. Incorporated.
4.1 Indenture dated December 11, 1998 between HS Resources,
Inc. and Harris Trust and Savings Bank.
25.1 Form T-1 Statement of Eligibility of Harris Trust and
Savings Bank to act as trustee under the Indenture.
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HS RESOURCES, INC.
$85,000,000
SERIES B 9 1/4% SENIOR SUBORDINATED NOTES DUE 2006
UNDERWRITING AGREEMENT
December 4, 1998
CHASE SECURITIES INC.
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INCORPORATED
As Representatives of the several
Underwriters named in Schedule 1,
c/o Chase Securities Inc.
270 Park Avenue, 4th floor
New York, New York 10017
Dear Sirs:
HS Resources, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell $85,000,000 aggregate principal amount of its Series B 9 1/4%
Senior Subordinated Notes due 2006 (the "Notes"). The Notes will be issued
pursuant to an Indenture to be dated as of December 11, 1998 (the "Indenture")
between the Company and Harris Trust and Savings Bank, as trustee (the
"Trustee"), the form of which has been filed as an exhibit to the Company's
Current Report on Form 8-K dated December 11, 1998. The Company hereby confirms
its agreement with Chase Securities Inc. ("CSI") and Lehman Brothers Inc.
(together with CSI, the "Joint Lead Book-Runners") and Morgan Stanley & Co.
Incorporated (together with CSI, the "Underwriters") concerning the purchase of
the Notes from the Company by the several Underwriters.
1. Representations, Warranties and Agreements of the Company. The Company
represents, warrants and agrees on and as of the date hereof and the Closing
Date (as defined in Section 3) that:
(a) A registration statement on Form S-3 (No. 333-21221) with
respect to the Notes has (i) been prepared by the Company in conformity
with the requirements of the United States Securities Act of 1933 (the
"Securities Act") and the rules and regulations (the "Rules and
Regulations") of the United States Securities and Exchange Commission
(the "Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement and any
amendments thereto have been delivered by the Company to you. As used
in this Agreement, "Registration Statement" means such registration
statement, as amended, to the date of this Agreement, including the
exhibits and schedules thereto, if any, and all documents incorporated
by reference or deemed to be incorporated by reference
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therein and the exhibits and schedules thereto and all information
contained in the final Prospectus (as defined herein) filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations and
deemed to be a part of the registration statement as of the Effective
Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; "Effective Time" means the date and the time as of which
the Registration Statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Basic Prospectus" means
the prospectus included in the Registration Statement; "Preliminary
Prospectus" means any preliminary form of Prospectus specifically
relating to the Notes, in the form first filed with, or transmitted for
filing to, the Commission pursuant to Rule 424 of the Rules and
Regulations; "Prospectus Supplement" means any prospectus supplement
specifically relating to the Notes, in the form first filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 of the
Rules and Regulations; and "Prospectus" means the Basic Prospectus,
together with the Prospectus Supplement, except that if such Basic
Prospectus is amended or supplemented on or prior to the date on which
the Prospectus Supplement was first filed with the Commission pursuant
to Rule 424 of the Rules and Regulations, the term "Prospectus" shall
refer to the Basic Prospectus as so amended or supplemented and as
supplemented by the Prospectus Supplement. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and any
reference to any amendment or supplement to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any document
filed under the United States Securities Exchange Act of 1934 (the
"Exchange Act") after the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and incorporated by reference in such
Preliminary Prospectus or the Prospectus, as the case may be, and any
reference to any amendment to the Registration Statement shall be
deemed to include any annual report of the Company filed with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act after
the Effective Time that is incorporated by reference in the
Registration Statement. The Commission has not issued any order
preventing or suspending the use of the Prospectus or the effectiveness
of the Registration Statement.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all respects to the
requirements of the Securities Act, the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the Rules and Regulations and
do not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances in which they were made) not
misleading; at the Effective Time and on the Closing Date, the
Indenture did or will conform in all material respects with the
applicable requirements of the Trust Indenture Act and the rules and
regulations of the Commission thereunder; and, at the Effective Time,
the Prospectus, if
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not filed pursuant to Rule 424(b), did not or will not, and on the date
of any filing pursuant to Rule 424(b) and on the Closing Date, the
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 light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply to (i) that part of the Registration Statement
which shall constitute the Statement of Eligibility and Qualification
(Form T-1) of the Trustee under the Trust Indenture Act or (ii)
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter
specifically for use therein (the "Underwriters' Information").
(c) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, when they became effective or were filed
with the Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(d) The Company and each of its subsidiaries (as defined in
Section 14) have been duly incorporated or formed and are validly
existing as corporations or partnerships in good standing under the
laws of their respective jurisdictions of incorporation or formation,
are duly qualified to do business and are in good standing as foreign
corporations or partnerships in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification (except where the
failure to so qualify would not result in a material adverse effect on
the condition, financial or otherwise, results of operations or
business prospects of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect"), and have all power (corporate and
other) and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged as
described in the Prospectus; and none of the subsidiaries of the
Company is a "significant subsidiary" as such term is defined in
Section 1.01 of the Indenture.
(e) The Company has an authorized capitalization as set forth
or incorporated by reference in the Prospectus, and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and conform to
the description thereof contained or incorporated by reference in the
Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and (except for
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directors' qualifying shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims.
(f) The Company has full right, power and authority to execute
and deliver this Agreement, the Indenture and the Notes (collectively,
the "Transaction Documents") and to perform its obligations hereunder
and thereunder; and all corporate action required to be taken for the
due and proper authorization, execution and delivery of each of the
Transaction Documents and the consummation of the transactions
contemplated thereby have been duly and validly taken.
(g) Each of the Transaction Documents has been duly
authorized, executed and delivered by the Company.
(h) The execution, delivery and performance of the Transaction
Documents by the Company and the consummation of the transactions
contemplated thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
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 the property or assets of the Company or any of its
subsidiaries is subject, except in each case for such conflicts,
breaches or violations that would not, individually or in the
aggregate, result in a Material Adverse Effect, nor will such actions
result in any violation of the provisions of the charter or by-laws of
the Company or any of its subsidiaries or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets; and except for the registration of the
Notes under the Securities Act, the qualification of the Indenture
under the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Notes by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby.
(i) There are no contracts, agreements or understandings
between the Company and any person granting such person the right
(other than rights which have been waived, satisfied or not exercised)
to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.
(j) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
incorporated by reference in the Prospectus, any loss or interference
with its business from fire, explosion, flood or other calamity,
whether
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or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
incorporated by reference in the Prospectus, except for such losses,
interferences, disputes, actions, orders or decrees that do not have
individually or in the aggregate a Material Adverse Effect.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
incorporated by reference in the Prospectus present fairly in all
material respects the financial condition and results of operations of
the entities purported to be shown thereby, at the dates and for the
periods indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved, except as otherwise stated therein.
(l) Arthur Anderson LLP, who have certified certain financial
statements of the Company, whose report is incorporated by reference in
the Prospectus and who have delivered the initial letter referred to in
Section 6(g) hereof, are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(m) Williamson Petroleum Consultants, Inc. and Netherland
Sewell & Associates, Inc., whose reports are incorporated by reference
in the Prospectus, as of the date of such report, and are, as of the
date hereof, independent petroleum engineers with respect to the
Company.
(n) The Company and each of its subsidiaries have good and
indefeasible title to all items of real property and good title to all
personal property owned by them, in each case free and clear of all
security interests, liens, encumbrances, equities, claims and other
defects except such as are described in the Prospectus or such as do
not materially and adversely affect the value of such property and do
not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and the Company and its
subsidiaries have valid, subsisting and enforceable leases for the
properties described in the Prospectus as leased by them, with such
exceptions as are not material and do not interfere with the business
of the Company and its subsidiaries, taken as a whole, in each case
except as described in or contemplated in the Prospectus.
(o) The Company and its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies of similar size
and engaged in similar businesses in similar industries.
(p) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights and intellectual property
licenses necessary for the conduct of their respective businesses and
have no reason to believe that the conduct of their respective
businesses will conflict with, and have not received any notice of any
claim of conflict with, any such rights of others.
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(q) Except as set forth in the Registration Statement, the
Prospectus or in the documents incorporated therein by reference, there
are no legal or governmental proceedings pending to which the Company
or any of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the subject which,
if determined adversely to the Company or any of its subsidiaries,
would have a Material Adverse Effect; and to the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(r) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied by the Company.
(s) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
(t) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described in the Prospectus or incorporated therein by reference as
permitted by the Rules and Regulations.
(u) No labor dispute by the employees of the Company exists
or, to the knowledge of the Company, is imminent which reasonably could
be expected to have a Material Adverse Effect.
(v) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company would have any liability;
the Company has not incurred and does not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each
"pension plan" for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification, except in any such case for such liability that would
not have a Material Adverse Effect.
(w) The Company has filed all federal, state and local income
and franchise tax returns required to be filed through the date hereof
or has timely requested extensions thereof and has paid all taxes due
thereon, except for such matters as are being contested in good faith,
and no tax deficiency has been determined adversely to the Company or
any of
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its subsidiaries which has had (nor does the Company have any
knowledge of any tax deficiency which, if determined adversely to the
Company or any of its subsidiaries, might have) a Material Adverse
Effect.
(x) Since the date as of which information is given in the
Prospectus, except as otherwise stated therein, (i) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs, management or business prospects of the
Company, whether or not arising in the ordinary course of business,
(ii) the Company has not incurred any material liability or obligation,
direct or contingent, other than in the ordinary course of business,
(iii) the Company has not entered into any material transaction other
than in the ordinary course of business and (iv) there has not been any
material change in the capital stock or long-term debt of the Company,
or any dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(y) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance
with management's general or specific authorization, (B) transactions
are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to
its assets is permitted only in accordance with management's general or
specific authorization and (D) the reported accountability for its
assets is compared with existing assets at reasonable intervals.
(z) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject or (iii) is in
violation in any material respect of any law, ordinance, governmental
rule, regulation or court decree to which it or its property or assets
may be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its
business, except, in the case of (ii) or (iii) above, for such defaults
and violations that would not have a Material Adverse Effect.
(aa) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, has used
any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
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(bb) Except as disclosed or incorporated by reference in the
Prospectus, there has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic
wastes, medical wastes, hazardous wastes or hazardous substances by the
Company or any of its subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any of
the property now or previously owned or leased by the Company or its
subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial
action which would not have, or would not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial
actions, a Material Adverse Effect; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company or any
of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not
have or would not be reasonably likely to have, singularly or in the
aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a Material Adverse Effect;
and the terms "hazardous wastes", "toxic wastes", "hazardous
substances" and "medical wastes" shall have the meanings specified in
any applicable local, state, federal and foreign laws or regulations
with respect to environmental protection.
(cc) Neither the Company, nor any subsidiary is an "investment
company" within the meaning of such term under the Investment Company
Act of 1940, as amended, and the rules and regulations of the
Commission thereunder.
(dd) Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall
be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
(ee) Neither the Company nor any of its subsidiaries owns any
"margin securities" as that term is defined in Regulation U of the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), and none of the proceeds of the sale of the Notes will be
used, directly or indirectly, for the purpose of purchasing or carrying
any margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Notes to be considered a "purpose credit" within the meanings of
Regulation T, U or X of the Federal Reserve Board.
(ff) Except as described in the Prospectus, neither the
Company nor any of its subsidiaries is a party to any contract,
agreement or understanding with any person that would give rise to a
valid claim against the Company or the Underwriters for a brokerage
commission, finder's fee or like payment in connection with the
offering and sale of the Notes.
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(gg) The Company has not taken and will not take, directly or
indirectly, any action designed to or that could reasonably be expected
to cause or result in the stabilization or manipulation of the price of
the Notes.
(hh) None of the Company or any of its subsidiaries does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Florida Statutes Section 517.075.
(ii) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Registration Statement has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good
faith.
2. Purchase of the Notes by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company hereby agrees to issue and sell to
each of the Underwriters, and each of the Underwriters severally and not
jointly, agrees to purchase from the Company the principal amount of Notes set
forth opposite that Underwriter's name in Schedule 1 hereto at a purchase price
equal to 95% of the principal amount thereof.
The Company shall not be obligated to deliver any of the Notes, except
upon payment for all the Notes to be purchased as provided herein. The Company
acknowledges and agrees that the Underwriters may sell Notes to any affiliate of
an Underwriter and that any such affiliate may sell Notes purchased by it to an
Underwriter.
3. Delivery of and Payment for the Notes. (a) Delivery of and payment
for the Notes shall be made at the office of Davis, Graham & Stubbs LLP, 370
Seventeenth Street, Suite 4700, Denver, CO 80201, at 9:00 A.M., Denver time, on
the fifth full business day following the date of this Agreement or at such
other date or place as shall be determined by agreement between the Underwriters
and the Company. This date and time are sometimes referred to as the "Closing
Date." (b) On the Closing Date, payment of the purchase price for the Notes
shall be made to the Company by certified or official bank check or checks drawn
in New York Clearing House funds or similar next-day funds, or by such other
means as the parties hereto shall agree prior to the Closing Date, against
delivery to the Underwriters of the certificates evidencing the Notes. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligations of the Underwriters
hereunder. Upon delivery, the Notes shall be in global form, registered in such
names and in such denominations as CSI on behalf of the Underwriters shall have
requested in writing not less than two full business days prior to the Closing
Date. The Company agrees to make one or more global certificates evidencing the
Notes available for inspection by CSI on behalf of the Underwriters in New York,
New York at least 24 hours prior to the Closing Date.
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4. Further Agreements of the Company. The Company agrees with each of
the several Underwriters:
(a) To prepare the Prospectus in a form approved by the
Underwriters and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than Commission's close of business on the
second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Securities Act; except for such
post-effective amendment made under Rule 462(d) under the Securities
Act, which amendment shall be approved by the Underwriters, to make no
further amendment or any supplement to the Registration Statement or to
the Prospectus prior to the Closing Date except as permitted herein; to
advise the Underwriters, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the Underwriters with
copies thereof; to file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Notes; to advise the Underwriters, promptly
after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Notes for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing
of the Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, to
use promptly its best efforts to obtain its withdrawal at the earliest
possible time.
(b) To furnish promptly to each Underwriter and to counsel for
the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed
therewith.
(c) To deliver promptly to each Underwriter such number of the
following documents as such Underwriter shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case excluding
exhibits other than this Agreement and the computation of per share
earnings), (ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus and (iii) any document incorporated
by reference in the Prospectus (excluding exhibits thereto); and, if
the delivery of a prospectus is required at any time after the
Effective Time in connection with the offering or sale of the Notes and
if at such time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
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<PAGE> 11
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus
in order to comply with the Securities Act or the Exchange Act, to
notify the Underwriters and, upon their request, to file such document
and to prepare and furnish without charge to each Underwriter and to
any dealer in securities as many copies as each Underwriter may from
time to time reasonably request of an amended or supplemented
Prospectus which will correct such statement or omission or effect such
compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Underwriters, be required by the Securities Act or requested by the
Commission.
(e) During the period when a prospectus is required to be
delivered in connection with the offering or sale of the Notes, prior
to filing with the Commission any amendment to the Registration
Statement or supplement to the Prospectus, any document incorporated by
reference in the Prospectus or any Prospectus pursuant to Rule 424 of
the Rules and Regulations, to furnish a copy thereof to each
Underwriter and counsel for the Underwriters and obtain the consent of
the Underwriters to the filing.
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to
the Underwriters an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158).
(g) For so long as the Notes are outstanding, to furnish to
the Underwriters copies of any annual reports, quarterly reports and
current reports filed by the Company with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission, and such other documents, reports and information as shall
be furnished by the Company to the Trustee or to the holders of the
Notes pursuant to the Indenture or the Exchange Act or any rule or
regulation of the Commission thereunder.
(h) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Notes for offering
and sale under the securities laws of such jurisdictions as the
Underwriters may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for
as long as required for the resale of the Notes.
(i) For a period of 60 days from the date of the Prospectus,
not to offer for sale, sell, contract to sell or otherwise dispose of,
directly or indirectly, or file a registration statement for, or
announce any offer, sale, contract for sale of or other disposition of
any debt securities issued or guaranteed by the Company or any of its
subsidiaries (other than the Notes) without the prior written consent
of the Joint Lead Book-Runners; provided
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<PAGE> 12
however, that the Company may (i) amend its Registration Statement on
Form S-3 (No. 333-21221), or otherwise file a related registration
statement, to increase the aggregate amount of securities registered
pursuant thereto, (ii) offer for sale and sell debt securities in a
private placement to five or fewer institutional investors in a
transaction not involving immediate registration or subsequent
registration pursuant to an exchange offer or otherwise and (iii) offer
for sale and sell securities convertible into or exchangeable for
equity securities of the Company.
(j) To take such steps as shall be necessary to ensure that
neither the Company, nor any subsidiary shall become an "investment
company" within the meaning of such term under the Investment Company
Act of 1940, as amended, and the rules and regulations of the
Commission thereunder.
(k) In connection with the offering of the Notes, until the
Joint Lead Book-Runners on behalf of the Underwriters shall have
notified the Company of the completion of the distribution of the
Notes, not to, and to cause its affiliated purchasers (as defined in
Regulation M under the Exchange Act) not to, either alone or with one
or more other persons, bid for or purchase, for any account in which it
or any of its affiliated purchasers has a beneficial interest, any
Notes, or attempt to induce any person to purchase any Notes; and not
to, and to cause its affiliated purchasers not to, make bids or
purchase for the purpose of creating actual, or apparent, active
trading in or of raising the price of the Notes.
(l) In connection with the offering of the Notes, to make its
officers, employees, independent accountants and legal counsel
reasonably available upon request by the Underwriters.
(m) To furnish to each of the Underwriters on the date hereof
a copy of the independent accountants' report included in the
Registration Statement signed by the accountants rendering such report.
(n) To do and perform all things required to be done and
performed by it under this Agreement that are within its control prior
to or after the Closing Date, and to use its best efforts to satisfy
all conditions precedent on its part to the delivery of the Notes.
(o) To not take any action prior to the execution and delivery
of the Indenture which, if taken after such execution and delivery,
would have violated any of the covenants contained in the Indenture.
(p) To not take any action prior to the Closing Date which
would require the Prospectus to be amended or supplemented pursuant to
Section 4(c).
(q) Prior to the Closing Date, not to issue any press release
or other communication directly or indirectly or hold any press
conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except
for routine oral marketing communications in the ordinary course of
business and consistent with the past practices of the Company and of
which the
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<PAGE> 13
Underwriters are notified), without the prior written consent of the
Underwriters, unless in the judgment of the Company and its counsel,
and after notification to the Underwriters, such press release or
communication is required by law.
(r) To apply the net proceeds from the sale of the Notes as
set forth in the Prospectus Supplement under the heading "Use of
Proceeds".
5. Expenses. The Company agrees to pay: (a) the costs incident to the
authorization, issuance, sale and delivery of the Notes and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus or any document
incorporated by reference therein, all as provided in this Agreement; (d) the
costs of producing and distributing the Indenture, this Agreement and any other
related documents in connection with the offering, purchase, sale and delivery
of the Notes; (e) the filing fees incident to securing any required review by
the National Association of Securities Dealers, Inc. of the terms of sale of the
Notes; (f) the fees and expenses of preparing, printing and distributing Blue
Sky Memoranda (including related fees and expenses of counsel to the
Underwriters); (g) the fees and expenses of the Company's counsel and
independent accountants; (h) any fees charged by rating agencies for rating the
Notes; (i) all fees and expenses of the Trustee and any paying agent (including
related fees and expenses of any counsel to such parties); and (j) all other
costs and expenses incident to the performance of the obligations of the Company
under this Agreement; provided that, except as provided in this Section 5 and in
Section 10, the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel, any transfer taxes on the Notes which
they may sell, the expenses of advertising any offering of the Notes made by the
Underwriters and the expenses of the roadshow (excluding the Company's air and
rail transportation and lodging expenses).
6. Conditions of Underwriters' Obligations. The respective obligations
of the several Underwriters hereunder are subject to the accuracy, when made and
on the Closing Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with.
(b) The Prospectus (and any amendments or supplements thereto)
shall have been printed and copies distributed to the Underwriters as
promptly as practicable on or following the date of this Agreement or
at such other date and time as to which the Underwriters may agree.
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<PAGE> 14
(c) No Underwriter shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of Akin, Gump,
Strauss, Hauer & Feld, L.L.P., counsel for the Underwriters, is
material or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(d) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Notes,
the Registration Statement, the Prospectus and any other Transaction
Document, and all other legal matters relating to this Agreement and
the transactions contemplated hereby shall be reasonably satisfactory
in all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass
upon such matters.
(e) Davis, Graham & Stubbs LLP shall have furnished to the
Underwriters their written opinion, as counsel to the Company,
addressed to the Underwriters and dated the Closing Date, in form and
substance reasonably satisfactory to the Underwriters, substantially to
the effect set forth below:
(i) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in
good standing as foreign corporations in each jurisdiction in
which their respective ownership or lease of property or the
conduct of their respective businesses requires such
qualification (except where the failure to so qualify or be in
good standing would not reasonably be expected to have a
Material Adverse Effect) and have all corporate power and
authority necessary to own or hold their respective properties
and conduct the businesses in which they are engaged;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the outstanding shares of
capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly
authorized and issued and are fully paid, non-assessable and
(except as disclosed or incorporated by reference in the
Prospectus and for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all
perfected security interests and, to the knowledge of such
counsel, any other liens, encumbrances or claims;
(iii) To such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property or
assets of the Company or any of its
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<PAGE> 15
subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would likely have a
Material Adverse Effect; and, to such counsel's knowledge, no
such proceedings are threatened by governmental authorities or
threatened by others;
(iv) The Registration Statement was declared effective under
the Securities Act as of the date and time specified in such
opinion, the Prospectus was filed with the Commission pursuant
to the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date specified
therein and no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the knowledge
of such counsel, no proceeding for that purpose is pending or
threatened by the Commission;
(v) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company
prior to the Closing Date (other than the financial statements
and related schedules therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Securities Act and the Rules and
Regulations; and the documents incorporated by reference in
the Prospectus and any further amendment or supplement to any
such incorporated document made by the Company prior to the
Closing Date (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all
material respects with the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder;
(vi) The Indenture complies as to form in all material
respects with the requirements of the Trust Indenture Act and
the rules and regulations of the Commission thereunder;
(vii) To such counsel's knowledge, there are no contracts or
other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations which
have not been described or filed as exhibits to the
Registration Statement or incorporated therein by reference as
permitted by the Rules and Regulations;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company;
(ix) The Indenture has been duly authorized, executed and
delivered by the Company, and assuming due authorization,
execution and delivery thereof by the Trustee, constitutes a
valid and legally binding agreement of
15
<PAGE> 16
the Company, enforceable against the Company in accordance
with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by
general equitable principles (whether considered in a
proceeding in equity or at law);
(x) The Notes have been duly authorized and issued by the
Company and, assuming due authentication thereof by the
Trustee and upon payment and delivery in accordance with the
Underwriting Agreement, will constitute valid and legally
binding obligations of the Company and be enforceable against
the Company in accordance with their terms, except to the
extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether
considered in a proceeding in equity or at law);
(xi) The Company is not an "investment company" within the
meaning of such term under the Investment Company Act of 1940,
as amended, and the rules and regulations of the Commission
thereunder;
(xii) Each Transaction Document conforms in all material
respects to the description thereof contained in the
Prospectus;
(xiii) The execution, delivery and performance by the Company
of each of the Transaction Documents, the issuance,
authentication, sale and delivery of the Notes and compliance
by the Company with the terms thereof and the consummation of
the transactions contemplated by the Transaction Documents
will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any material
indenture, mortgage, deed of trust, loan agreement or 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 the property
or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any judgment, order,
decree, rule or regulation of any court or arbitrator or
governmental agency or body having jurisdiction over it or any
of its subsidiaries or any of their properties or assets; and
no consent, approval, authorization or order of, or filing or
registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment,
order, decree, rule or regulation is required for the
execution,
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<PAGE> 17
delivery and performance by the Company of each of the
Transaction Documents, the issuance, authentication, sale and
delivery of the Notes and compliance by the Company with the
terms thereof and the consummation of the transactions
contemplated by the Transaction Documents, except for the
registration of the Notes under the Securities Act, the
qualification of the Indenture under the Trust Indenture Act
and such consents, approvals, authorizations, filings,
registrations or qualifications (i) which shall have been
obtained or made prior to the Closing Date and (ii) as may be
required to be obtained or made under the Exchange Act and
applicable state securities laws in connection with the
purchase and distribution of the Notes by the Underwriters;
(xiv) To such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any
person granting such person the right (other than rights which
have been waived, satisfied or not exercised) to require the
Company to file a registration statement under the Securities
Act with respect to any securities of the Company owned or to
be owned by such person or to require the Company to include
such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Securities Act; and
(xv) The information set forth in the Prospectus Supplement
under the headings "Certain Federal Income Tax Consequences"
and "Risk Factors -- Governmental and Environmental
Regulation" and in Item 1--Business--Regulation and Item
3--Legal Proceedings and Environmental Issues of the Company's
Annual Report on Form 10-K for the year ended December 31,
1997, to the extent that it constitutes matters of law,
summaries of legal matters, the Company's charter and bylaws
or legal proceedings, or legal conclusions, is correct in all
material respects.
In rendering such opinion, such counsel may (i) state that their
opinion is limited to matters governed by the Federal laws of the United States
of America, the laws of the State of New York and the General Corporation Law of
the State of Delaware and that such counsel is not admitted in the State of
Delaware and (ii) rely as to matters of fact (but not legal conclusions), to the
extent they deem proper, on certificates of responsible officers of the Company
and public officials. Such counsel shall also have furnished to the Underwriters
a written statement, addressed to the Underwriters and dated the Closing Date,
in form and substance satisfactory to the Underwriters, to the effect that (i)
such counsel has acted as counsel to the Company on a regular basis (although
the Company is also represented by its General Counsel and, with respect to
certain other matters, by other outside counsel), has acted as counsel to the
Company in connection with previous financing transactions and has acted as
counsel to the Company in connection with the preparation of the Registration
Statement, and (ii) based on the foregoing, no facts have come to the attention
of such counsel which lead them to believe that (A) the Registration Statement,
as of the Effective Date, contained any untrue statement of a material fact or
omitted to state a material fact required to be
17
<PAGE> 18
stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading or (B) any document incorporated by
reference in the Prospectus or any further amendment or supplement to any such
incorporated document made by the Company prior to the Closing Date, when they
became effective or were filed with the Commission as the case may be, contained
in the case of a registration statement which became effective under the
Securities Act, any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or, in the case of other documents which were
filed under the Exchange Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Notwithstanding the foregoing, such counsel need express no
belief with respect to the financial statements, financial schedules, other
financial or statistical data (including any reserve, production and cost data)
and any geologic information included in or incorporated by reference in the
Prospectus and any amendment or supplement thereto.
(f) The Underwriters shall have received from Akin, Gump,
Strauss, Hauer & Feld, L.L.P., counsel for the Underwriters, such
opinion or opinions, dated the Closing Date, with respect to the
issuance and sale of the Notes, the Registration Statement, the
Prospectus and other related matters as the Underwriters may reasonably
require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them
to pass upon such matters.
(g) At the time of execution of this Agreement, the
Underwriters shall have received from Arthur Andersen LLP a letter, in
form and substance satisfactory to the Underwriters, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as
of which specified financial information is given in the Prospectus, as
of a date not more than three days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(h) With respect to the letter of Arthur Andersen LLP referred
to in the preceding paragraph and delivered to the Underwriters
concurrently with the execution of this Agreement (the "initial
letter"), the Company shall have furnished to the Underwriters a letter
(the "bring-down letter") of such accountants, addressed to the
Underwriters and dated the Closing Date (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified
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<PAGE> 19
financial information is given in the Prospectus, as of a date not more
than three days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set
forth in the initial letter.
(i) The Company shall have furnished to the Underwriters a
certificate, dated the Closing Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating
that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct as of the
Closing Date; the Company has complied with all its agreements
contained herein; and the conditions set forth in Sections
6(a) and 6(i) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of
the Effective Date, the Registration Statement and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (B) since the Effective Date no event has
occurred which is required under the Securities Act to be set
forth in a supplement or amendment to the Registration
Statement or the Prospectus.
(j) (x) Neither the Company nor any of its subsidiaries shall
have sustained since the date hereof or the respective dates as of
which information is given in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree, otherwise than as set forth or
incorporated by reference in the Prospectus, except such losses,
interferences, disputes, actions, orders or decrees that do not
individually or in the aggregate have a Material Adverse Effect, or (y)
since such dates there shall not have been any material change in the
capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or incorporated by
reference in the Prospectus, the effect of which, in any such case
described in clause (x) or (y), is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Notes being delivered on the Closing Date on the terms and in the
manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any
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<PAGE> 20
such exchange or such market by the Commission, by such exchange or by
any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by
Federal or state authorities, (iii) the United States shall have become
engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority in interest
of the several Underwriters, impracticable or inadvisable to proceed
with the public offering or delivery of the Notes being delivered on
the Closing Date on the terms and in the manner contemplated in the
Prospectus.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who
controls any Underwriter within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and sales of
Notes), to which that Underwriter, officer, employee or controlling
person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of,
or is based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or
supplement thereto, or (ii) the omission or alleged omission to state
in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, any material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the Company shall not
be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, in reliance upon
and in conformity with any Underwriters' Information. The foregoing
indemnity agreement is in addition to any liability which the Company
may otherwise have to any Underwriter or to any officer, employee or
controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, each of its officers and
employees, each of its directors, and each person, if any, who controls
the Company within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action
in respect thereof, to which the Company or any such director, officer,
employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim,
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<PAGE> 21
damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or (ii) the
omission or alleged omission to state in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and
in conformity with written information concerning such Underwriter
furnished to the Company through the Underwriters by or on behalf of
that Underwriter specifically for inclusion therein, and shall
reimburse the Company and any such director, officer, employee or
controlling person for any legal or other expenses reasonably incurred
by the Company or any such director, officer, employee or controlling
person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as
such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to
the Company or any such director, officer, employee or controlling
person.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 7 except to the extent it has been materially prejudiced
by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 7. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under this Section 7 for any legal
or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the indemnified party shall have
the right to employ counsel to represent such indemnified party if the
indemnified party shall have been advised by counsel that there may be
legal defenses available to it which are different from or in addition
to those available to such indemnifying party, and in that event the
fees and expenses of such separate counsel shall be paid by the
indemnifying party. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent
21
<PAGE> 22
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, or (ii) be liable for any
settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with
the consent of the indemnifying party or if there be a final judgment
of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 7
shall for any reason be unavailable to or insufficient to hold harmless
an indemnified party under Section 7(a), 7(b) or 7(c) in respect of any
loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the
other from the offering of the Notes or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Underwriters on the other with respect
to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Notes purchased
under this Agreement (before deducting expenses) received by the
Company on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the Notes
purchased under this Agreement on the other hand, bear to the total
gross proceeds from the offering of the Notes under this Agreement, in
each case as set forth in the Prospectus Supplement. The relative fault
shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or
the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this
Section 7(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Section shall be deemed to include, for purposes of this Section 7(d),
any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 7(d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes underwritten by it
and distributed to the public was offered to the public exceeds the
amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged
22
<PAGE> 23
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section
7(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of
the Notes by the Underwriters set forth on the cover page of, and the
information under the caption "Underwriting" in, the Prospectus
Supplement, and the legend concerning stabilization on the inside front
cover page of the Prospectus, are correct and constitute the only
information concerning such Underwriters furnished in writing to the
Company by or on behalf of the Underwriters specifically for inclusion
in the Registration Statement and the Prospectus.
8. Defaulting Underwriters. If, on the Closing Date, any Underwriter
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting Underwriters shall be obligated to purchase the Notes
which the defaulting Underwriter agreed but failed to purchase on the Closing
Date in the respective proportions which the principal amount of Notes set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total principal amount of Notes set opposite the names of
all the remaining non-defaulting Underwriters in Schedule 1 hereto; provided,
however, that the remaining non-defaulting Underwriters shall not be obligated
to purchase any of the Notes on the Closing Date if the total principal amount
of Notes which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such date exceeds 10% of the total principal amount of Notes to be
purchased on the Closing Date, and any remaining non-defaulting Underwriter
shall not be obligated to purchase more than 110% of the principal amount of
Notes which it agreed to purchase on the Closing Date pursuant to the terms of
Section 2. If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to such non-defaulting
Underwriters who so agree, shall have the right, but shall not be obligated, to
purchase, in such proportion as may be agreed upon among them, all the Notes to
be purchased on the Closing Date. If the remaining Underwriters or other
underwriters satisfactory to the non-defaulting Underwriters do not elect to
purchase the Notes which the defaulting Underwriter or Underwriters agreed but
failed to purchase on the Closing Date, this Agreement shall terminate without
liability on the part of the non-defaulting Underwriters or the Company, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Sections 5 and 10 and except that the provisions of Sections
6 and 7 shall not terminate and shall remain in effect. As used in this
Agreement, the term "Underwriters" includes, for all purposes of this Agreement
unless the context otherwise requires, any party not listed in Schedule 1 hereto
that, pursuant to this Section 8, purchases Notes which a defaulting Underwriter
agreed but failed to purchase.
Nothing contained herein shall release a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default.
9. Termination. The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the Company
prior to delivery of and payment
23
<PAGE> 24
for the Notes if, prior to that time, any of the events described in Sections
6(i) or 6(j), shall have occurred or if the Underwriters shall decline to
purchase the Notes for any reason permitted under this Agreement.
10. Reimbursement of Underwriters' Expenses. If (a) the Company shall
fail to tender the Notes for delivery to the Underwriters for any reason
permitted under this Agreement or (b) the Underwriters shall decline to purchase
the Notes for any reason permitted under this Agreement, the Company shall
reimburse the Underwriters for such out-of-pocket expenses (including fees and
disbursements of counsel) as shall have been reasonably incurred by the
Underwriters in connection with this Agreement and the proposed public offering
and sale of the Notes, and upon demand the Company shall pay the full amount
thereof to the Underwriters. If this Agreement is terminated pursuant to Section
8 by reason of the default of one or more of the Underwriters, the Company shall
not be obligated to reimburse any defaulting Underwriter on account of such
expenses.
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(f) if to the Underwriters, shall be delivered or sent by mail
or telecopy transmission to Chase Securities Inc., 270 Park Avenue, New
York, New York 10017, Attention: Larry Landry (telecopier no.: (212)
270-0994); or
(g) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: James M. Piccone, Esq. (Fax:
(303) 296-3601); and
provided, however, that any notice to an Underwriter pursuant to Section 7(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Underwriters, which address will be supplied to any other party hereto by the
Underwriters upon request. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Company shall be entitled
to act and rely upon any request, consent, notice or agreement given or made on
behalf of the Underwriters by CSI.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act (b) the indemnity agreement of the Underwriters contained in
Section 7(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 12, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
24
<PAGE> 25
13. Survival. The respective indemnities, representations, warranties
and agreements of the Company and the Underwriters contained in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Notes and shall remain in full force
and effect, regardless of any investigation made by or on behalf of any of them
or any person controlling any of them.
14. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[The remainder of this page is intentionally left blank.]
25
<PAGE> 26
S-2
If the foregoing correctly sets forth the agreement among the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
HS RESOURCES, INC.
By: /s/ Nicholas J. Sutton
---------------------------------
Nicholas J. Sutton
Chief Executive Officer
Accepted:
CHASE SECURITIES INC.
By: illegible
---------------------------------
Authorized Representative
For itself and as Representative
of the several Underwriters named
in Schedule 1 hereto
S-2
<PAGE> 27
SCHEDULE 1
<TABLE>
<CAPTION>
Principal Amount
of Notes
--------
Underwriters
------------
<S> <C>
Chase Securities Inc............................................................. $31,875,000
Lehman Brothers Inc.............................................................. $31,875,000
Morgan Stanley & Co. Incorporated................................................ $21,250,000
Total $85,000,000
</TABLE>
<PAGE> 1
================================================================================
HS RESOURCES, INC.
$85,000,000
9-1/4% Series B Senior Subordinated Notes due 2006
INDENTURE
Dated as of December 11, 1998
HARRIS TRUST AND SAVINGS BANK
Trustee
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 Definitions and Incorporation by Reference ..................................... 1
SECTION 1.01 Definitions ........................................................ 1
SECTION 1.02 Incorporation by Reference of Trust Indenture Act .................. 22
SECTION 1.03 Rules of Construction .............................................. 23
ARTICLE 2 The Securities ................................................................. 23
SECTION 2.01 Form and Dating .................................................... 23
SECTION 2.02 Execution and Authentication ....................................... 23
SECTION 2.03 Registrar and Paying Agent ......................................... 24
SECTION 2.04 Paying Agent To Hold Money in Trust ................................ 24
SECTION 2.05 Holder Lists ....................................................... 24
SECTION 2.06 Replacement Securities ............................................. 25
SECTION 2.07 Outstanding Securities ............................................. 25
SECTION 2.08 Temporary Securities ............................................... 25
SECTION 2.09 Cancellation ....................................................... 25
SECTION 2.10 Defaulted Interest ................................................. 26
SECTION 2.11 CUSIP Numbers ...................................................... 26
ARTICLE 3 Redemption...................................................................... 26
SECTION 3.01 Notices to Trustee ................................................. 26
SECTION 3.02 Selection of Securities To Be Redeemed ............................. 26
SECTION 3.03 Notice of Redemption ............................................... 27
SECTION 3.04 Effect of Notice of Redemption ..................................... 27
SECTION 3.05 Deposit of Redemption Price ........................................ 27
SECTION 3.06 Securities Redeemed in Part ........................................ 27
SECTION 3.07 Limitation on Redemptions .......................................... 28
ARTICLE 4 Covenants ...................................................................... 28
SECTION 4.01 Payment of Securities .............................................. 28
SECTION 4.02 Commission Reports ................................................. 28
SECTION 4.03 Limitation on Indebtedness ......................................... 28
SECTION 4.04 Limitation on Restricted Payments .................................. 30
SECTION 4.05 Limitation on Payment Restrictions Affecting Restricted Subsidiaries 33
SECTION 4.06 Limitation on Asset Sales .......................................... 34
SECTION 4.07 Limitation on Transactions with Affiliates ......................... 36
SECTION 4.08 Limitation on Issuance and Sale of Capital Stock of Restricted
Subsidiaries........................................................ 37
SECTION 4.09 Change of Control................................................... 37
SECTION 4.10 Limitation on Liens................................................. 38
</TABLE>
(i)
<PAGE> 3
<TABLE>
<S> <C>
SECTION 4.11 Limitation on Layered Indebtedness ................................. 39
SECTION 4.12 Future Guarantors .................................................. 39
SECTION 4.13 Maintenance of Office or Agency .................................... 39
SECTION 4.14 Money for the Security Payments to be Held in Trust ................ 40
SECTION 4.15 Payment of Taxes and Other Claims 40
SECTION 4.16 Corporate Existence ................................................ 40
SECTION 4.17 Compliance Certificate ............................................. 41
SECTION 4.18 Further Instruments and Acts 41
SECTION 4.19 Prohibition on Company and Guarantors Becoming Investment
Companies ................................................. 41
SECTION 4.20 Stay, Extension and Usury Laws ..................................... 41
SECTION 4.21 Limitation on Redemptions and Other Repayments of Securities and
Series A 9-1/4 % Notes.............................................. 41
ARTICLE 5 Successor Company .............................................................. 42
SECTION 5.01 Merger, Consolidation and Sale of Substantially All Assets ......... 42
SECTION 5.02 When a Subsidiary Guarantor May Merge or Transfer Assets ........... 45
ARTICLE 6 Defaults and Remedies .......................................................... 45
SECTION 6.01 Events of Default .................................................. 45
SECTION 6.02 Acceleration ....................................................... 47
SECTION 6.03 Other Remedies ..................................................... 48
SECTION 6.04 Waiver of Past Defaults ............................................ 48
SECTION 6.05 Control by Majority ................................................ 48
SECTION 6.06 Limitation on Suits ................................................ 48
SECTION 6.07 Rights of Holders to Receive Payment ............................... 49
SECTION 6.08 Collection Suit by Trustee ......................................... 49
SECTION 6.09 Trustee May File Proofs of Claim ................................... 49
SECTION 6.10 Priorities ......................................................... 49
SECTION 6.11 Undertaking for Costs............................................... 49
ARTICLE 7
Trustee................................................................................... 50
SECTION 7.01 Duties of Trustee................................................... 50
SECTION 7.02 Rights of Trustee................................................... 51
SECTION 7.03 Individual Rights of Trustee........................................ 52
SECTION 7.04 Trustee's Disclaimer................................................ 52
SECTION 7.05 Notice of Defaults.................................................. 52
SECTION 7.06 Reports by Trustee to Holders....................................... 52
SECTION 7.07 Compensation and Indemnity.......................................... 53
SECTION 7.08 Replacement of Trustee.............................................. 53
SECTION 7.09 Successor Trustee by Merger......................................... 54
SECTION 7.10 Eligibility; Disqualification....................................... 54
SECTION 7.11 Preferential Collection of Claims Against Company................... 55
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE 8 Discharge of Indenture; Defeasance............................................. 55
SECTION 8.01 Discharge of Liability on Securities................................ 55
SECTION 8.02 Defeasance.......................................................... 55
SECTION 8.03 Conditions to Defeasance............................................ 56
SECTION 8.04 Application of Trust Money.......................................... 57
SECTION 8.05 Repayment to Company................................................ 57
SECTION 8.06 Indemnity for Government Obligations................................ 57
SECTION 8.07 Reinstatement....................................................... 57
ARTICLE 9 Amendments...................................................................... 58
SECTION 9.01 Without Consent of Holders.......................................... 58
SECTION 9.02 With Consent of Holders............................................. 59
SECTION 9.03 Compliance with Trust Indenture Act................................. 60
SECTION 9.04 Revocation and Effect of Consents and Waivers....................... 60
SECTION 9.05 Notation on or Exchange of Securities............................... 60
SECTION 9.06 Trustee To Sign Amendments.......................................... 60
SECTION 9.07 Payment for Consent................................................. 60
ARTICLE 10 Subordination of the Securities................................................ 61
SECTION 10.01 Agreement to Subordinate........................................... 61
SECTION 10.02 Liquidation; Dissolution; Bankruptcy............................... 61
SECTION 10.03 Default on Senior Indebtedness..................................... 63
SECTION 10.04 Security Payments Permitted if No Default.......................... 64
SECTION 10.05 When Security Payment Must Be Paid Over............................ 64
SECTION 10.06 Notices by the Company............................................. 65
SECTION 10.07 Subrogation........................................................ 65
SECTION 10.08 Relative Rights.................................................... 65
SECTION 10.09 Subordination May Not Be Impaired by the Company................... 66
SECTION 10.10 Distribution of Notice to Representative........................... 66
SECTION 10.11 Rights of Trustee and Paying Agent................................. 66
SECTION 10.12 Consent of Holders of Specified Senior Indebtedness................ 66
SECTION 10.13 Contractual Subordination.......................................... 67
ARTICLE 11 Subsidiary Guaranties.......................................................... 67
SECTION 11.01 Guaranties......................................................... 67
SECTION 11.02 Limitation on Liability............................................ 69
SECTION 11.03 Successors and Assigns............................................. 69
SECTION 11.04 No Waiver.......................................................... 69
SECTION 11.05 Modification....................................................... 69
SECTION 11.06 Release of Subsidiary Guarantor.................................... 69
SECTION 11.07 Execution of Supplemental Indenture for Future Subsidiary
Guarantors......................................................... 70
ARTICLE 12 Subordination of Subsidiary Guaranties......................................... 70
SECTION 12.01 Agreement to Subordinate........................................... 70
SECTION 12.02 Liquidation; Dissolution; Bankruptcy............................... 71
SECTION 12.03 Default on Subsidiary Guarantor Senior Indebtedness................ 73
SECTION 12.04 Guaranty Payments Permitted if No Default.......................... 74
SECTION 12.05 When Guaranty Payment Must Be Paid Over............................ 74
SECTION 12.06 Notices by a Subsidiary Guarantor.................................. 74
SECTION 12.07 Subrogation........................................................ 75
SECTION 12.08 Relative Rights.................................................... 75
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<S> <C>
SECTION 12.09 Subordination May Not be Impaired by the Subsidiary Guarantor...... 75
SECTION 12.10 Distribution or Notice to Representative........................... 76
SECTION 12.11 Rights of Trustee and Paying Agent................................. 76
SECTION 12.12 Consent of Holders of Subsidiary Guarantor Senior Indebtedness..... 76
SECTION 12.13 Contractual Subordination.......................................... 77
ARTICLE 13 Miscellaneous.................................................................. 77
SECTION 13.01 Compliance Certificates and Opinions............................... 77
SECTION 13.02 Form of Documents Delivered to Trustee............................. 77
SECTION 13.03 Acts of Holders.................................................... 78
SECTION 13.04 Trust Indenture Act Controls....................................... 79
SECTION 13.05 Notices............................................................ 79
SECTION 13.06 Communication by Holders with Other Holders........................ 80
SECTION 13.07 When Securities Disregarded........................................ 80
SECTION 13.08 Rules by Trustee, Paying Agent and Registrar....................... 80
SECTION 13.09 Legal Holidays..................................................... 81
SECTION 13.10 Governing Law...................................................... 81
SECTION 13.11 No Recourse Against Others......................................... 81
SECTION 13.12 Submission to Jurisdiction; Appointment of Agent for Service of
Process; Waiver of Immunities...................................... 81
SECTION 13.13 Successors......................................................... 82
SECTION 13.14 Multiple Originals................................................. 82
SECTION 13.15 Table of Contents; Headings........................................ 82
Appendix A Provisions Relating to Transfer of Securities
Exhibit A Form of Security
Exhibit B Form of Supplemental Indenture
</TABLE>
(iv)
<PAGE> 6
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) .................................................................. 2.05
(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) .................................................................. 2.04
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> 7
INDENTURE dated as of December 11, 1998, among HS RESOURCES, INC., a
Delaware corporation (the "Company"), any of the Company's subsidiaries that may
become parties hereto after the date hereof (if any, each, a "Subsidiary
Guarantor" and, collectively, the "Subsidiary Guarantors") and HARRIS TRUST AND
SAVINGS BANK, an Illinois banking corporation, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 9-1/4% Series B
Senior Subordinated Notes Due 2006 (the "Securities"):
ARTICLE 1.
Definitions and Incorporation by Reference
SECTION 1.01 Definitions.
"Acquired Indebtedness" means, with respect to the Company,
Indebtedness of a Person existing at the time such Person becomes a Restricted
Subsidiary.
"Additional Assets" means (i) any Property (other than cash, Permitted
Short-Term Investments or securities) used in the Oil and Gas Business or any
business ancillary thereto, (ii) 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 made in compliance with
the definition of the term "Restricted Subsidiary" and Section 4.04, (iii) the
acquisition from third parties of Capital Stock of a Restricted Subsidiary, (iv)
the costs of acquiring, exploiting, developing, exploring, producing or
operating in respect of oil and gas properties or (v) Permitted Business
Investments.
"Adjusted Consolidated Net Tangible Assets" means, without duplication,
as of the date of determination, (i) the sum of (A) discounted future net cash
flows from proved oil and gas reserves of the Company and its Restricted
Subsidiaries, calculated in accordance with Commission guidelines (before any
state or Federal income tax), as estimated by the Company and reviewed by
independent petroleum engineers as of a date no earlier than the date of the
Company's latest annual consolidated financial statements (or, in the case that
the date of determination is after the end of the first fiscal quarter of the
fiscal year of the Company, as estimated by the Company's engineers as of a date
no earlier than the end of the most recent fiscal quarter, which estimates shall
be confirmed by independent petroleum engineers in accordance with Commission
guidelines in the event of a Material Change), (B) the Net Working Capital on a
date no earlier than the date of the Company's latest consolidated annual or
quarterly financial statements and (C) with respect to each other tangible asset
(including undeveloped acreage) of the Company or its Restricted Subsidiaries,
the greater of (1) the net book value of such other tangible asset on a date no
earlier than the date of the Company's latest consolidated annual or quarterly
financial statements and (2) the appraised value, as estimated by a qualified
independent appraiser, of such other tangible asset, as of a date no earlier
than the date of the Company's latest audited financial statements, minus (ii)
minority interests and, to the
-1-
<PAGE> 8
extent not otherwise taken into account in determining Adjusted Consolidated Net
Tangible Assets, any gas balancing liabilities of the Company and its Restricted
Subsidiaries.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean
the amount by which the fair value of the Property of such Subsidiary Guarantor
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date), but excluding liabilities under
the Subsidiary Guaranty, of such Subsidiary Guarantor at such date.
"Affiliate" of any specified Person means any other Person (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person or (ii)
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.
"Asset Sale" means (including, without limitation, any such actions
taken prior to the Issue Date but from and after the Series A Issue Date): (i)
any direct or indirect sale, transfer, assignment, lease, conveyance or other
disposition (including, without limitation, dispositions pursuant to any merger,
consolidation, Investment or Production Payment and Reserve Sale) by the Company
or any of its Restricted Subsidiaries in any single transaction or series of
transactions having a Fair Market Value in excess of $1,000,000 of (A) shares of
Capital Stock or other ownership interests of another Person (including Capital
Stock of Unrestricted Subsidiaries) or (B) any other Property of the Company or
any of its Restricted Subsidiaries, and (ii) the issuance of Capital Stock
(including, without limitation, pursuant to any merger, consolidation,
recapitalization or similar transaction) by a Restricted Subsidiary to a Person
other than the Company or a Wholly Owned Restricted Subsidiary in any single
transaction or series of transactions having a Fair Market Value in excess of
$1,000,000. Notwithstanding the preceding sentence, for purposes of Section
4.06, the term "Asset Sale" shall not include: (i) the sale or transfer of
Permitted Short-Term Investments, inventory, accounts receivable or other
Property (excluding the sale or transfer of oil and gas in place and other
interests in real property) in the ordinary course of business; (ii) the lease,
farm-out or abandonment of any oil and gas property in the ordinary course of
business of the Company and its Restricted Subsidiaries and in a manner
customary in the Oil and Gas Business; (iii) the disposition of Property
received in settlement of debts (including, without limitation, under any
bankruptcy or similar proceeding) owing to the Company or any Restricted
Subsidiary as a result of foreclosure, perfection or enforcement of any Lien or
debt, which debts were owing to the Company or any Restricted Subsidiary in the
ordinary course of business of the Company or such Restricted Subsidiary; (iv)
the transfer of Property to an Unrestricted Subsidiary or other Person to the
extent that such transfer constitutes a Restricted Payment made pursuant to and
in compliance with Section 4.04; (v) any disposition of all or substantially all
of the Property of the Company and its Restricted Subsidiaries taken as a whole
made subject to and in compliance with Section 5.01; (vi) the disposition of any
Property by the Company or a Restricted Subsidiary to the Company or a
Restricted Subsidiary; (vii) any issuance of Capital Stock made by a Material
Restricted Subsidiary that results in such Material Restricted Subsidiary no
longer
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being a Subsidiary of the Company, which issuance was made subject to and in
compliance with Section 5.01; and (viii) any Production Payment and Reserve Sale
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.
"Assigned Restricted Subsidiary Indebtedness" means Indebtedness of a
Restricted Subsidiary to the Company that the Company has assigned to the
lenders under the Bank Credit Facility, as collateral securing Indebtedness of
the Company under the Bank Credit Facility.
"Average Life" means, with respect to any Indebtedness, as at any date
of determination, the quotient obtained by dividing (i) the sum of the products
of (A) the number of years (and any portion thereof) from the date of
determination to the date or dates of each successive scheduled principal
payment (including, without limitation, any sinking fund or mandatory redemption
payment requirements) of such Indebtedness multiplied by (B) the amount of each
such principal payment by (ii) the sum of all such principal payments.
"Bank Credit Facility" means collectively, one or more senior credit
facilities or commercial paper facilities with banks or other institutional
lenders (including, without limitation, the credit facility pursuant to the
Amended and Restated Credit Agreement, dated June 14, 1996, as amended, among
the Company, The Chase Manhattan Bank, as Agent, and certain banks), together
with any security and related documents, as all such credit facilities and
documents may be amended, supplemented, extended, increased, refinanced or
replaced from time to time. For purposes of determining whether Indebtedness
under the Bank Credit Facility constitutes Permitted Indebtedness and only for
such purposes, Indebtedness Incurred in reliance on clause (i) of Section
4.03(a) shall not be deemed to constitute Indebtedness Incurred in reliance on
clause (i) of the definition of the term "Permitted Indebtedness."
"Bankruptcy Law" means Title 11, United States Code, or any similar
Federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Board Resolutions" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions are authorized or
obligated by law or executive order to close in New York, New York and Chicago,
Illinois and, with respect to any payment of cash or delivery of securities, the
place of such payment or delivery.
"Capitalized Lease Obligation" of any Person means the obligation of
such Person to pay rent or other amounts under a lease of property, real or
personal, that is required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of such obligation shall be the capitalized
amount thereof determined in accordance with GAAP. For purposes of Section 4.10,
a Capitalized Lease Obligation shall be deemed to be secured by a Lien on the
Property being leased.
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<PAGE> 10
"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" shall be deemed to occur if (i) 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), other than any one or
more of the Permitted Holders, becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act) of 40% or more of the total voting power of
all classes of the Voting Stock of the Company and/or warrants or options to
acquire such Voting Stock, calculated on a fully diluted basis, (ii) the sale,
lease, conveyance or transfer of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole (other than to any
Wholly Owned Restricted Subsidiary) shall have occurred, (iii) the stockholders
of the Company shall have approved any plan of liquidation or dissolution of the
Company, (iv) 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 (A) the outstanding Voting Stock of the Company
is reclassified into or exchanged for Voting Stock of the surviving corporation
that is Capital Stock and (B) the holders of the Voting Stock of the Company
immediately prior to such transaction own, directly or indirectly, not less than
a majority of the Voting Stock of the surviving corporation immediately after
such transaction or (v) 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 stockholders of the Company was approved by
a vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Company's Board of Directors then in office.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this instrument, such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"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 (i) 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 to
(ii) the aggregate Consolidated Interest Expense of the Company and its
Restricted Subsidiaries that is
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<PAGE> 11
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 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, (i) the sum of (A) 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, without
limitation, (1) any amortization of debt discount, (2) net costs associated with
Interest Rate Protection Agreements (including any amortization of discounts),
(3) the interest portion of any deferred payment obligation, (4) all accrued
interest, and (5) all commissions, discounts, commitment fees, origination fees
and other fees and charges owed with respect to any Bank Credit Facility and
other Indebtedness paid, accrued or scheduled to be paid or accrued during such
period); (B) Preferred Stock and Redeemable Stock dividends of such Person and
of its Restricted Subsidiaries (if such dividends are paid to a Person other
than such Person or its Wholly Owned Restricted Subsidiaries) declared and
payable other than in kind; (C) the portion of any rental obligation of such
Person or its Restricted Subsidiaries in respect of any Capitalized Lease
Obligation allocable to interest expense in accordance with GAAP; (D) 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
Capitalized Lease Obligation); and (E) 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 (ii) to the extent included
in (i) above, amortization or write-off of deferred financing costs of such
Person and its Restricted Subsidiaries during such period; in the case of
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<PAGE> 12
both (i) and (ii) 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, (i) items classified as extraordinary (other than the tax benefit
of the utilization of net operating loss carry-forwards and alternative minimum
tax credits); (ii) any gain or loss, net of taxes, on the sale or other
disposition of assets (including the Capital Stock of any other Person) in
excess of $1,000,000, from any sale or disposition, or series of related sales
or dispositions (but in no event shall this clause (ii) apply to the sale of oil
and gas inventories in the ordinary course of business); (iii) the net income of
any Subsidiary of such specified Person 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 Subsidiary to such
Person during such period; (iv) the net income (or net loss) of any other Person
in which such specified Person or any of its Restricted Subsidiaries has an
ownership interest (which ownership interest does not cause the net income of
such other Person to be consolidated with the net income of such specified
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 Restricted Subsidiaries by
such other Person during such period; (v) the net income (or net loss) of any
Person acquired by such specified Person or any of its Restricted Subsidiaries
in a pooling-of-interests transaction for any period prior to the date of such
acquisition; (vi) any gain or loss, net of taxes, realized on the termination of
any employee pension benefit plan; (vii) 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; and (viii) the
cumulative effect of a change in accounting principles.
"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.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 311 West Monroe Street, Chicago, Illinois 60606.
"Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
"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.
"EBITDA" means with respect to any Person for any period, the
Consolidated Net Income of such Person and its consolidated Restricted
Subsidiaries for such period, plus (i) 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
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<PAGE> 13
deducted in the determination of such Consolidated Net Income, without
duplication, (A) income tax expense (but excluding income tax expense relating
to (1) sales or other disposition of assets (including the Capital Stock of any
other Person) resulting in a net gain in excess of $1,000,000 and (2) the
redemption or retirement of any Indebtedness prior to its Stated Maturity), (B)
Consolidated Interest Expense, (C) depreciation and depletion expense, (D)
amortization expense, (E) exploration expense, (F) any loss, net of taxes, in
connection with the redemption or retirement of any Indebtedness prior to its
Stated Maturity, and (G) any other noncash charges, including, without
limitation, unrealized foreign exchange losses; less (ii) 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, (A) income tax recovery (but excluding income tax recovery
relating to (1) sales or other dispositions of assets (including the Capital
Stock of any other Person) resulting in a net loss in excess of $1,000,000 and
(2) the redemption or retirement of any Indebtedness prior to its Stated
Maturity), (B) any gain, net of taxes, in connection with the redemption or
retirement of any Indebtedness prior to its Stated Maturity and (C) unrealized
foreign exchange gains.
"Equity Offering" means a bona fide underwritten sale to the public of
Capital 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
following the Series A Issue Date and resulting in aggregate gross proceeds to
the Company of at least $30,000,000.
"Event of Default" has the meaning specified in Section 6.01.
"Excess Proceeds" has the meaning specified in Section 4.06.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Exchanged Properties" means oil and gas properties received by the
Company or a Restricted Subsidiary in trade or as a portion of the total
consideration for other such properties.
"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, designed and
entered into in order to provide protection against fluctuations in currency
exchange rates, and entered into in the ordinary course of business of such
Person.
"Existing Unrestricted Subsidiary" means Resource Gathering Systems,
Inc., a California corporation.
"Fair Market Value" means, with respect to any assets to be transferred
pursuant to any Asset Sale or Sale and Leaseback Transaction or any non-cash
consideration or property transferred or received by any Person, the fair market
value of such consideration or property as determined in good faith by (i) any
officer of the Company if such fair market value is less than $10,000,000 and
(ii) 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 $10,000,000.
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<PAGE> 14
"GAAP" means United States generally accepted accounting principles as
in effect on the Series A Issue Date, unless stated otherwise.
"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, without limitation, any
Lien on the assets of such Person securing obligations of the primary obligor
and any obligation of such Person (i) 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, (ii) to purchase Property, securities or services
for the purpose of assuring the holder of such Indebtedness of the payment of
such Indebtedness, or (iii) 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
(A) endorsements by such Person for collection or deposit, in either case, in
the ordinary course of business or (B) 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 (ii) of the definition of
Permitted Investments.
"Holder" means the Person in whose name a Security is registered on the
Registrar's books.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
extend, 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 other 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 or a Restricted Subsidiary held by a Wholly Owned
Restricted Subsidiary shall be deemed to be Incurred by the Company or such
Restricted Subsidiary in the event such Wholly Owned Restricted Subsidiary
ceases to be a Wholly Owned Restricted Subsidiary or in the event such
Indebtedness is transferred to a Person other than the Company or a Wholly Owned
Restricted Subsidiary. For purposes of this definition, any non-interest bearing
or other discount Indebtedness shall be deemed to have been Incurred only on the
date of the original issuance 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, (i) any Obligation of such Person for
borrowed money, (ii) any Obligation of such Person evidenced by bonds,
debentures, notes, Guarantees or other similar instruments, including, without
limitation, any such Obligations incurred in connection with the acquisition of
Property, assets or businesses, (iii) any reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (iv) any Obligation of such
Person issued or assumed as the deferred purchase price of Property or
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<PAGE> 15
services, (v) any Capital Lease Obligation of such Person, (vi) the maximum
fixed redemption or repurchase price of Redeemable Stock of such Person at the
time of determination, (vii) any payment obligation of such Person under
Permitted Hedging Agreements at the time of determination, (viii) 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 (ix) any obligation
of the type referred to in clauses (i) through (viii) 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 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.
Notwithstanding the foregoing, so long as any principal of, premium, if
any, on or interest on the 9-7/8% Notes remains outstanding, for purposes of the
subordination provisions of this Indenture, the Securities and any Subsidiary
Guaranties (and to the extent used therein, any applicable definitions and other
provisions, if any), and only for such purposes, "Indebtedness" means (without
duplication), with respect to any Person, (i) any liability or obligation,
contingent or otherwise, of such Person (A) for borrowed money, (B) evidenced by
bonds, notes, debentures or similar instruments, (C) with respect to the
reimbursement of any letter of credit or banker's acceptance, (D) representing
the balance deferred and unpaid of the purchase price of any property (except
any such balance that constitutes a trade payable or accrued liability in the
ordinary course of business that is not overdue by more than 120 days or is
being contested in good faith), (E) for the payment of money relating to a
Capitalized Lease Obligation or (F) in respect of Interest Rate Protection
Agreements; (ii) direct and indirect Guarantees or similar agreements,
contingent or otherwise, in respect of any Obligation of others of the types
described in the preceding clause (i); (iii) any Obligation or liability secured
by a consensual Lien to which the property or assets of such Person are subject,
regardless of whether the Obligations secured thereby shall have been assumed by
or shall otherwise be such Person's legal liability; (iv) with respect to such
Person, the liquidation preference and any mandatory redemption payment
obligations in respect of Redeemable Stock; and (v) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses (i), (ii), (iii) and (iv).
"Interest Rate Protection Agreement" means, with respect to any Person,
any interest rate swap agreement, forward rate agreement, interest rate cap or
other rate hedge arrangement to or under which such Person is a party or a
beneficiary, and, in the case of the Company and its Restricted Subsidiaries,
only to the extent such agreements are related to payment obligations on
Indebtedness of the Company and its Restricted Subsidiaries permitted by the
terms of Section 4.03 and are entered into in the ordinary course of business of
the Company and its Restricted Subsidiaries.
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<PAGE> 16
"Investment" means, with respect to any Person (i) any amount paid by
such Person, directly or indirectly (such amount to be the Fair Market Value of
such Capital Stock, securities or Property at the time of transfer), to any
other Person for Capital Stock or other securities of, or as a capital
contribution to, any other Person or (ii) any direct or indirect loan or advance
to any other Person (other than accounts receivable of such Person arising in
the ordinary course of business); provided, however, that Investments shall not
include 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 upon which the Securities first are issued
and authenticated 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,
without limitation, 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 Capitalized Lease Obligation shall be deemed to be
secured by a Lien on the Property being leased.
"Liquid Securities" means securities (i) of an issuer that is not an
Affiliate of the Company, (ii) that are publicly traded on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market and (iii) as
to which the Company 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 (i), (ii) and (iii) above shall be treated
as Liquid Securities from the date of receipt thereof until and only until the
earlier of (x) the date on which such securities are sold or exchanged for cash
or Permitted Short-Term Investments and (y) 180 days following the date of
receipt of such securities. In the event such securities are not sold or
exchanged for cash or cash equivalents within 180 days of receipt thereof, for
purposes of determining whether the transaction pursuant to which the Company or
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 (excluding changes that
result solely from changes in prices) of more than 20% during a fiscal quarter
in the estimated discounted future net cash flows from proved oil and gas
reserves of the Company and its Restricted Subsidiaries, calculated in
accordance with clause (i)(A) of the definition of Adjusted Consolidation Net
Tangible Assets; provided, however, that the following will be excluded from the
calculation of Material Change: (i) any acquisitions during the quarter of oil
and gas reserves with respect to which the Company's estimate of the discounted
future net cash flows from proved oil and gas reserves has been confirmed by
independent petroleum engineers and (ii) any dispositions of Properties existing
at the beginning of such quarter that have been disposed of in compliance with
Section 4.06.
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"Material Restricted Subsidiary" means any Restricted Subsidiary that
directly or indirectly (including through its Subsidiaries) owns or controls
Property constituting all or substantially all of the Property of the Company
and its Restricted Subsidiaries taken as a whole.
"Net Available Cash" from an Asset Sale means cash proceeds received
therefrom (including (i) 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 (ii) the Fair Market Value of Liquid Securities and
Permitted Short-Term Investments, and excluding (A) any consideration received
in the form of assumption of Indebtedness of the Company or any Restricted
Subsidiary, and (B) except to the extent subsequently converted to cash, Liquid
Securities or Permitted Short-Term Investments, consideration constituting
Exchanged Properties or consideration other than Permitted Consideration), in
each case net of (i) 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, (ii) all payments (which 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) made by the Company and its Restricted
Subsidiaries on any Indebtedness (but specifically excluding Indebtedness of the
Company and its Restricted Subsidiaries assumed in connection with such Asset
Sale) which is secured by any assets subject 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, (iii) all distributions and
other payments required to be made to minority interest holders in Restricted
Subsidiaries or joint ventures as a result of such Asset Sale, and (iv) 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 (to the extent such reserves are not
subsequently reversed); provided, however, that (A) in the event that 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 its Restricted Subsidiaries from escrow; and (B) any Exchanged
Properties and any consideration other than Permitted Consideration received in
connection with an Asset Sale which are subsequently converted to cash, Liquid
Securities or Permitted Short-Term Investments shall be deemed to be Net
Available Cash at such time and shall thereafter be applied in accordance with
Section 4.06.
"Net Working Capital" means (i) all current assets of the Company and
its Restricted Subsidiaries, less (ii) all current liabilities of the Company
and its Restricted Subsidiaries, except current liabilities included in
Indebtedness, in each case as set forth in financial statements of the Company
prepared in accordance with GAAP.
"9-7/8% Notes" means the 9-7/8% Senior Subordinated Notes due 2003 of
the Company in the original aggregate principal amount of $75,000,000.
"9-7/8% Notes Asset Sale Offer" means an offer by the Company to
purchase 9-7/8% Notes required by the indenture pursuant to which the 9-7/8%
Notes were issued as a result of a
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<PAGE> 18
sale by the Company or a Restricted Subsidiary of certain assets, as more
particularly set forth in Section 10.16 of such indenture.
"Obligation" means any principal, interest, premium, penalty, fee and
any other liability payable under the documentation governing any Indebtedness.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the Chief Financial Officer, the President, any Vice President, the Treasurer or
the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers
meeting the requirements set forth in Section 13.01 and delivered to the
Trustee.
"Oil and Gas Business" means the business of exploiting, exploring for,
developing, acquiring, producing, processing, gathering, marketing, storing,
transporting, selling, hedging or swapping hydrocarbons or trading positions
with respect thereto and/or with respect to transportation rates or basis
differentials and other related energy businesses.
"Oil and Gas Liens" means (i) Liens on a specific oil or gas 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 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); (ii)
Liens on an oil and/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; (iii) Liens arising
under partnership agreements, oil and gas leases, overriding royalty agreements,
net profits agreements, production payment agreements, royalty trust agreements,
partnership agreements, limited liability company agreements, farm-out
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 in all instances that
such Liens are limited to the assets that are the subject of the relevant
agreement; (iv) Liens arising in connection with Production Payments and Reserve
Sales; and (v) Liens on pipelines or pipeline facilities that arise by operation
of law.
"Oil and Gas Purchase, Sale and/or Swap Contract" means, with respect
to any Person, any oil and gas purchase, sale and/or swap agreements and other
agreements or arrangements, or any combination thereof, financially tied to oil
and gas prices, transportation or basis fluctuations or differentials that are
customary in the Oil and Gas Business and, in the case of the Company
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<PAGE> 19
and its Restricted Subsidiaries, which are entered into by the Company and its
Restricted Subsidiaries in the ordinary course of their business.
"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 or the Trustee.
"Order" means a written order signed in the name of the Company by an
Officer and delivered to the Trustee.
"Pari Passu Indebtedness" means any Indebtedness of the Company (or a
Subsidiary Guarantor) that is pari passu in right of payment with the Securities
(or a Subsidiary Guaranty, as appropriate), including, without limitation, the
9-7/8% Notes and the Series A 9-1/4% Notes.
"Pari Passu Offer" means an offer by the Company to purchase Pari Passu
Indebtedness (other than the 9-7/8% Notes) required by the indenture or other
agreement or instrument pursuant to which such Pari Passu Indebtedness was
issued as a result of a sale by the Company or a Restricted Subsidiary of
certain assets.
"Paying Agent" has the meaning specified in Section 2.03.
"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 exploiting,
exploring for, acquiring, developing, processing, gathering, storing, marketing
or transporting oil and gas through agreements, transactions, interests or
arrangements which permit one to share risks or costs, comply with regulatory
requirements regarding local ownership or satisfy other objectives customarily
achieved through the conduct of Oil and Gas Business jointly with third parties,
including, without limitation, (i) ownership interests in oil and gas properties
or gathering, transportation, processing, storage or related systems and (ii)
Investments and expenditures in the form of or pursuant to operating agreements,
process 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, limited liability company agreements,
subscription agreements, stock purchase agreements and other similar agreements
with third parties (including Unrestricted Subsidiaries).
"Permitted Consideration" has the meaning assigned to such term in
Section 4.06.
"Permitted Designee" means (i) a spouse or a child of a Permitted
Holder, (ii) trusts whose sole beneficiaries are Permitted Holders or spouses or
children of Permitted Holders, (iii) in the event of the death or incompetence
of a Permitted Holder, his estate, heirs, executor, administrator, committee or
other personal representative or (iv) any Person so long as a Permitted Holder
owns at least 51% of the voting power of all classes of the Voting Stock of such
Person.
"Permitted Hedging Agreements" means Interest Rate Protection
Agreements, Exchange Rate Contracts and Oil and Gas Purchase, Sale and/or Swap
Contracts.
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<PAGE> 20
"Permitted Holders" means Nicholas J. Sutton, P. Michael Highum and
their Permitted Designees.
"Permitted Indebtedness" has the meaning specified in Section 4.03.
"Permitted Investments" has the meaning specified in Section 4.04.
"Permitted Liens" means any and all of the following: (i) Liens
existing as of the Series A Issue Date; (ii) Liens securing the Securities, the
Subsidiary Guaranties and other obligations arising under this Indenture; (iii)
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 Subsidiary Guarantor or becomes a
Restricted Subsidiary that is a Subsidiary Guarantor (and not incurred in
anticipation of such transaction), provided that such Liens are not extended to
other Property of the Company or the Subsidiary Guarantors; (iv) any Lien
existing on any Property at the time of the acquisition thereof (and not
incurred in anticipation of such transaction), provided that such Liens are not
extended to other Property of the Company or the Subsidiary Guarantors; (v) any
Lien incidental to the normal conduct of the business of the Company or the
Subsidiary Guarantors, the ownership of their Property or the conduct in the
ordinary course of their business (including, without limitation, (A) easements,
rights of way and similar encumbrances, (B) rights or title of lessors under
leases (other than Capitalized Lease Obligations), (C) rights of collecting
banks having rights of setoff, revocation, refund or chargeback with respect to
money or instruments of the Company or the Subsidiary Guarantors or on deposit
with or in the possession of such banks, (D) Liens imposed by law, including
without limitation, Liens under workers' compensation or similar legislation and
mechanics', carriers', warehousemen's, materialmen's, suppliers' and vendors'
Liens, (E) 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 and incurred in a manner
consistent with industry practice, and (F) Liens on deposits made in the
ordinary course of business), 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 and which do not in the aggregate
impair in any material respect the use of Property in the operation of the
business of the Company and its Restricted Subsidiaries taken as a whole; (vi)
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; (vii) judgment and
attachment Liens not giving rise to an Event of Default or Liens created by or
existing from any litigation or legal proceeding that are currently being
contested in good faith by appropriate proceedings, promptly instituted and
diligently conducted, and for which adequate reserves have been made to the
extent required by GAAP; (viii) Liens securing Permitted Hedging Agreements of
the Company and its Restricted Subsidiaries; (ix) Oil and Gas Liens Incurred in
the ordinary course of the business of the Company and its Restricted
Subsidiaries; (x) purchase money security interests (including, without
limitation, Capitalized Lease Obligations) granted in connection with the
acquisition of fixed assets in the ordinary course of business of the Company
and its Restricted Subsidiaries, provided, that (A) such Liens attach only to
the Property so acquired with the purchase money Indebtedness secured thereby
and (B) such Liens secure only Indebtedness that is not in excess of the
purchase price of such Property; (xi) Liens to secure Permitted Non-Recourse
Indebtedness; (xii) Liens resulting from the deposit of funds or evidences of
Indebtedness in trust
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<PAGE> 21
for the purpose of decreasing Indebtedness of the Company or any of its
Subsidiaries so long as such deposit of funds is permitted under Section 4.04;
(xiii) Liens resulting from a pledge of Capital Stock of a Person that is not a
Restricted Subsidiary; (xiv) 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 (i), (ii), (iii), (iv) and
(x) above; provided, however, that (A) such new Lien shall be limited to all or
part of the same Property that secured the original Lien, plus improvements on
such Property and (B) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of (1) the outstanding principal
amount of the Indebtedness secured by such original Lien immediately prior to
such extension, renewal, refinancing, refunding or exchange and (2) an amount
necessary to pay any fees and expenses, including premiums, related to such
refinancing, refunding, extension, renewal or replacement; and (xv) Liens in
favor of the Company. Notwithstanding anything in this paragraph to the
contrary, the term "Permitted Liens" does not include Liens resulting from the
creation, incurrence, issuance, assumption or Guarantee of any Production
Payment and Reserve Sale other than (1) Production Payments and Reserve Sales in
connection with the acquisition of Properties after the Series A Issue Date,
provided that any such Liens created in connection therewith are 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,
or (2) Production Payments and Reserve Sales other than those described in
clause (1) 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.
"Permitted Non-Recourse Indebtedness" means Indebtedness of the Company
or any Restricted Subsidiary Incurred in connection with the acquisition by the
Company or such Restricted Subsidiary of any Property with respect to which (i)
the holders of such Indebtedness agree that they will look solely to the
Property so acquired and securing such Indebtedness, and neither the Company nor
any Restricted Subsidiary (A) provides direct or indirect credit support,
including any undertaking, agreement or instrument that would constitute
Indebtedness (other than the grant of a Lien on such acquired Property) or (B)
is directly or indirectly liable for such Indebtedness, and (ii) no default with
respect to such Indebtedness would cause, or permit (after notice or passage of
time or otherwise), according to the terms thereof, any holder (or any
representative of any such holder) of any other Indebtedness of the Company or a
Restricted Subsidiary to declare, a 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.
"Permitted Refinancing Indebtedness" means Indebtedness ("new
Indebtedness") Incurred in exchange for, or the proceeds of which are used to
refinance, other Indebtedness ("old Indebtedness"), provided, however, that (i)
such new Indebtedness is in an aggregate principal amount not in excess of the
sum of (A) 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
(B) an amount necessary to pay any fees and expenses, including premiums related
to such exchange or refinancing, (ii) such new Indebtedness has a Stated
Maturity no earlier than the Stated Maturity of the old Indebtedness, (iii) such
new Indebtedness has an Average Life to Stated Maturity at the time such new
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<PAGE> 22
Indebtedness is Incurred that is equal to or greater than the Average Life to
Stated Maturity of the old Indebtedness at such time and (iv) such new
Indebtedness is subordinated in right of payment to Senior Indebtedness of the
Company (or, if applicable, a Subsidiary Guarantor) and the Securities to at
least the same extent, if any, as the old Indebtedness.
"Permitted Short-Term Investments" means (i) Investments in U.S.
Government Obligations maturing within one year of the date of acquisition
thereof, (ii) 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 that is a member of the Federal Reserve System having capital,
surplus and undivided profits aggregating in excess of $500,000,000 and whose
long-term indebtedness is rated "A" (or higher) according to Moody's Investors
Service Inc., (iii) 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 Canadian bank to
which the Bank Act (Canada) applies having capital, surplus and undivided
profits aggregating in excess of U.S. $500,000,000, (iv) investments in deposits
available for withdrawal on demand with any commercial bank which is organized
under the laws of any country in which the Company or any Restricted Subsidiary
maintains an office or is engaged in the Oil and Gas Business, provided that (A)
all such deposits have been made in such accounts in the ordinary course of
business and (B) such deposits do not at any one time exceed $10,000,000 in the
aggregate, (v) repurchase and reverse repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clause
(i) entered into with a bank meeting the qualifications described in either
clause (ii) or (iii), (vi) Investments in commercial paper, maturing not more
than 270 days 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 with a rating at the time as of
which any Investment therein is made of "P-1" (or higher) according to Moody's
Investors Service Inc. or "A-1" (or higher) according to Standard & Poor's
Ratings Group, and (vii) Investments in any money market mutual fund having
assets in excess of $250,000,000 substantially all of which consist of
obligations of the types described in clauses (i), (ii), (v) and (vi) hereof.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company, unincorporated organization or government or
any agency or political subdivision thereof or other entity.
"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 and/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 at least one other class of such Person; provided, however,
that "Preferred Stock" shall not include Redeemable Stock.
"Principal Agent" means, on any date, (i) if the Bank Credit Facility
shall remain in effect on such date, the administrative agent(s) (or the
institution(s) performing similar functions) under the Bank Credit Facility and
(ii) if the Bank Credit Facility is no longer in effect on such date, the
administrative agent(s) (or the institution(s) performing similar functions)
with respect to the Specified Senior Indebtedness (or, if applicable, Specified
Senior Indebtedness of
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<PAGE> 23
such Subsidiary Guarantor) having the highest principal amount (including all
revolving credit, letter of credit and other working capital commitments) on
such date.
"Principal Subsidiary Indebtedness Agent" means, on any date, the
administrative agent(s) (or institution(s) performing similar functions) with
respect to the Specified Senior Indebtedness of a Subsidiary Guarantor having
the highest principal amount (including all revolving credit, letter of credit
and other working capital commitments) on such date.
"Production Payments and Reserve Sales" means the grant or transfer to
any Person of a royalty, overriding royalty, net profits interest, production
payment (whether volumetric or dollar denominated), partnership interest 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.
"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, without limitation, 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 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 preferences as
to dividends or liquidation over any other Capital Stock of the Company.
"Registrar" has the meaning specified in Section 2.03.
"Representative" means any trustee, agent or representative (if any)
for the holders of any Indebtedness that constitutes Senior Indebtedness or
Subsidiary Guarantor Senior Indebtedness.
"Responsible Officer" means, when used with respect to the Trustee, any
officer assigned to the Corporate Trust Office, including any vice president,
assistant vice president, assistant secretary or any other officer of the
Trustee to whom any corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Payment" means any or all of the following actions
(including, without limitation, any such actions taken prior to the Issue Date
but from and after the Series A Issue
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<PAGE> 24
Date): (i) the declaration or payment of any dividend on, or any distribution to
holders of, any shares of the Company's Capital Stock or Redeemable Stock (other
than dividends or distributions payable solely in shares of Capital Stock of the
Company or in options, warrants or other rights to purchase or acquire Capital
Stock of the Company); (ii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock or Redeemable Stock of the Company or
any Affiliate thereof (other than a Restricted Subsidiary) or any options,
warrants or other rights to acquire such Capital Stock or Redeemable Stock;
(iii) any principal payment on or repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to any scheduled principal payment,
scheduled sinking fund payment or maturity, of any Pari Passu Indebtedness or
Subordinated Indebtedness, except (A) a 9-7/8% Notes Asset Sale Offer, (B) a
Pari Passu Offer, (C) 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 instrument pursuant to which any Subordinated Indebtedness
was issued, an offer to purchase such Subordinated Indebtedness upon a
disposition of assets, and (D) upon a "Change of Control" (even if such event is
not a Change of Control under this Indenture) to the extent required by the
indenture or other agreement or instrument pursuant to which any Pari Passu
Indebtedness or Subordinated Indebtedness was issued, provided the Company is
then in compliance with Section 4.09; (iv) the making of any Investment (other
than any Permitted Investment); or (v) the occurrence of any deemed Restricted
Payment under (A) Section 4.08, or (B) the definition of the term "Unrestricted
Subsidiary."
"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on or after the date of this Indenture, unless such Subsidiary of the
Company is an Unrestricted Subsidiary or is designated as an Unrestricted
Subsidiary pursuant to the terms of this Indenture. 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 immediately after giving effect to such transaction or transactions on a
pro forma basis, (i) no Default or Event of Default shall have occurred and be
continuing and (ii) the Company could incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under Section 4.03.
"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 Restricted Subsidiary of such Person or between
one or more Wholly Owned Restricted 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.
"Security" has the meaning stated in the first paragraph of this
Indenture and more particularly means any Security authenticated and delivered
under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the Obligations of the Company with respect
to (i) Indebtedness of the Company under the Bank Credit Facility and any
renewal, refunding, refinancing, replacement or extension thereof and (ii) any
other Indebtedness of the Company (other than the Securities), whether
outstanding on the date of this Indenture or thereafter
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<PAGE> 25
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 Indebtedness shall
not be senior in right of payment to the Securities. Notwithstanding the
foregoing, Senior Indebtedness shall not include (i) Indebtedness of the Company
to a Subsidiary of the Company, (ii) amounts owed for goods, materials or
services purchased in the ordinary course of business, (iii) Indebtedness (other
than Indebtedness under the Bank Credit Facility) incurred in violation of this
Indenture, (iv) amounts payable or any other Indebtedness to employees of the
Company or any Subsidiary of the Company, (v) any liability for Federal, state,
local or other taxes owed or owing by the Company, (vi) 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, (vii) Indebtedness evidenced by the 9-7/8% Notes, (viii) Indebtedness
evidenced by the Series A 9-1/4 Notes and (ix) Indebtedness evidenced by the
Securities.
"Senior Indebtedness of a Subsidiary Guarantor" or "Subsidiary
Guarantor Senior Indebtedness" means the Obligations of a Subsidiary Guarantor
with respect to (i) Indebtedness under the Bank Credit Facility and any renewal,
refunding, refinancing, replacement or extension thereof, (ii) Assigned
Restricted Subsidiary Indebtedness and (iii) any other Indebtedness of a
Subsidiary Guarantor (other than the Subsidiary Guaranties), whether outstanding
on the date of this Indenture 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 Indebtedness shall not be senior in right of payment to the
Subsidiary Guaranties. Notwithstanding the foregoing, Senior Indebtedness of a
Subsidiary Guarantor shall not include (i) Indebtedness of a Subsidiary
Guarantor to the Company or a Subsidiary of the Company, (ii) amounts owed for
goods, materials or services purchased in the ordinary course of business, (iii)
Indebtedness (other than Indebtedness under the Bank Credit Facility) incurred
in violation of this Indenture, (iv) amounts payable or any other Indebtedness
to employees of the Company or any Subsidiary of the Company, (v) any liability
for Federal, state, local or other taxes owed or owing by such Subsidiary
Guarantor, (vi) any Indebtedness of a Subsidiary Guarantor that, when incurred
and without regard to any election under Section 1111(b) of the United States
Bankruptcy Code, was without recourse to such Subsidiary Guarantor, (vii)
Indebtedness evidenced by the 9-7/8% Notes and any guaranties thereof, (viii)
Indebtedness evidenced by the Series A 9-1/4% Notes and any guaranties thereof
and (ix) Indebtedness evidenced by the Securities and the Subsidiary Guaranties.
"Series A Issue Date" means November 27, 1996, which date is the date
on which the Series A 9-1/4% Notes were originally issued under the Series A
9-1/4% Note Indenture.
"Series A 9-1/4% Note Indenture" means the Indenture dated as of
November 27, 1996 among the Company, the subsidiary guarantors parties thereto,
and Harris Trust and Savings Bank, as Trustee, providing for the issuance of the
Series A 9-1/4% Notes in the aggregate principal amount of $150,000,000, as such
may be amended and supplemented from time to time.
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<PAGE> 26
"Series A 9-1/4% Notes" means the Company's 9-1/4% Senior Subordinated
Notes due November 15, 2006 issued pursuant to the Series A 9-1/4% Note
Indenture, as such may be amended or supplemented from time to time.
"Significant Subsidiary" means, at any date of determination, (i) any
Subsidiary (other than TWTTC) of a Person that, together with its Subsidiaries,
(A) for the most recent fiscal year of the Company, accounted for more than 5%
of the consolidated revenues of such Person and its Subsidiaries or (B) as of
the end of such fiscal year, was the owner of more than 5% of the consolidated
assets of such Person and its Subsidiaries, and (ii) TWTTC if TWTTC, together
with its Subsidiaries, as of the end of the most recent fiscal year of the
Company, was the owner of more than 10% of the consolidated assets of the
Company and its Subsidiaries, in each case all as set forth on the most recently
available consolidated financial statements of such Person for such fiscal year.
"Specified Senior Indebtedness" means (i) Indebtedness of the Company
under the Bank Credit Facility and (ii) so long as no Indebtedness under the
Bank Credit Facility is outstanding, on any date of determination, any Senior
Indebtedness if the sum of (A) the outstanding principal amount of all Senior
Indebtedness plus (B) the amount of unused revolving credit, letter of credit
and working capital commitments of lenders included in such Senior Indebtedness,
is not less than $20,000,000 on such date.
"Specified Senior Indebtedness of a Subsidiary Guarantor" means (i)
Assigned Restricted Subsidiary Indebtedness of such Subsidiary Guarantor, (ii)
Indebtedness of such Subsidiary Guarantor under the Bank Credit Facility and
(iii) so long as no Assigned Restricted Subsidiary Indebtedness of such
Subsidiary Guarantor and no Indebtedness of such Subsidiary Guarantor under the
Bank Credit Agreement are outstanding, on any date of determination, any Senior
Indebtedness of such Subsidiary Guarantor if the sum of (A) the outstanding
principal amount of all such Senior Indebtedness of such Subsidiary Guarantor
plus (B) the amount of unused revolving credit, letter of credit and working
capital commitments of lenders included in such Senior Indebtedness of such
Subsidiary Guarantor, is not less than $20,000,000 on such date.
"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 expressly subordinated in right of payment to the
Securities (or a Subsidiary Guaranty, as appropriate).
"Subsidiary" of a Person means (i) another Person which is a
corporation a majority of whose Voting Stock is at the time, directly or
indirectly, owned or controlled by (A) the first Person, (B) the first Person
and one or more of its Subsidiaries or (C) one or more of the first Person's
Subsidiaries or (ii) another Person which is not a corporation (A) at least 50%
of the ownership interest of which and (B) the power to elect or direct the
election of a majority of the
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directors or other governing body of which are controlled by Persons referred to
in clause (i)(A), (i)(B) or (i)(C) above.
"Subsidiary Guarantors" means, unless released from such Subsidiary
Guaranty 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.
"Subsidiary Guaranty" means an unconditional guaranty of the Securities
given by any Restricted Subsidiary pursuant to the terms of Article 11 of this
Indenture.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this Indenture was executed.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provision of this Indenture, and thereafter "Trustee"
shall mean such successor Trustee.
"TWTTC" means HS Energy Services, Inc., an Oklahoma corporation
formerly known as Tide West Trading and Transport Company.
"Uniform Commercial Code" means the New York Uniform Commercial Code as
in effect from time to time.
"Unrestricted Subsidiary" means (i) the Existing Unrestricted
Subsidiary, (ii) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors in the
manner provided below and (iii) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary of the Company) to be an
Unrestricted Subsidiary unless such Subsidiary (i) owns any Capital Stock,
Redeemable Stock or Indebtedness of, or owns or holds any Lien on any Property
of, the Company or any other Subsidiary of the Company that is not a Subsidiary
of the Subsidiary to be so designated or (ii) is obligated, directly or
indirectly, with respect to any Indebtedness other than Unrestricted Subsidiary
Indebtedness; provided, however, that either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) if such Subsidiary has
assets greater than $1,000, then such designation would be permitted under
Section 4.04 as a "Restricted Payment." The designation of a Restricted
Subsidiary as an Unrestricted Subsidiary shall be deemed to cause a Restricted
Payment to be made at the time of such designation in an amount equal to that
portion of the Fair Market Value of such Restricted Subsidiary represented by
the Company's direct and indirect ownership interest in such Subsidiary. Unless
so designated as an Unrestricted Subsidiary, any Person that becomes a
Subsidiary of the Company or of any Restricted Subsidiary will be classified as
a Restricted Subsidiary. Notwithstanding the foregoing sentence, the Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving pro forma effect to
such designation (i) the Company could incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under Section 4.03, and (ii) no Default
shall have occurred and be continuing. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with
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the Trustee a copy of a resolution of the Board of Directors giving effect to
such designation and an Officers' Certificate certifying such resolution and
certifying that such designation complies with the foregoing provisions.
"Unrestricted Subsidiary Indebtedness" means Indebtedness of an
Unrestricted Subsidiary (i) as to which neither the Company nor any Restricted
Subsidiary is directly or indirectly liable (by virtue of the Company or any
such Restricted Subsidiary being the primary obligor on, guarantor of, or
otherwise liable in any respect for such Indebtedness) and (ii) which, upon the
occurrence of a default with respect thereto, does not result in, or permit any
holder (or any representative of any such holder) of any Indebtedness of the
Company or a Restricted Subsidiary to declare (with the passage of time or the
giving of notice or otherwise), a default on any Indebtedness of the Company or
any Restricted Subsidiary 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.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian, with respect to any such 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 U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
"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 Restricted Subsidiary" means, at any time, a Restricted
Subsidiary all of the Voting Stock of which (except directors' qualifying
shares) is at the time owned, directly or indirectly, by the Company and its
other Wholly Owned Restricted Subsidiaries.
SECTION 1.02 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:
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
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"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company 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 Commission
rule have the meanings assigned to them by such definitions.
SECTION 1.03 Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision;
(7) provisions apply to successive events and
transactions; and
(8) references to agreements and other instruments include
subsequent amendments and waivers but only to the extent not prohibited
by this Indenture.
ARTICLE 2.
The Securities
SECTION 2.01 Form and Dating. Provisions relating to the
Securities are set forth in Appendix A, which is hereby incorporated in and
expressly made part of this Indenture. The 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 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 acceptable
to the Company). Each Security shall be dated the date of its authentication.
The terms of the Securities set forth in Exhibit A are part of the terms of this
Indenture.
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SECTION 2.02 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.
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 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 2.03 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; provided, however, that so long as Harris Trust and Savings Bank shall
be the Trustee, without the consent of the Trustee, there shall be no more than
one Registrar or Paying Agent. 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 of its domestically incorporated Wholly Owned Restricted
Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.04 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 Holders or the Trustee all money held by the Paying
Agent for the payment of principal of 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 Subsidiary acts as Paying Agent, it shall segregate the money
held by it as Paying Agent and hold it as a separate trust
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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 2.05 Holder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Holders. 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 Holders.
SECTION 2.06 Replacement Securities. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that the
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 replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.07 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 cancellation 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.
If a Security is replaced pursuant to Section 2.06, 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, in which
event the replacement Security shall cease to be outstanding, subject to the
provisions of Section 8-405 of the Uniform Commercial Code.
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 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 Holders 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 2.08 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.
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SECTION 2.09 Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee 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
cancellation and deliver a certificate of such destruction to the Company. The
Company may not issue new Securities to replace Securities it has redeemed, paid
or delivered to the Trustee for cancellation.
SECTION 2.10 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
Holders 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 Holder a notice that
states the special record date, the payment date and the amount of defaulted
interest to be paid.
SECTION 2.11 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 3.
Redemption
SECTION 3.01 Notices to Trustee. If the Company elects to
redeem Securities pursuant to paragraph 5 of 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 the redemption
will occur.
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 fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee considers fair and appropriate and in accordance with methods generally
used at the time of selection by fiduciaries in similar circumstances. 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 that the Trustee selects shall be in amounts
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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 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:
(1) The redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) 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
(7) 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 at least 45 days before the redemption date.
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.
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 Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest 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 cancellation.
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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.
SECTION 3.07 Limitation on Redemptions. Sections 4.04 and 4.21
limit the ability of the Company to make certain redemptions of the Securities.
In addition, Section 4.04 of the Series A 9-1/4% Note Indenture may limit
redemptions of the Securities.
ARTICLE 4.
Covenants
SECTION 4.01 Payment of Securities. The Company shall promptly
pay the principal of and interest 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 a Paying
Agent holds in New York, New York in accordance with this Indenture money
sufficient to pay all principal and interest then due and the Trustee or the
Paying Agent, as the case may be, is not prohibited from paying such money to
the Holders 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 Commission Reports. So long as any Securities are
outstanding, the Company will file with the Commission and furnish to the
Holders of Securities all quarterly and annual financial information required to
be contained in a filing with the Commission on Forms 10-Q and 10-K, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual consolidated financial statements
only, a report thereon by the Company's independent auditors. 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 Commission and provide the Trustee and Holders and prospective Holders
(upon request) with such annual reports and such information, documents and
other reports as are specified in such Sections and applicable to a U.S.
corporation subject to such Sections, such information, documents and other
reports to be so filed and provided at the times specified for the filing of
such information, documents and reports under such Sections; provided, however,
that the Company shall not be required to file any report, document or other
information with the Commission if the Commission does not permit such filing.
SECTION 4.03 Limitation on Indebtedness.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness
(including Acquired Indebtedness) unless, after giving pro forma effect to the
application of the proceeds thereof, no Default or Event of Default would occur
as a consequence of such Incurrence or be continuing following
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such Incurrence and either (i) after giving pro forma effect to the Incurrence
of such Indebtedness and the receipt and application of the proceeds thereof,
the Consolidated Interest Coverage Ratio would be at least 2.5 to 1.0 or (ii)
such Indebtedness is Permitted Indebtedness.
(b) "Permitted Indebtedness" means:
(i) Indebtedness under the Bank Credit Facility,
provided that the aggregate principal amount of all such Indebtedness under the
Bank Credit Facility at any one time outstanding does not exceed the greater of
(A) $275,000,000 and (B) an amount equal to the sum of (1) $170,000,000 and (2)
15% of Adjusted Consolidated Net Tangible Assets determined as of the date of
the Incurrence of such Indebtedness; provided, however, that the maximum amount
available to be outstanding under the Bank Credit Facility shall be permanently
reduced by the amount of Net Available Cash from Asset Sales used to permanently
repay Indebtedness under the Bank Credit Facility and not subsequently
reinvested in Additional Assets or used to permanently reduce other Indebtedness
to the extent permitted pursuant to Section 4.06;
(ii) (A) Indebtedness arising under this Indenture,
including without limitation the Securities and the Subsidiary Guaranties and
(B) Indebtedness arising under the Series A 9-1/4% Note Indenture, including
without limitation the Series A 9-1/4% Notes and the Subsidiary Guaranties
thereof;
(iii) Indebtedness owed to the Company or any of its
Wholly Owned Restricted Subsidiaries by any of its Restricted Subsidiaries or
Indebtedness owed by the Company to any of its Wholly Owned Restricted
Subsidiaries (but only so long as such Indebtedness is held by the Company or a
Wholly Owned Restricted Subsidiary);
(iv) Indebtedness under Permitted Hedging Agreements
of the Company and its Restricted Subsidiaries (including guaranties thereof by
the Company or another Restricted Subsidiary, as applicable);
(v) Indebtedness in connection with one or more
standby letters of credit, Guarantees, performance bonds or other reimbursement
obligations issued in the ordinary course of business of the Company and its
Restricted Subsidiaries and not in connection with the borrowing of money or the
obtaining of advances or credit (other than advances or credit on open account,
includable in current liabilities, for goods and services in the ordinary course
of business of the Company and its Restricted Subsidiaries and on terms and
conditions which are customary in the Oil and Gas Business and other than the
extension of credit represented by such letter of credit, Guarantee or
performance bond itself);
(vi) obligations relating to net oil or gas balancing
positions arising in the ordinary course of business of the Company and its
Restricted Subsidiaries which are customary in the Oil and Gas Business;
(vii) Permitted Non-Recourse Indebtedness of the
Company or any of its Restricted Subsidiaries;
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(viii) Indebtedness outstanding on the Series A Issue
Date that was not repaid with the proceeds of the Series A 9-1/4% Notes and not
otherwise permitted in clauses (i) through (vii) above;
(ix) Indebtedness not otherwise permitted to be
Incurred pursuant to this subsection (b), 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 subsection in respect
of Indebtedness previously Incurred pursuant to this clause (ix), at any one
time outstanding does not exceed $25,000,000;
(x) Permitted Refinancing Indebtedness Incurred in
exchange for, or the proceeds of which are used to refinance, (A) Indebtedness
referred to in clauses (ii), (viii) and (ix) of this subsection (including
Indebtedness previously incurred pursuant to this clause (x)) or (B)
Indebtedness Incurred pursuant to clause (a)(i) of this Section; and
(xi) 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.
At all times the aggregate principal amount of Indebtedness outstanding under
clauses (i) and (ix) of this definition shall be deemed to be the same amounts
as are deemed outstanding under clauses (i) and (ix), respectively, of the
definition of the term "Permitted Indebtedness" in the Series A 9-1/4% Note
Indenture.
SECTION 4.04 Limitation on Restricted Payments.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries 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 (other
than Permitted Indebtedness) pursuant to Section 4.03 or (iii) the aggregate
amount expended or declared for all Restricted Payments from the Series A Issue
Date would exceed the sum (without duplication) of the following:
(1) 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 the Series A Issue Date, 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
(2) the aggregate net cash proceeds or the Fair Market
Value of Property other than cash received by the
Company on or after the Series A Issue Date, 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
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(3) the aggregate net cash proceeds received by the
Company as capital contributions to the Company
(other than from a Subsidiary of the Company) on or
after the Series A Issue Date, plus
(4) the aggregate net cash proceeds received by the
Company upon the exercise of any options, warrants or
rights to purchase shares of Capital Stock of the
Company (other than from a Subsidiary of the Company)
on or after the Series A Issue Date, plus
(5) the aggregate net cash proceeds received on or after
the Series A Issue Date by the Company from the
issuance or sale (other than to any Subsidiary of the
Company) of convertible debt or convertible
Redeemable Stock 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, plus
(6) to the extent not otherwise included in the Company's
Consolidated Net Income, an amount equal to the net
reduction in any Investment made by the Company and
its Restricted Subsidiaries subsequent to the Series
A Issue Date in any Person resulting from (a)
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,
and in an amount not to exceed the book value of such
Investment previously made in such Person that was
treated as a Restricted Payment, or (b) the
designation of any Unrestricted Subsidiary as a
Restricted Subsidiary, in each case in an amount not
to exceed the lesser of (x) the book value of such
Investment previously made in such Unrestricted
Subsidiary that was treated as a Restricted Payment,
and (y) the Fair Market Value of such Unrestricted
Subsidiary, plus
(7) $15,000,000.
(b) The limitations set forth in paragraph (a) above do not
prevent the Company or any Restricted Subsidiary from making 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 a Restricted Payment may be made even if a Default or Event of
Default has occurred and is continuing):
(i) the payment of any dividend on Capital Stock of
the Company or any Restricted Subsidiary within 60 days after
the declaration thereof, if at such declaration date such
dividend could have been paid in compliance with paragraph (a)
above;
(ii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company or
any Restricted Subsidiary, in exchange for, or out of the
aggregate net cash proceeds of, a substantially
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concurrent issuance and sale (other than to a Subsidiary of
the Company) of Capital Stock of the Company;
(iii) the making of any principal payment on or the
repurchase, redemption, defeasance or other acquisition or
retirement for value, prior to any scheduled principal
payment, scheduled sinking fund payment or maturity, of any
Pari Passu Indebtedness or 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)
of Capital Stock of the Company;
(iv) the making of any principal payment on or the
repurchase, redemption, defeasance or other acquisition or
retirement for value of Pari Passu Indebtedness or
Subordinated Indebtedness in exchange for, or out of the
aggregate net cash proceeds of, a substantially concurrent
Incurrence (other than a sale to a Subsidiary of the Company)
of Pari Passu Indebtedness or Subordinated Indebtedness so
long as such new Indebtedness is Permitted Refinancing
Indebtedness and such new Indebtedness (1) has an Average Life
to Stated Maturity that is longer than the Average Life to
Stated Maturity of the Securities and (2) has a Stated
Maturity for its final scheduled principal payment that is at
least 91 days later than the Stated Maturity of the final
scheduled principal payment of the Securities; and
(v) loans made to officers, directors and employees
of the Company or any Restricted Subsidiary approved by the
Board of Directors (or a duly authorized officer), the
proceeds of which are used (1) 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 and (2) to refinance
loans, together with accrued interest thereon, made pursuant
to item (1) of this clause (v), provided, however, that such
loans do not exceed $7,500,000 at any one time outstanding
(and at all times the aggregate amount of all such loans
outstanding shall be deemed to be the same amount as is deemed
outstanding under Section 4.04(b)(v) of the Series A 9-1/4 %
Note Indenture).
The actions described in clauses (i), (ii), (iii) and (v) of this
paragraph (b) shall be Restricted Payments that shall be permitted to be taken
in accordance with this paragraph (b) but shall reduce the amount that would
otherwise be available for Restricted Payments under paragraph (a) (provided
that any dividend paid pursuant to clause (i) of this paragraph (b) shall reduce
the amount that would otherwise be available under paragraph (a) when declared,
but not also when subsequently paid pursuant to such clause (i)), and the
actions described in clause (iv) of this paragraph (b) shall be Restricted
Payments that shall be permitted to be taken in accordance with this paragraph
(b) but shall not reduce the amount that would otherwise be available for
Restricted Payments under paragraph (a).
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(c) "Permitted Investments" means any and all of the following
(including, without limitation, any such actions taken prior to the Issue Date
but from and after the Series A Issue Date): (i) Permitted Short-Term
Investments; (ii) Investments in property, plant and equipment used in the
ordinary course of business and Permitted Business Investments; (iii)
Investments by a Restricted Subsidiary in the Company; (iv) Investments by the
Company or any Restricted Subsidiary in any Restricted Subsidiary; (v)
Investments by the Company or any Restricted Subsidiary in a Person, if such
Person or a Subsidiary of such Person will, as a result of the making of such
Investment and all other contemporaneous related transactions, become a
Restricted Subsidiary or be merged or consolidated with or transfer or convey
all or substantially all of its assets to the Company or a Restricted
Subsidiary; (vi) Investments in Persons in the Oil and Gas Business (other than
Restricted Subsidiaries) intended to promote the Company's strategic business
objectives in an amount not to exceed $20,000,000 at any one time outstanding
(which Investments shall be deemed to be no longer outstanding only upon the
return of capital thereof); (vii) Investments in the form of securities received
from Asset Sales, provided that such Asset Sales are made in compliance with
Section 4.06; (viii) 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, without limitation, 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; (ix) Investments in
the form of Permitted Hedging Agreements of the Company and its Restricted
Subsidiaries; (x) relocation allowances, advances and loans to officers,
directors and employees of the Company or any of its Restricted Subsidiaries in
the ordinary course of business, provided such items do not exceed $2,500,000 at
any one time outstanding; and (xi) Investments not otherwise permitted to be
made pursuant to this subsection in an amount not to exceed $5,000,000 at any
one time outstanding. At all times the aggregate amount of Investments
outstanding under clauses (vi), (x) and (xi) of this definition shall be deemed
to be the same amounts as are deemed outstanding under clauses (vi), (x) and
(xi), respectively, of the definition of the term "Permitted Investments" in the
Series A 9-1/4 % Note Indenture.
SECTION 4.05 Limitation on Payment Restrictions Affecting
Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create, assume or otherwise cause or suffer to exist
or to become effective any consensual encumbrance or restriction on the ability
of any Restricted Subsidiary to (i) pay dividends or make any other
distributions on its Capital Stock or Redeemable Stock held by the Company or a
Restricted Subsidiary, (ii) make payments in respect of any Indebtedness owed to
the Company or any of its Restricted Subsidiaries, (iii) make loans or advances
to the Company or any of its Restricted Subsidiaries or (iv) transfer any of its
assets to the Company or any of its Restricted Subsidiaries, other than:
(A) consensual encumbrances or restrictions required by a Bank
Credit Facility that are not more restrictive than those in effect under the
Bank Credit Facility on the Series A Issue Date;
(B) with respect to clause (iv) above, customary provisions
restricting subletting, assignment, pledging or transfer of any Property that is
a lease, license, contract or similar type of Property;
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(C) consensual encumbrances or restrictions in instruments
governing Indebtedness of a Person acquired by the Company or any Restricted
Subsidiary at the time of such acquisition, provided that such Indebtedness was
not Incurred in anticipation of such acquisition;
(D) with respect to clause (iv) above, restrictions contained
in purchase money obligations for property acquired in the ordinary course of
business;
(E) with respect to clause (iv) above, customary restrictions
contained in asset sale agreements limiting the transfer of such assets pending
the closing of such sale; and
(F) consensual encumbrances or restrictions in instruments
governing Indebtedness Incurred to refinance, refund, extend or renew
Indebtedness referred to in clauses (C) and (D) above, provided that the payment
restrictions contained therein are not more restrictive taken as a whole than
those provided for in the Indebtedness being refinanced, refunded, extended or
renewed.
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 paid to the Company or such
Restricted Subsidiary in connection with such Asset Sale is in the form of cash,
Permitted Short-Term Investments, Exchanged Properties, Liquid Securities 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), liabilities of any Subsidiary Guarantor that made such Asset Sale
(other than liabilities of a Subsidiary Guarantor that are by their terms
subordinated to such Subsidiary Guarantor's Subsidiary Guaranty), or liabilities
of any Restricted Subsidiary that made such Asset Sale and which is not a
Subsidiary Guarantor, in each case as a result of which the Company and its
Restricted Subsidiaries are no longer liable ("Permitted Consideration");
provided, however, that the Company and its Restricted Subsidiaries shall be
permitted to receive Property other than Permitted Consideration if, after
giving pro forma effect to such Asset Sale, the aggregate Fair Market Value
(evaluated at the time of such Asset Sale) of all such Property other than
Permitted Consideration received from Asset Sales made after the Series A Issue
Date, which Property is held by the Company or any Restricted Subsidiary at the
time of such Asset Sale, shall not exceed 10% of Adjusted Consolidated Net
Tangible Assets.
(b) The Net Available Cash from Asset Sales may be applied by
the Company or a Restricted Subsidiary, to the extent the Company or such
Restricted Subsidiary elects (or is required by the terms of any Senior
Indebtedness), (i) to prepay, repay or purchase Senior Indebtedness of the
Company or a Subsidiary Guarantor or Indebtedness of a Restricted Subsidiary (in
each case excluding Indebtedness owed to the Company or an Affiliate of the
Company) 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; (ii) to reinvest
in Additional Assets (including by means
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of an Investment in Additional Assets by a Restricted Subsidiary with Net
Available Cash received by the Company or another Restricted Subsidiary); (iii)
to purchase Securities, Series A 9-1/4 Notes or 9-7/8% Notes pursuant to a
9-7/8% Notes Asset Sale Offer (excluding Securities, Series A 9-1/4 Notes or
9-7/8% Notes owned by the Company or an Affiliate of the Company); or (iv) in
such other manner as the Company or such Restricted Subsidiary may elect in
compliance with the other provisions of this Indenture.
(c) Any Net Available Cash from an Asset Sale not applied in
accordance with clauses (i), (ii) and (iii) of the preceding subsection within
360 days from the date of such Asset Sale shall constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $10,000,000, the Company
will make an offer to purchase Securities having an aggregate principal amount
equal to the aggregate amount of Excess Proceeds (the "Prepayment Offer") at a
purchase price equal to 100% of the principal amount of such Securities plus
accrued and unpaid interest thereon (if any) to the Purchase Date (as defined
below) (the "Prepayment Offer Payment") in accordance with the procedures set
forth in this Section, 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
by a method that complies with applicable legal and securities exchange
requirements, if any, and that the Trustee considers fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances. To the extent that any portion of the amount of Excess
Proceeds remains after compliance with the second sentence of this subsection
and provided that all Holders of Securities have been given the opportunity to
tender their Securities for purchase as described in the following subsection in
accordance with this Indenture, the Company or such Restricted Subsidiary may
use such remaining amount for general corporate purposes otherwise permitted
under this Indenture and the amount of Excess Proceeds will be reset to zero.
(d) Within five Business Days after 360 days from the date of
an Asset Sale, the Company shall, if it is obligated to apply an amount equal to
any Excess Proceeds (or any portion thereof) to fund an offer to purchase the
Securities, 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 in good
faith believes will enable such holders of the Securities to make an informed
decision with respect to the Prepayment Offer. The Prepayment Offer Notice will
state, among other things, (1) that the Company is offering to purchase
Securities pursuant to the provisions of Section 4.06 of this Indenture, (2) 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"), (3) that
any Securities (or any portions thereof) accepted for payment (and duly paid on
the Purchase Date) pursuant to the Prepayment Offer shall cease to accrue
interest after the Purchase Date, (4) that any Securities (or portions thereof)
not properly tendered will continue to accrue interest, (5) the aggregate
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principal amount of Securities to be purchased, (6) a description of the
procedure 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 (7) all other
instructions and materials necessary to enable holders to tender Securities
pursuant to the Prepayment Offer.
(e) On the Purchase Date, the Company will (i) accept for
payment Securities or portions thereof properly tendered pursuant to the
Prepayment Offer, (ii) deposit with the Paying Agent in immediately available
funds an amount equal to the Prepayment Offer Payment in respect of Securities
or portions thereof so tendered and (iii) deliver, or cause to be delivered, to
the Trustee the Securities so accepted together with an Officers' Certificate
listing the Securities or portions thereof tendered to the Company and accepted
for payment. The Paying Agent shall promptly mail to each holder of Securities
so accepted payment in an amount equal to the Prepayment Offer Payment for such
Securities and the Trustee shall promptly authenticate and mail to each holder a
new Securities in a principal amount equal to any unpurchased portion of the
Securities surrendered, if any; provided, that each such new Security shall be
in a principal amount of $1,000 or any integral multiple thereof. The Company
will announce publicly the results of a Prepayment Offer on or as soon as
practicable after the Purchase Date.
(f) The Company will comply, to the extent applicable, with
the requirements of Rules 13e-4 and 14e-1 under the 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 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 4.07 Limitation on Transactions with Affiliates.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into or suffer to
exist any transaction or series of related transactions (including, without
limitation, the sale, purchase, exchange or lease of assets, property or
services) with any Affiliate of the Company unless (i) such transaction or
series of related transactions is on terms that are no less favorable to the
Company or such Restricted Subsidiary, as the case may be, than would be
available in a comparable transaction in arm's-length dealings with an unrelated
third party, (ii) with respect to a transaction or series of related
transactions involving payments in excess of $1,000,000 in the aggregate, the
Company delivers an Officers' Certificate to the Trustee certifying that such
transaction complies with clause (i) above, and (iii) with respect to a
transaction or series of transactions involving payments in excess of $5,000,000
in the aggregate, the Company delivers an Officers' Certificate to the Trustee
certifying that (A) such transaction complies with clause (i) above and (B) such
transaction or series of related transactions has been approved by a majority of
the disinterested directors of the Board of Directors of the Company.
(b) The limitations of the preceding subsection do not apply
to:
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(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 bylaws and
applicable statutory provisions;
(iii) any employee compensation and other benefit
arrangements entered into by the Company or any of its Subsidiaries in
the ordinary course of business;
(iv) relocation allowances, advances and loans made
to officers, directors and employees of the Company and its Restricted
Subsidiaries provided such items do not exceed $2,500,000 in the
aggregate at any one time outstanding;
(v) transactions among the Company and its Restricted
Subsidiaries;
(vi) loans constituting Restricted Payments made
pursuant to and in compliance with Section 4.04(b)(v); and
(vii) the gas gathering agreement between the Company
and the Existing Unrestricted Subsidiary as in effect on the Series A
Issue Date and oil and gas operating agreements entered into in the
ordinary course of business by the Company and its Restricted
Subsidiaries in a manner consistent with the current practice of the
Company and its Restricted Subsidiaries as of the Issue Date so long as
such operating agreements are in a form customary in the Oil and Gas
Business.
SECTION 4.08 Limitation on Issuance and Sale of Capital Stock
of Restricted Subsidiaries. The Company will not (i) permit any Restricted
Subsidiary to issue any Capital Stock (including, without limitation, pursuant
to any merger, consolidation, recapitalization or similar transaction) other
than to the Company or a Wholly Owned Restricted Subsidiary or (ii) permit any
Person other than the Company or a Restricted Subsidiary to own any Capital
Stock of any other Restricted Subsidiary (other than directors' qualifying
shares), except for (A) a sale to a Person of the Capital Stock of a Restricted
Subsidiary, which sale was made by the Company or a Restricted Subsidiary
subject to, and in compliance with, as appropriate, either Section 4.04 or
Section 4.06, and such Person's subsequent ownership of such Capital Stock of
such Restricted Subsidiary, (B) the issuance of Capital Stock by a Restricted
Subsidiary to a Person other than the Company or a Wholly Owned Restricted
Subsidiary, which issuance was made subject to and in compliance with Section
4.06, and such Person's subsequent ownership of such Capital Stock and (C) the
ownership of Capital Stock of a Restricted Subsidiary owned by a Person at the
time such Restricted Subsidiary became a Restricted Subsidiary or acquired by
such Person in connection with the formation of the Restricted Subsidiary (and
in the case of the formation of such Restricted Subsidiary, the issuance of such
Capital Stock). If a Person (other than a Material Restricted Subsidiary) whose
Capital Stock was issued or sold in a transaction described in this Section is,
as a result of such transaction, no longer a Restricted Subsidiary, then any
Capital Stock of such Person retained by the Company or a Restricted Subsidiary
shall be treated as a Restricted Payment made at the time of such transaction in
an amount equal to that portion of the Fair Market Value of such Person
represented by such retained Capital Stock.
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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 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, thereon to the purchase 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 notifies the Holders of the occurrence of the Change of Control (the
"Change of Control Payment Date"); (iii) that any Securities (or portions
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
after 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.
(c) On the Change of Control Payment Date, the Company will
(i) accept for payment Securities or portions thereof properly tendered pursuant
to the Change of Control Offer, (ii) deposit with the Paying Agent in
immediately available funds an amount equal to the Change of Control Payment in
respect of Securities or portions thereof so tendered and (iii) deliver, or
cause to be delivered, to the Trustee the Securities so accepted together with
an Officers' Certificate listing the Securities or portions thereof tendered to
the Company and accepted for payment. The Paying Agent shall promptly mail to
each Holder of Securities so accepted payment in an amount equal to the Change
of Control Payment for such Securities and the Trustee shall promptly
authenticate and mail to each holder a new Security in a principal amount equal
to any unpurchased portion of the Securities surrendered, if any; provided, that
each such new Security shall be in a principal amount of $1,000 or any integral
multiple thereof. The Company will announce publicly the results of a Change in
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
(d) The Company will comply, to the extent applicable, with
the requirements of Rules 13e-4 and 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 provisions of any
securities laws or regulations conflict with the provisions relating to the
Change of Control Offer, the Company will comply with the applicable securities
laws and regulations and will not be deemed to have breached its obligations
described above by virtue thereof.
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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 after the Issue Date, or any interest therein or any
income or profits therefrom, unless the Securities (and, in the case of a
Restricted Subsidiary, a Subsidiary Guaranty from such Subsidiary) 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, Liens securing Senior Indebtedness of a Subsidiary Guarantor,
Liens securing Indebtedness of a Restricted Subsidiary that is not a Subsidiary
Guarantor and Permitted Liens.
SECTION 4.11 Limitation on Layered Indebtedness.
(a) The Company will not Incur any Indebtedness that is
subordinated or junior in right of payment to any Senior Indebtedness unless
such Indebtedness constitutes Indebtedness that is junior to, or pari passu
with, the Securities in right of payment.
(b) The Company will not permit any Subsidiary Guarantor to,
and no Subsidiary Guarantor will, Incur any Indebtedness that is subordinated or
junior in right of payment to any other Indebtedness of such Subsidiary
Guarantor unless such Indebtedness is, by its terms, pari passu with or
subordinated in right of payment to such Subsidiary Guarantor's Subsidiary
Guaranty.
SECTION 4.12 Future Guarantors. The Company shall cause any
Restricted Subsidiary that is or becomes a Significant Subsidiary (and any
Significant Subsidiary that was previously an Unrestricted Subsidiary which
becomes a Restricted Subsidiary) after the Issue Date to execute and deliver to
the Trustee a supplemental indenture in the form of Exhibit B hereto pursuant to
which such Significant Subsidiary will become a Subsidiary Guarantor and shall
Guarantee payment of the Securities as provided in Section 11.07.
SECTION 4.13 Maintenance of Office or Agency. The Company
shall maintain in The City of New York, an office or agency where Securities may
be presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee its agent to receive all
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies (in or outside of The City of New York) where the
Securities may be presented or surrendered for any or all of such purposes, and
may from time to time rescind such designations; provided that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York, for such
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purposes. The Company shall give prompt written notice to the Trustee of any
such designation and any change in the location of any such other office or
agency.
SECTION 4.14 Money for the Security Payments to be Held in
Trust. If the Company, any Subsidiary of the Company or any of their respective
Affiliates shall at any time act as Paying Agent with respect to the Securities,
such Paying Agent shall, on or before each due date of the principal of (and
premium, if any) or interest on any of the Securities, segregate and hold in
trust for the benefit of the Persons entitled thereto money sufficient to pay
the principal (and premium, if any) or interest so becoming due until such money
shall be paid to such Persons or otherwise disposed of as herein provided, and
shall promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents with
respect to the Securities, it shall, prior to or on each due date of the
principal of (and premium, if any) or interest on any of the Securities, deposit
with a Paying Agent a sum sufficient to pay the principal (and premium, if any)
or interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Paying Agent shall promptly notify the Trustee of the
Company's action or failure so to act.
Any funds deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any Securities and remaining unclaimed for two years
after the date upon which such payment shall have become due, shall be paid to
the Company on Order or, if then held by the Company, shall be discharged from
such trust; provided, however, that the Company shall cause to be published at
least once in a newspaper of general circulation in The City of New York or
mailed to each Holder entitled to such unclaimed funds, notice that such funds
remain unclaimed and that, after a date specified therein, which shall be a date
not less than 30 days from the date of such publication or mailing, any
unclaimed balance of such money remaining as of such date shall be repaid to the
Company. After repayment to the Company, Holders entitled to such funds shall
look only to the Company for payment without interest thereon, as an unsecured
general creditor, and the Trustee and the Paying Agent shall have no further
liability with respect to such trust money, and the Company shall not be a
trustee in respect of such funds.
SECTION 4.15 Payment of Taxes and Other Claims. The Company
shall pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (a) all material taxes, assessments and governmental charges
levied or imposed upon the Company or any of its Subsidiaries or upon the
income, profits or property of the Company or any of its Subsidiaries and (b)
all material lawful claims for labor, materials and supplies which, if unpaid,
might by law become a Lien upon the property of the Company or any of its
Subsidiaries; provided that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which adequate reserves in accordance with
GAAP or other appropriate provision has been made.
SECTION 4.16 Corporate Existence. The Company will, and will
cause each of its Significant Subsidiaries to, preserve and keep in full force
and effect its corporate existence in
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accordance with applicable law, except as permitted in Sections 5.01 and 5.02;
provided, however, that the Company may terminate the corporate existence of any
Significant Subsidiary that is not a Subsidiary Guarantor if, in the good faith
judgment of the Board of Directors, such termination is desirable in the conduct
of the business of the Company and its Restricted Subsidiaries and is not
disadvantageous in any material respect to the Holders.
SECTION 4.17 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 ss. 314(a)(4).
SECTION 4.18 Further Instruments and Acts. Upon request of the
Trustee, the Company will 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 4.19 Prohibition on Company and Guarantors Becoming
Investment Companies. None of the Company or the Subsidiary Guarantors shall
become an "investment company" as defined in the Investment Company Act of 1940,
as amended.
SECTION 4.20 Stay, Extension and Usury Laws. The Company and
each of the Subsidiary Guarantors covenants (to the extent that it may lawfully
do so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit of advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
SECTION 4.21 Limitation on Redemptions and Other Repayments of
Securities and Series A 9-1/4 % Notes.
(a) The Company will not optionally make any principal payment
on, or redeem, repurchase, defease (including in-substance or legal defeasance)
or otherwise acquire or retire for value (including pursuant to mandatory
repurchase covenants), prior to any scheduled principal payment, scheduled
sinking fund payment or other stated maturity (collectively, for purposes of
this covenant only, "redeem," and such action being a "redemption") the
Securities unless, substantially concurrently with such redemption, the Company
redeems (or, if such redemption requires the consent of the holders of the
Series A 9-1/4 % Notes, offers to redeem) an aggregate principal amount of the
Series A 9-1/4 % Notes (rounded to the nearest integral multiple of $1,000)
equal to the product of (i) a fraction, the numerator of which is the aggregate
principal amount of the Securities to be so redeemed (or for which such offer to
redeem will be made) and the denominator of which is the aggregate principal
amount of the Securities outstanding immediately prior to such proposed
redemption and (ii) the aggregate principal amount of the Series A 9-1/4 % Notes
outstanding immediately prior to such proposed redemption.
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(b) The Company will not optionally redeem the Series A 9-1/4
% Notes unless, substantially concurrently with such redemption, the Company
redeems (or, if such redemption requires the consent of the holders of the
Securities, offers to redeem) an aggregate principal amount of the Securities
(rounded to the nearest integral multiple of $1,000) equal to the product of (i)
a fraction, the numerator of which is the aggregate principal amount of the
Series A 9-1/4 % Notes to be so redeemed (or for which such offer to redeem will
be made) and the denominator of which is the aggregate principal amount of the
Series A 9-1/4 % Notes outstanding immediately prior to such proposed redemption
and (ii) the aggregate principal amount of the Securities outstanding
immediately prior to such proposed redemption.
(c) The preceding two paragraphs shall not apply to a purchase
of the Securities or the Series A 9-1/4 % Notes that satisfies both of the
following requirements: (1) such purchase is an individually negotiated,
one-on-one private transaction or an open-market transaction; and (2) such
purchase does not constitute a "tender offer" under applicable law.
ARTICLE 5.
Successor Company
SECTION 5.01 Merger, Consolidation and Sale of Substantially
All Assets.
(a) The Company (i) will not merge or consolidate with or into
any other Person (whether or not the Company is the surviving entity), and (ii)
will not and will not permit its Restricted Subsidiaries to, directly or
indirectly, sell, transfer, assign, lease, convey or otherwise dispose of all or
substantially all of the Property of the Company and its Restricted Subsidiaries
taken as a whole in any one transaction or a series of transactions (including,
without limitation, dispositions pursuant to mergers, consolidations,
Investments and Production Payments and Reserve Sales), in each case unless:
(A) the Surviving Entity shall be a corporation
organized and existing under the laws of the United States of America
or a State thereof or the District of Columbia;
(B) if the Company is not the Surviving Entity, the
Surviving Entity expressly assumes, by supplemental indenture
satisfactory to the Trustee, executed and delivered to the Trustee by
the Surviving Entity, the due and punctual payment of the principal of,
premium, if any, and interest on all the Securities, according to their
tenor, and the due and punctual performance and observance of all of
the covenants and conditions of this Indenture to be performed by the
Company (and in the case of clause (ii) above, the Company and the
Surviving Entity shall both be considered as the issuer of the
Securities);
(C) in the case of the sale, transfer, assignment,
lease, conveyance or other disposition of all or substantially all of
the Property of the Company and its
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Restricted Subsidiaries taken as a whole, such Property shall have been
transferred as an entirety or virtually as an entirety to one Person;
(D) immediately before and after giving effect to
such transaction or series of transactions on a pro forma basis, no
Default or Event of Default shall have occurred and be continuing;
(E) except in the case of a merger of the Company
with a Restricted Subsidiary, immediately after giving effect to such
transaction or series of transactions on a pro forma basis, the
Surviving Entity would be able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under Section 4.03;
(F) except in the case of a merger of the Company
with a Restricted Subsidiary, immediately after giving effect to such
transaction or series of transactions on a pro forma basis, the
Surviving Entity shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately
prior to the transaction or series of transactions;
(G) if the Company is not the Surviving Entity, then
(1) each Subsidiary Guarantor (unless it is the Surviving Entity) shall
have executed and delivered to the Trustee a supplemental indenture
satisfactory to the Trustee confirming that such Subsidiary Guarantor's
Subsidiary Guaranty remains in full force and effect and guarantees the
Surviving Entity's obligations under this Indenture and the Securities,
(2) each Significant Subsidiary of the Surviving Entity (determined
immediately after giving effect to such transaction or series of
transactions on a pro forma basis) shall have executed and delivered to
the Trustee a supplemental indenture satisfactory to the Trustee
pursuant to which such Person becomes a Subsidiary Guarantor and
guarantees the Securities pursuant to the terms of a Subsidiary
Guaranty and (3) in the case of clause (ii) above, the Company shall
have executed and delivered to the Trustee a supplemental indenture
satisfactory to the Trustee pursuant to which the Company confirms its
obligations for the due and punctual payment of the principal of,
premium, if any, and interest on all the Securities, according to their
tenor, and the due and punctual performance and observance of all of
the covenants and conditions of this Indenture to be performed by the
Company; and
(H) the Company and, if the Company is not the
Surviving Entity, the Surviving Entity, each shall have delivered to
the Trustee Officers' Certificates (attaching the calculations to
demonstrate compliance with clauses (E) and (F) above) and an Opinion
of Counsel, each stating that such merger, consolidation or disposition
and any such supplemental indentures comply with the above provisions
and that all conditions precedent relating to such transaction or
transactions have been complied with.
The term "Surviving Entity" shall mean the Person referred to
in clauses (i) and (ii) above (1) formed by or surviving any such merger or
consolidation involving the Company or (2) to which any such sale, transfer,
assignment, lease, conveyance or other disposition is made.
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(b) In addition to, and not in limitation of, subsection (a)
above, (i) the Company will not permit any Material Restricted Subsidiary to
merge or consolidate with or into any other Person (whether or not such Material
Restricted Subsidiary survives such merger or consolidation), and (ii) the
Company will not permit any Material Restricted Subsidiary to directly or
indirectly issue Capital Stock or Redeemable Stock in a single transaction or a
series of transactions (including, without limitation, engaging in any
recapitalization or similar transaction) if, after giving effect to such
issuance (and all possible conversions, exercises and similar events with
respect to any such stock (whether or not then convertible or exercisable) in
order to reach a fully diluted, fully converted basis), such Material Restricted
Subsidiary would no longer be a Subsidiary of the Company, in each case unless:
(A) immediately before and after giving effect to
such transaction or series of transactions on a pro forma basis, no
Default or Event of Default shall have occurred and be continuing;
(B) except in the case of a merger of a Material
Restricted Subsidiary with the Company or a Wholly Owned Restricted
Subsidiary, immediately after giving effect to such transaction or
series of transactions on a pro forma basis, the Company would be able
to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under Section 4.03;
(C) except in the case of a merger of a Material
Restricted Subsidiary with the Company or a Wholly Owned Restricted
Subsidiary, immediately after giving effect to such transaction or
series of transactions on a pro forma basis, the Company shall have a
Consolidated Net Worth equal to or greater than the Consolidated Net
Worth of the Company immediately prior to the transaction or series of
transactions;
(D) the Material Restricted Subsidiary Survivor shall
have executed and delivered to the Trustee, as appropriate, either (1)
a supplemental indenture satisfactory to the Trustee confirming that
such Material Restricted Subsidiary Survivor's Subsidiary Guaranty
remains in full force and effect and guarantees the Company's
obligations under this Indenture and the Securities, or (2) a
supplemental indenture satisfactory to the Trustee pursuant to which
such Material Restricted Subsidiary Survivor becomes a Subsidiary
Guarantor and guarantees the Securities pursuant to the terms of a
Subsidiary Guaranty; and
(E) the Company and such Material Restricted
Subsidiary Survivor each shall have delivered to the Trustee Officers'
Certificates (in the case of the Company, attaching the calculations to
demonstrate compliance with clauses (B) and (C) above) and an Opinion
of Counsel, each stating that such merger, consolidation or issuance
and any such supplemental indentures comply with the above provisions
and that all conditions precedent relating to such transaction or
transactions have been complied with.
The term "Material Restricted Subsidiary Survivor"
shall mean (1) in the case of clause (i) above, the Person surviving any such
merger or consolidation or (2) in the case of clause (ii) above, such Material
Restricted Subsidiary.
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(c) With respect to each transaction or series of transactions
described in subsections (a) and (b) above, giving effect to such transaction or
series of transactions on a pro forma basis shall include, without limitation,
(i) treating any Indebtedness not previously the obligation of the Company or
any of its Restricted Subsidiaries which becomes an obligation of the Company or
any of its Restricted Subsidiaries in connection with or as a result of such
transaction or series of transactions as having been Incurred at the time of
such transaction or series of transactions, and (ii) giving effect to any
Indebtedness Incurred or anticipated to be Incurred in connection with such
transaction or series of transactions.
SECTION 5.02 When a Subsidiary Guarantor May Merge or Transfer
Assets. Each Subsidiary Guarantor may merge or consolidate with or dispose of
its assets to the Company or a Wholly Owned Restricted Subsidiary that is a
Subsidiary Guarantor except to the extent any such transaction is limited by
Section 5.01. In addition, each Subsidiary Guarantor may merge or consolidate
with or dispose of its assets to any Person (other than the Company or a Wholly
Owned Restricted Subsidiary that is a Subsidiary Guarantor), regardless of
whether such Person is an Affiliate of such Subsidiary Guarantor, if: (i)
immediately after such transaction, and giving effect thereto, no Default or
Event of Default has occurred and is continuing;(ii) such transaction was
subject to, and consummated in compliance with, as appropriate, either Section
4.06 or Section 5.01; and (iii) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that such
transaction complies with the above provisions and that all conditions precedent
relating to such transaction have been complied with.
ARTICLE 6.
Defaults and Remedies
SECTION 6.01 Events of Default. Whenever used herein, an
"Event of Default" means any one of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) the Company shall fail to make any payment of interest on
the Securities within 30 days after any such amount becomes due in accordance
with the terms thereof;
(b) the Company shall fail to make any payment of principal of
(or premium, if any, on) the Securities when due in accordance with the terms
thereof, whether upon maturity, acceleration, call for redemption, call for
purchase under Section 4.06 or Section 4.09 or otherwise;
(c) the Company and any Subsidiary Guarantor shall fail to
observe or perform any other covenant or agreement contained in the Securities
or this Indenture and such failure continues for a period of 60 days after
written notice of such failure has been sent to the Company by the Trustee
specifying such default and requiring it to be remedied and stating that such
notice is a "Notice of Default";
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(d) the occurrence and continuation beyond any applicable
grace period of any default in the payment of the principal of (or premium, if
any, on) or interest on any Indebtedness (other than Permitted Non-Recourse
Indebtedness) of the Company (other than the Securities) or any Restricted
Subsidiary for money borrowed when due (whether resulting from maturity,
acceleration, mandatory redemption or otherwise), or any other default causing
acceleration of any Indebtedness (other than Permitted Non-Recourse
Indebtedness) of the Company or any Restricted Subsidiary for money borrowed,
provided that the aggregate principal amount of such Indebtedness shall exceed
$5,000,000; and specifically including, without limitation, any such default
under or acceleration of any Indebtedness (other than Permitted Non-Recourse
Indebtedness) directly or indirectly resulting or derived from, or caused by, a
default under or acceleration of any Permitted Non-Recourse Indebtedness;
(e) 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 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;
(f) the Company or any Restricted Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or files a request or
petition for a writ of execution to initiate bankruptcy
proceedings or have itself adjudicated as bankrupt;
(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
(v) proposes or agrees to an accord or composition in
bankruptcy between itself and its creditors;
(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
Restricted Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any
Restricted Subsidiary or for any substantial part of the
property of the Company or any Restricted Subsidiary;
(iii) orders the winding up or liquidation of the
Company or any Restricted Subsidiary;
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(iv) adjudicates the Company or a Restricted
Subsidiary as bankrupt or insolvent; or
(v) ratifies an accord or composition in bankruptcy
between the Company or a Restricted Subsidiary and the
respective creditors thereof;
and the order or decree remains unstayed and in effect for 60 days; or
(h) a Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of this Indenture and such
Subsidiary Guaranty) or a Subsidiary Guarantor denies or disaffirms its
obligations under its Subsidiary Guaranty.
SECTION 6.02 Acceleration. If an Event of Default (other than
an Event of Default described in clause (f) or (g) above) with respect to the
Securities at the time outstanding shall occur and be continuing, either the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding by written notice may declare the principal amount
of the Securities to be due and payable immediately. If an Event of Default
described in clause (f) or (g) above shall occur, the principal amount of all
the Securities will automatically, and without any action by the Trustee or any
Holder, become immediately due and payable.
After any such acceleration, but before a judgment or decree
based on acceleration, the Holders of a majority in aggregate principal amount
of the Securities then outstanding may rescind and annul such acceleration if
(a) the Company or any Subsidiary Guarantor has paid or
deposited with the Trustee a sum sufficient to pay
(i) all money paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursement and advances of the Trustee, its agents and
counsel,
(ii) all overdue installments of interest on all
Securities;
(iii) the principal of (and premium, if any, on ) any
Securities that have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
or rates prescribed therefor in the Securities, and
(iv) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate prescribed
therefor in the Securities;
(b) all Events of Default, other than the nonpayment of
principal of Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.04;
(c) the annulment of such acceleration would not conflict with
any judgment or decree of a court of competent jurisdiction; and
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(d) the Company has delivered an Officers' Certificate to the
Trustee to the effect of clauses (b) and (c) of this sentence.
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 Holder 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 principal amount of the Securities by notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Security or (ii) a Default in
respect of a provision that under Section 9.02 cannot be amended without the
consent of each Holder 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
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. 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 Holders, it being understood that the Trustee shall have no
duty to ascertain whether or not such actions or forbearances are unduly
prejudiced to such Holders, 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 indemnification satisfactory
to it in its sole discretion against all losses and expenses caused by taking or
not taking such action.
SECTION 6.06 Limitation on Suits. No Holder of any Securities
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or a trustee, or
for any other remedy hereunder, unless:
(i) such Holder has previously given to the Trustee
written notice of a continuing Event of Default with respect
to the Securities;
(ii) the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities have made
written request, and such Holder or Holders have offered
reasonable indemnity, to the Trustee to institute such
proceeding as trustee; and
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(iii) the Trustee has failed to institute such
proceeding, and has not received from the Holders of a
majority in aggregate principal amount of the then outstanding
Securities a direction inconsistent with such request, within
60 days after such notice, request and offer.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
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 the 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 Holders allowed in
any judicial proceedings relative to the Company, its creditors or its 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 6, it shall pay out the money or property in
the following 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 10;
THIRD: to Holders 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 Holders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to
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each Holder 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 principal amount of the Securities.
ARTICLE 7.
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:
(1) 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
(2) 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 willful
misconduct, except that:
(1) this subsection does not limit the effect of
subsection (b) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
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(3) 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 subsections (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 Trust
Indenture Act.
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 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.
(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 willful 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.
(f) Prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any
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investigation into the facts or matters stated in any resolution, Officer's
Certificate, or other certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, or other paper or document unless requested in writing to do
so by the Holders of not less than a majority in aggregate principal amount of
the Securities then outstanding; provided, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the Company or,
if advanced by the Trustee, shall be repaid by the Company upon demand.
(g) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties hereunder.
(h) The Trustee shall not be bound to ascertain or inquire as
to the performance or observance of any covenants, conditions, or agreements on
the part of the Company, except as otherwise set forth herein, but the Trustee
may require of the Company full information and advice as to the performance of
the covenants, conditions and agreements contained herein and shall be entitled
in connection herewith to examine the books, records and premises of the
Company.
(i) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty.
(j) Except for (i) a default under Section 6.01(a) or (b)
hereof, or (ii) any other event of which the Trustee has "actual knowledge" and
which event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not be
deemed to have notice of any Default or Event of Default unless specifically
notified in writing of such event by the Company or the Holders of not less than
25% in aggregate principal amount of the Securities then outstanding; as used
herein, the term "actual knowledge" means the actual fact or statement of
knowing, without any duty to make any investigation with regard thereto.
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, co-registrar
or co-paying agent 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.
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SECTION 7.05 Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Holder notice of the Default within 90 days after it occurs. Except in the case
of a Default in payment of principal of or interest on any Security (including
payments pursuant to the mandatory redemption provisions of such Security, if
any), the Trustee may withhold the notice if and so long as the Trustee in good
faith determines that withholding the notice is in the interests of Holders.
SECTION 7.06 Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Holder a brief report dated as of such date that complies
with TIA Section 313(a). The Trustee also shall comply with TIA Sections 313(b)
and 313(c).
A copy of each report at the time of its mailing to Holders
shall be filed with the Commission 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 promptly upon request from time to time the compensation for its
services as agreed to by the Trustee and the Company. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee promptly upon request for all
reasonable 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 reasonable
expense (including reasonable 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 willful misconduct, negligence or bad faith.
The Company need not pay for any settlement made by the Trustee without 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) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
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SECTION 7.08 Replacement of Trustee. The Trustee may resign at
any time by so notifying the Company. The Holders of a majority in 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 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.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. 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 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 Holder
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 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
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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
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.
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
therein.
ARTICLE 8.
Discharge of Indenture; Defeasance
SECTION 8.01 Discharge of Liability on Securities.
(a) When (i) the Company delivers to the Trustee all
outstanding Securities (other than Securities replaced pursuant to Section 2.06)
for cancellation 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 3 hereof and the Company irrevocably deposits with the
Trustee cash in U.S. dollars, U.S. Government Obligations or a combination
thereof sufficient to pay at maturity or upon redemption all outstanding
Securities, including premium and interest thereon to maturity or such
redemption date (other than Securities replaced pursuant to Section 2.06), and
premium, if any, and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Sections
8.01(b), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company.
(b) Notwithstanding subsection (a) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 7.07, 7.08, 8.05, 8.06 and 8.07
shall survive until the Securities have been paid in full. Thereafter, the
Company's obligations in Sections 7.07, 8.05 and 8.06 shall survive.
SECTION 8.02 Defeasance.
(a) Subject to Sections 8.02(d) and 8.03, 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
4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.12, 4.15, 4.21
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5.01(a)(E) and 5.01(a)(F) and the operation of Sections 6.01(d), 6.01(e),
6.01(f) and 6.01(g) (but, in the case of Sections 6.01(f) and (g), with respect
only to Significant Subsidiaries) ("covenant defeasance option"). The Company
may exercise its legal defeasance option notwithstanding its prior exercise of
its covenant defeasance option.
(b) 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(d), 6.01(e), 6.01(f) and 6.01(g) (but, in the case of Sections
6.01(f) and (g), with respect only to Significant Subsidiaries). If the Company
exercises its legal defeasance option or its covenant defeasance option, each
Subsidiary Guarantor shall be released from all its obligations under its
Subsidiary Guaranty.
(c) 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.
(d) Notwithstanding subsection (a) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 7.07, 7.08, 8.05, 8.06 and 8.07
shall survive until the Securities have been paid in full. Thereafter, the
Company's obligations in Section 7.07, 8.05 and 8.06 shall survive.
SECTION 8.03 Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
cash in U.S. dollars, U.S. Government Obligations or a combination
thereof for the payment of principal of, interest on and premium, if
any, on the Securities to maturity or redemption, as the case may be;
(2) 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, premium and
interest when due on all the Securities to maturity or redemption, as
the case may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.01(f) or (g) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) 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;
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(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders will not recognize income,
gain or loss for Federal income tax purposes as a result of such
defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be
subject to Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such covenant
defeasance had not occurred; and
(8) 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 8.04 Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
this Article 8. 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, premium and interest on the Securities.
SECTION 8.05 Repayment to 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 Order any money held by them
for the payment of principal of, premium, if any, or interest on any Securities
that remains unclaimed for two years after the date upon which such payment
shall have become due; provided, however, that the Company shall cause to be
published at least once in a newspaper of general circulation in The City of New
York or mailed to each Holder entitled to such unclaimed funds, notice that such
funds remain unclaimed and that, after a date specified therein, which shall be
a date not less than 30 days from the date of such publication or mailing, any
unclaimed balance of such money remaining as of such date shall be repaid to the
Company. After repayment to the Company, Holders entitled to such funds shall
look only to the Company for payment without interest thereon, as an unsecured
general creditor, and the Trustee and the Paying Agent shall have no further
liability with respect to such money.
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SECTION 8.06 Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S.
Government Obligations.
SECTION 8.07 Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 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 8 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 8; 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 9.
Amendments
SECTION 9.01 Without Consent of Holders.
(a) The Company, the Subsidiary Guarantors and the Trustee may
amend this Indenture or the Securities without notice to or consent of any
Holder:
(i) to cure any ambiguity, omission, defect or
inconsistency;
(ii) to provide for the assumption of the obligations
of the Company under this Indenture upon the merger,
consolidation or sale or other disposition of all or
substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole and certain other
events specified in Section 5.01;
(iii) to provide for uncertificated Securities in
addition to or in place of certificated Securities;
(iv) to comply with any requirement of the Commission
in order to effect or maintain the qualification of this
Indenture under the TIA;
(v) to make any change that does not adversely affect
the rights of any Holder of Securities in any material
respect;
(vi) to add or remove Subsidiary Guarantors pursuant
to the procedures set forth in this Indenture; and
(vii) 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.
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(b) An amendment under this Section may not make any change
that adversely affects the rights under Article 10 or Article 12 of any holder
of Senior Indebtedness of the Company or any Subsidiary Guarantor then
outstanding unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to such change in
writing.
(c) After an amendment under this Section becomes effective,
the Company shall mail to Holders a notice briefly describing such amendment.
The failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
SECTION 9.02 With Consent of Holders.
(a) The Company, the Subsidiary Guarantors and the Trustee,
with the written consent of the Holders of at least a majority of the principal
amount of the Securities, may execute supplemental indentures or amendments
adding any provisions to or changing or eliminating any of the provisions of
this Indenture or modifying the rights of the Holders of the Securities, except
that no supplemental indenture, amendment or wavier, without the consent of each
Holder affected thereby, may:
(i) reduce the principal amount of Securities whose
Holders must consent to an amendment or waiver;
(ii) reduce the rate of or extend the time for
payment of interest on any Securities;
(iii) change the currency in which any amount due in
respect of the Securities is payable;
(iv) reduce the principal of or any premium on or
change the Stated Maturity of any Securities or alter the
redemption or repurchase provisions with respect thereto;
(v) reduce the relative ranking of any Securities;
(vi) release any security that may have been granted
in respect of the Securities;
(vii) make any change in Article 10 or Article 12
that adversely affects the rights of any Holder under Article
10 or Article 12;
(viii) 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 Guaranty; or
(ix) make any change in Sections 6.04, 6.07 or 9.02.
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(b) 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.
(c) An amendment under this Section may not make any change
that adversely affects the rights under Article 10 or Article 12 of any holder
of Senior Indebtedness of the Company or any Subsidiary Guarantor then
outstanding unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to such change in
writing.
(d) After an amendment under this Section becomes effective,
the Company shall mail to Holders a notice briefly describing such amendment.
The failure to give such notice to all Holders, 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 Trust
Indenture Act as then in effect.
SECTION 9.04 Revocation and Effect of Consents and
Waivers.
(a) 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
Holder. An amendment or waiver becomes effective upon the execution of such
amendment or waiver by the Trustee.
(b) The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders 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 subsection, those Persons who were
Holders 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 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.
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SECTION 9.06 Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if the 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
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 10.
Subordination of the Securities
SECTION 10.01 Agreement to Subordinate.
Notwithstanding any other provision to the contrary in this
Indenture, the Company covenants and agrees, and each Holder by accepting a
Security covenants and agrees, that the principal of (and premium, if any) and
interest on the Indebtedness now or hereafter evidenced by the Securities and
this Indenture are subordinated in right of payment, to the extent and in the
manner provided in this Article, to the prior payment in full in cash of all
existing and future Senior Indebtedness, and that the subordination provisions
set forth in this Article are for the benefit of, and shall be enforceable
directly by, the holders of Senior Indebtedness.
Each Holder authorizes and directs the Trustee on such
Holder's behalf to take such action as may be necessary or appropriate, in the
sole discretion of the Trustee, to acknowledge or effectuate the subordination
between the Holders and the holders of Senior Indebtedness as provided in this
Article and appoints the Trustee as such Holder's attorney-in-fact for any and
all such purposes, including, in the event of any voluntary or involuntary
liquidation or dissolution of the Company, whether total or partial, or in a
bankruptcy, reorganization, insolvency, receivership, dissolution, assignment
for the benefit of creditors, marshalling of assets or similar proceeding
relating to the Company or its property, the timely filing of a claim for the
unpaid balance of such Holder's Securities in the form required in said
proceeding and cause said claim to be approved. If the Trustee does not file a
proper claim or proof of debt in the form required in such proceeding prior to
20 days before the expiration of the time to file such claim or claims, then the
Principal Agent is hereby authorized to have the right to file and is hereby
authorized to file an appropriate claim for and on behalf of the Holders;
provided, however, that any such claim filed by the Principal Agent shall be
superseded by the claim, if any, subsequently filed by the Trustee.
Each Holder by accepting a Security acknowledges and agrees
that the subordination provision set forth in this Article are, and are intended
to be, an inducement and
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consideration to each holder of any Senior Indebtedness, whether such Senior
Indebtedness was created 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 upon such subordination provisions in acquiring and continuing to hold,
or in continuing to hold, such Senior Indebtedness, and such holder is made an
obligee hereunder and may enforce directly such subordination provisions.
SECTION 10.02 Liquidation; Dissolution; Bankruptcy
Upon any payment or distribution (whether in cash, property,
debt, equity or other securities, a combination thereof or otherwise) to
creditors or equity holders of the Company in a voluntary or involuntary
liquidation or dissolution of the Company, whether total or partial, or in
bankruptcy, reorganization, insolvency, receivership, dissolution, assignment
for the benefit of creditors, marshalling of assets or similar proceeding
relating to the Company or its property:
(a) holders of Senior Indebtedness shall be entitled to
receive payment in full in cash of all amounts due or to become due on or in
respect of all Senior Indebtedness before Holders shall be entitled to receive
any Security Payment (as defined in Section 10.03(a)); and
(b) until all Senior Indebtedness is paid in full in cash, any
Security Payment (as defined in Section 10.03(a)) to which Holders would be
entitled but for this Article shall be made to holders of Senior Indebtedness,
as their interests may appear.
Upon any prepayment, payment or distribution referred to in
this Article, the Trustee and the Holders shall be entitled to rely upon any
order or decree of a court of competent jurisdiction in which such proceedings
are pending for the purpose of ascertaining the identity of Persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness,
the amount thereof or payable thereon and all other facts pertinent thereto or
to this Article, and the Trustee and the Holders shall be entitled to rely upon
a certificate of the liquidating trustee or agent or other Person (including any
Representative of holders of Senior Indebtedness) making any payment or
distribution to the Trustee or to the Holders for the purpose of ascertaining
the identity of Persons entitled to participate in such payment or distribution,
the holders of Senior Indebtedness, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person,
as a holder of Senior Indebtedness, to participate in any payment or
distribution pursuant to this Section, the Trustee may requires such Person (at
the expense of the Holders) to furnish evidence to the reasonable satisfaction
of the Trustee, acting in good faith, as to the amount of such Senior
Indebtedness held by such Person, as to the extent to which such Person is
entitled to participate in such payment or distribution, and as to other facts
pertinent to the rights of such Person under this Section, 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 payment.
For purposes of this Article, a distribution may consist of
cash, securities or other property, by set-off or otherwise; provided that, for
purposes of this Article only, the words "cash, securities or other property"
shall not be deemed to include securities of the Company or
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any other corporation ("Reorganization Securities") provided for by a plan of
reorganization or readjustment of the Company the payment of which is
subordinated, at least to the extent provided in this Article with respect to
the Securities, to the payment of all Senior Indebtedness that may at the time
be outstanding; provided, further, that (a) all Senior Indebtedness is assumed
by the new corporation, if any, resulting from any such reorganization or
readjustment, (b) no right, remedy, power, privilege or Lien of any holder of
Senior Indebtedness is, without the consent of such holder, altered by such
reorganization or readjustment, (c) the stated maturity date of the
Reorganization Securities is not earlier than the later of the stated maturity
date of the Securities or two years after the stated maturity of the Senior
Indebtedness, (d) no amortization of principal of Reorganization Securities is
required prior to the stated maturity date of the Reorganization Securities, (e)
the interest rate on the Reorganization Securities is not greater than the
nondefault interest rate on the Securities, (f) no scheduled interest payments
on the Reorganization Securities shall be made in cash while the Senior
Indebtedness is outstanding, (g) the principal amount of the Reorganization
Securities on the date of issuance thereof does not exceed the outstanding
principal amount of the Securities on the date of commencement of the bankruptcy
case pursuant to which the Reorganization Securities are issued, (h) the
circumstances requiring redemption or defeasance of the Reorganization
Securities are not broader than those requiring redemption or defeasance of the
Securities and (i) the covenants, representations and warranties and events of
default applicable to the Reorganization Securities are not materially more
restrictive or burdensome than those contained in this Indenture.
The consolidation or merger of the Company with or into any
Person, or the sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the Company's assets to any Person,
upon the terms and conditions set forth in Article 5, shall not be deemed to be
liquidation, dissolution or reorganization or similar proceeding relating to the
Company for purposes of this Section if the Person formed by or surviving such
consolidation or merger, or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made, shall, as a part of such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition,
comply with the conditions set forth in Article 5.
SECTION 10.03 Default on Senior Indebtedness.
(a) Upon any Senior Indebtedness becoming due and payable,
whether at the stated maturity thereof or by acceleration or otherwise, such
Senior Indebtedness shall first be irrevocably and indefeasibly paid in full in
cash, or the immediate payment thereof duly provided for in cash, before the
Company or any Person acting on behalf of the Company shall directly or
indirectly pay, prepay, redeem, retire, repurchase or otherwise acquire for
value, or make any deposit pursuant to Article 8 in respect of, or make any
other prepayment, payment or distribution (whether in cash, property, securities
or a combination thereof or otherwise) on account of the principal of (or
premium, if any) or interest on, any Securities (each, a "Security Payment").
(b) No Security Payment shall be made if, at the time of such
Security Payment there exists a default in payment of all or any portion of any
principal of (and premium, if any) and interest and fees, expenses, costs and
other obligations on Senior Indebtedness, and such default shall not have been
cured or waived in writing or the benefits of this sentence waived in writing by
or on behalf of the holders of such Senior Indebtedness.
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(c) In addition, during the continuance of any event of
default (other than a default referred to in subsection (b) of this Section
10.03) with respect to any Specified Senior Indebtedness, as such event of
default is defined therein or in the instrument under which such Specified
Senior Indebtedness is outstanding, permitting the holders of such Specified
Senior Indebtedness to accelerate the maturity thereof under the terms of such
Specified Senior Indebtedness, and upon written notice of such event of default
given by the Principal Agent to the Trustee, with a copy to the Company (the
delivery of such shall not affect the validity of the notice to the Trustee),
then, unless and until such event of default shall have been cured or waived or
shall have ceased to exist, no Security Payment shall be made; provided, that if
the holders of the Specified Senior Indebtedness to which the default relates
have not declared such Specified Senior Indebtedness to be immediately due and
payable within 179 days after the occurrence of such default (or have declared
such Specified Senior Indebtedness to be immediately due and payable and within
such period have rescinded such declaration of acceleration), then, subject to
the provisions of Section 10.02 and 10.03(a), the Company shall resume making
any and all unpaid scheduled Security Payments. Any period during which any
Security Payment is prohibited pursuant to the immediately preceding sentence is
referred to in this Article as a "payment blockage period." Notwithstanding any
other provisions of this Article or any other provision of this Indenture, in no
event shall a payment blockage period under this Article extend beyond 179 days
from the date on which such payment blockage period commenced. Not more than one
payment blockage period may be commenced within any consecutive 365-day period
with respect to the Securities. For all purposes of this Article, no event of
default that existed or was continuing on the date of the commencement of any
payment blockage period with respect to the Specified Senior Indebtedness
initialing such payment blockage period shall be, or be made, the basis for the
commencement of a second payment blockage period by the holder or holders of
such Specified Senior Indebtedness at any time after the 365-day period referred
to in the previous sentence unless such event of default shall have been cured
or waived for a period of not less than 90 consecutive days.
(d) The Company covenants that it will, upon request of the
Trustee, deliver an Officers' Certificate (with copies thereof to the
Representative of each class of Senior Indebtedness) showing in reasonable
detail the Senior Indebtedness outstanding as of the date of such Officers'
Certificate and the Representative of each class of Senior Indebtedness. The
Trustee may conclusively rely thereon except to the extent that it shall have
received, from the Representative of any class of Senior Indebtedness, notice in
writing controverting any of the statements made therein. Not less than 10 days
prior to making any distribution in respect of Senior Indebtedness pursuant to
this Section, the Trustee shall deliver to each Representative of any class of
Senior Indebtedness copies of the most recent Officers' Certificate filed with
it by the Company pursuant to this subsection (d).
(e) In the event that the Securities are declared due and
payable before their Stated Maturity in accordance with Article 6, then and in
such event the holders of Senior Indebtedness outstanding at the time the
Securities so become due and payable shall be entitled to receive payment in
full in cash of all amounts due or to become due on or in respect of such Senior
Indebtedness (whether or not an event of default has occurred thereunder or such
Senior Indebtedness is, or has been declared to be, due and payable prior to the
date on which it otherwise would have become due and payable) before the Holders
shall be entitled to receive any Security Payment.
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SECTION 10.04 Security Payments Permitted if No Default.
Nothing contained in this Article or elsewhere in this
Indenture, or in any of the Securities, shall prevent the Company or any Person
acting on behalf of the Company, at any time except as otherwise provided in
Section 10.02 from making any Security Payment.
SECTION 10.05 When Security Payment Must Be Paid Over.
In the event that any Security Payment is made to the Trustee
or the Holders that, because of this Article, should not have been so made or
may not be paid over to the Holders, such Security Payment shall be held by the
Trustee or the Holders who receive such Security Payment, as the case may be,
for the benefit of, and shall forthwith be paid over or delivered to, the
holders of the Senior Indebtedness remaining unpaid or their Representatives, as
their interests may appear, to the extent necessary to irrevocably and
indefeasibly pay such Senior Indebtedness in full in cash in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness.
SECTION 10.06 Notices by the Company.
The Company shall promptly notify the Trustee, each Paying
Agent and the Principal Agent of any facts known to the Company that would cause
a Security Payment to violate this Article, but failure to give such notice
shall not affect the subordination provided in this Article of the Securities to
Senior Indebtedness. Without limiting the foregoing, if payment of the
Securities is accelerated because of an Event of Default, the Company shall
promptly notify the Principal Agent of the acceleration.
SECTION 10.07 Subrogation.
After all Senior Indebtedness is irrevocably and indefeasibly
paid in full in cash and until the Securities are paid in full, Holders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent that distributions
otherwise payable to Holders have been applied to the payment of Senior
Indebtedness. A distribution made under this Article to holders of Senior
Indebtedness which otherwise would have been made to Holders is not, as between
the Company and the Holders, payment by the Company on Senior Indebtedness.
SECTION 10.08 Relative Rights.
This Article defines the relative rights of Holders and
holders of Senior Indebtedness. Nothing in this Indenture shall:
(a) impair, as between the Company and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay the
principal of (and premium, if any) and interest on the Securities in accordance
with their terms;
(b) affect the relative rights of Holders and creditors of the
Company other than holders of Senior Indebtedness; or
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(c) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders of Senior Indebtedness to receive prepayment, payments and distributions
otherwise payable to Holders.
If the Company fails because of this Article to pay the
principal of (or premium, if any) or interest on a Security on the due date or
upon the acceleration thereof, the failure is still a Default or Event of
Default.
SECTION 10.09 Subordination May Not Be Impaired by the
Company.
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by (a) any act or failure to act by the Company or by its failure to comply with
this Indenture, (b) any release of any collateral or any guarantor or any Person
of the Company's obligations under the Senior Indebtedness, (c) any amendment,
supplement, extension, renewal, restatement or other modification of the Senior
Indebtedness, (d) any settlement or compromise of any Senior Indebtedness, (e)
the unenforceability of any of the Senior Indebtedness or (f) the failure of any
holder of Senior Indebtedness to pursue claims against the Company.
SECTION 10.10 Distribution of Notice to Representative.
Whenever a distribution is to be made or a notice given to
holders of Senior Indebtedness, the distribution may be made and the notice
given to their Representative (if any).
SECTION 10.11 Rights of Trustee and Paying Agent.
The Trustee or any Payment Agent may continue to make payments
in respect of the Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payment unless,
not less than three Business Days prior to the date of any such payment, a
Responsible Officer of the Trustee receives written notice reasonably
satisfactory to it that payments in respect of the Securities may not be made
under this Article. Only the Company, a Representative (satisfactorily
identified to the Trustee) or a holder of a class of Senior Indebtedness that
has no Representative (satisfactorily identified to the Trustee) may give the
notice. Prior to the receipt of such notice, the Trustee and any Paying Agent
shall be entitled in all respects to assume that no such facts exist. In any
case, the Trustee shall have no responsibility to the holders of Senior
Indebtedness for payments made to Holders by the Company or any Paying Agent
unless cash payments are made at the direction of the Trustee after receipt of
such notice referred to above.
Neither the Trustee nor any Payment Agent shall be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have it were not Trustee.
This Section is solely for the benefit of the Trustee and any
Payment Agents and shall not limit the obligations of the Holders under Section
10.05.
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SECTION 10.12 Consent of Holders of Specified Senior
Indebtedness.
The provisions of this Article (including the definitions
contained in this Article and references to this Article contained in this
Indenture) shall not be amended, waived or modified in a manner that would
adversely affect the rights of the holders of any Specified Senior Indebtedness,
and no such amendment, waiver or modification shall become effective, unless the
holders of such Specified Senior Indebtedness shall have consented in writing
(in accordance with the provisions of the agreement governing such Specified
Senior Indebtedness) to such amendment, waiver or modification.
SECTION 10.13 Contractual Subordination.
This Article 10 represents a bona fide agreement of
contractual subordination pursuant to Section 510(b) of the United States
Bankruptcy Code.
ARTICLE 11.
Subsidiary Guaranties
SECTION 11.01 Guaranties. Each Subsidiary Guarantor hereby
unconditionally and irrevocably 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, premium, if any, 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 11 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 (a) 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; (b) any extension or renewal of
any thereof; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Securities or any other agreement;
(d) the release of any security held by any Holder or the Trustee for the
Obligations or any of them; (e) the failure of any Holder or the Trustee to
exercise any right or remedy against any other guarantor of the Obligations; or
(f) any change in the ownership of such Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee
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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 Guaranty is, to the extent and in the manner
set forth in Article 12, subordinated and subject in right of payment to the
prior payment in full of the principal of and premium, if any, and interest on
all Senior Indebtedness of the Subsidiary Guarantor giving such Subsidiary
Guaranty and each Subsidiary Guaranty is made subject to such provisions of this
Indenture.
Except as expressly set forth in Sections 8.02, 11.02 and
11.06, 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
Guaranty 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, premium, if
any, 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 Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of, premium, if any, 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 (i) the unpaid amount of such Obligations,
(ii) accrued and unpaid interest on such Obligations (but only to the extent not
prohibited by law) and (iii) 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 of all Obligations and all obligations to which the
Obligations are subordinated as provided in Article 12. Each Subsidiary
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Obligations
Guaranteed hereby may be accelerated as provided in Article 6 for the purposes
of such Subsidiary
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Guarantor's Subsidiary Guaranty herein, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such Obligations as provided in Article 6, such Obligations (whether or not due
and payable) shall forthwith become due and payable by 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 Limitation on Liability. Any term or provision
of this Indenture to the contrary notwithstanding, the maximum aggregate amount
of the obligations guaranteed hereunder by any Subsidiary Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally. To effectuate the foregoing
intention, the obligations of each Subsidiary Guarantor shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Subsidiary Guaranty or pursuant to its contribution obligations hereunder,
result in the obligations of such Subsidiary Guarantor under its Subsidiary
Guaranty not constituting a fraudulent conveyance or fraudulent transfer under
federal, state or foreign law. Each Subsidiary Guarantor that makes a payment or
distribution under a Subsidiary Guaranty shall be entitled to a contribution
from each other Subsidiary Guarantor in a pro rata amount based on the Adjusted
Net Assets of each Subsidiary Guarantor.
SECTION 11.03 Successors and Assigns. This Article 11 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
inure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred 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 11 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 11
at law, in equity, by statute or otherwise.
SECTION 11.05 Modification. No modification, amendment or
waiver of any provision of this Article 11, nor the consent to any departure by
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 any Subsidiary Guarantor in any case
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shall entitle such Subsidiary Guarantor to any other or further notice or demand
in the same, similar or other circumstances.
SECTION 11.06 Release of Subsidiary Guarantor. Any Subsidiary
Guarantor that is no longer a Significant Subsidiary may, by execution and
delivery to the Trustee of a supplemental indenture satisfactory to the Trustee
(attaching the calculations to demonstrate such status), be released from its
Subsidiary Guaranty and cease to be a Subsidiary Guarantor. Any Subsidiary
Guarantor that is designated an Unrestricted Subsidiary pursuant to and in
compliance with the terms of this Indenture shall be released from and relieved
of its obligations under its Subsidiary Guaranty upon execution and delivery of
a supplemental indenture satisfactory to the Trustee. Such supplemental
indenture shall be accompanied by an Officers' Certificate and an Opinion of
Counsel, each stating that such supplemental indenture and release of the
Subsidiary Guaranty complies with the provisions of this Indenture and that all
conditions precedent to such supplemental indenture and release of the
Subsidiary Guaranty have been complied with.
SECTION 11.07 Execution of Supplemental Indenture for Future
Subsidiary Guarantors. Each Subsidiary which is required to become a Subsidiary
Guarantor pursuant to Section 4.12 shall, and the Company shall cause each such
Subsidiary to, promptly execute and deliver to the Trustee a supplemental
indenture in the form of Exhibit B hereto pursuant to which such Subsidiary
shall become a Subsidiary Guarantor under this Article 11 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 Guaranty 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 12.
Subordination of Subsidiary Guaranties
SECTION 12.01 Agreement to Subordinate.
Notwithstanding any other provision to the contrary in this
Indenture, each Subsidiary Guarantor covenants and agrees, and each Holder by
accepting a Security covenants and agrees, that all payments by such Subsidiary
Guarantor in respect of its Subsidiary Guarantee are subordinated in right of
payment, to the extent and in the manner provided in this Article, to the prior
payment in full in cash of all existing and future Senior Indebtedness of such
Subsidiary Guarantor, and that the subordination provisions set forth in this
Article are for the benefit of, and shall be enforceable directly by, the
holders of Senior Indebtedness of such Subsidiary Guarantor.
Each Holder authorizes and directs the Trustee on such
Holder's behalf to take such action as may be necessary or appropriate, in the
sole discretion of the Trustee, to acknowledge or effectuate the subordination
between the Holders and the holders of Subsidiary
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Guarantor Senior Indebtedness as provided in this Article and appoints the
Trustee as such Holder's attorney-in-fact for any and all such proposes,
including, in the event of any voluntary or involuntary liquidation or
dissolutio of a Subsidiary Guarantor, whether total or partial, or in a
bankruptcy, reorganization, insolvency, receivership, dissolution, assignment of
the benefit of creditors, marshalling of assets or similar proceeding relating
to a Subsidiary Guarantor or its property, the timely filing of a claim for the
unpaid balance of such Holder's Securities in the form required in said
proceeding and cause said claim to be approved. If the Trustee does not file a
property claim or proof to debt in the form required in such proceeding prior to
20 days before the expiration of the time to exile such claim or claims, then
the Principal Subsidiary Indebtedness Agent is hereby authorized to have the
right to file and is hereby authorized to file an appropriate claim for and on
behalf of the Holders; provided, however, that any such claim filed by such
Principal Subsidiary Indebtedness Agent shall be superseded by the claim, if
any, subsequently filed by the Trustee.
Each Holder by accepting a Security acknowledges and agrees
that the subordination provisions set forth in this Article are, and are
intended to be, an inducement and consideration to each holder of any Subsidiary
Guarantor Senior Indebtedness, whether such Subsidiary Guarantor Senior
Indebtedness was created before or after the issuance of the Securities, to
acquire and continue to hold, or to continue to hold, such Subsidiary Guarantor
Senior Indebtedness, and such holder of Subsidiary Guarantor Senior Indebtedness
shall be deemed conclusively to have relied upon such subordination provisions
in acquiring and continuing to hold, or in continuing to hold, such Subsidiary
Guarantor Senior Indebtedness, and such holder is made an obligee hereunder and
may enforce directly such subordination provisions.
SECTION 12.02 Liquidation; Dissolution; Bankruptcy.
Upon any payment or distribution (whether in cash, property,
debt, equity or other securities, a combination thereof or otherwise) to
creditors or equity holders of a Subsidiary Guarantor in a voluntary or
involuntary liquidation or dissolution of such Subsidiary Guarantor, whether
total or partial, or in bankruptcy, reorganization, insolvency, receivership,
dissolution, assignment for the benefit of creditors, marshalling of assets or
similar proceeding relating to such Subsidiary Guarantor or its property:
(a) holders of Subsidiary Guarantor Senior Indebtedness of
such Subsidiary Guarantor shall be entitled to receive payment in full in cash
of all amounts due or to become due on or in respect of all such Subsidiary
Guarantor Senior Indebtedness before Holders shall be entitled to receive any
payment by such Subsidiary Guarantor in respect of its Subsidiary Guaranty or
distribution of any assets or securities of such Subsidiary Guarantor (each, a
"Guaranty Payment"); and
(b) until all Subsidiary Guarantor Senior Indebtedness of such
Subsidiary Guarantor is paid in full in cash, any Guaranty Payment to which
Holders would be entitled but for this Article shall be made to holders of
Subsidiary Guarantor Senior Indebtedness of such Subsidiary Guarantor, as their
interests may appear.
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Upon any payment or distribution referred to in this Article,
the Trustee and the Holders shall be entitled to rely upon any order or decree
of a court of competent jurisdiction in which such proceedings are pending for
the purpose of ascertaining the identity of Persons entitled to participate in
such payment or distribution, the holders of Subsidiary Guarantor Senior
Indebtedness, the amount thereof or payable thereon and all other facts
pertinent thereto or to this Article, and the Trustee and the Holders shall be
entitled to rely upon a certificate of the liquidating trustee or agent or other
Person (including any Representative of holders of Subsidiary Guarantor Senior
Indebtedness) making any payment or distribution to the Trustee or to the
Holders for the purpose of ascertaining the identity of Persons entitled to
participate in such payment or distribution, the holders of Subsidiary Guarantor
Senior Indebtedness, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person, as a
holder of Subsidiary Guarantor Senior Indebtedness, the participate in any
payment or distribution pursuant to this Section, the Trustee may request such
Person (as the expense of the Holders) to furnish evidence to the reasonable
satisfaction of the Trustee, acting in good faith, as to the amount of such
Subsidiary Guarantor Senior Indebtedness held by such Person, as to the extent
to which such Person is entitled to participate in such payment or distribution,
and as to the other facts pertinent to the rights of such Person under this
Section, 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 payment.
For purposes of this Article, a distribution may consist of
cash, securities or other property, by set-off or otherwise, provided that, for
purposes of this Article only, the words "cash, securities or other property"
shall not be deemed to include securities of a Subsidiary Guarantor or any other
corporation ("Subsidiary Guarantor Reorganization Securities") provided for by a
plan of reorganization or readjustment of a Subsidiary Guarantor the payment of
which is subordinated, at least to the extent provided in this Article with
respect to its Subsidiary Guaranty, to the payment of all Subsidiary Guarantor
Senior Indebtedness of such Subsidiary Guarantor that may at the time be
outstanding, provided, further, that (a) all such Subsidiary Guarantor Senior
Indebtedness is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, (b) no right, remedy, power, privilege or Lien
of any holder of such Subsidiary Guarantor Senior Indebtedness is, without th
consent of such holder, altered by such reorganization or readjustment, (c) the
stated maturity date of the Subsidiary Guarantor Reorganization Securities is
not earlier than the later of the stated maturity date of the Securities or two
years after the stated maturity of such Subsidiary Guarantor Senior
Indebtedness, (d) no amortization of principal of Subsidiary Guarantor
Reorganization Securities is required prior to the stated maturity date of the
Subsidiary Guarantor Reorganization Securities, (e) th interest rate on the
Subsidiary Guarantor Reorganization Securities is not greater than the
nondefault interest rate on the Securities, (f) no scheduled interest payments
on the Subsidiary Guarantor Reorganization Securities shall be made in cash
while such Subsidiary Guarantor Senior Indebtedness is outstanding, (g) the
principal amount of the Subsidiary Guarantor Reorganization Securities on the
date of issuance thereof does not exceed the outstanding principal amount of the
Securities on the date of commencement of the bankruptcy case pursuant to which
the Subsidiary Guarantor Reorganization Securities are issued, (h) the
circumstances requiring redemption or defeasance of the Subsidiary Guarantor
Reorganization Securities are not broader than those requiring redemption or
defeasance of the Securities and (i) the covenants,
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representations and warranties and events of default applicable to the
Subsidiary Guarantor Reorganization Securities are not materially more
restrictive or burdensome than those contained in this Indenture.
The consolidation or merger of a Subsidiary Guarantor with or
into any Person, or the sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of such Subsidiary Guarantor's assets to
any Person, in compliance with the terms and conditions set forth in Sections
5.01 and 5.02, shall not be deemed to be a liquidation, dissolution or
reorganization or similar proceeding relating to such Subsidiary Guarantor for
purposes of this Section.
SECTION 12.03 Default on Subsidiary Guarantor Senior
Indebtedness.
(a) Upon any Subsidiary Guarantor Senior Indebtedness of a
Subsidiary Guarantor becoming due and payable, whether at the stated maturity
thereof or by acceleration or otherwise, such Subsidiary Guarantor Senior
Indebtedness shall first be irrevocably and indefeasibly paid in full in cash,
or the immediate payment thereof duly provided for in cash, before such
Subsidiary Guarantor or any Person acting on behalf of such Subsidiary Guarantor
shall directly or indirectly make any Guaranty Payment.
(b) No Guaranty Payment shall be made by a Subsidiary
Guarantor if, at the time of such Guaranty Payment, there exists a default in
payment of all or any portion of any principal of (and premium, if any) and
interest and fees, expenses, costs and other Obligations on Subsidiary Guarantor
Senior Indebtedness of such Subsidiary Guarantor, and such default shall not
have been cured or waived in writing or the benefits of this sentence waived in
writing by or on behalf of the holders of such Subsidiary Guarantor Senior
Indebtedness.
(c) In addition, during the continuance of any event of
default (other than a default referred to in subsection (b) of this Section
12.03) with respect to any Subsidiary Guarantor Senior Indebtedness, as such
event of default is defined therein or in the instrument under which such
Subsidiary Guarantor Senior Indebtedness is outstanding, permitting the holders
of such Specified Senior Indebtedness of a Subsidiary Guarantor to accelerate
the maturity thereof under the terms of such Specified Senior Indebtedness of a
Subsidiary Guarantor, and upon written notice of such event of default given by
the Principal Subsidiary Indebtedness Agent to the Trustee, with a copy to the
Company (the delivery of which shall not affect the validity of the notice to
the Trustee), then, unless and until such event of default shall have been cured
or waived or shall have ceased to exist, no Guaranty Payment shall be made;
provided, that if the holders of the Specified Senior Indebtedness of a
Subsidiar Guarantor to which the default relates have not declared such
Specified Senior Indebtedness of a Subsidiary Guarantor to be immediately due
and payable within 179 days after the occurrence of such default (or have
declared such Specified Senior Indebtedness of a Subsidiary Guarantor to be
immediately due and payable and within such period have rescinded such
declaration of acceleration), then, subject to the provisions of Section 12.02
and 12.03(a), Guaranty Payments may be made. Any period during which any
Guaranty Payment is prohibited pursuant to the immediately preceding sentence is
referred to in this Article as a "payment blockage period." Notwithstanding any
other provision of this Article or any other provision of this Indenture, in no
event shall a payment blockage period under this Article extend beyond 179 days
from the date
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on which such payment blockage period commenced. Not more than one payment
blockage period may be commenced within any consecutive 365-day period. For all
purposes of this Article, no event of default that existed or was continuing on
the date of the commencement of any payment blockage period with respect to the
Specified Senior Indebtedness of a Subsidiary Guarantor initialing such payment
blockage period shall be, or be made, the basis for the commencement of a second
payment blockage period by the holder or holders of such Specified Senior
Indebtedness of a Subsidiary Guarantor at any time after the 365-day period
referred to in the previous sentence unless such event of default shall have
been cured or waived for a period of not less than 90 consecutive days. In
addition, for purposes of this Article, neither the Company nor any of its
Subsidiaries shall be deemed to be a holder of any Specified Senior Indebtedness
of a Subsidiary Guarantor.
(d) Each Subsidiary Guarantor covenants that it will, upon
request of the Trustee, deliver an Officers' Certificate (with copies thereof to
the Representative of each class of Subsidiary Guarantor Senior Indebtedness of
such Subsidiary Guarantor) showing in reasonable detail the Subsidiary Guarantor
Senior Indebtedness of such Subsidiary Guarantor outstanding as of the date of
such Officers' Certificate and the Representative of each class of such
Subsidiary Guarantor Senior Indebtedness. The Trustee may conclusively rely
thereon except to the extent that it shall have received, from the
Representative of any class of such Subsidiary Guarantor Senior Indebtedness,
notice in writing controverting any of the statements made therein. Not less
than 10 days prior to making any distribution in respect of Subsidiary Guarantor
Senior Indebtedness of a Subsidiary Guarantor pursuant to this Section, the
Trustee shall deliver to each Representative of any class of such Subsidiary
Guarantor Senior Indebtedness copies of the most recent Officers' Certificate
filed with it by such Subsidiary Guarantor pursuant to this subsection (d).
(e) In the event that the Securities are declared due and
payable before their Stated Maturity in accordance with Article 6, then and in
such event the holders of Subsidiary Guarantor Senior Indebtedness of any
Subsidiary Guarantor outstanding at the time the Securities so become due and
payable shall be entitled to receive payment in full in cash of all amounts due
or to become due on or in respect of such Subsidiary Guarantor Senior
Indebtedness (whether or not an event of default has occurred thereunder or such
Subsidiary Guarantor Senior Indebtedness is, or has been declared to be, due and
payable prior to the date on which it otherwise would have become due and
payable) before the Holders shall be entitled to receive any Guaranty Payment.
SECTION 12.04 Guaranty Payments Permitted if No Default.
Nothing contained in this Article or elsewhere in this
Indenture, or in any of the Securities, shall prevent a Subsidiary Guarantor or
any Person acting on behalf of a Subsidiary Guarantor, at any time except as
otherwise provided in Section 12.02 or 12.03, from making any Guaranty Payment.
SECTION 12.05 When Guaranty Payment Must Be Paid Over.
In the event that any Guaranty Payment is made to the Trustee
or the Holders that, because of this Article, should not have been so made or
may not be paid over to the Holders,
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such Guaranty Payment shall be held by the Trustee or the Holders who receive
such Guaranty Payment, as the case may be, for the benefit of, and shall
forthwith be paid over or delivered to, the holders of the Subsidiary Guarantor
Senior Indebtedness remaining unpaid or their Representatives, as their
interests ma appear, to the extent necessary to irrevocably and indefeasibly pay
such Subsidiary Guarantor Senior Indebtedness in full in cash or in accordance
with its terms, after giving effect to any concurrent payment or distribution to
or for the holders of such Subsidiary Guarantor Senior Indebtedness.
SECTION 12.06 Notices by a Subsidiary Guarantor.
Each Subsidiary Guarantor shall promptly notify the Trustee,
each Paying Agent and the Principal Subsidiary Indebtedness Agent of any facts
known to such Subsidiary Guarantor that would cause a Guaranty Payment to
violate this Article, but failure to give such notice shall not affect the
subordination provided in this Article of any Subsidiary Guarantee to Subsidiary
Guarantor Senior Indebtedness.
SECTION 12.07 Subrogation.
After all Subsidiary Guarantor Senior Indebtedness is
irrevocably and indefeasibly paid in full in cash and until the Securities are
paid in full, Holders shall be subrogated to the rights of holders of Subsidiary
Guarantor Senior Indebtedness to receive distributions applicable to Subsidiary
Guarantor Senior Indebtedness to the extent that distributions otherwise payable
to Holders have been applied to the payment of Subsidiary Guarantor Senior
Indebtedness. A distribution made under this Article to holders of Subsidiary
Guarantor Senior Indebtedness which otherwise should have been made to Holders
is not, as between a Subsidiary Guarantor and the Holders, payment by such
Subsidiary Guarantor on Subsidiary Guarantor Senior Indebtedness.
SECTION 12.08 Relative Rights.
This Article defines the relative rights of Holders and
holders of Subsidiary Guarantor Senior Indebtedness. Nothing in this Indenture
shall:
(a) impair, as between a Subsidiary Guarantor and the Holders,
the obligation of a Subsidiary Guarantor, which is absolute and unconditional,
to make any Guaranty Payment in accordance with the terms of its Subsidiary
Guaranty;
(b) affect the relative rights of Holders and creditors of a
Subsidiary Guarantor other than holders of Subsidiary Guarantor Senior
Indebtedness of such Subsidiary Guarantor; or
(c) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders of Subsidiary Guarantor Senior Indebtedness to receive prepayment,
payments and distributions otherwise payable to Holders.
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If a Subsidiary Guarantor fails because of this Article to pay
the principal of (or premium, if any) or interest on a Security on the due date
or upon the acceleration thereof, the failure is still a Default or Event of
Default.
SECTION 12.09 Subordination May Not be Impaired by the
Subsidiary Guarantor.
No right of any holder of Subsidiary Guarantor Senior
Indebtedness to enforce the subordination of the Obligation of a Subsidiary
Guarantor pursuant to its Subsidiary Guaranty shall be impaired by (a) any act
or failure to act by such Subsidiary Guarantor or by its failure to comply with
this Indenture, (b) any release of any collateral or any guarantor or any Person
or such Subsidiary Guarantor's obligations under its Subsidiary Guarantor Senior
Indebtedness, (c) any amendment, supplement, extension, renewal, restatement or
other modification of any Subsidiary Guarantor Senior Indebtedness, (d) any
settlement or compromise of any Subsidiary Guarantor Senior Indebtedness, (e)
the unenforceability of any of the Subsidiary Guarantor Senior Indebtedness of
such Subsidiary Guarantor or (f) the failure of any holder of Subsidiary
Guarantor Senior Indebtedness of such Subsidiary Guarantor to pursue claims
against such Subsidiary Guarantor.
SECTION 12.10 Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to
holders of Subsidiary Guarantor Senior Indebtedness, the distribution may be
made and the notice given to their Representative (if any).
SECTION 12.11 Rights of Trustee and Paying Agent.
The Trustee or any Paying Agent may continue to make payments
in respect of the Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payment unless,
not less than three Business Days prior to the date of any such payment, a
Responsible Officer of the Trustee receives written notice reasonably
satisfactory to it that payments in respect of the Notices may not be made under
this Article. Only a Subsidiary Guarantor, a Representative (satisfactorily
identified to the Trustee) or a holder of a class of Subsidiary Guarantor Senior
Indebtedness that has no Representative (satisfactorily identified to the
Trustee) may give the notice. Prior to the receipt of such notice, the Trustee
and any Paying Agent shall be entitled in all respects to assume that no such
facts exist. In any case, the Trustee shall have no responsibility to the
holders of Subsidiary Guarantor Senior Indebtedness for payments made to Holders
by a Subsidiary Guarantor or any Paying Agent unless such payments are made at
the direction of the Trustee after receipt of such notice referred to above.
Neither the Trustee nor any Paying Agent shall be deemed to
owe any fiduciary duty to the holders of Subsidiary Guarantor Senior
Indebtedness.
The Trustee in its individual or any other capacity may hold
Subsidiary Guarantor Senior Indebtedness with the same rights it would have if
it were not Trustee.
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This Section is solely for the benefit of the Trustee and any
Paying Agents and shall not limit the obligations of the Holders under Section
12.05.
SECTION 12.12 Consent of Holders of Subsidiary Guarantor
Senior Indebtedness.
The provisions of this Article (including the definitions
contained in this Article and references to this Article contained in this
Indenture) shall not be amended, waived or modified in a manner that would
adversely affect the rights of the holders of any Specified Senior Indebtedness
of a Subsidiary Guarantor, and no such amendment, waiver or modification shall
become effective, unless the holders of such Specified Senior Indebtedness of a
Subsidiary Guarantor shall have consented in writing (in accordance with the
provisions of the Agreement governing such Specified Senior Indebtedness of a
Subsidiary Guarantor) to such amendment, waiver or modification.
SECTION 12.13 Contractual Subordination.
This Article represents a bona fide agreement of contractual
subordination pursuant to Section 510(b) of the United States Bankruptcy Code.
ARTICLE 13.
Miscellaneous
SECTION 13.01 Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee, to
the extent required by the TIA or this Indenture, (i) an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
(including any covenant, compliance with which constitutes a condition
precedent) relating to the propose action have been complied with and (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) 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;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
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(4) a statement as to whether or not, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 13.02 Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, and may
state that it is so based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate of opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 13.03 Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by a specified percentage of Holders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such specified
percentage of Holders in person or by agents duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are received by the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Sections 7.01 and 7.02) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact
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and date of the execution of any such instrument or writing, or the authority of
the Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient, including the execution of such instrument or writing
without more.
(c) The ownership, principal amount and serial numbers of
Securities held by any Person, and the date of holding the same, shall be proved
by the Security Register.
(d) If the Company shall solicit from the Holders of
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or pursuant to Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Such record date shall be the record date specified i or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation is completed. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than eleven months after
the record date.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(f) Without limiting the foregoing, a Holder entitled
hereunder to give or take any action with regard to any particular Security may
do so with regard to all or any part of the principal amount of such Security or
by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
SECTION 13.04 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 Trust Indenture Act, the
required provision shall control. If any provision of this Indenture modifies or
excludes any provision of the TIA that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be
SECTION 13.05 Notices. Any notice or communication shall be in
writing and delivered in person, or sent by registered or certified mail, by air
courier guaranteeing overnight delivery or by fax (promptly confirmed by
telephone) and addressed as follows:
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if to the Company or any Subsidiary Guarantor:
HS Resources, Inc.
One Maritime Plaza
Fifteenth Floor
San Francisco, CA 94111
Attn: Chief Financial Officer
Phone: (415) 433-5795
Fax: (415) 433-5811
with a copy to:
HS Resources, Inc.
1999 Broadway, Suite 3600
Denver, CO 80202
Attn: General Counsel
Phone: (303) 296-3600
Fax: (303) 296-3601
if to the Trustee:
Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60606
Attention: Indenture Trust Division/Marianne Tinerella
Phone: (312) 461-2420
Fax: (312) 461-3525
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication sent to a Holder shall be sent to
the Holder at the Holder's address as it appears on the registration books of
the Registrar and shall be sufficiently given if so sent within the time
prescribed.
Failure to send a notice or communication to a Holder or any
defect in it shall not effect its sufficiency with respect to other Holders. If
a notice or communication is given in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 13.06 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other Holders 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 13.07 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
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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 13.08 Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 13.09 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 and the State of Illinois. 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 13.10 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 13.11 No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company 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 Holder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 13.12 Submission to Jurisdiction; Appointment of Agent
for Service of Process; Waiver of Immunities.
(a) The Company and each Subsidiary Guarantor hereby
irrevocably, to the fullest extent it may do so under applicable law, submits to
the jurisdiction of any New York State or federal court sitting in the Borough
of Manhattan, The City of New York and to the courts of its own corporate
domicile with respect to all actions brought against it as a defendant in
respect of any suit, action or proceeding or arbitral award arising out or
relating to this Indenture, the Securities or any transaction contemplated
hereby or thereby (a "Proceeding"), and irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts, to the fullest extent it may do so under applicable law. The
Company and each Subsidiary Guarantor irrevocably waives, to the fullest extent
it may do so under applicable law, trial by jury and any objection which it may
now or hereafter have to the laying of the venue of any such Proceeding brought
in any such court and any claim that any such Proceeding brought in any such
court has been brought in an inconvenient forum. The Company and each Subsidiary
Guarantor acknowledges that it has, by separate written instrument, irrevocably
appointed CT Corporation System (the "Process Agent"), with an office at 1633
Broadway, New York, New York 10019, as its authorized agent to receive on behalf
of the Company and each Subsidiary Guarantor and its property service of copies
of the summons and compliant and any other process which may be served in any
proceeding, and that the
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Process Agent has accepted such appointment. If for any reason such Process
Agent shall cease to be such agent for service of process, the Company and each
Subsidiary Guarantor shall forthwith appoint a new agent of recognized standing
for service of process in the State of New York, United States and deliver to
the Trustee a copy of the new agent's acceptance of that appointment within 30
days. Nothing herein shall affect the right of th Trustee, any Paying Agent or
any Holder to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Company or the Subsidiary
Guarantors in any other court of competent jurisdiction.
(b) Service may be made by delivering by hand a copy of such
process to the Company or the Subsidiary Guarantors, as the case may be, in care
of the Process Agent at the address specified above. The Company and the
Subsidiary Guarantors hereby irrevocably authorize and direct the Process Agent
to accept such service on their behalf. Failure of the Process Agent to give
notice to the Company or the Subsidiary Guarantors or failure of the Company or
the Subsidiary Guarantors to receive notice of such service of process shall not
affect in any way the validity of such service on the Process Agent or the
Company or the Subsidiary Guarantors. As an alternative method of service, the
Company and the Subsidiary Guarantors also irrevocably consent to the service of
any and all process in any such proceeding by the delivery by hand of copies of
such process to the Company or the Subsidiary Guarantors, as the case may be, at
the applicable address specified in Section 13.05 hereof or a the address most
recently furnished in writing by the Company or the Subsidiary Guarantors to the
Trustee. The Company and the Subsidiary Guarantors covenant and agree that they
shall take any and all reasonable action, including the execution and filing of
any and all documents, that may be necessary to continue the designation of the
Process Agent specified above in full force and effect during the term of the
Securities, and to cause the Process Agent to continue to act as such.
(c) The Company and the Subsidiary Guarantors irrevocably
agree that, in any Proceedings anywhere (whether for an injunction, specific
performance or otherwise), no immunity (to the extent that it may at any time
exist, whether on the grounds of sovereignty or otherwise) from such
Proceedings, from attachment (whether in aid of execution, before judgment or
otherwise) of their assets or from execution of judgment shall be claimed by
them or on their behalf or with respect to their assets, except to the extent
required by applicable law, any such immunity being irrevocably waived, to the
fullest extent permitted by applicable law. The Company and the Subsidiary
Guarantors irrevocably agree that, where permitted by applicable law, they and
their assets are, and shall be, subject to such Proceedings, attachment or
execution in respect of their obligations under this Indenture or the
Securities.
SECTION 13.13 Successors. All agreements of the Company in
this Indenture and the Securities shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 13.14 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. This Indenture may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute but one and the same instrument.
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SECTION 13.15 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 considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
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<PAGE> 90
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first above written.
THE COMPANY:
HS RESOURCES, INC.
By: /s/ P. Michael Highum
-----------------------------------
Name: P. Michael Highum
--------------------------------
Title: President
--------------------------------
TRUSTEE:
HARRIS TRUST AND SAVINGS BANK
By: /s/ Kevin O. Healy
-----------------------------------
Name: Kevin O. Healy
--------------------------------
Title: Senior Vice President
--------------------------------
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APPENDIX A
PROVISIONS RELATING TO TRANSFER OF SECURITIES
1. Definitions
1.1 Definitions
For the purposes of this Appendix A the following terms shall
have the meanings indicated below:
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor person
thereto and shall initially be the Trustee.
1.2 Other Definitions
<TABLE>
<CAPTION>
Defined in
Term Section:
---- --------
<S> <C>
"Agent Members".................................................... 2.1(b)
"Global Security".................................................. 2.1(a)
</TABLE>
2. The Securities
2.1 Form and Dating
(a) Global Securities. The Securities shall be issued in the
form of one or more permanent global Securities in definitive, fully registered
form without interest coupons with the global securities legend set forth in
Exhibit A to the Indenture (each, a "Global Security"), which shall be deposited
on behalf of the purchasers of the Securities represented thereby with the
Trustee, as custodian for the Depository, and registered in the name of the
Depository or a nominee of the Depository, duly executed by the Company and
authenticated by the Trustee as provided in the Indenture. The aggregate
principal amount of the Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depository
or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b) and pursuant to an order of the Company, authenticate
and deliver initially one or more
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<PAGE> 92
Global Securities that (i) shall be registered in the name of the Depository for
such Global Security or Global Securities or the nominee of such Depository and
(ii) shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository, or by the Trustee as the
custodian of the Depository, or under any Global Security, and the Depository or
its nominee, as the case may be, may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or shall impair, as between the
Depository and its Agent Members, the operation of customary practices of such
Depository governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
Ownership of beneficial interests by participants in a Global
Security will be shown on, and transfer of that ownership interest will be
effected only through, records maintained by the Depositary or its nominee (with
respect to interests of Agent Members) and the records of Agent Members (with
respect to interests of Persons other than Agent Members).
(c) Definitive Securities. Except as provided in this Section
2.1 or Sections 2.3 or 2.4, owners of beneficial interests in Global Securities
will not be entitled to receive physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver
Securities for original issue in an aggregate principal amount of $85,000,000
upon a written order of the Company signed by two Officers of the Company. Such
order shall specify the amount of the Securities to be authenticated and the
date on which the original issue of Securities is to be authenticated. The
aggregate principal amount of Securities outstanding at any time may not exceed
$85,000,000, except as provided in Section 2.07 of this Indenture.
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Global Securities.
(i) Transfers between participants in the Depository
will be effected in the ordinary manner in accordance with Depository
Rules and will be settled in same day funds. A transferor of a
beneficial interest in a Global Security shall deliver to the Registrar
a written order given in accordance with the Depositary's procedures
containing information regarding the participant account of the
Depositary to be credited with a beneficial interest in the Global
Security. The Registrar shall, in accordance with such instructions
instruct the Depository to credit to the account of the Person
specified in such instructions a beneficial interest in the Global
Security and to debit the account of the Person making the transfer the
beneficial interest in the Global Security being transferred.
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(ii) Notwithstanding any other provisions of this
Appendix A (other than the provisions set forth in Section 2.4), a
Global Security may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by
the Depository or any such nominee to a successor Depository or a
nominee of such successor Depository.
(b) Cancellation or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been exchanged
for certificated Securities, redeemed, repurchased or canceled, such Global
Security shall be returned to the Depository for cancellation or retained and
canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for certificated
Securities, repurchased or canceled, the principal amount of Securities
represented by such Global Security shall be reduced and an adjustment shall be
made on the books and records of the Trustee (if it is then the Securities
Custodian for such Global Security) with respect to such Global Security, by the
Trustee or the Securities Custodian, to reflect such reduction.
(c) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
certificated Securities and Global Securities at the Registrar's or
co-registrar's request.
(ii) No service charge shall be made for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax, assessments, or
similar governmental charge payable in connection therewith.
(iii) The Registrar or co-registrar shall not be
required to register the transfer of or exchange of any Security for a
period beginning 15 days before the mailing of a notice of an offer to
repurchase Securities or 15 days before an interest payment date.
(iv) Prior to the due presentation for registration
of transfer of any Security, the Company, the Trustee, the Paying
Agent, the Registrar or any co-registrar may deem and treat the person
in whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(v) All Securities issued upon any transfer or
exchange pursuant to the terms of this Indenture shall evidence the
same debt and shall be entitled to the same benefits under this
Indenture as the Securities surrendered upon such transfer or exchange.
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<PAGE> 94
(d) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Security, a member of,
or a participant in the Depository or other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
(ii) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with
respect to any transfer of any interest in any Security (including any
transfers between or among Depository participants, members or
beneficial owners in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as
are expressly required by, and to do so if and when expressly required
by, the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
2.4 Certificated Securities
(a) A Global Security deposited with the Depository or with
the Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depository notifies the Company
that it is unwilling or unable to continue as a depository for such Global
Security or if at any time the Depository ceases to be a clearing agency
registered under the Exchange Act, and a successor depository is not appointed
by the Company within 90 days, (ii) the Company executes and delivers to the
Trustee a notice that such Global Security shall be so transferable, registrable
and exchangeable, and such transfer shall be registrable or (iii) there shall
have occurred and be continuing an Event of Default or an event which, with the
giving of notice or lapse of time or both, would constitute an Event of Default
with respect to the Securities represented by such Global Security.
(b) Any Global Security that is exchangeable for certificated
Securities pursuant to Section 2.4 will be transferred to, and registered and
exchanged for, certificated Securities in authorized denominations and
registered in such names as the Depository or its nominee holding such Global
Security may direct. Subject to the foregoing, a Global Security is
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<PAGE> 95
not exchangeable, except for a Global Security of like denomination to be
registered in the name of the Depository or its nominee. In the event that a
Global Security becomes exchangeable for certificated Securities, (i)
certificated Securities will be issued only in fully registered form in
denominations of $1,000 or integral multiples thereof, (ii) payment of
principal, premium, any repurchase price, and interest on the certificated
Securities will be payable, and the transfer of the certificated Securities will
be registrable, at the office or agency of the Company maintained for such
purposes and (iii) no service charge will be made for any issuance of the
certificated Securities, although the Company may require payment of a sum
sufficient to cover any transfer tax, assessment or similar governmental charge
payable in connection therewith.
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.
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<PAGE> 96
EXHIBIT A
[FORM OF FACE OF SECURITY]
HS RESOURCES, INC.
No. CUSIP No.
--------- ---------
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY 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.
THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES IN
DEFINITIVE, FULLY REGISTERED FORM, WITHOUT INTEREST COUPONS, IF (A) DTC NOTIFIES
THE COMPANY THAT IT IS UNWILLING OR UNABLE TO CONTINUE AS DEPOSITORY FOR THIS
GLOBAL SECURITY OR IF AT ANY TIME DTC CEASES TO BE A "CLEARING AGENCY"
REGISTERED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND A
SUCCESSOR DEPOSITORY IS NOT APPOINTED BY THE COMPANY WITHIN 90 DAYS OF SUCH
NOTICE, (B) THE COMPANY EXECUTES AND DELIVERS TO THE TRUSTEE A NOTICE THAT THIS
GLOBAL SECURITY SHALL BE TRANSFERABLE, REGISTRABLE AND EXCHANGEABLE, AND SUCH
TRANSFER SHALL BE REGISTRABLE, OR (C) AN EVENT OF DEFAULT (AS HEREINAFTER
DEFINED) HAS OCCURRED AND IS CONTINUING WITH RESPECT TO THE SECURITIES.
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<PAGE> 97
GLOBAL SECURITY
Representing 9-1/4% Series B Senior Subordinated Notes Due 2006
HS RESOURCES, INC., a Delaware corporation, hereby promises to pay to
CEDE & CO., or registered assigns, the principal sum indicated on Schedule A
hereof, on November 15, 2006.
Interest Payment Dates: May 15 and November 15, commencing May 15,
1999.
Record Dates: May 1 and November 1.
Additional provisions of this Security are set forth on the other side
of this Security.
IN WITNESS WHEREOF, HS RESOURCES, INC. has caused this instrument to be
duly executed under its corporate seal.
Dated:
HS RESOURCES, INC.
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
HARRIS TRUST AND SAVINGS BANK, as Trustee, certifies that this is one of the
Securities referred to in the Indenture.
By:
------------------------------------------
Authorized Signatory
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<PAGE> 98
[FORM OF REVERSE SIDE OF SECURITY]
9-1/4% Series B Senior Subordinated Note Due 2006
1. Interest
HS Resources, Inc., a Delaware 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 May 15 and November 15 of each year. 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 the Issue Date. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
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 May 1 or November 1 immediately 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 the Securities
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company, but, at the option of the Company,
interest may be paid by check mailed to the registered Holders at their
registered addresses. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest), by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on the Securities may also be made, in the case of a Holder of at least
$1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, Harris Trust and Savings Bank, an Illinois banking
corporation ("Trustee"), 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 Restricted
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
December 11, 1998 (as such may be amended from time to time, the "Indenture"),
among the Company, any Subsidiary Guarantors that may become parties thereto
after the date thereof and the Trustee. The terms of the Securities include
those stated in the Indenture and those made part of the
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<PAGE> 99
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
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
Holders are referred to the Indenture and the Act for a statement of those
terms.
The Securities are unsecured senior subordinated obligations of the
Company limited to $85,000,000 aggregate principal amount at any one time
outstanding (subject to Section 2.07 of the Indenture). The Indenture imposes
certain limitations on the Incurrence of Indebtedness by the Company and its
Restricted Subsidiaries; the payment of dividends on, and redemption of, Capital
Stock of the Company and its Restricted Subsidiaries and the redemption of
certain Pari Passu Indebtedness and Subordinated Indebtedness of the Company and
its Restricted Subsidiaries; Investments; sales of assets and Restricted
Subsidiary Capital Stock; certain transactions with Affiliates of the Company;
the sale or issuance of Capital Stock of the Restricted Subsidiaries; the
creation of Liens; and consolidations, mergers and transfers of all or
substantially all of the Company's assets. In addition, the Indenture prohibits
certain restrictions on distributions and dividends from Restricted
Subsidiaries.
To guarantee the due and punctual payment of the principal, premium and
interest, if any, on the Securities and all 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 have
unconditionally guaranteed the Obligations on a senior subordinated basis
pursuant to the terms of the Indenture.
5. Optional Redemption
The Securities are not redeemable prior to November 15, 2001. At any
time on or after November 15, 2001, the Securities are redeemable at the option
of the Company, in whole or in part, on not less than 30 nor more than 60 days'
notice, at the following redemption prices (expressed as percentages of
principal amount), plus accrued and unpaid interest (if any) to the date of
redemption.
If redeemed during the 12-month period commencing November 15 of the
years indicated:
<TABLE>
<CAPTION>
Redemption
Year Price
---- -----
<S> <C>
2001..................................................... 104.625%
2002..................................................... 103.083%
2003..................................................... 101.542%
2004 and thereafter...................................... 100.000%
</TABLE>
Notwithstanding the foregoing, on and prior to November 15, 1999, the
Company may redeem up to 33 1/3% of the aggregate principal amount of the
Securities originally outstanding at a redemption price of 109.25% of the
principal amount thereof, plus accrued and unpaid interest (if any) thereon to
the redemption date, 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
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<PAGE> 100
the Securities originally issued remains outstanding immediately after the
occurrence of such redemption; and provided, further, that such redemption shall
occur not later than 75 days after the date of the closing of any such Equity
Offering. The redemption shall be made in accordance with procedures set forth
in the Indenture.
The Indenture contains a covenant, subject to specified exceptions,
that limits the ability of the Company to optionally redeem the Securities
unless a pro rata portion of the Series A 9-1/4 % Notes are simultaneously
redeemed.
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail 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. Put Provisions
Upon a Change of Control, unless the Company has elected to redeem the
Securities pursuant to paragraph 5, any Holder of Securities will have the
right, subject to certain conditions specified in the Indenture, to cause the
Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest, if any, to the date of purchase
(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 purchase) as provided in, and subject to the terms of, the
Indenture.
In the event that the aggregate amount of Excess Proceeds from Asset
Sales exceeds $10,000,000, the Company will, subject to certain conditions
specified in the Indenture, make an offer to repurchase Securities having an
aggregate principal amount equal to the aggregate amount of Excess Proceeds at a
purchase price equal to 100% of the principal amount of such Securities plus
accrued and unpaid interest, if any, to the purchase date.
8. Subordination
The Securities are subordinated to Senior Indebtedness of the Company,
as defined in the Indenture. 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 Guaranty is subordinated to Senior Indebtedness of the
relevant Subsidiary Guarantor, as defined in the Indenture. The Company and each
Subsidiary Guarantor agrees, and each Holder 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.
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<PAGE> 101
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes 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 to transfer or exchange any Securities for a period of 15 days prior to 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 written 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, 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, premium 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 be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions Indenture, without the consent of
any Holder, the Company, the Subsidiary Guarantors and the Trustee may amend the
Indenture or the Securities (i) to cure any ambiguity, omission, defect or
inconsistency, (ii) to provide for the assumption of the obligations of the
Company under the Indenture upon the merger, consolidation or sale or other
disposition of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole and certain other events specified in
Article 5 of the Indenture, (iii) to provide for uncertificated Securities in
addition to or in place of certificated Securities, (iv) to comply with any
requirement of the Commission in order to effect or maintain the qualification
of the Indenture under the Trust Indenture Act, (v) to make any change that does
not adversely affect the rights of any Holder of Securities in any material
respect, (vi) to add or remove Subsidiary Guarantors pursuant to the procedures
set forth in the Indenture, and (vii) to provide for certain other modifications
and amendments as set forth in the
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<PAGE> 102
Indenture. Certain provisions of the Securities and the Indenture may not be
amended or waived without the consent of each Holder affected thereby.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) failure to pay any
interest on the Securities when due, continued for 30 days; (ii) failure to pay
principal of (or premium, if any, on) the Securities when due; (iii) failure to
perform any other covenant of the Company or any Subsidiary Guarantor in the
Indenture, continued for 60 days after written notice as provided in the
Indenture; (iv) the occurrence and continuation beyond any applicable grace
period of any default in the payment of the principal of (or premium, if any,
on) or interest on any Indebtedness (other than Permitted Non-Recourse
Indebtedness) of the Company (other than the Securities) or any Restricted
Subsidiary for money borrowed when due (whether resulting from maturity,
acceleration, mandatory redemption or otherwise), or any other default causing
acceleration of any Indebtedness (other than Permitted Non-Recourse
Indebtedness) of the Company or any Restricted Subsidiary for money borrowed,
provided that the aggregate principal amount of such Indebtedness shall exceed
$5,000,000; and specifically including, without limitation, any such default
under or acceleration of any Indebtedness (other than Permitted Non-Recourse
Indebtedness) directly or indirectly resulting or derived from, or caused by, a
default under or acceleration of any Permitted Non-Recourse Indebtedness; (v)
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 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; (vi) certain events of bankruptcy, insolvency or
reorganization; or (vii) a Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of the Indenture and such
Subsidiary Guaranty) or a Subsidiary Guarantor denies or disaffirms its
obligations under its Subsidiary Guaranty.
Holders 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. The Trustee may
withhold from Holders notice of any continuing Default (except a Default in
payment of principal or interest) if it determines that withholding notice is in
the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Trust Indenture Act, 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.
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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 or a Subsidiary Guarantor 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 Holder waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Securities.
17. Governing Law
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.
18. 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.
19. Abbreviations
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. 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 Holders. 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.
The Company will furnish to any Holder upon written request and without
charge to the Holder a copy of the Indenture which has in it the text of this
Security.
-8-
<PAGE> 104
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 social security 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.
Dated: Your Signature:
-------------------------- ---------------------------------
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
Signature Guarantee:
- ----------------------------
Signature must be guaranteed
- --------------------------------------------------------------------------------
Notice: Signature(s) must be guaranteed by an institution which is a
participant in the Securities Transfer Agent Medallion Program
("STAMP") or similar program.
-9-
<PAGE> 105
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 Section 4.09 of the Indenture, check the
appropriate box:
Section 4.06 [ ]
Section 4.09 [ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or Section 4.09 of the
Indenture, state the amount in principal amount (must be an integral multiple of
$1,000): $_______________
Dated: Your Signature:
--------------------- --------------------------------------
(Sign exactly as your name appears
on the other side of this Security.)
Signature Guarantee:
-------------------------------------
(Signature must be guaranteed)
- --------------------------------------------------------------------------------
Notice: Signature(s) must be guaranteed by an institution which is a
participant in the Securities Transfer Agent Medallion Program
("STAMP") or similar program.
-10-
<PAGE> 106
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE A
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount at maturity of this Global Security shall
be $85,000,000. The following increases or decreases in this Global Security
have been made:
<TABLE>
<CAPTION>
Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Principal Amount of this Principal Amount of this Global Security following signatory of Trustee or
Date of Exchange Global Security Global Security such decrease or increase Securities Custodian
<S> <C> <C> <C> <C>
</TABLE>
-11-
<PAGE> 107
EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______________, among [SUBSIDIARY GUARANTOR] (the "New Subsidiary Guarantor"),
a subsidiary of HS Resources, Inc. (or its successor), a Delaware corporation
(the "Company"), HS RESOURCES, INC., the Subsidiary Guarantors (the "Existing
Subsidiary Guarantors") under the Indenture referred to below, and HARRIS TRUST
AND SAVINGS BANK, an Illinois banking corporation, 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 (as such may be amended from time to time, the
"Indenture"), dated as of December 11, 1998, providing for the issuance of an
aggregate principal amount of $85,000,000 of 9-1/4% Series B Senior Subordinated
Notes due 2006 (the "Securities");
WHEREAS Section 4.12 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 of the Company's obligations under the Securities pursuant to a Subsidiary
Guaranty on the terms and conditions set forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the
Trustee, the Company and 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:
1. Definitions. (a) Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
(b) For all purposes of this Supplemental Indenture, except as
otherwise herein expressly provided or unless the context otherwise requires:
(i) the terms and expressions used herein shall have the same meanings as
corresponding terms and expressions used in the Indenture; and (ii) the words
"herein," "hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
2. Agreement to Guarantee. The New Subsidiary Guarantor hereby
agrees, jointly and severally with all other Subsidiary Guarantors, to guarantee
the Company's obligations under the Securities on the terms and subject to the
conditions set forth in Article 11 of the Indenture and to be bound by all other
applicable provisions of the Indenture. From and
-1-
<PAGE> 108
after the date hereof, the New Subsidiary Guarantor shall be a Subsidiary
Guarantor for all purposes under the Indenture and the Securities.
3. 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.
4. 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.
5. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
6. 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.
7. Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction thereof.
-2-
<PAGE> 109
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:
--------------------------------------------
Title:
-------------------------------------------
HS RESOURCES, INC.
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
[SUBSIDIARY GUARANTORS]
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
HARRIS TRUST AND SAVINGS BANK,
as Trustee
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
-3-
<PAGE> 1
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) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Daniel G. Donovan, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
(312) 461-2908 phone (312) 461-3525 facsimile
(Name, address and telephone number for agent for service)
HR RESOURCES, INC.
(Obligor)
Illinois 36-2863847
(State of Incorporation) (I.R.S. Employer Identification No.)
One Maritime Plaza
Fifteenth Floor
San Francisco, CA 94111
(Address of principal executive offices)
9 1/4% Series B Senior Subordinated Notes due 2006
(Title of indenture securities)
<PAGE> 2
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of
Governors of the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
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.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in
effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as
now in effect and includes the authority of the Trustee to
commence business and to exercise corporate trust powers was filed
in connection with the Registration Statement of Louisville Gas
and Electric Company, File No. 2-44295, and is incorporated herein
by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 9th day of December, 1998.
HARRIS TRUST AND SAVINGS BANK
By: /s/ D. G. Donovan
-----------------------------------
D. G. Donovan
Assistant Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ D. G. Donovan
-----------------------------------
D. G. Donovan
Assistant Vice President
2
<PAGE> 4
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1998, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
[HARRIS BANK LOGO] HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1998, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin ............................................... $1,097,714
Interest bearing balances ......................................................................... $213,712
Securities:......................................................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $5,036,734
Federal funds sold and securities purchased under agreements to resell $48,950
Loans and lease financing receivables:
Loans and leases, net of unearned income .......................................................... $9,111,098
LESS: Allowance for loan and lease losses ........................................................ $104,900
-----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b) .............................................................................. $9,006,198
Assets held in trading accounts ................................................................................. $202,008
Premises and fixed assets (including capitalized leases) ........................................................ $245,290
Other real estate owned ......................................................................................... $365
Investments in unconsolidated subsidiaries and associated companies ............................................. $41
Customer's liability to this bank on acceptances outstanding .................................................... $34,997
Intangible assets ............................................................................................... $260,477
Other assets .................................................................................................... $1,148,163
-----------
TOTAL ASSETS $17,294,649
===========
</TABLE>
3
<PAGE> 5
<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices ........................................................................................ $9,467,895
Non-interest bearing .............................................................................. $2,787,471
Interest bearing .................................................................................. $6,680,424
In foreign offices, Edge and Agreement subsidiaries, and IBF's ............................................. $1,268,759
Non-interest bearing .............................................................................. $23,329
Interest bearing .................................................................................. $1,245,430
Federal funds purchased and securities sold under agreements to repurchase in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase ........................................ $3,118,548
Trading Liabilities 110,858
Other borrowed money:............................................................................................
a. With remaining maturity of one year or less $1,202,050
b. With remaining maturity of more than one year $0
Bank's liability on acceptances executed and outstanding $34,997
Subordinated notes and debentures ............................................................................... $225,000
Other liabilities ............................................................................................... $530,224
-----------
TOTAL LIABILITIES $15,958,331
===========
EQUITY CAPITAL
Common stock .................................................................................................... $100,000
Surplus.......................................................................................................... $604,834
a. Undivided profits and capital reserves....................................................................... $580,271
b. Net unrealized holding gains (losses) on available-for-sale securities $51,213
-----------
TOTAL EQUITY CAPITAL $1,336,318
===========
Total liabilities, limited-life preferred stock, and equity capital ............................................. $17,294,649
===========
</TABLE>
I, Pamela Piarowski, Vice President 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.
PAMELA PIAROWSKI
10/29/98
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 the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
CHARLES SHAW
Directors.
4
