Document:

EX-4.1

 Exhibit 4.1 

FORM OF FACE OF 4.50% SUBORDINATED NOTES DUE 2024 

THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY: 

THIS SECURITY IS AN UNSECURED SUBORDINATED DEBT OBLIGATION OF FULTON FINANCIAL CORPORATION. THIS SECURITY IS NOT A DEPOSIT OR SAVINGS ACCOUNT
AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY. 
 THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS
SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 

 FULTON FINANCIAL CORPORATION 

4.50% SUBORDINATED NOTES DUE 2024 
  

											
	No.     										U.S.$         

 CUSIP NO. 360271 AJ9 
 ISIN NO.
US360271AJ90 
 FULTON FINANCIAL CORPORATION, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania
(herein called the “Corporation”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay
to                     , or registered assigns, the principal sum of          Dollars on
November 15, 2024, and to pay interest thereon from May 15, 2015 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on May 15 and November 15 in each year, commencing
November 15, 2015, at the rate of 4.50% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the May 1 or November 1 (whether or
not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Corporation, notice whereof shall be given
to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. 
 Payment of
the principal of (and premium, if any) and interest on this Security will be made at the office or agency of the Corporation maintained for that purpose in the United States, in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. 
 Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 
 Unless
the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 

IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly executed. 

 [Signature Page Follows] 

											
							FULTON FINANCIAL CORPORATION
						
	Dated:										
					
							By:		  

									Name:		Patrick S. Barrett
									Title:		Senior Executive Vice President and Chief Financial Officer

  

					
	Attest:		  

			Name:		Daniel R. Stolzer
			Title:		General Counsel, Executive Vice President and Secretary

 (Trustee’s Certificate of Authentication) 

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. 

 

											
							 WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee

					
	Dated:		  
				By:		  

									Authorized Officer

 [FORM OF REVERSE SIDE OF THE NOTE] 

This Security is one of a duly authorized issue of securities of the Corporation (herein called the “Securities”), issued and to be
issued in one or more series under an Indenture, dated as of November 17, 2014 (herein called the “Indenture”, which term shall have the meaning assigned to it in such instrument), between the Corporation and Wilmington Trust,
National Association, as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of the Corporation, the Trustee, the holders of Senior Indebtedness and the Holders of the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on the face hereof. 
 The indebtedness evidenced by this
Security is, to the extent provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness, and this Security is issued subject to the provisions of the Indenture with respect thereto.
Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his or her behalf to take such actions as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his or her attorney-in-fact for any and all such purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter created, incurred, assumed or guaranteed, and waives reliance by each such holder upon said provisions. 

The Indenture contains provisions for defeasance at any time of certain restrictive covenants and Events of Default with respect to this
Security, in each case upon compliance with certain conditions set forth in the Indenture. 
 If an Event of Default with respect to
Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Corporation and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Corporation and the Trustee with the consent of the Holders of 66 2/3% in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all
Securities of such series, to waive compliance by the Corporation with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security. 

 As provided in and subject to the provisions of the Indenture, the Holder of this Security shall
not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a
continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default and offered the Trustee indemnity reasonably satisfactory to it, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time
Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the
Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein. 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the
Corporation, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the
Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Corporation maintained under Section 1002 of the Indenture for such purpose, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Corporation and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
 The Securities of
this series are issuable only in registered form without coupons in denominations of $1,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this
series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. 

No service charge shall be made for any such registration of transfer or exchange, but the Corporation may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith. 
 Prior to due presentment of this Security for registration
of transfer, the Corporation, the Trustee and any agent of the Corporation or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the contrary. 

 This Security shall be governed by and construed in accordance with the laws of the State of New
York. 
 All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.Exhibit 4.1

 

Execution Version

 

SANDRIDGE ENERGY, INC.
 as Issuer

 

the Guarantors party hereto

 

and

 

U.S. BANK NATIONAL ASSOCIATION
 as Trustee

 

 

Indenture

 

Dated as of June 10, 2015

 

 

8.75% SENIOR SECURED NOTES DUE 2020

 

 

Reference is made to the Intercreditor Agreement, dated as of June 10, 2015, between Royal Bank of Canada, as Priority Lien Agent (as defined therein), and U.S. Bank National Association, as Second Lien Collateral Trustee (as defined therein) and acknowledged and agreed by SandRidge Energy, Inc. and certain of its subsidiaries (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “Intercreditor Agreement”).  Each holder of any Second Lien Obligations, by its acceptance of such Second Lien Obligations i) consents to the subordination of Liens provided for in the Intercreditor Agreement, ii) agrees that it will be bound by, and will take no actions contrary to, the provisions of the Intercreditor Agreement and iii) authorizes and instructs the Second Lien Collateral Trustee on behalf of each Second Lien Secured Party (as defined therein) to enter into the Intercreditor Agreement as Second Lien Collateral Trustee on behalf of such Second Lien Secured Parties.  The foregoing provisions are intended as an inducement to the lenders under the Priority Lien Documents (as defined in the Intercreditor Agreement) to extend credit to SandRidge and such lenders are intended third party beneficiaries of such provisions and the provisions of the Intercreditor Agreement.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1   Definitions
    	
1
    
	
Section 1.01.
    	
Definitions
    	
1
    
	
Section 1.02.
    	
Rules of   Construction
    	
39
    
	
 
    	
 
    	
 
    
	
ARTICLE 2   The Notes
    	
40
    
	
Section 2.01.
    	
Form, Dating and   Denominations; Legends
    	
40
    
	
Section 2.02.
    	
Execution and   Authentication; Additional Notes
    	
41
    
	
Section 2.03.
    	
Registrar, Paying Agent   and Authenticating Agent; Paying Agent to Hold Money in Trust
    	
42
    
	
Section 2.04.
    	
Replacement Notes
    	
42
    
	
Section 2.05.
    	
Outstanding Notes
    	
42
    
	
Section 2.06.
    	
Temporary Notes
    	
43
    
	
Section 2.07.
    	
Cancellation
    	
43
    
	
Section 2.08.
    	
CUSIP and ISIN Numbers
    	
43
    
	
Section 2.09.
    	
Registration, Transfer   and Exchange
    	
43
    
	
Section 2.10.
    	
Restrictions on   Transfer and Exchange
    	
46
    
	
 
    	
 
    	
 
    
	
ARTICLE 3   Redemption; Offer to Purchase
    	
48
    
	
Section 3.01.
    	
Optional Redemption
    	
48
    
	
Section 3.02.
    	
[Reserved]
    	
48
    
	
Section 3.03.
    	
Method and Effect of   Redemption
    	
48
    
	
Section 3.04.
    	
Offer to Purchase
    	
49
    
	
 
    	
 
    	
 
    
	
ARTICLE 4   Covenants
    	
51
    
	
Section 4.01.
    	
Payment of Notes
    	
51
    
	
Section 4.02.
    	
Maintenance of Office   or Agency
    	
52
    
	
Section 4.03.
    	
Existence
    	
52
    
	
Section 4.04.
    	
Payment of Obligations
    	
53
    
	
Section 4.05.
    	
Maintenance of   Properties and Insurance
    	
53
    
	
Section 4.06.
    	
Limitation on   Indebtedness and Disqualified Stock
    	
53
    
	
Section 4.07.
    	
Limitation on   Restricted Payments
    	
57
    
	
Section 4.08.
    	
Limitation on Liens
    	
62
    
	
Section 4.09.
    	
[Reserved]
    	
62
    
	
Section 4.10.
    	
Limitation on Dividend   and Other Payment Restrictions Affecting Restricted Subsidiaries
    	
62
    
	
Section 4.11.
    	
[Reserved]
    	
64
    
	
Section 4.12.
    	
Guarantees by   Restricted Subsidiaries
    	
64
    
	
Section 4.13.
    	
Repurchase of Notes   Upon a Change of Control
    	
64
    
	
Section 4.14.
    	
Limitation on Asset   Sales
    	
65
    
	
Section 4.15.
    	
Limitation on   Transactions with Shareholders and Affiliates
    	
66
    
	
Section 4.16.
    	
[Reserved]
    	
67
    
	
Section 4.17.
    	
Designation of   Restricted and Unrestricted Subsidiaries
    	
67
    
	
Section 4.18.
    	
[Reserved]
    	
69
    

 

i

 

	
Section 4.19.
    	
Financial Reports
    	
69
    
	
Section 4.20.
    	
Reports to Trustee
    	
70
    
	
Section 4.21.
    	
Suspension of Covenants   when Notes Rated Investment Grade
    	
70
    
	
 
    	
 
    	
 
    
	
ARTICLE 5   Consolidation, Merger or Sale of Assets
    	
71
    
	
Section 5.01.
    	
Consolidation, Merger   or Sale of Assets by the Company
    	
71
    
	
Section 5.02.
    	
Consolidation, Merger   or Sale of Assets by a Guarantor
    	
72
    
	
 
    	
 
    	
 
    
	
ARTICLE 6   Default and Remedies
    	
74
    
	
Section 6.01.
    	
Events of Default
    	
74
    
	
Section 6.02.
    	
Acceleration
    	
76
    
	
Section 6.03.
    	
Other Remedies
    	
76
    
	
Section 6.04.
    	
Waiver of Past Defaults
    	
76
    
	
Section 6.05.
    	
Control by Majority
    	
76
    
	
Section 6.06.
    	
Limitation on Suits
    	
77
    
	
Section 6.07.
    	
Rights of Holders to   Receive Payment
    	
77
    
	
Section 6.08.
    	
Collection Suit by   Trustee
    	
77
    
	
Section 6.09.
    	
Trustee May File   Proofs of Claim
    	
77
    
	
Section 6.10.
    	
Priorities
    	
78
    
	
Section 6.11.
    	
Restoration of Rights   and Remedies
    	
78
    
	
Section 6.12.
    	
Undertaking for Costs
    	
78
    
	
Section 6.13.
    	
Rights and Remedies   Cumulative
    	
78
    
	
Section 6.14.
    	
Delay or Omission Not   Waiver
    	
79
    
	
Section 6.15.
    	
Waiver of Stay,   Extension or Usury Laws
    	
79
    
	
 
    	
 
    	
 
    
	
ARTICLE 7   The Trustee
    	
79
    
	
Section 7.01.
    	
General
    	
79
    
	
Section 7.02.
    	
Certain Rights of   Trustee
    	
80
    
	
Section 7.03.
    	
Individual Rights of   Trustee
    	
80
    
	
Section 7.04.
    	
Trustee’s Disclaimer
    	
81
    
	
Section 7.05.
    	
Notice of Default
    	
81
    
	
Section 7.06.
    	
Reports by Trustee to Holders
    	
81
    
	
Section 7.07.
    	
Compensation and   Indemnity
    	
81
    
	
Section 7.08.
    	
Replacement of Trustee
    	
82
    
	
Section 7.09.
    	
Successor Trustee by   Merger
    	
83
    
	
Section 7.10.
    	
Eligibility
    	
83
    
	
Section 7.11.
    	
Money Held in Trust
    	
83
    
	
Section 7.12.
    	
Trustee in Other   Capacities
    	
83
    
	
 
    	
 
    	
 
    
	
ARTICLE 8   Defeasance and Discharge
    	
83
    
	
Section 8.01.
    	
Discharge of Company’s   Obligations
    	
83
    
	
Section 8.02.
    	
Legal Defeasance
    	
84
    
	
Section 8.03.
    	
Covenant Defeasance
    	
85
    
	
Section 8.04.
    	
Application of Trust   Money
    	
85
    
	
Section 8.05.
    	
Repayment to Company
    	
86
    
	
Section 8.06.
    	
Reinstatement
    	
86
    

 

ii

 

	
ARTICLE 9   Amendments, Supplements and Waivers
    	
86
    
	
Section 9.01.
    	
Amendments Without   Consent of Holders
    	
86
    
	
Section 9.02.
    	
Amendments With Consent   of Holders
    	
87
    
	
Section 9.03.
    	
Effect of Consent
    	
89
    
	
Section 9.04.
    	
Trustee’s Rights and   Obligations
    	
89
    
	
Section 9.05.
    	
[Reserved]
    	
90
    
	
Section 9.06.
    	
Payments for Consents
    	
90
    
	
 
    	
 
    	
 
    
	
ARTICLE 10   Reserved
    	
90
    
	
 
    	
 
    	
 
    
	
ARTICLE 11   Guarantees
    	
90
    
	
Section 11.01.
    	
The Guarantees
    	
90
    
	
Section 11.02.
    	
Guarantee Unconditional
    	
90
    
	
Section 11.03.
    	
Discharge;   Reinstatement
    	
91
    
	
Section 11.04.
    	
Waiver by the   Guarantors
    	
91
    
	
Section 11.05.
    	
Subrogation and   Contribution
    	
91
    
	
Section 11.06.
    	
Stay of Acceleration
    	
91
    
	
Section 11.07.
    	
Limitation on Amount of   Guarantee
    	
91
    
	
Section 11.08.
    	
Delivery of Guarantee
    	
92
    
	
Section 11.09.
    	
Release of Note   Guarantee
    	
92
    
	
 
    	
 
    	
 
    
	
ARTICLE 12   Miscellaneous
    	
92
    
	
Section 12.01.
    	
Trust Indenture Act of   1939
    	
92
    
	
Section 12.02.
    	
Noteholder   Communications; Noteholder Actions
    	
93
    
	
Section 12.03.
    	
Notices
    	
93
    
	
Section 12.04.
    	
Certificate and Opinion   as to Conditions Precedent
    	
94
    
	
Section 12.05.
    	
Statements Required in   Certificate or Opinion
    	
94
    
	
Section 12.06.
    	
Payment Date Other Than   a Business Day
    	
95
    
	
Section 12.07.
    	
Governing Law
    	
95
    
	
Section 12.08.
    	
No Adverse   Interpretation of Other Agreements
    	
95
    
	
Section 12.09.
    	
Successors
    	
95
    
	
Section 12.10.
    	
Duplicate Originals
    	
95
    
	
Section 12.11.
    	
Separability
    	
95
    
	
Section 12.12.
    	
Table of Contents and   Headings
    	
95
    
	
Section 12.13.
    	
No Liability of Directors,   Officers, Employees, Incorporators, Members, Partners and Stockholders
    	
95
    
	
 
    	
 
    	
 
    
	
ARTICLE 13   Collateral and Security
    	
96
    
	
Section 13.01.
    	
Security Interest
    	
96
    
	
Section 13.02.
    	
Post-Issue Date   Collateral Requirements
    	
97
    
	
Section 13.03.
    	
Further Assurances;   Liens on Additional Property
    	
97
    
	
Section 13.04.
    	
Intercreditor Agreement
    	
99
    
	
Section 13.05.
    	
Collateral Trust   Agreement
    	
100
    
	
Section 13.06.
    	
Release of Liens in   Respect of Notes
    	
100
    
	
Section 13.07.
    	
Collateral Trustee
    	
101
    
	
Section 13.08.
    	
Insurance
    	
101
    

 

iii

 

	
EXHIBITS
    	
 
    
	
EXHIBIT A
    	
Form of Note
    
	
EXHIBIT B
    	
Form of   Supplemental Indenture
    
	
EXHIBIT C
    	
Restricted Legend
    
	
EXHIBIT D
    	
DTC Legend
    
	
EXHIBIT E
    	
Regulation S   Certificate
    
	
EXHIBIT F
    	
Rule 144A   Certificate
    
	
EXHIBIT G
    	
Institutional   Accredited Investor Certificate
    

 

iv

 

THIS INDENTURE, dated as of June 10, 2015, is among SANDRIDGE ENERGY, INC., a Delaware corporation, as the Company, the Guarantors party hereto and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as Trustee.

 

RECITALS

 

The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of up to $1,250,000,000 aggregate principal amount of the Company’s 8.75% Senior Secured Notes due 2020, and if and when issued, any Additional Notes as provided herein (the “Notes”). All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done, and the Company has done all things necessary to make the Notes (in the case of the Additional Notes, when duly authorized), when executed by the Company and authenticated and delivered by the Trustee and duly issued by the Company, the valid obligations of the Company as hereinafter provided.

 

In addition, the Guarantors party hereto have duly authorized the execution and delivery of this Indenture as guarantors of the Notes. All things necessary to make this Indenture a valid agreement of each Guarantor, in accordance with its terms, have been done, and each Guarantor has done all things necessary to make the Note Guarantees, when the Notes are executed by the Company and authenticated and delivered by the Trustee and duly issued by the Company, the valid obligations of such Guarantor as hereinafter provided.

 

THIS INDENTURE WITNESSETH

 

For and in consideration of the premises and the purchase of the Notes by the Holders thereof, the parties hereto covenant and agree, for the equal and proportionate benefit of all Holders, as follows:

 

ARTICLE 1
 DEFINITIONS

 

Section 1.01. Definitions.

 

“Acquired Debt” means Indebtedness of a Person (1) existing at the time such Person is merged with or into or becomes a Restricted Subsidiary or (2) assumed in connection with the acquisition of assets from such Person, in each case, other than Indebtedness incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary or such acquisition, as the case may be. Acquired Debt shall be deemed to be incurred on the date of the related acquisition of assets from any Person or the date the acquired Person becomes a Restricted Subsidiary, as the case may be.

 

“Act of Parity Lien Debtholders” means, as to any matter at any time, a direction in writing delivered to the Collateral Trustee by or with the written consent of the holders of Parity Lien Debt representing the Required Parity Lien Debtholders.

 

“Additional Assets” means (i) any assets or property (other than cash, Cash Equivalents 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, (iii) the acquisition from third parties of Capital Stock of a Restricted Subsidiary or (iv) Permitted Business Investments.

 

“Additional Notes” means any Notes issued under this Indenture in addition to the Initial Notes, and in accordance with Section 2.02, and Article 4, having the same terms in all respects as the Initial Notes except that (i) interest may accrue on the Additional Notes from their date of issuance and (ii) Additional Notes will have different CUSIP and/or ISIN numbers than the Initial Notes to the extent such Additional Notes are not fungible with the Initial Notes for United States federal income tax purposes.

 

“Additional Secured Debt Designation” means the written agreement of the holders of any Series of Parity Lien Debt or their Parity Lien Representative, as set forth in the indenture, credit agreement or other agreement governing such Series of Parity Lien Debt, for the benefit of all holders of each existing and future Series of Priority Lien Debt, the Priority Lien Collateral Agent and each existing and future holder of Priority Liens:

 

(1)           that all Parity Lien Obligations will be and are secured equally and ratably by all Parity Liens at any time granted by the Company or any Guarantor to secure any Obligations in respect of such Series of Parity Lien Debt, whether or not upon property otherwise constituting collateral for such Series of Parity Lien Debt, and that all such Parity Liens will be enforceable by the Collateral Trustee for the benefit of all holders of Parity Lien Obligations equally and ratably;

 

(2)           that the holders of Obligations in respect of such Series of Parity Lien Debt are bound by the provisions of the Collateral Trust Agreement and the Intercreditor Agreement, including the provisions relating to the ranking of Parity Liens and the order of application of proceeds from the enforcement of Parity Liens; and

 

(3)           consenting to and directing the Collateral Trustee to perform its obligations under the Collateral Trust Agreement, the Intercreditor Agreement and the other security documents establishing Parity Liens.

 

“Adjusted Consolidated Net Tangible Assets” means (without duplication), as of the date of determination, the remainder of:

 

(i)                                     the sum of:

 

(a)           discounted future net revenues from proved oil and gas reserves of the Company and its Restricted Subsidiaries calculated in accordance with SEC guidelines before any state, federal or foreign income taxes, as estimated in a reserve report prepared as of the end of the Company’s most recently completed fiscal year, which reserve report is prepared or reviewed by independent petroleum engineers as to reserves accounting for at least 80% of all such discounted future net revenues and by the Company’s petroleum engineers with respect to any other reserves covered by such report, as increased by, as of the date of determination, the estimated discounted future net revenues from (1) estimated proved oil and gas reserves acquired since such year-end, which reserves were not reflected in such year-end reserve report, and (2) estimated increases in proved oil and gas reserves since such year-end due to exploration,

 

2

 

development or exploitation activities or due to changes in geological conditions or other factors which would, in accordance with standard industry practice, cause such revisions, in each case calculated in accordance with SEC guidelines (utilizing the prices utilized in such year-end reserve report), and decreased by, as of the date of determination, the estimated discounted future net revenues from (3) estimated proved oil and gas reserves reflected in such year-end report produced or disposed of since such year-end and (4) estimated oil and gas reserves attributable to downward revisions of estimates of proved oil and gas reserves since such year-end due to changes in geological conditions or other factors which would, in accordance with standard industry practice, cause such revisions, in each case calculated in accordance with SEC guidelines (utilizing the prices utilized in such year-end reserve report); provided that, in the case of each of the determinations made pursuant to clauses (1) through (4), such increases and decreases shall be as estimated by the Company’s petroleum engineers, plus

 

(b)           the capitalized costs that are attributable to oil and gas properties of the Company and its Restricted Subsidiaries to which no proved oil and gas reserves are attributable, based on the Company’s books and records as of a date no earlier than the date of the Company’s latest annual or quarterly financial statements, plus

 

(c)           the Net Working Capital on a date no earlier than the date of the Company’s latest annual or quarterly financial statements, plus

 

(d)           the greater of (1) the net book value on a date no earlier than the date of the Company’s latest annual or quarterly financial statements and (2) the appraised value, as estimated by independent appraisers, of other tangible assets (including, without duplication, Investments in unconsolidated Restricted Subsidiaries) of the Company and its Restricted Subsidiaries, as of the date no earlier than the date of the Company’s latest audited financial statements (provided that the Company shall not be required to obtain such appraisal of such assets if no such appraisal has been performed),

 

minus

 

(ii)                                  the sum of:

 

(a)           minority interests, plus

 

(b)           any net gas balancing liabilities of the Company and its Restricted Subsidiaries reflected in the Company’s latest audited Consolidated financial statements, plus

 

(c)           to the extent included in (i)(a) above, the discounted future net revenues, calculated in accordance with SEC guidelines (utilizing the prices utilized in the Company’s year-end reserve report), attributable to reserves which are required to be delivered to third parties to fully satisfy the obligations of the Company and its Restricted Subsidiaries with respect to Volumetric Production Payments (determined, if applicable, using the schedules specified with respect thereto), plus

 

(d)           the discounted future net revenues, calculated in accordance with SEC guidelines, attributable to reserves subject to Dollar-Denominated Production Payments which, based on the estimates of production and price assumptions included in determining the

 

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discounted future net revenues specified in (i)(a) above, would be necessary to fully satisfy the payment obligations of the Company and its Restricted Subsidiaries with respect to Dollar-Denominated Production Payments (determined, if applicable, using the schedules specified with respect thereto).

 

If the Company changes its method of accounting from the full cost method to the successful efforts method or a similar method of accounting, “Adjusted Consolidated Net Tangible Assets” will continue to be calculated as if the Company were still using the full cost method of accounting.

 

“Affiliate” means, with respect to any specified Person: (1) any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person; (2) any other Person that owns, directly or indirectly, 10% or more of the Voting Stock of such specified Person (or any of such specified Person’s direct or indirect parent’s Voting Stock); or (3) any other Person 10% or more of the Voting Stock of which is beneficially owned or held directly or indirectly by 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 ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Agent” means any Registrar, Paying Agent or Authenticating Agent.

 

“Agent Member” means a member of, or a participant in, the Depositary.

 

“Asset Sale” means any sale, issuance, conveyance, transfer, lease or other disposition (including, without limitation, by way of merger or consolidation, Production Payments and Reserve Sales or a Sale Leaseback Transaction) (collectively, a “transfer”), directly or indirectly, in one or a series of related transactions, of:

 

(1)           any Capital Stock of any Restricted Subsidiary;

 

(2)           all or substantially all of the properties and assets of any division or line of business of the Company or any Restricted Subsidiary; or

 

(3)           any other properties, assets or rights of the Company or any Restricted Subsidiary other than in the ordinary course of business.

 

For the purposes of this definition, the term “Asset Sale” shall not include:

 

(A)          any transfer of properties and assets (including any Capital Stock of a Restricted Subsidiary) that is governed by Article 5, or any transfer of equity interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary,

 

(B)          any transfer of properties and assets that is by the Company to any Restricted Subsidiary, or by any Restricted Subsidiary to the Company or any other Restricted Subsidiary in accordance with the terms of this Indenture,

 

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(C)          any transfer of properties and assets that would be within the definition of a “Permitted Payment,” a “Permitted Investment” or a “Restricted Payment” and, in the latter case, would be permitted to be made as a Restricted Payment (and shall be deemed a Restricted Payment) under Section 4.07; provided that any cash proceeds received by the Company or any Restricted Subsidiary in connection with a transfer of property or assets (which cash proceeds would otherwise constitute Net Available Cash if such transfer were treated as an Asset Sale) made pursuant to clause (12) of the definition of ‘‘Permitted Investments” shall be applied in accordance with Section 4.14,

 

(D)          the transfer of Cash Equivalents, inventory, accounts receivable, surplus or obsolete equipment or other property (excluding the disposition of oil and gas in place and other interests in real property unless made in connection with a Permitted Business Investment),

 

(E)           the abandonment, assignment, lease, sublease or farm-out of oil and gas properties, or the forfeiture or other disposition of such properties, pursuant to operating agreements or other instruments or agreements that, in each case, are entered into in the ordinary course of business in a manner that is customary in the Oil and Gas Business,

 

(F)           the transfer of Property received in settlement of debts owing to such Person as a result of foreclosure, perfection or enforcement of any Lien or debt, which debts were owing to such Person in the ordinary course of its business,

 

(G)          any Production Payments and Reserve Sales, provided that any such Production Payments and Reserve Sales (other than incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to the Company or a Restricted Subsidiary), shall have been created, incurred, issued, assumed or guaranteed in connection with the acquisition or financing of, and within 90 days after the acquisition of, the Property that is subject thereto,

 

(H)          the licensing or sublicensing of intellectual property or other general intangibles to the extent that such license does not prohibit the licensor from using the intellectual property and licenses, leases or subleases of other property,

 

(I)            the creation or incurrence of any Lien,

 

(J)            the surrender or waiver of contract rights or the settlement, release or surrender of contract, tort or other claims of any kind,

 

(K)          the sale or other disposition of (i) the office buildings located at (x) 120 Robert S. Kerr Avenue, Oklahoma City, OK 73102, (y) 123 Robert S. Kerr Avenue, Oklahoma City, OK 73102 and (z) 324 N. Robinson Avenue, Oklahoma City, OK 73102, (ii) the Broadway-Kerr Parking Garage located at the northeast corner of the intersection of Broadway Avenue and Robert S. Kerr Avenue in downtown Oklahoma City, OK, (iii) the three surface parking lots located on Broadway Avenue in downtown Oklahoma City, OK and (iv) any other buildings located in Oklahoma City, OK,

 

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(L)           the sale or other disposition (whether or not in the ordinary course of business) of oil and gas properties, provided at the time of such sale or other disposition such properties do not have associated with them any proved reserves, or

 

(M)         any transfer of assets the Fair Market Value of which in the aggregate does not exceed $20.0 million in any transaction or series of related transactions.

 

“Attributable Indebtedness” in respect of a Sale Leaseback Transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale Leaseback Transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended).

 

“Authenticating Agent” refers to a Person engaged to authenticate the Notes in the stead of the Trustee.

 

“Banking Services” means each and any of the following bank services provided to the Company or any Guarantor by any holder of Priority Lien Debt or any Affiliate thereof: (a) commercial credit cards, (b) stored value cards and (c) Treasury Management Arrangements (including controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

 

“Banking Services Obligations” means any and all obligations of the Company or any Guarantor, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

 

“Board of Directors” means the board of directors or comparable governing body of the Company, or any committee thereof duly authorized to act on its behalf.

 

“Borrowing Base” means the maximum amount in United States dollars determined or re-determined by the lenders under the Senior Credit Facility as the aggregate lending value to be ascribed to the Oil and Gas Properties of the Company and the Guarantors against which such lenders are prepared to provide loans or other Indebtedness to the Company and the Guarantors under the Senior Credit Facility, using their customary practices and standards for determining reserve based loans and which are generally applied by commercial lenders to borrowers in the Oil and Gas Business, as determined semi-annually during each year and/or on such other occasions as may be provided for by the Senior Credit Facility, and which is based upon, inter alia, the review by such lenders of the Hydrocarbon reserves, royalty interests and assets and liabilities of the Company and the Restricted Subsidiaries; provided that such amount shall not as of the date of its semi-annual or other determination or re-determination under the Senior Credit Facility exceed 65% of the discounted future net revenue before state or federal income taxes from Proved Reserves of the Company and its Restricted Subsidiaries calculated using Modified ACNTA Prices (after giving effect to commodity derivatives contracts in effect as of the date of determination) but otherwise calculated in accordance with SEC guidelines, as estimated in the most recent Reserve Report after giving effect to exploration and production activities,

 

6

 

acquisitions, dispositions and production since the date of such Reserve Report in the same manner as would be given in calculating Modified ACNTA.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized by law to close, or are in fact closed, in New York City or in the city where the Corporate Trust Office of the Trustee is located.

 

“Capital Lease Obligation” of any Person means any obligation of such Person and its Restricted Subsidiaries on a Consolidated basis under any capital lease of (or other agreement conveying the right to use) real or personal property which, in accordance with GAAP as in effect on the Issue Date, is required to be recorded as a capitalized lease obligation.

 

“Capital Stock” of any Person means any and all shares, units, interests, participations, rights in or other equivalents (however designated) of such Person’s capital stock, other equity interests whether now outstanding or issued after the date hereof, partnership interests (whether general or limited), limited liability company interests, any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, including any Preferred Stock, and any rights (other than debt securities or other Indebtedness convertible into Capital Stock), warrants or options exchangeable for or convertible into such Capital Stock.

 

“Cash Equivalents” means:

 

(1)           any evidence of Indebtedness issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof;

 

(2)           deposits, time deposit accounts, certificates of deposit, money market deposits or acceptances of any financial institution having capital and surplus in excess of $500.0 million that is a member of the Federal Reserve System and whose senior unsecured debt is rated at least “A-1” by S&P or at least “P-1” by Moody’s;

 

(3)           commercial paper with a maturity of 365 days or less issued by a corporation (other than an Affiliate or Subsidiary of the Company) organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and rated at least “A-1” by S&P and at least “P-1” by Moody’s;

 

(4)           repurchase agreements and reverse repurchase agreements relating to Indebtedness of a type described in clause (1) above that are entered into with a financial institution described in clause (2) above and mature within 365 days from the date of acquisition;

 

(5)           deposits and certificates of deposit with any commercial bank not meeting the qualifications specified in clause (2) above, provided all such deposits do not exceed $1.0 million in the aggregate at any one time; and

 

(6)           money market funds which invest substantially all of their assets in securities described in the preceding clauses (1) through (4).

 

“Certificated Note” means a Note in registered individual form without interest coupons.

 

7

 

“Change of Control” means the occurrence of any of the following events:

 

(1)           any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to have beneficial ownership of all shares that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total outstanding Voting Stock of the Company or any Successor Parent (measured by voting power rather than the number of shares); provided, however, that no Change of Control shall be deemed to occur by reason of the Company becoming a Subsidiary of a Successor Parent;

 

(2)           the Company or any Successor Parent consolidates with or merges with or into any Person, or sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets to any such Person, or any such Person consolidates with or merges into or with the Company or any Successor Parent, in any such event pursuant to a transaction in which the outstanding Voting Stock of the Company or such Successor Parent, as the case may be, is converted into or exchanged for cash, securities or other property, other than any such transaction where:

 

(A)          the outstanding Voting Stock of the Company, or such Successor Parent, as the case may be, is changed into or exchanged for Voting Stock of the surviving Person which is not Disqualified Stock; and

 

(B)          immediately after such transaction, no “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total outstanding Voting Stock (measured by voting power rather than the number of shares) of the surviving Person; or

 

(3)           the Company is liquidated or dissolved or adopts a plan of liquidation or dissolution other than in a transaction which complies with the provisions of Article 5.

 

For purposes of this definition, any transfer of an equity interest of an entity that was formed for the purpose of acquiring Voting Stock of the Company will be deemed to be a transfer of such portion of such Voting Stock as corresponds to the portion of the equity of such entity that has been so transferred. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur upon the consummation of any actions undertaken by the Company or any Restricted Subsidiary solely for the purpose of changing the legal structure of the Company or such Restricted Subsidiary.

 

“Collateral” means all property wherever located and whether now owned or at any time acquired after the Issue Date by the Company or any Guarantor as to which a Lien is granted under the Security Documents to secure the Notes or any Note Guarantee, which shall consist of all properties and assets subject to Liens securing the Priority Lien Obligations (except as set forth in the Security Documents).

 

8

 

“Collateral Trust Agreement” means the Collateral Trust Agreement, dated as of the Issue Date, among the Company, the Guarantors party thereto, the Collateral Trustee and the Trustee, as the same may be amended, supplemented or otherwise modified from time to time

 

“Collateral Trustee” means U.S. Bank National Association, the collateral trustee for all holders of Parity Lien Obligations pursuant to the Collateral Trust Agreement, and any successor thereof.

 

“Company” means the party named as such in the first paragraph of this Indenture or any successor obligor under this Indenture and the Notes pursuant to Article 5.

 

“Consolidated” means with respect to any Person, the consolidation of the accounts of such Person and each of its Subsidiaries if and to the extent the accounts of such Person and each of its Subsidiaries would normally be consolidated with those of such Person, all in accordance with GAAP.

 

“Consolidated ACNTA Coverage Ratio” means, as of any date of determination, the ratio of (x) Modified ACNTA to (y) the aggregate principal amount of Secured Debt that is then outstanding.

 

“Consolidated Fixed Charge Coverage Ratio” of any Person means, for any period, the ratio of:

 

(a)           without duplication, the sum of Consolidated Net Income, and in each case to the extent deducted in computing such Consolidated Net Income for such period, Consolidated Interest Expense, Consolidated Income Tax Expense and Consolidated Non-cash Charges for such period, of such Person and its Restricted Subsidiaries on a Consolidated basis, all determined in accordance with GAAP, less all non-cash items increasing Consolidated Net Income for such period, less (to the extent included in determining Consolidated Net Income) the sum of (1) the amount of deferred revenues that are amortized during the period and are attributable to reserves that are subject to Volumetric Production Payments and (2) amounts recorded in accordance with GAAP as repayments of principal and interest pursuant to Dollar-Denominated Production Payments, and less all cash payments during such period relating to non-cash charges that were added back to Consolidated Net Income in determining the Consolidated Fixed Charge Coverage Ratio in any prior period to

 

(b)           Consolidated Interest Expense for such period, in each case after giving pro forma effect to, without duplication:

 

(1)           the incurrence of the Indebtedness giving rise to the need to make such calculation and (if applicable) the application of the net proceeds therefrom, including to refinance other Indebtedness, as if such Indebtedness was incurred, and the application of such proceeds occurred, on the first day of such period;

 

(2)           the incurrence, repayment or retirement of any other Indebtedness by the Person and its Restricted Subsidiaries since the first day of such period as if such Indebtedness was incurred, repaid or retired at the beginning of such period (except that, in making such

 

9

 

computation, the amount of Indebtedness under any revolving credit facility shall be computed based upon the average daily balance of such Indebtedness during such period);

 

(3)           in the case of Acquired Debt or any acquisition occurring at the time of the incurrence of such Indebtedness, the related acquisition, assuming such acquisition had been consummated on the first day of such period; and

 

(4)           any acquisition or disposition by such Person and its Restricted Subsidiaries of any company or any business or any assets out of the ordinary course of business, whether by merger, stock purchase or sale or asset purchase or sale, or any related repayment of Indebtedness, in each case since the first day of such period, assuming such acquisition or disposition had been consummated on the first day of such period, and any expense and cost reductions that have occurred or are reasonably expected to occur, in the reasonable judgment of the chief financial or accounting officer of the Company (regardless of whether those costs savings or operating improvements could then be reflected in pro forma financial statements in accordance with Regulation S-X promulgated under the Securities Act or any other regulation or policy of the SEC related thereto);

 

provided that:

 

(1)           in making such computation, the Consolidated Interest Expense attributable to interest on any Indebtedness computed on a pro forma basis and (A) bearing a floating interest rate shall be computed as if the rate in effect on the date of computation had been the applicable rate for the entire period and (B) which was not outstanding for any part of the period for which the computation is being made but which bears, at the option of such Person, a fixed or floating rate of interest, shall be computed by applying at the option of such Person either the fixed or floating rate, and

 

(2)           in making such computation, the Consolidated Interest Expense of such Person attributable to interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period.

 

“Consolidated Income Tax Expense” of any Person means, for any period, the provision for federal, state, local and foreign income taxes (including state franchise taxes accounted for as income taxes in accordance with GAAP) of such Person and its Restricted Subsidiaries for such period as determined, on a Consolidated basis, in accordance with GAAP.

 

“Consolidated Interest Expense” of any Person means, without duplication, for any period, the sum of:

 

(a)           the interest expense, less interest income, of such Person and its Restricted Subsidiaries for such period, on a Consolidated basis, excluding any interest attributable to Dollar-Denominated Production Payments but including, without limitation,

 

(1)           amortization of debt discount (excluding amortization of capitalized debt issuance costs),

 

10

 

(2)           the net cash costs associated with Interest Rate Agreements (including amortization of discounts),

 

(3)           the interest portion of any deferred payment obligation,

 

(4)           all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers acceptance financing, and

 

(5)           accrued interest, minus

 

(b)           to the extent included in (a) above, write-offs of deferred financing costs of such Person and its Restricted Subsidiaries during such period and any charge related to, or any premium paid in connection with, paying any such Indebtedness of such Person and its Restricted Subsidiaries prior to its Stated Maturity, plus

 

(c)           (1) the interest component of the Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Restricted Subsidiaries during such period but excluding the interest component of any obligation with respect to a lease that is not a Capital Lease Obligation and

 

(2)           all capitalized interest of such Person and its Restricted Subsidiaries, plus

 

(d)           the interest expense under any Guaranteed Debt of such Person and any Restricted Subsidiary to the extent not included under any other clause hereof, whether or not paid by such Person or its Restricted Subsidiaries, plus

 

(e)           dividend payments by the Person with respect to Disqualified Stock and of any Restricted Subsidiary with respect to Preferred Stock (except, in either case, dividends paid solely in Qualified Capital Stock of such Person or such Restricted Subsidiary, as the case may be).

 

“Consolidated Net Income” of any Person means, for any period, the Consolidated net income (or loss) of such Person and its Restricted Subsidiaries for such period on a Consolidated basis as determined in accordance with GAAP, adjusted, to the extent included in calculating such net income (or loss), by excluding, without duplication,

 

(1)           all extraordinary gains or losses net of taxes (less all fees and expenses relating thereto),

 

(2)           the portion of net income (or loss) of such Person and its Restricted Subsidiaries on a Consolidated basis allocable to minority interests in unconsolidated Persons or Unrestricted Subsidiaries but only to the extent that cash dividends or distributions have not actually been received by such Person or one of its Consolidated Restricted Subsidiaries,

 

(3)           any gain or loss, net of taxes, realized upon the termination of any employee pension benefit plan,

 

11

 

(4)           gains or losses, net of taxes (less all fees and expenses relating thereto), in respect of dispositions of assets other than in the ordinary course of the Oil and Gas Business (including, without limitation, dispositions pursuant to Sale Leaseback Transactions, but excluding transactions such as farmouts, sales of leasehold inventory and sales of undivided interests in drilling prospects),

 

(5)           the net income of any Restricted Subsidiary that is not also a Guarantor, to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of that income is not at the time permitted, directly or indirectly, by operation of the terms of its charter or any judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or the holders of its Capital Stock,

 

(6)           any write-downs of non-current assets, provided that any ceiling limitation write-downs under SEC guidelines shall be treated as capitalized costs, as if such write-downs had not occurred,

 

(7)           any cumulative effect of a change in accounting principles,

 

(8)           all deferred financing costs written off, and premiums paid, in connection with any early extinguishment of Indebtedness,

 

(9)           any unrealized non-cash gains or losses or charges in respect of hedge or non-hedge derivatives (including those resulting from the application of the Derivatives and Hedging Topic of the FASB Accounting Standards Codification), and

 

(10)         any non-cash compensation charge arising from any grant of stock, stock options or other equity-based awards.

 

“Consolidated Net Worth” means, with respect to any specified Person as of any date, the consolidated shareholders’ equity of such Person and its consolidated Subsidiaries as of such date determined on a consolidated basis in accordance with GAAP, less (without duplication) amounts attributable to Disqualified Stock of such Person.

 

“Consolidated Non-cash Charges” of any Person means, for any period, the aggregate depreciation, depletion, amortization and exploration expense and other non-cash charges of such Person and its Restricted Subsidiaries on a Consolidated basis for such period, as determined in accordance with GAAP (excluding any non-cash charge which requires an accrual or reserve for cash charges for any future period but including, without limitation, any non-cash charge arising from any grant of Capital Stock, options to acquire Capital Stock, or other equity based awards).

 

“Corporate Trust Office” means the office of the Trustee at which at any time the corporate trust business in relation to this Indenture and the Notes is administered, which office at the date of this Indenture is located at 5555 San Felipe Street, 11th Floor, Houston, Texas 77056, EX-TX-WSFH, Attention: Corporate Trust Services.

 

“Credit Agreement Agent” means, at any time, the Person serving at such time as the “Agent” or “Administrative Agent” under the Senior Credit Facility or any other representative

 

12

 

then most recently designated in accordance with the applicable provisions of the Senior Credit Facility, together with its successors in such capacity.

 

“Credit Facility” means one or more debt facilities (including, without limitation, the Senior Credit Facility), commercial paper facilities or other debt instruments, indentures or agreements providing for revolving credit loans, term loans, receivables financings (including through the sale of receivables to the lenders or to special purpose entities formed to borrow from the lenders against such receivables), letters of credit, capital markets financings and/or private placements involving bonds or other debt securities, or other debt obligations, in each case, as amended, restated, modified, renewed, refunded, restructured, supplemented, replaced or refinanced from time to time in whole or in part from time to time, including without limitation any amendment increasing the amount of Indebtedness incurred or available to be borrowed thereunder, extending the maturity of any Indebtedness incurred thereunder or contemplated thereby or deleting, adding or substituting one or more parties thereto (whether or not such added or substituted parties are banks or other institutional lenders).

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

“Depositary” means the depositary of each Global Note, which will initially be DTC.

 

“Designation” has the meaning assigned to such term in Section 4.18.

 

“Designation Amount” has the meaning assigned to such term in Section 4.18.

 

“Disinterested Director” means, with respect to any transaction or series of related transactions, a member of the Board of Directors of the Company who does not have any material direct or indirect financial interest (other than as a shareholder or employee of the Company or any Subsidiary) in or with respect to such transaction or series of related transactions.

 

“Disqualified Stock” means any Capital Stock that, either by its terms or by the terms of any security into which it is convertible or exchangeable or otherwise, is or upon the happening of an event or passage of time would be, required to be redeemed (unless, at the option of the Company such redemption can be satisfied solely with Qualified Capital Stock) prior to the final Stated Maturity of the Notes or is redeemable at the option of the Holder thereof (unless, at the option of the Company such redemption can be satisfied solely with Qualified Capital Stock) at any time prior to such final Stated Maturity (other than upon a change of control of or sale of assets by the Company in circumstances where the Holders would have similar rights), or is convertible into or exchangeable for debt securities at any time prior to such final Stated Maturity at the option of the Holder thereof.

 

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“Disposal Assets” means (i) assets used primarily for the gathering, processing and disposal of saltwater, including disposal wells, gathering pipelines, processing and disposal facilities, well connections and related infrastructure and (ii) equity interests of any Person that has no substantial assets other than assets referred to in clause (i).

 

“Dollar” and “$” mean lawful money of the United States.

 

“Dollar-Denominated Production Payment” means a production payment required to be recorded as a borrowing in accordance with GAAP, together with all undertakings and obligations in connection therewith.

 

“DTC” means The Depository Trust Company, a New York corporation, and its successors.

 

“DTC Legend” means the legend set forth in Exhibit D.

 

“Electrical Assets” means (i) assets used primarily for transmission and delivery of electricity, including electrical substations, power lines and other electrical infrastructure assets, and (ii) equity interests of any Person that has no substantial assets other than assets referred to in clause (i).

 

“equity interests” means, with respect to any Person, all of the shares of Capital Stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of Capital Stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of Capital Stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

“Equity Offering” means a public or private offering of Capital Stock (other than Disqualified Stock) of the Company.

 

“Event of Default” has the meaning assigned to such term in Section 6.01.

 

“Excess Proceeds” means any Net Available Cash from an Asset Sale not applied in accordance with Section 4.14(b) within 365 days from the date of such Asset Sale.

 

“Existing Unsecured Notes” means the Company’s 8.75% Senior Notes due 2020, 7.5% Senior Notes due 2021, 8.125% Senior Notes due 2022 and 7.5% Senior Notes due 2023, in each case that are outstanding on the Issue Date.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Exchanged Properties” means properties or assets or Capital Stock representing an equity interest in or assets used or useful in the Oil and Gas Business, received by the Company

 

14

 

or a Restricted Subsidiary in a substantially concurrent purchase and sale, trade or exchange as a portion of the total consideration for other such properties or assets.

 

“Excluded Property” has the meaning assigned to such term in any applicable Security Document.

 

“Fair Market Value” means, with respect to any asset or property, the sale value that would be obtained in an arm’s-length free market transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy. Fair Market Value of an asset or property in excess of $25.0 million shall be determined by the Board of Directors of the Company acting in good faith, in which event it shall be evidenced by a resolution of the Board of Directors.

 

“Foreign Subsidiary” means any Restricted Subsidiary of the Company that (x) is not organized under the laws of the United States of America or any State thereof or the District of Columbia, or (y) was organized under the laws of the United States of America or any State thereof or the District of Columbia and that has no material assets other than Capital Stock of one or more foreign entities of the type described in clause (x) above and is not a guarantor of Indebtedness under a Credit Facility.

 

“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time.

 

“Global Note” means a Note in registered global form without interest coupons.

 

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof, in whole or in part; provided that the term “Guarantee” does not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

 

“Guaranteed Debt” of any Person means, without duplication, all Indebtedness of any other Person referred to in the definition of Indebtedness below guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement, made primarily for the purpose of enabling the debtor to make payment of such Indebtedness or to assure the holder of such Indebtedness against loss,

 

(1)           to pay or purchase such Indebtedness or to advance or supply funds for the payment or purchase of such Indebtedness,

 

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(2)           to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services,

 

(3)           to supply funds to, or in any other manner invest in, the debtor (including any agreement to pay for property or services without requiring that such property be received or such services be rendered),

 

(4)           to maintain working capital or equity capital of the debtor, or otherwise to maintain the net worth, solvency or other financial condition of the debtor or to cause such debtor to achieve certain levels of financial performance, or

 

(5)                                 otherwise to assure a creditor against loss;

 

provided that the term “guarantee” shall not include endorsements for collection or deposit, in either case in the ordinary course of business.

 

“Guarantors” means (i) each Restricted Subsidiary that executes this Indenture as an initial Guarantor to provide for the guarantee of the payment of the Notes and (ii) each Restricted Subsidiary that executes a supplemental indenture in substantially the form of Exhibit B to this Indenture providing for the guarantee of the payment of the Notes, or any successor obligor under its Note Guarantee pursuant to this Indenture, in each case unless and until such Guarantor is released from its Note Guarantee pursuant to this Indenture.

 

“Holder” or “Noteholder” means the registered holder of any Note.

 

“Hedging Obligations” means, with respect to any Person, the obligations of such Person under or in respect of currency exchange contracts, oil, gas or other hydrocarbon price hedging arrangements and Interest Rate Agreements.

 

“Hydrocarbon Interests” means all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature.

 

“Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom.

 

“Immaterial Subsidiary” means any Subsidiary with total assets of less than $500,000, as determined in accordance with its latest financial statements.

 

“Indebtedness” means, with respect to any Person, without duplication,

 

(1)           all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, excluding any Trade Accounts Payable and other accrued current liabilities arising in the ordinary course of business, but including, without limitation, all

 

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obligations, contingent or otherwise, of such Person in connection with any letters of credit issued under letter of credit facilities, acceptance facilities or other similar facilities,

 

(2)           all obligations of such Person evidenced by bonds, notes, debentures or other similar instruments,

 

(3)           all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding Trade Accounts Payable,

 

(4)           all obligations under or in respect of currency exchange contracts, oil, gas or other hydrocarbon price hedging arrangements and Interest Rate Agreements of such Person (the amount of any such obligations to be equal at any time to the termination value of such agreement or arrangement giving rise to such obligation that would be payable by such Person at such time),

 

(5)           all Capital Lease Obligations of such Person,

 

(6)           the Attributable Indebtedness of such Person related to any Sale Leaseback Transaction,

 

(7)           all Indebtedness referred to in clauses (1) through (6) above of other Persons and all dividends of other Persons, to the extent the payment of such Indebtedness or dividends is secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien, upon or with respect to property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness,

 

(8)           all Guaranteed Debt of such Person,

 

(9)           all Disqualified Stock issued by such Person, valued at the greater of its voluntary or involuntary maximum fixed repurchase price, plus accrued and unpaid dividends,

 

(10)         all Preferred Stock of any Restricted Subsidiary of the Person, valued at the greater of its voluntary or involuntary maximum fixed repurchase price, plus accrued and unpaid dividends,

 

(11)         with respect to any Production Payment and Reserve Sale, any warranties or guarantees of production or payment by such Person with respect to such Production Payment and Reserve Sale but excluding other contractual obligations of such Person with respect to such Production Payment and Reserve Sale, and

 

(12)         any amendment, supplement, modification, deferral, renewal, extension, refunding or refinancing of any liability of the types referred to in clauses (1) through (11) above.

 

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For purposes hereof, the “maximum fixed repurchase price” of any Disqualified Stock or Preferred Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as if it were purchased on any date on which Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the Fair Market Value of such Disqualified Stock or Preferred Stock, such Fair Market Value to be determined in good faith by the Board of Directors of the issuer of such Disqualified Stock or Preferred Stock. Subject to clause (11) of the preceding sentence, Production Payments and Reserve Sales shall not be deemed to be Indebtedness.

 

“Indenture” means this indenture, as amended or supplemented from time to time.

 

“Initial Junior Lien Indebtedness” means Indebtedness secured by a Junior Lien for which certain requirements of the Intercreditor Agreement have been satisfied that was permitted to be incurred and so secured under each applicable Secured Debt Document, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time in accordance with the applicable Secured Debt Documents.

 

“Initial Junior Lien Trustee” means, at any time, the Person serving at such time as the “collateral trustee” or “collateral agent” under the Initial Junior Lien Indebtedness or any other representative then most recently designated in accordance with the applicable provisions of the Initial Junior Lien Indebtedness, together with its successors in such capacity.

 

“Initial Notes” means the Notes issued on the Issue Date and any Notes issued in replacement thereof.

 

“Institutional Accredited Investor Certificate” means a certificate substantially in the form of Exhibit G hereto.

 

“Intercreditor Agreement” means the Intercreditor Agreement among the Collateral Trustee, the Trustee, the Priority Lien Collateral Agent, the Company, the Guarantors party thereto and the other parties from time to time party thereto, to be entered into on the Issue Date, as it may be amended, restated, supplemented or otherwise modified from time to time.

 

“Interest Payment Date” means June 1 and December 1 of each year, commencing December 1, 2015.

 

“Interest Rate Agreements” means one or more of the following agreements which shall be entered into from time to time by one or more financial institutions: interest rate protection agreements (including, without limitation, interest rate swaps, caps, floors, collars and similar agreements) and/or other types of interest rate hedging agreements.

 

“Investment” means, with respect to any Person, directly or indirectly, any advance, loan (including Guarantees), or other extension of credit or capital contribution to any other Person (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase, acquisition or ownership by such Person of any Capital Stock, bonds, notes, debentures or other securities issued or owned by any other Person and all other items that would be classified as investments on a balance sheet

 

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prepared in accordance with GAAP. “Investment” shall exclude direct or indirect advances to customers or suppliers in the ordinary course of business that are, in conformity with GAAP, recorded as accounts receivable, prepaid expenses or deposits on the Company’s or any Restricted Subsidiary’s balance sheet, endorsements for collection or deposit arising in the ordinary course of business and extensions of trade credit on commercially reasonable terms in accordance with normal trade practices. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Capital Stock of any direct or indirect Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Company (other than the sale of all of the outstanding Capital Stock of such Subsidiary), the Company will be deemed to have made an Investment on the date of such sale or disposition equal to the Fair Market Value of the Company’s Investments in such Subsidiary that were not sold or disposed of in an amount determined as provided in Section 4.07.

 

“Investment Grade Status” shall occur when the Notes are rated as follows by one of the following two rating agencies: Baa3 or better by Moody’s or BBB- or better by S&P (or, if either such entity ceases to rate the Notes, the equivalent investment grade credit rating from any other “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act selected by the Company as a replacement agency).

 

“Issue Date” means the earliest date on which any Notes are originally issued under this Indenture.

 

“Junior Lien” means a Lien, junior to the Priority Liens and the Parity Liens as provided in the Intercreditor Agreement, granted by the Company or any Guarantor in favor of holders of Junior Lien Debt (or any collateral trustee or representative in connection therewith), at any time, upon any property of the Company or any Guarantor to secure Junior Lien Obligations.

 

“Junior Lien Collateral Agent” means the Initial Junior Lien Trustee (or such Person designated by the Initial Junior Lien Trustee), or if the Initial Junior Lien Indebtedness ceases to exist, the collateral trustee or other representative of lenders or holders of Junior Lien Obligations designated pursuant to the terms of the Junior Lien Documents and the Intercreditor Agreement.

 

“Junior Lien Debt” means:

 

(1)           the Initial Junior Lien Indebtedness, and

 

(2)           any other Indebtedness (other than intercompany Indebtedness owing to the Company or its Subsidiaries) of the Company or any Guarantor that is secured by a Junior Lien that was permitted to be incurred and so secured under each applicable Secured Debt Document; provided that, in the case of any Indebtedness referred to in this definition:

 

(a)           on or before the date on which such Indebtedness is incurred by the Company or any Guarantor, such Indebtedness is designated by the Company, in an Officers’ Certificate delivered to the Junior Lien Collateral Agent and Collateral Trustee as (x) in the case of Initial Junior Lien Indebtedness, as “Initial Junior Lien Indebtedness” and (y) in the case of all Junior Lien Debt, as “Junior Lien Debt” for the purposes of the Secured Debt Documents;

 

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provided that if such Series of Secured Debt is designated “Junior Lien Debt,” it cannot also be designated as Parity Lien Debt or Priority Lien Debt (or any combination of the three);

 

(b)                                 the collateral agent or other representative with respect to such Indebtedness, the Priority Lien Collateral Agent, the Junior Lien Collateral Agent, the Collateral Trustee, the Company, each applicable Guarantor have duly executed and delivered the Intercreditor Agreement (or a joinder to the Intercreditor Agreement or a new Intercreditor Agreement substantially similar to the Intercreditor Agreement, as in effect on the date of this Indenture, and in a form reasonably acceptable to each of the parties thereto); and

 

(c)                                  all other requirements set forth in the Intercreditor Agreement as to the confirmation, grant or perfection of the Liens of the holders of Junior Debt to secure such Indebtedness or Obligations in respect thereof are satisfied.

 

“Junior Lien Documents” means, collectively, any indenture, credit agreement or other agreement or instrument pursuant to which Junior Lien Debt is incurred and the documents pursuant to which Junior Lien Obligations are granted.

 

“Junior Lien Obligations” means Junior Lien Debt and all other Obligations in respect thereof.

 

“Lien” means any mortgage or deed of trust, charge, pledge, lien (statutory or otherwise), privilege, security interest, assignment, deposit, arrangement, hypothecation, claim, preference, priority or other encumbrance for security purposes upon or with respect to any property of any kind (including any conditional sale, capital lease or other title retention agreement, any leases in the nature thereof, and any agreement to give any security interest), real or personal, movable or immovable, now owned or hereafter acquired. A Person will be deemed to own subject to a Lien any property which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease Obligation or other title retention agreement. References herein to Liens allowed to exist upon any particular item of Property shall also be deemed (whether or not stated specifically) to allow Liens to exist upon any accessions, improvements or additions to such property, upon any contractual rights relating primarily to such Property, and upon any proceeds of such Property or of such accessions, improvements, additions or contractual rights.

 

“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 NYSE AMEX Equities or the Nasdaq Stock Market (or any successor thereof); 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 (a) the date on which such securities are sold or exchanged for cash or Cash Equivalents and (b) 360 days following the date of receipt of such securities. If such securities are not sold or exchanged for cash or Cash Equivalents within 360 days of receipt thereof, for purposes of determining whether the transaction pursuant to which

 

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the Company or a Restricted Subsidiary received the securities was in compliance with Section 4.14, such securities shall be deemed not to have been Liquid Securities at any time.

 

“Midstream Assets” means (i) assets used primarily for gathering, transmission, storage, processing or treatment of natural gas, natural gas liquids or other Hydrocarbons or carbon dioxide and (ii) equity interests of any Person that has no substantial assets other than assets referred to in clause (i).

 

“Modified ACNTA” means, as of any date of determination, an amount equal to Adjusted Consolidated Net Tangible Assets calculated as of a date not more than 60 days prior to the date of determination (the “calculation date”), on the following basis:

 

(a)                                 in lieu of commodity pricing of future net revenues based on SEC guidelines, Modified ACNTA Prices shall be used after giving effect to commodity derivatives contracts in effect as of the date of determination, as determined in good faith by the Company, and

 

(b)                                 such calculation shall be based on then current estimates of costs determined in good faith by the Company in light of prevailing market conditions.

 

“Modified ACNTA Prices” means, as of any date of determination, the forward month prices for the most comparable hydrocarbon commodity applicable to such future production month for a five year period (or such shorter period if forward month prices are not quoted for a reasonably comparable hydrocarbon commodity for the full five year period), with such prices held constant thereafter based on the last quoted forward month price of such period, as such prices are (i) quoted on the NYMEX (or its successor) as of the calculation date (as defined in the definition of Modified ACNTA) and (ii) adjusted for energy content, quality and basis differentials; provided that with respect to estimated future production for which prices are defined, within the meaning of SEC guidelines, by contractual arrangements excluding escalations based upon future conditions, then such contract prices shall be applied to future production subject to such arrangements.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgages” means all mortgages, debentures, hypothecs, deeds of trust, deeds to secure Indebtedness and similar documents, instruments and agreements (and all amendments, modifications and supplements thereof) creating, evidencing, perfecting or otherwise establishing the Liens on Oil and Gas Properties and other related assets to secure payment of the Notes and the Note Guarantees or any part thereof.

 

“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 Cash Equivalents, and excluding (iii) any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the assets or property that is the subject of such Asset Sale and (iv) except to the extent subsequently converted to cash within 360 days after such Asset Sale, consideration constituting Exchanged Properties or consideration other than as identified in the immediately preceding clauses (i) and (ii)), in each case net of:

 

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(a)                                 all legal, title and recording expenses, commissions and other fees and expenses incurred, and all federal, state, foreign and local taxes required to be paid or accrued as a liability under GAAP as a consequence of such Asset Sale,

 

(b)                                 all payments made on any Indebtedness (but specifically excluding Indebtedness of the Company and its Restricted Subsidiaries assumed in connection with or in anticipation of such Asset Sale) which is secured by any assets subject to such Asset Sale, in accordance with the terms of any Lien upon such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Sale or by applicable law, be repaid out of the proceeds from such Asset Sale, provided that such payments are made in a manner that results in the permanent reduction in the balance of such Indebtedness and, if applicable, a permanent reduction in any outstanding commitment for future incurrences of Indebtedness thereunder,

 

(c)                                  all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale, and

 

(d)                                 the deduction of appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the assets disposed of in such Asset Sale and retained by the Company or any Restricted Subsidiary after such Asset Sale; provided, however, that if any consideration for an Asset Sale (which would otherwise constitute Net Available Cash) is required to be held in escrow pending determination of whether a purchase price adjustment will be made, such consideration (or any portion thereof) shall become Net Available Cash only at such time as it is released to the Company or its Restricted Subsidiaries from escrow.

 

“Net Cash Proceeds” means with respect to any issuance or sale of Capital Stock or debt securities or Capital Stock that has been converted into or exchanged for Capital Stock as referred to in Section 4.07, the proceeds of such issuance or sale in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations when received in the form of, or stock or other assets when disposed of for, cash or Cash Equivalents (except to the extent that such obligations are financed or sold with recourse to the Company or any Restricted Subsidiary), net of attorney’s fees, accountant’s fees and brokerage, consultation, underwriting and other fees and expenses actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.

 

“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 Consolidated financial statements of the Company prepared in accordance with GAAP, provided, however, that all of the following shall be excluded in the calculation of Net Working Capital: (a) current assets or liabilities relating to the mark-to-market value of Interest Rate Agreements and hedging arrangements constituting Permitted Debt, (b) any current assets or liabilities relating to non-cash charges arising from any grant of Capital Stock, options to acquire Capital Stock, or other equity based awards and (c) any current assets or liabilities relating to non-cash charges or accruals for future abandonment liabilities.

 

“Non-U.S. Person” means a Person that is not a U.S. person, as defined in Regulation S.

 

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“Note Documents” means the Indenture, the Notes, the Note Guarantees, the Collateral Trust Agreement, the Security Documents and the Intercreditor Agreement.

 

“Notes” has the meaning assigned to such term in the Recitals.

 

“Note Guarantee” means the guarantee of the Notes by a Guarantor pursuant to this Indenture.

 

“Notes Obligations” has the meaning assigned to such term in Section 13.01(a).

 

“NYMEX” means the New York Mercantile Exchange.

 

“Obligations” means any principal, premium, if any, interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization, whether or not a claim for post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses, indemnifications, reimbursement obligations, damages, guarantees, and other liabilities or amounts payable under the documentation governing any Indebtedness or in respect thereto.

 

“Offer to Purchase” has the meaning assigned to such term in Section 3.04(a).

 

“Offering Memorandum” means the final confidential offering memorandum, dated May 28, 2015, relating to the issuance of the Initial Notes.

 

“Officer” means the chairman of the Board of Directors, the president or chief executive officer, any vice president, the chief financial officer, the treasurer or any assistant treasurer, or the secretary or any assistant secretary, of the Company.

 

“Officers’ Certificate” means a certificate signed in the name of the Company (i) by the chairman of the Board of Directors, the president or chief executive officer or a vice president and (ii) by the chief financial officer, the treasurer or any assistant treasurer or the secretary or any assistant secretary.

 

“Offshore Global Note” means a Global Note representing Notes issued and sold pursuant to Regulation S.

 

“Oil and Gas Business” means the business of exploiting, exploring for, developing, acquiring, operating, producing, processing, gathering, marketing, storing, selling, hedging, treating, swapping, refining and transporting Hydrocarbons and carbon dioxide and other related energy businesses, including contract drilling and other oilfield services.

 

“Oil and Gas Liens” means (i) Liens on any specific property or any interest therein, construction thereon or improvement thereto to secure all or any part of the costs incurred for surveying, exploration, drilling, extraction, development, operation, production, construction, alteration, repair or improvement of, in, under or on such property and the plugging and abandonment 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

 

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an oil or gas producing property to secure obligations incurred or guarantees of obligations incurred in connection with or necessarily incidental to commitments for the purchase or sale of, or the transportation or distribution of, the products derived from such property; (iii) Liens arising under partnership agreements, oil and gas leases, overriding royalty agreements, net profits agreements, production payment agreements, royalty trust agreements, incentive compensation programs for geologists, geophysicists and other providers of technical services to the Company or a Restricted Subsidiary, master limited partnership agreements, farm-out agreements, farm-in agreements, division orders, contracts for the sale, purchase, exchange, transportation, gathering or processing of oil, gas or other Hydrocarbons, unitizations and pooling designations, declarations, orders and agreements, development agreements, operating agreements, production sales contracts, area of mutual interest agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or geophysical permits or agreements, and other agreements which are customary in the Oil and Gas Business; provided, however, in all instances that such Liens are limited to the assets that are the subject of the relevant agreement, program, order or contract; (iv) Liens arising in connection with Production Payments and Reserve Sales; provided that such Liens are limited to the property that is subject to such Production Payments and Reserve Sales, and such Production Payments and Reserve Sales either (a) were created in connection with the acquisition or financing of the property and were incurred within 90 days after the acquisition of the property subject thereto, or (b) constitute Asset Sales made in compliance with Section 4.14; and (v) Liens on pipelines or pipeline facilities that arise by operation of law.

 

“Oil and Gas Properties” means (a) Hydrocarbon Interests; (b) the Properties now or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any governmental authority) that may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including production sharing contracts and agreements, that relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and under and that may be produced and saved or attributable to the Hydrocarbon Interests, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests; and (g) all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereinafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment, rental equipment or other personal Property that may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes, together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing.

 

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“Opinion of Counsel” means a written opinion signed by legal counsel, who may be an employee of or counsel to the Company, satisfactory to the Trustee.

 

“Parity Lien” means a Lien granted by the Company or any Guarantor in favor of the Collateral Trustee pursuant to a Security Document, at any time, upon any property of the Company or any Guarantor to secure Parity Lien Obligations.

 

“Parity Lien Debt” means:

 

(1)                                 the Notes issued on the date of this Indenture and Note Guarantees thereof; and

 

(2)                                 any other Indebtedness (other than intercompany Indebtedness owing to the Company or its Subsidiaries) of the Company or any Guarantor (including Additional Notes and Note Guarantees thereof) that is secured equally and ratably with the Notes by a Parity Lien that was permitted to be incurred and so secured under each applicable Secured Debt Document; provided that, in the case of any Indebtedness referred to in clause (2) of this definition:

 

(a)                                 on or before the date on which such Indebtedness is incurred by the Company or any Guarantor, such Indebtedness is designated by the Company, in an Officers’ Certificate delivered to each Parity Lien Representative and the Collateral Trustee, as “Parity Lien Debt” for the purposes of this Indenture and the Collateral Trust Agreement; provided further that no Series of Secured Debt may be designated as both Parity Lien Debt and either Priority Lien Debt or Junior Lien Debt or both;

 

(b)                                 other than in the case of Additional Notes issued under this Indenture, such Indebtedness is governed by an indenture, credit agreement or other agreement that includes an Additional Secured Debt Designation and, in each case, the Parity Lien Representative of such Parity Lien Debt (other than Additional Notes) shall have executed a joinder to the Intercreditor Agreement substantially in the form provided therein; and

 

(c)                                  all requirements set forth in the Collateral Trust Agreement as to the confirmation, grant or perfection of the Collateral Trustee’s Liens to secure such Indebtedness or Obligations in respect thereof are satisfied (and the satisfaction of such requirements and the other provisions of this clause (c) will be conclusively established if the Company delivers to the Collateral Trustee an Officers’ Certificate stating that such requirements and other provisions have been satisfied and that such Indebtedness is “Parity Lien Debt”).

 

“Parity Lien Documents” means, collectively, the Note Documents and any additional indenture, supplemental indenture, credit agreement or other agreement governing each other Series of Parity Lien Debt and the Security Documents (other than any Security Documents that do not secure Parity Lien Obligations).

 

“Parity Lien Obligations” means Parity Lien Debt and all other Obligations in respect thereof.

 

“Parity Lien Representative” means:

 

(1)                                 in the case of the Notes, the Trustee; or

 

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(2)                                 in the case of any other Series of Parity Lien Debt, the Trustee, agent or representative of the holders of such Series of Parity Lien Debt who (a) is appointed as a Parity Lien Representative (for purposes related to the administration of the Security Documents) pursuant to this Indenture, credit agreement or other agreement governing such Series of Parity Lien Debt, together with its successors in such capacity and (b) has become a party to the Collateral Trust Agreement by executing a joinder in the form required under the Collateral Trust Agreement.

 

“Paying Agent” refers to a Person engaged to perform the obligations of the Trustee in respect of payments made or funds held hereunder in respect of the Notes.

 

“Permitted Business Investments” means Investments and expenditures made in the ordinary course of, and of a nature that is or shall have become customary in, the Oil and Gas Business as a means of actively engaging therein through agreements, transactions, interests or arrangements which permit one to share risks or costs, comply with regulatory requirements regarding local ownership or satisfy other objectives customarily achieved through the conduct of Oil and Gas Business jointly with third parties, including (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, processing agreements, farm-in agreements, farm-out agreements, development agreements, area of mutual interest agreements, unitization agreements, pooling arrangements, joint bidding agreements, service contracts, joint venture agreements, partnership agreements (whether general or limited) and other similar agreements (including for limited liability companies) with third parties.

 

“Permitted Collateral Liens” means Liens described in clauses (1), (2), (4), (5), (6), (7), (8), (10), (11), (12), (13), (14) (with respect to Liens under clauses (1), (4), (5), (6), (7), (8), (10), (11), (12), (13) and (18) of such clause only), (15) and (18) of the definition of “Permitted Liens.”

 

“Permitted Debt” has the meaning assigned to such term in Section 4.06(b).

 

“Permitted Investments” mean:

 

(1)                                 Investments in the Company or any Restricted Subsidiary or any Person which, as a result of such Investment, (a) becomes a Restricted Subsidiary or (b) is merged or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or any Restricted Subsidiary;

 

(2)                                 Indebtedness of the Company or a Restricted Subsidiary described under clauses (4), (5), (6) and (10) of the definition of “Permitted Debt”;

 

(3)                                 Investments in the Notes;

 

(4)                                 Cash Equivalents;

 

(5)                                 Investments in property, plant and equipment used in the ordinary course of business and Permitted Business Investments;

 

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(6)                                 Investments acquired by the Company or any Restricted Subsidiary in connection with an Asset Sale permitted under Section 4.14 to the extent such Investments are non-cash proceeds as permitted under such covenant;

 

(7)                                 Investments in existence on the Issue Date;

 

(8)                                 Investments acquired in exchange for the issuance of Capital Stock of the Company (other than Disqualified Stock of the Company or a Restricted Subsidiary or Preferred Stock of a Restricted Subsidiary);

 

(9)                                 Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and worker’s compensation, performance and other similar deposits provided to third parties in the ordinary course of business;

 

(10)                          loans or advances to employees of the Company and its Restricted Subsidiaries in the ordinary course of business for bona fide business purposes of the Company and its Restricted Subsidiaries (including travel, entertainment and relocation expenses) in the aggregate amount outstanding at any one time of not more than $2.0 million;

 

(11)                          any Investments received in good faith in settlement or compromise of receivables or other obligations that were obtained in the ordinary course of business, including in settlement of litigation, arbitration or other disputes or pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer;

 

(12)                          any Investments in an Unrestricted Subsidiary in exchange for the contribution or other transfer of Disposal Assets or Midstream Assets to such Unrestricted Subsidiary;

 

(13)                          other Investments in the aggregate amount outstanding at any one time of up to the greater of (x) $25.0 million and (y) 2.5% of Adjusted Consolidated Net Tangible Assets at the time the Investment is made; and

 

(14)                          Guarantees received with respect to any Permitted Investment listed above.

 

Investments permitted by this definition need not be permitted solely by reference to one clause of this definition but may be permitted in part by one such clause and in part by one or more other clauses of this definition. In connection with any assets or property contributed or transferred to any Person as an Investment, the value of such property and assets shall be equal to the Fair Market Value at the time of Investment, without regard to subsequent changes in value.

 

“Permitted Liens” means:

 

(1)                                 any Lien existing on the Issue Date securing Indebtedness or obligations existing on the Issue Date and not otherwise referred to in this definition (other than Liens permitted under clauses (2) and (15));

 

(2)                                 any Lien securing Priority Lien Debt or Parity Lien Debt under any Credit Facilities incurred under sub-clause (A) of clause (1) of the definition of “Permitted Debt” and

 

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Liens securing Banking Services Obligations and Hedging Obligations constituting Priority Lien Obligations;

 

(3)                                 any Lien in favor of the Company or a Restricted Subsidiary;

 

(4)                                 any Lien arising by reason of:

 

(A)                               any judgment, decree or order of any court, so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment, decree or order shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;

 

(B)                               taxes, assessments or governmental charges or claims that are not yet delinquent or which are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, provided that any reserve or other appropriate provision as will be required in conformity with GAAP will have been made therefor;

 

(C)                               security made in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other types of social security;

 

(D)                               good faith deposits in connection with tenders, leases and contracts (other than contracts for the payment of Indebtedness);

 

(E)                                zoning restrictions, easements, licenses, reservations, title defects, rights of others for rights of way, utilities, sewers, electric lines, telephone or telegraph lines, and other similar purposes, provisions, covenants, conditions, waivers, restrictions on the use of property or minor irregularities of title (and with respect to leasehold interests, mortgages, obligations, Liens and other encumbrances incurred, created, assumed or permitted to exist and arising by, through or under a landlord or owner of the leased property, with or without consent of the lessee), none of which materially impairs the use of any parcel of property material to the operation of the business of the Company or any Restricted Subsidiary or the value of such property for the purpose of such business;

 

(F)                                 deposits to secure public or statutory obligations, or in lieu of surety or appeal bonds;

 

(G)                               operation of law or contract in favor of mechanics, carriers, warehousemen, landlords, materialmen, laborers, employees, suppliers and similar persons, incurred in the ordinary course of business for sums which are not yet delinquent or are being contested in good faith by negotiations or by appropriate proceedings which suspend the collection thereof; and

 

(H)                              normal depository arrangements with banks;

 

(5)                                 any Lien securing Acquired Debt created prior to (and not created in connection with, or in contemplation of) the incurrence of such Indebtedness by the Company or any Restricted Subsidiary; provided that such Lien only secures the assets acquired in connection

 

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with the transaction pursuant to which the Acquired Debt became an obligation of the Company or a Restricted Subsidiary;

 

(6)                                 any Lien to secure performance bids, leases (including, without limitation, statutory and common law landlord’s liens), statutory obligations, letters of credit and other obligations of a like nature and incurred in the ordinary course of business of the Company or any Subsidiary and not securing or supporting Indebtedness, and any Lien to secure statutory or appeal bonds;

 

(7)                                 any Lien securing Indebtedness permitted to be incurred pursuant to clause (6) or clause (8) of the definition of Permitted Debt, so long as none of such Indebtedness constitutes debt for borrowed money;

 

(8)                                 any Lien securing (A) Attributable Indebtedness incurred pursuant to Sale Leaseback Transactions in accordance with clause (7) of the definition of Permitted Debt and (B) Indebtedness represented by Capital Lease Obligations or Purchase Money Obligations or other Indebtedness incurred in accordance with clause (7) of the definition of Permitted Debt; provided that, in the case of clause (B), such Liens only extend to such acquired, developed or constructed property and such Liens secure Indebtedness the value of which does not at the time of incurrence thereof exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed;

 

(9)                                 leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;

 

(10)                          (A) Liens on property, assets or shares of stock of a Person at the time such Person becomes a Restricted Subsidiary or is merged with or into or consolidated with the Company or any of its Restricted Subsidiaries; provided, however, that such Liens are not created, incurred or assumed in connection with, or in contemplation of, such other Person becoming a Restricted Subsidiary or such merger or consolidation; provided, further, that any such Lien may not extend to any other property owned by the Company or any Restricted Subsidiary and assets fixed or appurtenant thereto; and (B) Liens on property, assets or shares of capital stock existing at the time of acquisition thereof by the Company or any of its Restricted Subsidiaries; provided, however, that such Liens are not created, incurred or assumed in connection with, or in contemplation of, such acquisition and do not extend to any property other than the property so acquired;

 

(11)                          Oil and Gas Liens, in each case which are not incurred in connection with the borrowing of money by the Company or any Restricted Subsidiary;

 

(12)                          Liens arising under this Indenture in favor of the Trustee for its own benefit and similar Liens in favor of other trustees, agents and representatives arising under instruments governing Indebtedness permitted to be incurred under this Indenture, provided, however, that such Liens are solely for the benefit of the trustees, agents or representatives in their capacities as such and not for the benefit of the holders of the Indebtedness;

 

(13)                          Liens (including put and call arrangements) on Capital Stock of (A) any Unrestricted Subsidiary that secure Indebtedness of such Unrestricted Subsidiary or (B) any

 

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other Person (including a joint venture) in which the Company or any Restricted Subsidiary owns any Capital Stock that is not a Restricted Subsidiary that secure Indebtedness of such other Person;

 

(14)                          any extension, renewal, refinancing or replacement, in whole or in part, of any Lien described in the foregoing clauses (1) and (3) through (13) and this clause (14) so long as the Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or under such written arrangements could secure) the original Indebtedness;

 

(15)                          Liens securing Parity Lien Debt incurred pursuant to clause (2) of the definition of “Permitted Debt” and Permitted Refinancing Indebtedness in respect thereof to the extent such Permitted Refinancing Indebtedness is Parity Lien Debt or Junior Lien Debt;

 

(16)                          any Lien securing Junior Lien Obligations under any Indebtedness incurred under sub-clause (B) of clause (1) of the definition of “Permitted Debt” and Permitted Refinancing Indebtedness in respect thereof to the extent such Permitted Refinancing Indebtedness is Junior Lien Debt;

 

(17)                          Liens securing Permitted Refinancing Indebtedness of the Company or any Guarantor to the extent such Permitted Refinancing Indebtedness was incurred to refinance Existing Unsecured Notes and constitutes Junior Lien Debt; and

 

(18)                          in addition to the items referred to in clauses (1) through (17) above, Liens of the Company and its Restricted Subsidiaries to secure Indebtedness and Permitted Refinancing Indebtedness in respect thereof in an aggregate amount at any time outstanding which does not exceed the greater of (x) $50.0 million and (y) 2.5% of Adjusted Consolidated Net Tangible Assets outstanding in the aggregate at the time of incurrence; provided, such aggregate principal amount shall not be deemed to be exceeded as a result of the incurrence of Permitted Refinancing Indebtedness.

 

If a Lien meets the criteria of more than one of the categories of Permitted Liens described in clauses (1) through (18) of this definition, the Company may classify, or later reclassify, such Lien in whole or in part in any manner that complies with this definition, including by allocation to more than one other type of Permitted Lien.

 

“Permitted Payment” has the meaning assigned to such term in Section 4.07(b).

 

“Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace (“refinance”) other Indebtedness of the Company or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

 

(1)                                 the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness being refinanced (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith);

 

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(2)                                 such Permitted Refinancing Indebtedness has a final maturity date (a) later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being refinanced or (b) later than 90 days after the final maturity date of the Notes;

 

(3)                                 if the Indebtedness being refinanced is subordinated in right of payment to the Notes or the Note Guarantees, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes or the Note Guarantees, as the case may be, on terms at least as favorable to the Holders as those contained in the documentation governing the Indebtedness being refinanced; and

 

(4)                                 such Indebtedness is incurred by either (i) the Company or (ii) the Restricted Subsidiary that is the obligor on the Indebtedness refinanced.

 

“Person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity, including a government or political subdivision or an agency or instrumentality thereof.

 

“Preferred Stock” means, with respect to any Person, any Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over the Capital Stock of any other class in such Person.

 

“principal” of any Indebtedness means the principal amount of such Indebtedness (or if such Indebtedness was issued with original issue discount, the face amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness), together with, unless the context otherwise indicates, any premium then payable on such Indebtedness.

 

“Priority Lien” means a Lien granted by the Company or any Guarantor in favor of the Priority Lien Collateral Agent, at any time, upon any Property of the Company or any Guarantor to secure Priority Lien Obligations.

 

“Priority Lien Collateral Agent” means the Credit Agreement Agent (or other Person designated by the Credit Agreement Agent), or if the Senior Credit Facility ceases to exist, the collateral agent or other representative of lenders or holders of Priority Lien Obligations designated pursuant to the terms of the Priority Lien Documents and the Intercreditor Agreement.

 

“Priority Lien Debt” means:

 

(1)                                 Indebtedness of the Company and the Guarantors under the Senior Credit Facility (including letters of credit (with outstanding letters of credit being deemed to have a principal amount equal to the stated amount thereof) and reimbursement obligations with respect thereto) that is subject to the Intercreditor Agreement and permitted to be incurred and secured under each applicable Secured Debt Document; and

 

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(2)                                 additional Indebtedness of the Company and the Guarantors under any other Credit Facility that is secured with the Senior Credit Facility by a Priority Lien that was permitted to be incurred and so secured under each applicable Secured Debt Document; provided that, in the case of any Indebtedness referred to in this clause (2), that:

 

(a)                                 on or before the date on which such Indebtedness is incurred by the Company and the Guarantors, such Indebtedness is designated by the Company, in an Officers’ Certificate delivered to the Priority Lien Collateral Agent and the Collateral Trustee, as “Priority Lien Debt” for the purposes of the Secured Debt Documents; provided that if such Series of Secured Debt is designated as “Priority Lien Debt,” it cannot also be designated as Parity Lien Debt or Junior Lien Debt (or any combination of the three);

 

(b)                                 the collateral agent or other representative with respect to such Indebtedness, the Priority Lien Collateral Agent, the Collateral Trustee, the Company, each applicable Guarantor have duly executed and delivered the Intercreditor Agreement (or a joinder to the Intercreditor Agreement or a new Intercreditor Agreement substantially similar to the Intercreditor Agreement, as in effect on the date of this Indenture, and in a form reasonably acceptable to each of the parties thereto); and

 

(c)                                  all other requirements set forth in the Intercreditor Agreement as to the confirmation, grant or perfection of the Priority Lien Collateral Agent’s Liens to secure such Indebtedness or Obligations in respect thereof are satisfied;

 

provided that all such Indebtedness (other than any DIP Financing that is permitted by the Intercreditor Agreement) is pari passu in right of payment, it being understood that there may be different tranches of Priority Lien Debt with different maturities and amortization profiles, but the principal amount of Indebtedness under all such tranches must in all other respects be pari passu in right of payment. Any such Indebtedness (other than any such DIP Financing) that is not consistent with the foregoing requirement for pari passu treatment in right of payment with the revolving credit loans under the Priority Lien Documents shall not constitute Priority Lien Debt.

 

“Priority Lien Documents” means the Senior Credit Facility and any other Credit Facility pursuant to which any Priority Lien Debt is incurred and the documents pursuant to which Priority Lien Obligations are granted.

 

“Priority Lien Obligations” means Priority Lien Debt and all other Obligations in respect of Priority Lien Debt, Hedging Obligations and Banking Services Obligations, in each case, that are secured by Priority Liens.

 

“Priority Lien Representative” means (1) the Credit Agreement Agent or (2) in the case of any other Series of Priority Lien Debt, the Trustee, agent or representative of the holders of such Series of Priority Lien Debt who maintains the transfer register for such Series of Priority Lien Debt and is appointed as a representative of the Priority Lien Debt (for purposes related to the administration of the Security Documents) pursuant to the credit agreement or other agreement governing such Series of Priority Lien Debt.

 

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“Production Payments” means, collectively, Dollar-Denominated Production Payments and Volumetric Production Payments.

 

“Production Payments and Reserve Sales” means the grant or transfer by the Company or a Restricted Subsidiary to any Person of a royalty, overriding royalty, net profits interest, Production Payment, partnership or other interest in oil and gas properties, reserves or the right to receive all or a portion of the production or the proceeds from the sale of production attributable to such properties where the holder of such interest has recourse solely to such properties, production or proceeds of production, subject to the obligation of the grantor or transferor to operate and maintain, or cause the subject interests to be operated and maintained, in a reasonably prudent manner or other customary standard or subject to the obligation of the grantor or transferor to indemnify for environmental, title or other matters customary in the Oil and Gas Business, including any such grants or transfers pursuant to incentive compensation programs on terms that are reasonably customary in the Oil and Gas Business for geologists, geophysicists and other providers of technical services to the Company or a Restricted Subsidiary.

 

“Property” means, with respect to any Person, any interest of such Person in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including cash, accounts, contract rights, Capital Stock and other securities issued by any other Person (but excluding Capital Stock or other securities issued by such first mentioned Person).

 

“Proved Reserves” means “Proved Reserves” as defined in the Definitions for Oil and Gas Reserves promulgated by the Society of Petroleum Engineers (or any generally recognized successor) as in effect at the time in question.

 

“Purchase Money Obligation” means any Indebtedness secured by a Lien on assets related to the business of the Company or any Restricted Subsidiary which are purchased or constructed by the Company or such Restricted Subsidiary at any time after the Issue Date; provided that:

 

(1)                                 the security agreement or conditional sales or other title retention contract pursuant to which the Lien on such assets is created (collectively a “Purchase Money Security Agreement”) shall be entered into within 90 days after the purchase or substantial completion of the construction of such assets and shall at all times be confined solely to the assets so purchased or acquired (together with any additions, accessions, and other related assets referred to in the last sentence of the definition of “Liens”),

 

(2)                                 at no time shall the aggregate principal amount of the outstanding Indebtedness secured thereby be increased, except in connection with the purchase of additions, improvements, and accessions thereto and except in respect of fees and other obligations in respect of such Indebtedness, and

 

(3)                                 (A) the aggregate outstanding principal amount of Indebtedness secured thereby (determined on a per asset basis in the case of any additions, improvements and accessions) shall not at the time such Purchase Money Security Agreement is entered into exceed 100% of the purchase price to the Company or the applicable Restricted Subsidiary of the assets subject

 

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thereto or (B) the Indebtedness secured thereby shall be with recourse solely to the assets so purchased or acquired subject to the last sentence of the definition of “Liens”).

 

“Qualified Capital Stock” of any Person means any and all Capital Stock of such Person other than Disqualified Stock.

 

“Register” has the meaning assigned to such term in Section 2.09(a).

 

“Registrar” means a Person engaged to maintain the Register.

 

“Regular Record Date” means, in respect of any Interest Payment Date, the May 15 or November 15 (whether or not a Business Day) immediately preceding such Interest Payment Date.

 

“Regulation S” means Regulation S under the Securities Act.

 

“Regulation S Certificate” means a certificate substantially in the form of Exhibit E hereto.

 

“Reporting Default” means a Default of the Company’s obligations under Section 4.19.

 

“Required Parity Lien Debtholders” means, at any time, the holders of a majority in aggregate principal amount of all Parity Lien Debt then outstanding, calculated in accordance with the provisions of Section 7.2 of the Collateral Trust Agreement. For purposes of this definition, Parity Lien Debt registered in the name of, or beneficially owned by, the Company or any Affiliate of the Company will be deemed not to be outstanding.

 

“Reserve Report” means a report setting forth, as of each December 31st or June 30th, the Proved Reserves attributable to the Oil and Gas Properties of the Company and the Restricted Subsidiaries, together with a projection of the rate of production and future net income, taxes, operating expenses and capital expenditures with respect thereto as of such date, in each case in the form delivered in accordance with the requirements of the Senior Credit Facility, or if there is no Senior Credit Facility requiring delivery of a Reserve Report, in form substantially consistent as determined in good faith by the Company with the form of Reserve Report required under the Senior Credit Facility as in effect on the Issue Date.

 

“Restricted Legend” means the legend set forth in Exhibit C.

 

“Restricted Payment” has the meaning assigned to such term in Section 4.07.

 

“Restricted Period” means the relevant 40-day distribution compliance period as defined in Regulation S.

 

“Restricted Subsidiary” of a Person means any Subsidiary of that Person that is not an Unrestricted Subsidiary.

 

“Revocation” has the meaning assigned to such term in Section 4.17(d).

 

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“Rule 144A” means Rule 144A under the Securities Act.

 

“Rule 144A Certificate” means (i) a certificate substantially in the form of Exhibit F hereto or (ii) a written certification addressed to the Company and the Trustee to the effect that the Person making such certification (x) is acquiring the applicable Note (or beneficial interest) for its own account or one or more accounts with respect to which it exercises sole investment discretion and that it and each such account is a qualified institutional buyer within the meaning of Rule 144A, (y) is aware that the transfer to it or exchange, as applicable, is being made in reliance upon the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A, and (z) acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A(d)(4) or has determined not to request such information.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

 

“Sale Leaseback Transaction” means, with respect to the Company or any of its Restricted Subsidiaries, any arrangement with any Person providing for the leasing by the Company or any of its Restricted Subsidiaries of any real property or equipment, acquired or placed into service more than 180 days prior to such arrangement, whereby such property has been or is to be sold or transferred by the Company or any of its Restricted Subsidiaries to such Person.

 

“SEC” 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 Indenture such Commission is not existing and performing the duties now assigned to it under the Securities Act and the Exchange Act then the body performing such duties at such time.

 

“Secured Debt” means Priority Lien Debt, Parity Lien Debt and Junior Lien Debt.

 

“Secured Debt Documents” means the Priority Lien Documents, the Parity Lien Documents and the Junior Lien Documents.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Security Agreement” means the Second Lien Security Agreement, dated as of the date hereof, among the Company, the Guarantors party thereto and the Collateral Trustee, on behalf of itself and the Secured Parties (as defined therein), as the same may be amended, supplemented or otherwise modified or replaced from time to time.

 

“Security Documents” means the Collateral Trust Agreement, each joinder agreement required by the Collateral Trust Agreement, the Security Agreement, and all other security agreements, pledge agreements, hypothecs, collateral assignments, Mortgages, deeds of trust, deeds to secure debt, collateral agency agreements, debentures, control agreements or other grants or transfers for security executed and delivered by the Company or any Guarantor creating (or purporting to create) a Parity Lien upon Collateral in favor of the Collateral Trustee (including, without limitation, the financing statements under the Uniform Commercial Code of the relevant state), in each case, as amended, modified, renewed, restated or replaced, in whole

 

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or in part, from time to time, in accordance with its terms and Section 7.1 of the Collateral Trust Agreement.

 

“Senior Credit Facility” means that certain Fourth Amended and Restated Credit Agreement, dated as of the Issue Date, by and among SandRidge Energy, Inc., Royal Bank of Canada, as Administrative Agent, Swing Line Lender and an L/C Issuer, and the other lenders party thereto, as such agreement, in whole or in part, in one or more instances, may be amended, restated, renewed, extended, substituted, refinanced, restructured, replaced, supplemented or otherwise modified from time to time (including, without limitation, any successive amendments, restatements, renewals, extensions, substitutions, refinancings, restructurings, replacements, supplementations or other modifications of the foregoing).

 

“Senior Unsecured Obligations” means senior Indebtedness that is not secured by a Lien.

 

“Series of Junior Lien Debt” means, severally, each issue or series of Junior Lien Debt for which a single transfer register is maintained.

 

“Series of Parity Lien Debt” means, severally, the Notes and each other issue or series of Parity Lien Debt for which a single transfer register is maintained.

 

“Series of Priority Lien Debt” means, severally, the Indebtedness outstanding under the Senior Credit Facility and any other Credit Facility that constitutes Priority Lien Debt.

 

“Series of Secured Debt” means each Series of Priority Lien Debt, each Series of Parity Lien Debt and each Series of Junior Lien Debt.

 

“Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC as in effect on the Issue Date.

 

“Stated Maturity” means (i) with respect to any Indebtedness, the date specified as the fixed date on which the final installment of principal of such Indebtedness is due and payable or (ii) with respect to any scheduled installment of principal of or interest on any Indebtedness, the date specified as the fixed date on which such installment is due and payable as set forth in the documentation governing such Indebtedness, not including any contingent obligation to repay, redeem or repurchase prior to the regularly scheduled date for payment.

 

“Subordinated Indebtedness” means any Indebtedness of the Company or any Guarantor which is subordinated in right of payment to the Notes or the Note Guarantee, as the case may be.

 

“Subsidiary” of a Person means:

 

(1)                                 any corporation more than 50% of the outstanding voting power of the Voting Stock of which is owned or controlled, directly or indirectly, by such Person or by one or more other Subsidiaries of such Person, or by such Person and one or more other Subsidiaries thereof, or

 

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(2)                                 any limited partnership of which such Person or any Subsidiary of such Person is a general partner, or

 

(3)                                 any other Person in which such Person, or one or more other Subsidiaries of such Person, or such Person and one or more other Subsidiaries, directly or indirectly, has more than 50% of the outstanding Capital Stock or has the power, by contract or otherwise, to direct or cause the direction of the policies, management and affairs thereof.

 

Unless otherwise specified, “Subsidiary” means a Subsidiary of the Company.

 

“Successor Parent” with respect to any Person means any other Person more than 50% of the total outstanding Voting Stock of which (measured by voting power rather than number of shares) is, at the time the first Person becomes a Subsidiary of such other Person, “beneficially owned” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to have beneficial ownership of all shares that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time) by one or more Persons that “beneficially owned” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to have beneficial ownership of all shares that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time) more than 50% of the total outstanding Voting Stock of the first Person (measured by voting power rather than number of shares) immediately prior to the first Person becoming a Subsidiary of such other Person.

 

“Supplemental Indenture” means a supplemental indenture substantially in the form of Exhibit B hereto.

 

“Surviving Entity” has the meaning specified in Section 5.01(a)(1).

 

“Surviving Guarantor Entity” has the meaning specified in Section 5.02(a)(1).

 

“Suspended Covenants” has the meaning assigned to such term in Section 4.21(a)(2).

 

“Suspension Period” has the meaning assigned to such term in Section 4.21(a)(2).

 

“Trade Accounts Payable” of any Person means accounts payable or other obligations of that Person or any Restricted Subsidiary to trade creditors created or assumed by the Person or such Restricted Subsidiary in the ordinary course of business in connection with the obtaining of goods or services.

 

“Treasury Management Arrangement” means any agreement or other arrangement governing the provision of treasury or cash management services, including deposit accounts, overdraft, credit or debit card, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services.

 

“Trustee” means the party named as such in the first paragraph of this Indenture or any successor trustee under this Indenture pursuant to Article 7.

 

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“Trust Indenture Act” and “TIA” means the Trust Indenture Act of 1939, as amended.

 

“U.S. Global Note” means a Global Note that bears the Restricted Legend representing Notes issued and sold pursuant to Rule 144A.

 

“U.S. Government Obligations” means obligations issued or directly and fully guaranteed or insured by the United States of America or by any agent or instrumentality thereof; provided that the full faith and credit of the United States of America is pledged in support thereof.

 

“Unrestricted Subsidiary” means any Subsidiary of the Company that at the time of determination has previously been designated, and continues to be, an Unrestricted Subsidiary in accordance with Section 4.17 and any Subsidiary thereof.

 

“Unrestricted Subsidiary Indebtedness” of any Unrestricted Subsidiary means Indebtedness of such Unrestricted Subsidiary:

 

(1)                                 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 to, such Indebtedness), except Guaranteed Debt of the Company or any Restricted Subsidiary to any Affiliate of the Company, in which case (unless the incurrence of such Guaranteed Debt resulted in a Restricted Payment at the time of incurrence) the Company shall be deemed to have made a Restricted Payment equal to the principal amount of any such Indebtedness to the extent guaranteed at the time such Affiliate is designated an Unrestricted Subsidiary; and

 

(2)         which, upon the occurrence of a default with respect thereto, does not result in, or permit any holder of any Indebtedness of the Company or any Restricted Subsidiary to declare, a default on such Indebtedness of the Company or any Restricted Subsidiary or cause the payment thereof to be accelerated or payable prior to its Stated Maturity; provided that notwithstanding the foregoing, any Unrestricted Subsidiary may Guarantee the Notes or any Credit Facility.

 

“Volumetric Production Payment” means a production payment that is recorded as a sale in accordance with GAAP, whether or not the sale price must be recorded as deferred revenue, together with all undertakings and obligations in connection therewith.

 

“Voting Stock” of a Person means Capital Stock of such Person of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time Capital Stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

 

“Weighted Average Life to Maturity” means, as of the date of determination with respect to any Indebtedness, the quotient obtained by dividing (1) the sum of the products of (a) the number of years from the date of determination to the date or dates of each successive scheduled principal payment and (b) the amount of each such principal payment by (2) the sum of all such principal payments.

 

38

 

Section 1.02.  Rules of Construction.

 

(a)                                 Unless the context otherwise requires or except as otherwise expressly provided:

 

(1)                                 the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined;

 

(2)                                 whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms;

 

(3)                                 the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” unless such phrase is already present in the text;

 

(4)                                 the word “will” shall be construed to have the same meaning and effect as the word “shall”;

 

(5)                                 any reference herein to any Person shall be construed to include such Person’s successors and assigns;

 

(6)                                 the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights;

 

(7)                                 an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(8)                                 “herein,” “hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Section, Article or other subdivision;

 

(9)                                 all references to Sections or Articles or Exhibits refer to Sections or Articles or Exhibits of or to this Indenture unless otherwise indicated;

 

(10)                          references to agreements or instruments, or to statutes or regulations, are to such agreements or instruments, or statutes or regulations, as amended from time to time (or to successor statutes and regulations); and

 

(11)                          in the event that a transaction meets the criteria of more than one category of permitted transactions or listed exceptions the Company may classify such transaction as it, in its sole discretion, determines.

 

(12)                          In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including.”

 

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(13)         As used herein, the term “proved reserves” has the meaning given such term from time to time and at the time in question by the Society of Petroleum Engineers of the American Institute of Mining Engineers.

 

(14)         Any financial ratios required to be calculated pursuant to this Indenture shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

ARTICLE 2
 THE NOTES

 

Section 2.01.         Form, Dating and Denominations; Legends.

 

(a)           The Notes and the Trustee’s certificate of authentication will be substantially in the form attached as Exhibit A. The terms and provisions contained in the forms of the Notes annexed as Exhibit A constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. To the extent any provision of any Note or any Guarantee conflicts with the express provisions of this Indenture, the provisions of this Indenture (to the extent permitted by law) shall govern and be controlling. The Notes may have notations, legends or endorsements required by law, rules of or agreements with national securities exchanges to which the Company is subject, or usage. Each Note will be dated the date of its authentication. The Notes will be issuable in denominations of $1,000 in principal amount and any multiple of $1,000 in excess thereof.

 

(b)           (1) Except as otherwise provided in paragraph (c), Section 2.09(b)(4) or Section 2.10(b)(3), (b)(5), or (c), each Initial Note will bear the Restricted Legend.

 

(2)           Each Global Note, whether or not an Initial Note or Additional Note, will bear the DTC Legend.

 

(3)           Initial Notes will be issued in the form of Global Notes only, except as provided in Section 2.09(b)(4).

 

(c)           (1) If the Company determines (upon the advice of counsel and such other certifications and evidence as the Company may reasonably require) that a Note is eligible for resale pursuant to Rule 144(d) under the Securities Act (or a successor provision) and that the Restricted Legend is no longer necessary or appropriate in order to ensure that subsequent transfers of the Note (or a beneficial interest therein) are effected in compliance with the Securities Act, or

 

(2)           after any Note bearing the Restricted Legend is sold pursuant to an effective registration statement under the Securities Act,

 

the Company may instruct the Trustee to cancel the Note and issue to the Holder thereof (or to its transferee) a new Note of like tenor and amount, registered in the name of the

 

40

 

Holder thereof (or its transferee), that does not bear the Restricted Legend, and the Trustee will comply with such instruction.

 

(d)           By its acceptance of any Note bearing the Restricted Legend (or any beneficial interest in such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the restrictions on transfer of such Note (and any such beneficial interest) set forth in this Indenture and in the Restricted Legend and agrees that it will transfer such Note (and any such beneficial interest) only in accordance with this Indenture and such legend.

 

Section 2.02.         Execution and Authentication; Additional Notes.

 

(a)           An Officer shall execute the Notes for the Company by facsimile or manual signature in the name and on behalf of the Company. If an Officer whose signature is on a Note no longer holds that office at the time the Note is authenticated, the Note will still be valid.

 

(b)           A Note will not be valid until the Trustee manually signs the certificate of authentication on the Note, with the signature conclusive evidence that the Note has been authenticated under this Indenture.

 

(c)           At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication. The Trustee will authenticate and deliver

 

(i)            Initial Notes for original issue in the aggregate principal amount not to exceed $1,250,000,000, and

 

(ii)           Additional Notes from time to time for original issue in aggregate principal amounts specified,

 

after receipt by the Trustee of an Officers’ Certificate specifying

 

(1)           the amount of Notes to be authenticated and the date on which the Notes are to be authenticated,

 

(2)           whether the Notes are to be Initial Notes or Additional Notes,

 

(3)           in the case of Additional Notes, that the issuance of such Notes does not contravene any provision of Article 4,

 

(4)           whether the Notes are to be issued as one or more Global Notes or Certificated Notes, and

 

(5)           other information the Company may determine to include or the Trustee may reasonably request.

 

41

 

Section 2.03.         Registrar, Paying Agent and Authenticating Agent; Paying Agent to Hold Money in Trust.

 

(a)           The Company may appoint one or more Registrars and one or more Paying Agents, and the Trustee may appoint an Authenticating Agent, in which case each reference in this Indenture to the Trustee in respect of the obligations of the Trustee to be performed by that Agent will be deemed to be references to the Agent. The Company may act as Registrar or (except for purposes of Article 8) Paying Agent. In each case the Company and the Trustee will enter into an appropriate agreement with the Agent implementing the provisions of this Indenture relating to the obligations of the Trustee to be performed by the Agent and the related rights. The Company initially appoints the Trustee as Registrar and Paying Agent.

 

(b)           The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent for the payment of principal of and interest on the Notes and will promptly notify the Trustee of any default by the Company in making any such payment. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and account for any funds disbursed, and the Trustee may at any time during the continuance of any payment default, upon written request to a Paying Agent, require the Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. Upon doing so, the Paying Agent will have no further liability for the money so paid over to the Trustee.

 

Section 2.04.         Replacement Notes. If a mutilated Note is surrendered to the Trustee or if a Holder claims that its Note has been lost, destroyed or wrongfully taken, the Company will issue and the Trustee will authenticate a replacement Note of like terms, tenor and principal amount and bearing a number not contemporaneously outstanding. Every replacement Note is an additional obligation of the Company and entitled to the benefits of this Indenture. If required by the Trustee or the Company, an indemnity must be furnished that is sufficient in the judgment of both the Trustee and the Company to protect the Company and the Trustee from any loss they may suffer if a Note is replaced. The Company may charge the Holder for the expenses of the Company and the Trustee in replacing a Note. In case the mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Company in its discretion may pay the Note instead of issuing a replacement Note.

 

Section 2.05.         Outstanding Notes.

 

(a)           Notes outstanding at any time are all Notes that have been authenticated by the Trustee except for Notes cancelled by the Trustee or delivered to it for cancellation;

 

(b)           any Note which has been replaced pursuant to Section 2.04 unless and until the Trustee and the Company receive proof satisfactory to them that the replaced Note is held by a “protected purchaser” (as defined in the Uniform Commercial Code as in effect in the State of New York); and

 

(c)           on or after the maturity date or any redemption date or date for purchase of any Notes pursuant to an Offer to Purchase, those Notes payable or to be redeemed or purchased on that date for which the Trustee (or Paying Agent, other than the Company or an Affiliate of the Company) holds money sufficient to pay all amounts then due.

 

42

 

(d)           A Note does not cease to be outstanding because the Company or one of its Affiliates holds the Note, provided that in determining whether the Holders of the requisite principal amount of the outstanding Notes have given or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder, Notes owned by the Company or any Affiliate of the Company will be disregarded and deemed not to be outstanding, (it being understood that in determining whether the Trustee is protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Notes which the Trustee knows to be so owned will be so disregarded).

 

Section 2.06.         Temporary Notes. Until definitive Notes are ready for delivery, the Company may prepare and the Trustee will authenticate temporary Notes. Temporary Notes will be substantially in the form of definitive Notes but may have insertions, substitutions, omissions and other variations determined to be appropriate by the Officer executing the temporary Notes, as evidenced by the execution of the temporary Notes. If temporary Notes are issued, the Company will cause definitive Notes to be prepared without unreasonable delay. After the preparation of definitive Notes, the temporary Notes will be exchangeable for definitive Notes upon surrender of the temporary Notes at the office or agency of the Company designated for such purpose pursuant to Section 4.02, without charge to the Holder. Upon surrender for cancellation of any temporary Notes the Company will execute and the Trustee will authenticate and deliver in exchange therefor a like principal amount of definitive Notes of authorized denominations and like terms and tenor. Until so exchanged, the temporary Notes will be entitled to the same benefits under this Indenture as definitive Notes.

 

Section 2.07.         Cancellation. The Company at any time may deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Notes previously authenticated hereunder which the Company has not issued and sold. Any Registrar or the Paying Agent will forward to the Trustee any Notes surrendered to it for transfer, exchange or payment. The Trustee will cancel all Notes surrendered for transfer, exchange, payment or cancellation and dispose of them in accordance with its normal procedures or the written instructions of the Company. The Company may not issue new Notes to replace Notes it has paid in full or delivered to the Trustee for cancellation.

 

Section 2.08.         CUSIP and ISIN Numbers. The Company in issuing the Notes may use “CUSIP” and “ISIN” numbers, and the Trustee will use CUSIP numbers or ISIN numbers in notices of redemption or exchange or in Offers to Purchase as a convenience to Holders, the notice to state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption or exchange or Offer to Purchase. The Company will promptly notify the Trustee of any change in the CUSIP or ISIN numbers.

 

Section 2.09.         Registration, Transfer and Exchange.

 

(a)           The Notes will be issued in registered form only, without coupons, and the Company shall cause the Trustee to maintain a register (the “Register”) of the Notes, for registering the record ownership of the Notes by the Holders and transfers and exchanges of the Notes.

 

43

 

(b)           (1)           Each Global Note will be registered in the name of the Depositary or its nominee and, so long as DTC is serving as the Depositary thereof, will bear the DTC Legend.

 

(2)           Each Global Note will be delivered to the Trustee as custodian for the Depositary. Transfers of a Global Note (but not a beneficial interest therein) will be limited to transfers thereof in whole, but not in part, to the Depositary, its successors or their respective nominees, except (1) as set forth in Section 2.09(b)(4) and (2) if approved by the Company in its reasonable discretion, transfers of portions thereof in the form of Certificated Notes may be made upon request of an Agent Member (for itself or on behalf of a beneficial owner) by written notice given to the Trustee by or on behalf of the Depositary in accordance with customary procedures of the Depositary and in compliance with this Section 2.09 and Section 2.10.

 

(3)           Agent Members will have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary, and the Depositary may be treated by the Company, any Guarantor, the Trustee and any agent of the Company, any Guarantor or the Trustee as the absolute owner and Holder of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, the Depositary or its nominee may grant proxies and otherwise authorize any Person (including any Agent Member and any Person that holds a beneficial interest in a Global Note through an Agent Member) to take any action which a Holder is entitled to take under this Indenture or the Notes, and nothing herein will impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any security.

 

(4)           If (x) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for a Global Note and a successor Depositary is not appointed by the Company within 90 days of the notice or (y) an Event of Default has occurred and is continuing and the Trustee has received a request from the Depositary, the Trustee will promptly exchange each beneficial interest in a Global Note for one or more Certificated Notes in authorized denominations and of like terms and tenor having an equal aggregate principal amount registered in the name of the owner of such beneficial interest, as identified to the Trustee by the Depositary, and thereupon such Global Note will be deemed canceled. If such Note does not bear the Restricted Legend, then the Certificated Notes issued in exchange therefor will not bear the Restricted Legend. If such Note bears the Restricted Legend, then the Certificated Notes issued in exchange therefor will bear the Restricted Legend.

 

(c)           Each Certificated Note will be registered in the name of the Holder thereof or its nominee.

 

(d)           A Holder may transfer a Note (or a beneficial interest therein) to another Person or exchange a Note (or a beneficial interest therein) for another Note or Notes of any authorized denomination and of like terms and tenor by presenting to the Trustee a written request therefor stating the name of the proposed transferee or requesting such an exchange, accompanied by any certification, opinion or other document required by Section 2.10. The Trustee will promptly register any transfer or exchange that meets the requirements of this Section 2.09 by noting the same in the Register; provided that:

 

44

 

(x)           no transfer or exchange will be effective until it is registered in the Register and

 

(y)           the Trustee will not be required (i) to issue, register the transfer of or exchange any Note for a period of 15 days before a selection of Notes of like terms and tenor to be redeemed or purchased pursuant to an Offer to Purchase, (ii) to register the transfer of or exchange any Note so selected for redemption or purchase in whole or in part, except, in the case of a partial redemption or purchase, that portion of any Note not being redeemed or purchased, or (iii) if a redemption or a purchase pursuant to an Offer to Purchase is to occur after a Regular Record Date but on or before the corresponding Interest Payment Date, to register the transfer of or exchange any Note on or after the Regular Record Date and before the date of redemption or purchase. Prior to the registration of any transfer, the Company, each Guarantor, the Trustee and their agents will treat the Person in whose name the Note is registered as the owner and Holder thereof for all purposes (whether or not the Note is overdue), and will not be affected by notice to the contrary.

 

From time to time the Company will execute and the Trustee will authenticate additional Notes as necessary in order to permit the registration of a transfer or exchange in accordance with this Section 2.09.

 

No service charge will be imposed in connection with any transfer or exchange of any Note, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than a transfer tax or other similar governmental charge payable upon exchange pursuant to Section 2.09(b)(4)).

 

(e)           (1)           Global Note to Global Note. If a beneficial interest in a Global Note is transferred or exchanged for a beneficial interest in another Global Note, the Trustee will (x) record a decrease in the principal amount of the Global Note being transferred or exchanged equal to the principal amount of such transfer or exchange and (y) record a like increase in the principal amount of the other Global Note. Any beneficial interest in one Global Note that is transferred to a Person who takes delivery in the form of an interest in another Global Note, or exchanged for an interest in another Global Note, will, upon transfer or exchange, cease to be an interest in such Global Note and become an interest in the other Global Note and, accordingly, will thereafter be subject to all transfer and exchange restrictions, if any, and other procedures applicable to beneficial interests in such other Global Note for as long as it remains such an interest.

 

(2)           Global Note to Certificated Note. If a beneficial interest in a Global Note is transferred or exchanged for a Certificated Note, the Trustee will (x) record a decrease in the principal amount of such Global Note equal to the principal amount of such transfer or exchange and (y) deliver one or more new Certificated Notes in authorized denominations and of like terms and tenor having an equal aggregate principal amount to the transferee (in the case of a transfer) or the owner of such beneficial interest (in the case of an exchange), registered in the name of such transferee or owner, as applicable.

 

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(3)           Certificated Note to Global Note. If a Certificated Note is transferred or exchanged for a beneficial interest in a Global Note, the Trustee will (x) cancel such Certificated Note, (y) record an increase in the principal amount of such Global Note equal to the principal amount of such transfer or exchange and (z) in the event that such transfer or exchange involves less than the entire principal amount of the canceled Certificated Note, deliver to the Holder thereof one or more new Certificated Notes in authorized denominations and of like terms and tenor having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Certificated Note, registered in the name of the Holder thereof.

 

(4)           Certificated Note to Certificated Note. If a Certificated Note is transferred or exchanged for another Certificated Note, the Trustee will (x) cancel the Certificated Note being transferred or exchanged, (y) deliver one or more new Certificated Notes in authorized denominations and of like terms and tenor having an aggregate principal amount equal to the principal amount of such transfer or exchange to the transferee (in the case of a transfer) or the Holder of the canceled Certificated Note (in the case of an exchange), registered in the name of such transferee or Holder, as applicable, and (z) if such transfer or exchange involves less than the entire principal amount of the canceled Certificated Note, deliver to the Holder thereof one or more Certificated Notes in authorized denominations and of like terms and tenor having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Certificated Note, registered in the name of the Holder thereof.

 

Section 2.10.         Restrictions on Transfer and Exchange.

 

(a)           The transfer or exchange of any Note (or a beneficial interest therein) may only be made in accordance with this Section 2.10 and Section 2.09 and, in the case of a Global Note (or a beneficial interest therein), the applicable rules and procedures of the Depositary. The Trustee shall refuse to register any requested transfer or exchange that does not comply with the preceding sentence.

 

(b)           Subject to paragraph (c), the transfer or exchange of any Note (or a beneficial interest therein) of the type set forth in column A below for a Note (or a beneficial interest therein) of the type set forth opposite in column B below may only be made in compliance with the certification requirements (if any) described in the clause of this paragraph set forth opposite in column C below.

 

	
A
    	
 
    	
B
    	
 
    	
C
    
	
U.S. Global Note
    	
 
    	
U.S. Global Note
    	
 
    	
(1)
    
	
U.S. Global Note
    	
 
    	
Offshore Global Note
    	
 
    	
(2)
    
	
U.S. Global Note
    	
 
    	
Certificated Note
    	
 
    	
(3)
    
	
Offshore Global Note
    	
 
    	
U.S. Global Note
    	
 
    	
(4)
    
	
Offshore Global Note
    	
 
    	
Offshore Global Note
    	
 
    	
(1)
    
	
Offshore Global Note
    	
 
    	
Certificated Note
    	
 
    	
(5)
    
	
Certificated Note
    	
 
    	
U.S. Global Note
    	
 
    	
(4)
    
	
Certificated Note
    	
 
    	
Offshore Global Note
    	
 
    	
(2)
    
	
Certificated Note
    	
 
    	
Certificated Note
    	
 
    	
(3)
    

 

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(1)           No certification is required.

 

(2)           The Person requesting the transfer or exchange must deliver or cause to be delivered to the Trustee a duly completed Regulation S Certificate; provided that if the requested transfer or exchange is made by the Holder of a Certificated Note that does not bear the Restricted Legend, then no certification is required.

 

(3)           The Person requesting the transfer or exchange must deliver or cause to be delivered to the Trustee (x) a duly completed Rule 144A Certificate, (y) a duly completed Regulation S Certificate or (z) a duly completed Institutional Accredited Investor Certificate, and/or an Opinion of Counsel and such other certifications and evidence as the Company may reasonably require in order to determine that the proposed transfer or exchange is being made in compliance with the Securities Act and any applicable securities laws of any state of the United States; provided that if the requested transfer or exchange is made by the Holder of a Certificated Note that does not bear the Restricted Legend, then no certification is required. In the event that (i) the requested transfer or exchange takes place after the Restricted Period and a duly completed Regulation S Certificate is delivered to the Trustee or (ii) a Certificated Note that does not bear the Restricted Legend is surrendered for transfer or exchange, upon transfer or exchange the Trustee will deliver a Certificated Note that does not bear the Restricted Legend.

 

(4)           The Person requesting the transfer or exchange must deliver or cause to be delivered to the Trustee a duly completed Rule 144A Certificate.

 

(5)           If the requested transfer or exchange occurs during the Restricted Period and involves a beneficial interest in an Offshore Global Note, the Person requesting the transfer must deliver or cause to be delivered to the Trustee (x) a duly completed Rule 144A Certificate or (y) a duly completed Institutional Accredited Investor Certificate, and/or an Opinion of Counsel and such other certifications and evidence as the Company may reasonably require in order to determine that the proposed transfer is being made in compliance with the Securities Act and any applicable securities laws of any state of the United States. If the requested transfer or exchange involves a beneficial interest in an Offshore Global Note but does not occur during the Restricted Period, no certification is required and the Trustee will deliver a Certificated Note that does not bear the Restricted Legend.

 

(c)           No certification is required in connection with any transfer or exchange of any Note (or a beneficial interest therein):

 

(1)           after such Note is eligible for resale pursuant to Rule 144(d) under the Securities Act (or a successor provision); provided that the Company has provided the Trustee with an Officers’ Certificate to that effect, and the Company may require from any Person requesting a transfer or exchange in reliance upon this clause (c) an opinion of counsel and any other reasonable certifications and evidence in order to support such certificate; or

 

(2)           sold pursuant to an effective registration statement.

 

Any Certificated Note delivered in reliance upon this paragraph will not bear the Restricted Legend.

 

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(d)           The Trustee will retain copies of all certificates, opinions and other documents received in connection with the transfer or exchange of a Note (or a beneficial interest therein), and the Company will have the right to inspect and make copies thereof at any reasonable time upon written notice to the Trustee.

 

ARTICLE 3
 REDEMPTION; OFFER TO PURCHASE

 

Section 3.01.         Optional Redemption. The Notes may be redeemed as set forth in Section 4 of the form of Notes and Section 4.13(c) of this Indenture.

 

Section 3.02.         [Reserved].

 

Section 3.03.         Method and Effect of Redemption.

 

(a)           If the Company elects to redeem Notes, it must notify the Trustee of the redemption date and the principal amount of Notes to be redeemed by delivering an Officers’ Certificate at least 10 days before the notice of redemption required pursuant to this Section 3.03(a) is sent to Holders (unless a shorter period is satisfactory to the Trustee). If fewer than all of the Notes are being redeemed, the Officers’ Certificate must also specify a record date not less than 15 days after the date the notice of redemption is sent to Holders, and the Trustee will select the Notes to be redeemed pro rata, by lot or by any other method the Trustee in its sole discretion deems fair and appropriate (or, in the case of Notes represented by Global Notes, in such manner as DTC may require), in denominations of $1,000 principal amount and multiples thereof. The Trustee will notify the Company promptly of the Notes or portions of Notes to be called for redemption. Notice of redemption must be sent by the Company or at the Company’s request, by the Trustee in the name and at the expense of the Company, to Holders whose Notes are to be redeemed at least 15 days but not more than 60 days before the redemption date, except that a redemption notice may be sent more than 60 days prior to a redemption date if it is issued in connection with a discharge of the Company’s obligations under the Notes and this Indenture pursuant to Section 8.01 or a defeasance pursuant to Section 8.02 or 8.03.

 

(b)           The notice of redemption will identify the Notes to be redeemed and will include or state the following:

 

(1)           the redemption date;

 

(2)           the redemption price, if then determinable, and otherwise the method of determining the redemption price;

 

(3)           the name and address of the Paying Agent where Notes are to be surrendered for redemption;

 

(4)           Notes called for redemption must be so surrendered in order to collect the redemption price;

 

(5)           if such redemption or purchase is subject to satisfaction of one or more conditions precedent, such notice shall describe each such condition, and if applicable,

 

48

 

shall state that, in the Company’s discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption or purchase may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date as so delayed, or such notice may be rescinded at any time in the Company’s discretion if in the good faith judgment of the Company any or all of such conditions will not be satisfied;

 

(6)           subject to any condition precedent contained in such notice, on the redemption date the redemption price will become due and payable on Notes called for redemption, and interest on Notes called for redemption will cease to accrue on and after the redemption date;

 

(7)           if fewer than all the outstanding Notes are to be redeemed, the identification and principal amounts of the particular Notes to be redeemed;

 

(8)           if any Note is redeemed in part, on and after the redemption date, upon surrender of such Note, new Notes of like terms and tenor equal in principal amount to the unredeemed portion will be issued;

 

(9)           that, unless the Company defaults in making such redemption payment, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date;

 

(10)         if any Note contains a CUSIP or ISIN number, no representation is being made as to the correctness of the CUSIP or ISIN number either as printed on the Notes or as contained in the notice of redemption and that the Holder should rely only on the other identification numbers printed on the Notes; and

 

(11)         that payment of the redemption price and performance of the Company’s obligations with respect to such redemption may be performed by another Person.

 

(c)           Once notice of redemption is sent to the Holders, Notes called for redemption become due and payable at the redemption price on the redemption date, subject to any condition precedent contained in such notice, together with interest accrued thereon to the redemption date, and upon surrender of the Notes called for redemption, the Company shall redeem such Notes at the redemption price, together with interest accrued thereon to the redemption date. Commencing on the redemption date, if funds are deposited by the Company to pay the redemption price for the Notes as provided herein, together with interest accrued thereon to the redemption date, the Notes redeemed will cease to accrue interest. Upon surrender of any Note redeemed in part, the Holder will receive a new Note of like terms and tenor equal in principal amount to the unredeemed portion of the surrendered Note. The Trustee shall notify the Registrar of the issuance of such new Note.

 

Section 3.04.         Offer to Purchase.

 

(a)           An “Offer to Purchase” means an offer by the Company to purchase Notes as required by this Indenture. An Offer to Purchase must be made by written offer (the “offer”) sent to the Holders. The Company will notify the Trustee at least 15 days (or such

 

49

 

shorter period as is acceptable to the Trustee) prior to sending the offer to Holders of its obligation to make an Offer to Purchase, and the offer will be sent by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company.

 

(b)           The offer must include or state the following as to the terms of the Offer to Purchase:

 

(1)           the provision of this Indenture pursuant to which the Offer to Purchase is being made;

 

(2)           the aggregate principal amount of the outstanding Notes offered to be purchased by the Company pursuant to the Offer to Purchase (including, if less than 100%, the manner by which such amount has been determined pursuant to this Indenture) (the “purchase amount”);

 

(3)           the purchase price;

 

(4)           an expiration date (the “expiration date”) not less than 30 days or more than 60 days after the date of the offer, and a settlement date for purchase (the “purchase date”) not more than five Business Days after the expiration date;

 

(5)           a Holder may tender all or any portion of its Notes, subject to the requirement that any portion of a Note tendered must be in a multiple of $1,000 principal amount;

 

(6)           the place or places where Notes are to be surrendered for tender pursuant to the Offer to Purchase;

 

(7)           each Holder electing to tender a Note pursuant to the offer will be required to surrender such Note at the place or places specified in the offer prior to the close of business on the expiration date (any such Certificated Note being, if the Company or the Trustee so requires, duly endorsed or accompanied by a duly executed written instrument of transfer);

 

(8)           interest on any Note not tendered, or tendered but not purchased by the Company pursuant to the Offer to Purchase, will continue to accrue;

 

(9)           on the purchase date the purchase price will become due and payable on each Note accepted for purchase, together with interest accrued thereon to the purchase date, and interest on Notes purchased will cease to accrue on and after the purchase date;

 

(10)         Holders are entitled to withdraw Notes tendered by giving notice, which must be received by the Company or the Trustee not later than the close of business on the expiration date, setting forth the name of the Holder, the principal amount of the tendered Notes, the certificate number of any tendered Certificated Notes and a statement that the Holder is withdrawing all or a portion of the tender;

 

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(11)         (i) if Notes in an aggregate principal amount less than or equal to the amount of such Notes being purchased pursuant to the Offer to Purchase are duly tendered and not withdrawn, the Company will purchase all such Notes, and (ii) if Notes in an aggregate principal amount in excess of the amount of such Notes being purchased pursuant to the Offer to Purchase are duly tendered and not withdrawn, the Company will purchase Notes having an aggregate principal amount equal to the purchase amount on a pro rata basis, with adjustments so that only Notes in multiples of $1,000 principal amount will be purchased;

 

(12)         if any Note is purchased in part, new Notes equal in principal amount to the unpurchased portion of the Note will be issued; and

 

(13)         if any Note contains a CUSIP or ISIN number, no representation is being made as to the correctness of the CUSIP or ISIN number either as printed on the Notes or as contained in the offer and that the Holder should rely only on the other identification numbers printed on the Notes.

 

(c)           Prior to the purchase date, the Company will accept tendered Notes for purchase as required by the Offer to Purchase and deliver to the Trustee all Notes so accepted together with an Officers’ Certificate specifying which Notes have been accepted for purchase. On the purchase date the purchase price will become due and payable on each Note accepted for purchase, together with interest accrued thereon to the purchase date, and interest on Notes purchased will cease to accrue on and after the purchase date. The Trustee will promptly return to Holders any Notes not accepted for purchase and send to Holders new Notes of like terms and tenor equal in principal amount to any unpurchased portion of any Notes accepted for purchase in part.

 

(d)           The Company will comply with Rule 14e-1 under the Exchange Act and all other applicable laws in making any Offer to Purchase, and the above procedures will be deemed modified as necessary to permit such compliance.

 

(e)           The Company will timely repay Indebtedness or obtain consents as necessary under, or terminate, any agreements or instruments that would otherwise prohibit an Offer to Purchase required to be made pursuant to this Indenture.

 

ARTICLE 4
 COVENANTS

 

Section 4.01.         Payment of Notes.

 

(a)           The Company agrees to pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and this Indenture. Not later than 11:00 a.m. (New York City time) on the due date of any principal of or interest on any Notes, or any redemption or purchase price of the Notes, the Company will deposit with the Trustee (or Paying Agent) money in immediately available funds sufficient to pay such amounts, provided that if the Company or any Affiliate of the Company is acting as Paying Agent, it will, on or before each due date, segregate and hold in a separate trust fund for the benefit of the Holders a sum of money sufficient to pay such amounts until paid to such Holders or otherwise disposed of as

 

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provided in this Indenture. In each case the Company will promptly notify the Trustee of its compliance with this paragraph.

 

(b)           An installment of principal or interest will be considered paid on the date due if the Trustee (or Paying Agent, other than the Company or any Affiliate of the Company) holds by 11:00 a.m. (New York City time) on that date money designated for and sufficient to pay the installment. If the Company or any Affiliate of the Company acts as Paying Agent, an installment of principal or interest will be considered paid on the due date only if paid to the Holders.

 

(c)           The Company agrees to pay interest on overdue principal, and, in certain circumstances and to the extent lawful, overdue installments of interest at the rate per annum specified in the Notes.

 

(d)           Payments in respect of the Notes represented by the Global Notes are to be made by wire transfer of immediately available funds to the accounts specified by the Holders of the Global Notes. With respect to Certificated Notes, the Company will make all payments by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each Holder’s registered address.

 

Section 4.02.         Maintenance of Office or Agency. The Company will maintain in the continental United States, an office or agency where Notes may be surrendered for registration of transfer or exchange or for presentation for payment and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company hereby initially designates the Corporate Trust Office of the Trustee as such office of the Company. The Company will 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 fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served to the Trustee.

 

The Company may also from time to time designate one or more other offices or agencies where the Notes may be surrendered or presented for any of such purposes and may from time to time rescind such designations. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

Section 4.03.         Existence. The Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence and the existence of each of its Restricted Subsidiaries in accordance with their respective organizational documents, and the material rights, licenses and franchises of the Company and each Restricted Subsidiary; provided that the Company is not required to preserve any such right, license or franchise, or the existence of any Restricted Subsidiary, if the maintenance or preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries taken as a whole; and provided, further, that this Section 4.03 does not prohibit any transaction otherwise permitted by Section 4.14 or Article 5.

 

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Section 4.04.         Payment of Obligations. The Company will pay or discharge, and cause each of its Restricted Subsidiaries to pay or discharge as the same shall become due and payable (i) all material tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Company or such Restricted Subsidiary and (ii) all material lawful claims which, if unpaid, would by law become a Lien upon the property of the Company or any Restricted Subsidiary.

 

Section 4.05.         Maintenance of Properties and Insurance.

 

(a)           The Company will cause all properties used or useful in the conduct of its business or the business of any of its Restricted Subsidiaries to be maintained and kept in good condition, repair and working order as in the judgment of the Company may be necessary so that the business of the Company and its Restricted Subsidiaries may be properly and advantageously conducted at all times; provided that nothing in this Section 4.05 prevents the Company or any Restricted Subsidiary from discontinuing the use, operation or maintenance of any of such properties or disposing of any of them, if such discontinuance or disposal is, in the judgment of the Company, desirable in the conduct of the business of the Company and its Restricted Subsidiaries taken as a whole.

 

(b)           The Company will maintain or cause to be maintained (at its own expense), for itself and its Restricted Subsidiaries, insurance with financially sound and reputable insurance companies, in such amounts, with such limitations or deductibles, against such risks, and in such form as is customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations.

 

Section 4.06.         Limitation on Indebtedness and Disqualified Stock.

 

(a)           The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.

 

(b)           Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):

 

(1)           Indebtedness of the Company or any Guarantor (whether as borrowers or guarantors):

 

(A)          with respect to Priority Lien Debt or Parity Lien Debt incurred under one or more Credit Facilities pursuant to this clause 1(A), up to an aggregate principal amount (with outstanding letters of credit being deemed to have a principal amount equal to the stated amount

 

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thereof) (together with the aggregate principal amount of all other such Indebtedness at any time outstanding pursuant to this clause (1)(A)) not to exceed the greater of (x) $950.0 million, (y) the Borrowing Base in effect at the time of incurrence if incurred under the Senior Credit Facility and (z) 30.0% of Modified ACNTA as of the date of such incurrence, and

 

(B)          with respect to Indebtedness that does not constitute Priority Lien Debt or Parity Lien Debt incurred pursuant to this clause 1(B), up to an aggregate principal amount such that after giving pro forma effect to the incurrence of such Indebtedness and the application of the proceeds therefrom, the Consolidated ACNTA Coverage Ratio would be no less than 1.1 to 1.0; provided that for purposes of determining the amount that may be incurred under this clause 1(B), all Indebtedness that is not Secured Debt incurred under this clause 1(B) shall be deemed to be included in clause (y) of the definition of “Consolidated ACNTA Coverage Ratio”;

 

(2)           Parity Lien Debt (including the Notes issued on the Issue Date and any related Note Guarantee) in an aggregate principal amount at any time outstanding (together, with any Permitted Refinancing Indebtedness incurred pursuant to clause (11) of this definition of “Permitted Debt” in respect thereof to refinance the foregoing) not to exceed the greater of (i) $1,500.0 million and (ii) 30.0% of Modified ACNTA as of the date of such incurrence;

 

(3)           Indebtedness of the Company or any Guarantor outstanding on the Issue Date, and not otherwise referred to in clauses (1) and (2) of this definition of “Permitted Debt”;

 

(4)           intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:

 

(A)          if the Company or any Guarantor is the obligor on such Indebtedness, such Indebtedness must be (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Company and its Restricted Subsidiaries) expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and

 

(B)          (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);

 

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(5)           Guarantees by the Company or any Guarantor of any Indebtedness of the Company or any of the Guarantors which is permitted to be incurred under this Indenture;

 

(6)           Indebtedness of the Company or any Restricted Subsidiary that represents:

 

(A)          obligations pursuant to Interest Rate Agreements entered into in the ordinary course of business with respect to Indebtedness permitted by this Indenture;

 

(B)          obligations under currency exchange contracts entered into in the ordinary course of business; and

 

(C)          obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of protecting, on a net basis, against price risks, basis risks, or other risks encountered in the Oil and Gas Business;

 

(7)           Indebtedness of the Company or any Restricted Subsidiary (A) represented by Sale Leaseback Transactions or (B) represented by Capital Lease Obligations or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property incurred for the purpose of financing or refinancing all or any part of the purchase price, lease expense, rental payment or cost of construction or improvement of property used in the business of the Company or any of its Restricted Subsidiaries, whether through the direct purchase of such property or through the purchase of Capital Stock of any Person owning such property, in an aggregate principal amount pursuant to sub-clauses (A) and (B) of this clause (7) (together with the aggregate principal amount of any Permitted Refinancing Indebtedness in respect of Indebtedness originally incurred pursuant to this clause (7)) not to exceed $250.0 million outstanding at any time; provided that the principal amount of any Indebtedness permitted under clause (7)(B) does not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed;

 

(8)           Indebtedness of the Company or any Guarantor in connection with:

 

(A)          one or more standby letters of credit issued for the account of the Company or a Guarantor in the ordinary course of business; and

 

(B)          other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 30 days following such drawing; provided, further, that with respect to clauses (A) and (B), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;

 

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(9)           Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;

 

(10)         Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary;

 

(11)         Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to Section 4.06(a) and clauses (2), (3), (7), (11) or (12) of this Section 4.06(b);

 

(12)         the incurrence by the Company or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting any one of the three alternative financial tests set forth in Section 5.01(a)(3);

 

(13)         Indebtedness of the Company or any Restricted Subsidiary with respect to any obligation arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided, however, that such Indebtedness is extinguished within five Business Days of incurrence;

 

(14)         Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and its Restricted Subsidiaries; and

 

(15)         Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (14) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness shall not exceed the greater of (x) $50.0 million and (y) 2.5% of Adjusted Consolidated Net Tangible Assets outstanding in the aggregate at the time of incurrence.

 

(c)           For purposes of determining compliance with this Section 4.06, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.06, the Company in its sole discretion may classify or reclassify such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that any Indebtedness under the Senior Credit Facility which was in existence on the Issue Date (after giving effect to the application of the net proceeds from the Notes) shall be deemed to have been incurred pursuant to Section 4.06(b)(1) rather than Section 4.06(a) and may not be reclassified.

 

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(d)           Subject to the proviso contained in the foregoing clause (c), Indebtedness permitted by this Section 4.06 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness.

 

(e)           Accrual of interest, accretion of principal or liquidation preference (or similar amount) in respect of Preferred Stock or amortization of original issue discount, and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.06; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.

 

(f)            For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.

 

(g)           If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred shall be equal to the greater of (x) the principal of such Indebtedness and (y) the amount that may be drawn under such letter of credit.

 

(h)           The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.

 

Section 4.07.         Limitation on Restricted Payments.

 

(a)           The Company will not, and will not cause or permit any Restricted Subsidiary to, directly or indirectly:

 

(1)           pay any dividend on, or make any distribution to holders of, any shares of the Company’s Capital Stock (other than dividends or distributions payable in shares of the Company’s Qualified Capital Stock);

 

(2)           purchase, redeem, defease or otherwise acquire or retire for value, directly or indirectly, the Company’s Capital Stock;

 

(3)           make any principal payment on, or purchase, redeem, defease, retire or otherwise acquire for value, prior to any scheduled principal payment, sinking fund payment or maturity, any Existing Unsecured Notes or Subordinated Indebtedness (excluding any intercompany Subordinated Indebtedness between or among the Company and any of its Restricted Subsidiaries), except a payment on, or a purchase, redemption, defeasance, retirement or other acquisition of such Existing Unsecured Notes or Subordinated Indebtedness within one year of final maturity;

 

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(4)           pay any dividend or distribution on any Capital Stock of any Restricted Subsidiary to any Person (other than (A) to the Company or any of its Restricted Subsidiaries or any Guarantor or (B) dividends or distributions made by a Restricted Subsidiary on a pro rata basis to all holders of the Capital Stock of such Restricted Subsidiary); or

 

(5)           make any Investment in any Person (other than any Permitted Investments);

 

(any of the foregoing actions described in clauses (1) through (5) above, other than any such action that is a Permitted Payment, collectively, “Restricted Payments”) (the amount of any such Restricted Payment, if other than cash, shall be the Fair Market Value of the assets proposed to be transferred, as determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a board resolution), unless:

 

(A)          immediately after giving effect to such proposed Restricted Payment on a pro forma basis, no Default (except a Reporting Default) or Event of Default shall have occurred and be continuing;

 

(B)          immediately after giving effect to such Restricted Payment on a pro forma basis, the Company could incur $1.00 of additional Indebtedness (other than Permitted Debt) under Section 4.06(a); and

 

(C)          after giving effect to the proposed Restricted Payment, the aggregate amount of all such Restricted Payments declared or made after the Issue Date (including all Designation Amounts) does not exceed the sum of:

 

(1)           50% of the aggregate Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning April 1, 2015 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of the Restricted Payment (or, if such aggregate cumulative Consolidated Net Income shall be a loss, minus 100% of such loss);

 

(2)           the aggregate Net Cash Proceeds, or the Fair Market Value of property other than cash (including assets used in the Oil and Gas Business or Capital Stock of Persons engaged in the Oil and Gas Business that become Restricted Subsidiaries), received since April 1, 2015 by the Company either (i) as capital contributions in the form of common equity to the Company or (ii) from the issuance or sale (other than to any of its Subsidiaries) of Qualified Capital Stock of the Company excluding the Net Cash Proceeds from the issuance of Qualified Capital Stock financed, directly or indirectly, using funds borrowed from the Company or any Subsidiary until and to the extent such borrowing is repaid);

 

(3)           the aggregate Net Cash Proceeds received since April 1, 2015 by the Company (other than from any of its Subsidiaries) upon the exercise of any options, warrants or rights to purchase Qualified

 

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Capital Stock of the Company (and excluding the Net Cash Proceeds from the exercise of any options, warrants or rights to purchase Qualified Capital Stock financed, directly or indirectly, using funds borrowed from the Company or any Subsidiary until and to the extent such borrowing is repaid);

 

(4)           the aggregate Net Cash Proceeds received after April 1, 2015 by the Company from the conversion or exchange, if any, of debt securities or Disqualified Stock of the Company or its Restricted Subsidiaries into or for Qualified Capital Stock of the Company plus the Fair Market Value of Qualified Capital Stock of the Company issued in exchange for such debt securities (and excluding the Net Cash Proceeds from the conversion or exchange of debt securities or Disqualified Stock financed, directly or indirectly, using funds borrowed from the Company or any Subsidiary until and to the extent such borrowing is repaid);

 

(5)           (a)           in the case of the disposition or repayment of any Investment constituting a Restricted Payment (including any Investment in an Unrestricted Subsidiary) made since April 1, 2015, an amount (to the extent not included in Consolidated Net Income) equal to the amount received with respect to such Investment, less the cost of the disposition of such Investment and net of taxes, and

 

(b)           in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (as long as the designation of such Subsidiary as an Unrestricted Subsidiary was deemed a Restricted Payment), the Fair Market Value of the Company’s interest in such Subsidiary at the time of such redesignation; and

 

(6)           any amount which previously qualified as a Restricted Payment on account of any Guarantee entered into by the Company or any Restricted Subsidiary; provided that such Guarantee has not been called upon and the obligation arising under such Guarantee no longer exists.

 

(b)           The foregoing provisions shall not prohibit the following actions (each of clauses (1) through (12) being referred to as a “Permitted Payment”):

 

(1)           the payment of any dividend within 60 days after the date of declaration thereof, if at such date of declaration such payment was permitted by paragraph (a) of this Section 4.07, and such payment shall be deemed to have been paid on such date of declaration; provided, that in determining the aggregate amount of Restricted Payments made after the Issue Date in accordance with Section 4.07(a)(C), amounts expended pursuant to this clause (1) shall be included in such calculation;

 

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(2)           the purchase, defeasance, redemption, or other acquisition or retirement for value of any Capital Stock of the Company in exchange for (including any such exchange pursuant to the exercise of a conversion right or privilege in connection with which cash is paid in lieu of the issuance of fractional shares or scrip), or out of the Net Cash Proceeds of a substantially concurrent issuance and sale for cash (other than to a Subsidiary) of, any Qualified Capital Stock of the Company; provided that the Net Cash Proceeds from the issuance of such Qualified Capital Stock shall be excluded from Section 4.07(a)(C)(2);

 

(3)           the purchase, redemption, defeasance, retirement or other acquisition for value or payment of principal of any Existing Unsecured Notes or Subordinated Indebtedness in exchange for, or in an amount not in excess of the Net Cash Proceeds of a substantially concurrent issuance and sale for cash (other than to any Subsidiary of the Company) of any Qualified Capital Stock of the Company, provided that the Net Cash Proceeds received from the issuance of Qualified Capital Stock and the Fair Market Value of Qualified Capital Stock issued in exchange for Subordinated Indebtedness shall be excluded from Section 4.07(a)(C)(2) with respect to the purchase, redemption, defeasance, retirement or other acquisition for value of Subordinated Indebtedness;

 

(4)           the purchase, redemption, defeasance, retirement or other acquisition for value or payment of principal of Existing Unsecured Notes or any Subordinated Indebtedness (other than Disqualified Stock) in exchange for or with the proceeds of the substantially concurrent issuance of Junior Lien Debt, Senior Unsecured Obligations or Subordinated Indebtedness that constitutes Permitted Refinancing Indebtedness;

 

(5)           any purchase, redemption, retirement, defeasance or other acquisition for value of any Existing Unsecured Notes or Subordinated Indebtedness pursuant to the provisions of such Existing Unsecured Notes or Subordinated Indebtedness upon a change of control or an asset sale after the Company shall have complied with Sections 4.13 or 4.14, as the case may be, and repurchased all Notes tendered for purchase in connection with the Offer to Purchase;

 

(6)           the purchase, redemption, defeasance or other acquisition or retirement for value of any Capital Stock of the Company held by any current or former officers, directors or employees of the Company or any of its Subsidiaries (or permitted transferees of such current or former officers, directors or employees) pursuant to the terms of agreements (including employment agreements) or plans approved by the Company’s Board of Directors, including any such purchase, redemption, defeasance or other acquisition or retirement of such Capital Stock that is deemed to occur upon the exercise of stock options or similar rights if such shares represent all or a portion of the exercise price or are surrendered in connection with satisfying Federal income tax obligations; provided, however, that the aggregate amount of such purchases, redemptions, defeasances or other retirements and acquisitions pursuant to this clause (6) will not, in the aggregate, exceed $2.0 million per fiscal year (with any unused amount in any fiscal year being carried over into one or more succeeding fiscal years);

 

(7)           loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $2.0 million outstanding at any one time, the proceeds of which are used

 

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solely (A) to purchase Capital Stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options or (B) to refinance loans, together with accrued interest thereon, made pursuant to subsection (A) of this clause (7);

 

(8)           payments of regularly scheduled or accrued dividends on any Preferred Stock of the Company outstanding on the Issue Date;

 

(9)           payments to dissenting stockholders of the Company (A) pursuant to applicable law or (B) in connection with the settlement or other satisfaction of legal claims made pursuant to or in connection with a consolidation, merger or transfer of assets in connection with a transaction that is not prohibited by this Indenture and payments made in lieu of the issuance of fractional shares of Capital Stock of the Company in connection with any such transaction;

 

(10)         payments made by any Person other than the Company or any Restricted Subsidiary to the stockholders of the Company in connection with or as part of (A) a merger or consolidation of the Company with or into such Person or a Subsidiary of such Person, or (B) a merger of a Subsidiary of such Person into the Company;

 

(11)         the purchase, redemption or other acquisition or retirement for value of equity interests deemed to occur upon the exercise or exchange of stock options, warrants or other convertible securities if the equity interests represent a portion of the exercise or exchange price thereof and purchases or other acquisitions or retirement for value of equity interests deemed to occur upon the withholding of a portion of the equity interests granted or awarded to an employee to pay for the taxes payable by such employee upon such grant, award or vesting or in connection with any such exercise or exchange of stock options, warrants or other convertible securities;

 

(12)         repurchases, redemptions or other payments with respect to Existing Unsecured Notes in an aggregate amount paid under this clause (12) since the Issue Date not to exceed $250.0 million, provided that, after giving effect to each such payment, the Company and its Restricted Subsidiaries would have cash, Cash Equivalents and undrawn availability (giving effect to any borrowing base limitations) under the Senior Credit Facility totaling at least $175.0 million; and

 

(13)         Restricted Payments not exceeding $25.0 million in the aggregate since the Issue Date.

 

(c)           The Company will not cause or permit any Unrestricted Subsidiary that holds Midstream Assets or Disposal Assets or the proceeds, products, offspring, rents or profits thereof to, directly or indirectly, take any of the actions described in clauses (2) or (3) of paragraph (a) of this Section 4.07 unless (i) the Company would have been permitted to take such action as a Restricted Payment at such time pursuant to paragraph (a) or (b) of this covenant and (ii) any such action taken by such Unrestricted Subsidiary shall be deemed to have been a

 

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Restricted Payment made directly by the Company for purposes of determining compliance with this covenant.

 

(d)           Not later than the date of making any Restricted Payment (except for any Restricted Payment under clauses (2) through (13) of Section 4.07(b)), the Company will deliver to the Trustee an Officers’ Certificate stating that the Restricted Payment is permitted and setting forth the basis upon which the calculations required by the covenant were calculated.

 

(e)           For purposes of clauses (2), (3) and (4) of Section 4.07(b), the term “substantially concurrent” means that the offering was consummated within 180 days after the date of determination.

 

(f)            For purposes of determining compliance with this Section 4.07, if a payment meets the criteria of more than one of the types of Permitted Payments described in clauses (1) through (13) of Section 4.07(b), the Company, in its sole discretion, may divide, redivide, classify or reclassify (or later divide, re-divide, classify or reclassify, in whole or in part) such payment in any manner that complies with this Section 4.07.

 

Section 4.08.         Limitation on Liens.

 

The Company will not, and will not cause or permit any Restricted Subsidiary to, directly or indirectly, create or incur, in order to secure any Indebtedness, any Lien of any kind, other than Permitted Liens, upon any property or assets (including any intercompany notes) of the Company or any Restricted Subsidiary owned on the date hereof or acquired after the date hereof, or assign or convey, in order to secure any Indebtedness, any right to receive any income or profits therefrom.

 

Section 4.09.         [Reserved].

 

Section 4.10.         Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.

 

(a)           The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause to come into existence or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

 

(1)           pay dividends or make any other distribution on its Capital Stock to the Company or any other Restricted Subsidiary;

 

(2)           pay any Indebtedness owed to the Company or any other Restricted Subsidiary;

 

(3)           make loans or advances to the Company or any other Restricted Subsidiary; or

 

(4)           transfer any of its properties or assets to the Company or any other Restricted Subsidiary.

 

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(b)           However, Section 4.10(a) will not prohibit any encumbrance or restriction created, existing or becoming effective under or by reason of:

 

(1)           any agreement (including the Senior Credit Facility, the Intercreditor Agreement and the Security Documents) in effect on the Issue Date;

 

(2)           any agreement or instrument with respect to a Person that was not a Restricted Subsidiary of the Company on the Issue Date, in existence at the time such Person becomes (or became) a Restricted Subsidiary of the Company and not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary, provided that such encumbrances and restrictions are not applicable to the Company or any Restricted Subsidiary or the properties or assets of the Company or any Restricted Subsidiary other than such Subsidiary which is becoming a Restricted Subsidiary;

 

(3)           any agreement or instrument governing any Acquired Debt or other agreement of any Person or related to assets acquired by or merged into or consolidated with the Company or any Restricted Subsidiaries, so long as such encumbrance or restriction (A) was not entered into in contemplation of the acquisition, merger or consolidation transaction, and (B) is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets or subsidiaries of the Person, so acquired, so long as the agreement containing such restriction does not violate any other provision of this Indenture;

 

(4)           any applicable law or any requirement of any regulatory body;

 

(5)           the security documents evidencing any Liens securing obligations or Indebtedness that limit the right of the debtor to dispose of the assets subject to such Liens; provided that such Liens are permitted to be incurred under Section 4.08;

 

(6)           provisions restricting subletting or assignment of any lease governing a leasehold interest of the Company or any Restricted Subsidiary, or restrictions in licenses relating to the property covered thereby, or other encumbrances or restrictions in agreements or instruments relating to specific assets or property that restrict generally the transfers of such assets or property, provided, however, that such encumbrances or restrictions do not materially impact the ability of the Company to make payments on the Notes when due as required by the terms of this Indenture;

 

(7)           asset sale agreements with respect to asset sales permitted to be made under Section 4.14 that limit the transfer of such assets pending the closing of such sale;

 

(8)           shareholders’, partnership, joint venture and similar agreements entered into in the ordinary course of business; provided, however, that such encumbrances or restrictions do not apply to any Restricted Subsidiaries other than the applicable company, partnership, joint venture or other entity; and provided, further, however, that such encumbrances and restrictions do not materially impact the ability of the Company to make payments on the Notes when due as required by the terms of this Indenture;

 

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(9)           cash or other deposits, or net worth requirements or similar requirements, imposed by suppliers or landlords under contracts entered into in the ordinary course of business;

 

(10)         any other Credit Facility governing debt of the Company or any Guarantor, permitted to be incurred under Section 4.06; provided, however, that such encumbrances or restrictions are not (in the view of the Board of Directors of the Company as expressed in a board resolution thereof) materially more restrictive, taken as a whole, than those contained in the Senior Credit Facility;

 

(11)         customary restrictions on the disposition or distribution of assets or property in agreements entered into in the ordinary course of the Oil and Gas Business of the types described in the definition of Permitted Business Investments; and

 

(12)         this Indenture, or any agreement, amendment, modification, restatement, renewal, supplement, refunding, replacement or refinancing that extends, renews, refinances or replaces the agreements containing the encumbrances or restrictions in the foregoing clauses (1) through (11), or in this clause (12); provided that the terms and conditions of any such encumbrances or restrictions are no more restrictive in any material respect taken as a whole than those under or pursuant to the agreement so extended, renewed, refinanced or replaced.

 

Section 4.11.         [Reserved].

 

Section 4.12.         Guarantees by Restricted Subsidiaries.

 

(a)           Upon the formation or acquisition of any new direct or indirect Restricted Subsidiary (excluding (i) any Foreign Subsidiary and (ii) any Immaterial Subsidiary) by the Company or any Restricted Subsidiary, then such new Restricted Subsidiary will provide a Note Guarantee within 20 days after its formation or acquisition.

 

(b)           Any Restricted Subsidiary required to provide a Note Guarantee shall (i) execute a Supplemental Indenture and (ii) deliver an Opinion of Counsel to the Trustee in accordance with Article 11 of this Indenture.

 

Section 4.13.         Repurchase of Notes Upon a Change of Control.

 

(a)           Not later than 30 days following a Change of Control, the Company will make an Offer to Purchase all outstanding Notes at a purchase price equal to 101% of the principal amount plus accrued interest to the date of purchase (subject to the right of Holders on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date).

 

(b)           The Company will not be required to make an Offer to Purchase pursuant to Section 4.13(a) if a third party makes an Offer to Purchase in the manner, at the times and otherwise in compliance with the requirements set forth in Section 4.13(a) and Section 3.04 applicable to an Offer to Purchase made by the Company and purchases all Notes validly tendered and not withdrawn pursuant to such Offer to Purchase.

 

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(c)           In the event that Holders of not less than 90% of the aggregate principal amount of the outstanding Notes accept an Offer to Purchase and the Company (or a third party making the Offer to Purchase as provided in paragraph (b) above) purchases all of the Notes held by such Holders, the Company will have the right, upon not less than 30 nor more than 60 days’ prior notice, given not more than 30 days following the purchase pursuant to the Offer to Purchase described above, to redeem all of the Notes that remain outstanding following such purchase at a redemption price equal to 101% of the principal amount plus accrued and unpaid interest on the Notes that remain outstanding, to the date of redemption (subject to the right of Holders on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date).

 

Section 4.14.         Limitation on Asset Sales.

 

(a)           The Company will not, and will not permit any Restricted Subsidiary to, consummate any Asset Sale unless (1) 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 (measured at the time of contractually agreeing to such Asset Sale) of the assets and property subject to such Asset Sale and (2) except with respect to any Asset Sale of Midstream Assets, Disposal Assets or Electrical Assets, at least 75% of the aggregate consideration paid to the Company or such Restricted Subsidiary in connection with such Asset Sale and all other Asset Sales since the Issue Date, on a cumulative basis, is in the form of (i) cash, Cash Equivalents, Liquid Securities, Exchanged Properties (including pursuant to asset swaps), or Additional Assets, (ii) the assumption by the purchaser of liabilities of the Company (other than liabilities of the Company that are by their terms subordinated to the Notes), (iii) the assumption by the purchaser of liabilities of any Guarantor that made such Asset Sale (other than liabilities of a Guarantor that are by their terms subordinated to such Guarantor’s Guarantee), and, in the case of each of clauses (ii) and (iii) as a result of which the Company and its remaining Restricted Subsidiaries are no longer liable for such liabilities or (iv) consideration consisting of the Fair Market Value of Indebtedness (other than Subordinated Indebtedness) of the Company or any Guarantor received from Persons who are not the Company or any Restricted Subsidiary.

 

(b)           The Net Available Cash from Asset Sales by the Company or a Restricted Subsidiary may be applied by the Company or such Restricted Subsidiary, to the extent the Company or such Restricted Subsidiary elects (or is required by the terms of any Parity Lien Debt of the Company or a Restricted Subsidiary), to:

 

(1)           repay any Priority Lien Debt and other outstanding Priority Lien Obligations or Parity Lien Debt and other outstanding Parity Lien Obligations; or

 

(2)           reinvest in Additional Assets (including by means of an Investment in Additional Assets by a Restricted Subsidiary with Net Available Cash received by the Company or another Restricted Subsidiary) or make capital expenditures in the Oil and Gas Business.

 

(c)           Excess Proceeds of less than $20.0 million will be carried forward and accumulated. When accumulated Excess Proceeds equals or exceeds $20.0 million, the Company

 

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must, within seven Business Days, make an Offer to Purchase Notes having a principal amount equal to:

 

(1)           accumulated Excess Proceeds, multiplied by

 

(2)           a fraction (x) the numerator of which is equal to the outstanding principal amount of the Notes and (y) the denominator of which is equal to the outstanding principal amount of the Notes and all Parity Lien Debt similarly required to be repaid, redeemed or tendered for in connection with the Asset Sale,

 

rounded down to the nearest $1,000. Any Offer to Purchase Notes pursuant to this Section 4.14(c) shall be made ratably to the Holders of the Notes on the basis of the principal amount of the Notes then outstanding. The purchase price for the Notes will be 100% of the principal amount plus accrued interest to the date of purchase (subject to the rights of Holders of record on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date). Upon completion of the Offer to Purchase, Excess Proceeds will be reset at zero.

 

Section 4.15.         Limitation on Transactions with Shareholders and Affiliates. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, enter into any transaction or series of related transactions (including, without limitation, the sale, purchase, exchange or lease of assets, property or services) with or for the benefit of any Affiliate of the Company (other than the Company or a Restricted Subsidiary) unless such transaction or series of related transactions is entered into in good faith and in writing and:

 

(a)           such transaction or series of related transactions is on terms that are no less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that would be available in a comparable transaction in arm’s-length dealings with a party who is not an Affiliate of the Company and, if in the good faith judgment of the Board of Directors of the Company (whose determination shall be conclusive), no comparable transaction is available with which to compare such transaction or series of related transactions, such transaction or series of related transactions is otherwise fair to the Company or such Restricted Subsidiary from a financial point of view,

 

(b)           with respect to any transaction or series of related transactions involving aggregate value in excess of $20.0 million, the Company delivers an Officers’ Certificate to the Trustee certifying that such transaction or series of related transactions complies with clause (a) above, and

 

(c)           with respect to any transaction or series of related transactions involving aggregate value in excess of $40.0 million, the Company delivers an Officers’ Certificate to the Trustee certifying that 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, or in the event there is only one Disinterested Director, by such Disinterested Director;

 

provided, however, that this Section 4.15 shall not apply to:

 

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(1)           employee benefit arrangements with any officer or director of the Company, including under any employment agreement, stock option or stock incentive plans, and customary indemnification arrangements with officers or directors of the Company, in each case entered into in the ordinary course of business,

 

(2)           the payment of reasonable and customary fees to directors of the Company or any of its Restricted Subsidiaries who are not employees of the Company or any Affiliate,

 

(3)           any Permitted Investments, Restricted Payments or Permitted Payments made in compliance with Section 4.07,

 

(4)           sales of Capital Stock (other than Disqualified Stock) of the Company to Affiliates of the Company,

 

(5)           in the case of contracts for purchase of drilling equipment or sale of oil field service supplies or natural gas or other operational contracts, any such contracts are entered into in the ordinary course of business on terms substantially similar to those contained in similar contracts entered into by the Company or any Restricted Subsidiary and third parties, or if neither the Company nor any Restricted Subsidiary has entered into a similar contract with a third party, that the terms are no less favorable than those available from third parties on an arm’s length basis, as determined by the Board of Directors of the Company,

 

(6)           any customary agreements with stockholders of the Company providing for preemptive, voting, tag-along and similar rights to certain stockholders of the Company; provided that such agreements are approved in advance by a majority of the Disinterested Directors,

 

(7)           transactions between the Company or any Restricted Subsidiary and any Person, a director of which is also a director of the Company or any direct or indirect parent of the Company and such director is the sole cause for such Person to be deemed an Affiliate of the Company or any Restricted Subsidiary; provided, however, that such director shall abstain from voting as a director of the Company or such direct or indirect parent company, as the case may be, on any matter involving such other Person, and

 

(8)           any transactions undertaken pursuant to any contracts in existence on the Issue Date (as in effect on such date) and any renewals, replacements or modifications of such contracts (pursuant to new transactions or otherwise) on terms no less favorable to the Holders of the Notes than those in effect on the Issue Date.

 

Section 4.16.         [Reserved].

 

Section 4.17.         Designation of Restricted and Unrestricted Subsidiaries.

 

(a)           The Board of Directors of the Company may designate after the Issue Date any Subsidiary as an “Unrestricted Subsidiary” (a “Designation”) only if:

 

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(1)           no Default or Event of Default shall have occurred and be continuing at the time of or after giving effect to such Designation;

 

(2)           (A) the Company would be permitted to make an Investment at the time of Designation (assuming the effectiveness of such Designation) pursuant to Section 4.07 in an amount (the “Designation Amount”) equal to the greater of (i) the net book value of the Company’s interest in such Subsidiary calculated in accordance with GAAP or (ii) the Fair Market Value of the Company’s interest in such Subsidiary, or

 

(B)          the Designation Amount is less than $1,000;

 

(3)           such Unrestricted Subsidiary does not own any Capital Stock in any Restricted Subsidiary of the Company which is not simultaneously being designated an Unrestricted Subsidiary;

 

(4)           such Unrestricted Subsidiary is not liable, directly or indirectly, with respect to any Indebtedness other than Unrestricted Subsidiary Indebtedness, provided that an Unrestricted Subsidiary may provide a Note Guarantee; and

 

(5)           such Unrestricted Subsidiary is not a party to any agreement, contract, arrangement or understanding at such time with the Company or any Restricted Subsidiary unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company or, in the event such condition is not satisfied, the value of such agreement, contract, arrangement or understanding to such Unrestricted Subsidiary shall be deemed a Restricted Payment.

 

In the event of any such Designation, the Company shall be deemed, for all purposes of this Indenture, to have made an Investment equal to the Designation Amount that constitutes a Restricted Payment pursuant to Section 4.07.

 

(b)           The Company shall not and shall not cause or permit any Restricted Subsidiary to at any time:

 

(1)           provide credit support for, Guarantee or subject any of its property or assets (other than the Capital Stock of any Unrestricted Subsidiary) to the satisfaction of, any Indebtedness of any Unrestricted Subsidiary (including any undertaking, agreement or instrument evidencing such Indebtedness); provided, however, that this Section 4.17(b)(1) shall not be deemed to prevent Permitted Investments in Unrestricted Subsidiaries that are otherwise allowed under this Indenture, or

 

(2)           be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary.

 

(c)           For purposes of the foregoing, the Designation of a Subsidiary of the Company as an Unrestricted Subsidiary shall be deemed to be the Designation of all of the Subsidiaries of such Subsidiary as Unrestricted Subsidiaries.

 

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(d)           The Company may revoke any Designation of a Subsidiary as an Unrestricted Subsidiary (a “Revocation”) if:

 

(1)           no Default or Event of Default shall have occurred and be continuing at the time of and after giving effect to such Revocation;

 

(2)           all Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately following such Revocation would, if incurred at such time, have been permitted to be incurred for all purposes of this Indenture; and

 

(3)           unless such redesignated Subsidiary shall not have any Indebtedness outstanding (other than Indebtedness that would be Permitted Debt), immediately after giving effect to such proposed Revocation, and after giving pro forma effect to the incurrence of any such Indebtedness of such redesignated Subsidiary as if such Indebtedness was incurred on the date of the Revocation, the Company could incur $1.00 of additional Indebtedness (other than Permitted Debt) pursuant to Section 4.06.

 

(e)           All Designations and Revocations must be evidenced by a resolution of the Board of Directors of the Company delivered to the Trustee certifying compliance with the foregoing provisions of this Section 4.17.

 

Section 4.18.         [Reserved].

 

Section 4.19.         Financial Reports.

 

(a)           Whether or not the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company must provide the Trustee and Holders within the time periods specified in those sections with:

 

(1)           all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10 Q and 10 K if the Company were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to annual information only, a report thereon by the Company’s certified independent accountants, and

 

(2)           all current reports that would be required to be filed with the SEC on Form 8 K if the Company were required to file such reports.

 

(b)           Whether or not required by the SEC, the Company will, if the SEC will accept the filing, file a copy of all of the information and reports referred to in clauses (1) and (2) of Section 4.19(a) with the SEC for public availability within the time periods specified in the SEC’s rules and regulations, and any such information and reports so filed with the SEC shall be deemed to have been provided to Holders pursuant to Section 4.19(a). The Company will make the information and reports referred to in clauses (1) and (2) of Section 4.19(a) available to securities analysts and prospective investors upon request, to the extent such information and reports have not been filed with the SEC.

 

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(c)           If the Company had any Unrestricted Subsidiaries during the relevant period, the Company will provide to the Trustee and the Holders information sufficient to ascertain the financial condition and results of operations of the Company and its Restricted Subsidiaries, excluding in all respects the Unrestricted Subsidiaries, to the extent such information has not been filed with the SEC.

 

(d)           For so long as any of the Notes remain outstanding and constitute “restricted securities” under Rule 144, the Company will furnish to the Holders and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

(e)           Delivery of these reports and information to the Trustee is for informational purposes only and the Trustee’s receipt of them will not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

 

Section 4.20.         Reports to Trustee.

 

(a)           The Company will deliver to the Trustee within 120 days after the end of each fiscal year a certificate from the principal executive, financial or accounting officer of the Company stating that the officer has conducted or supervised a review of the activities of the Company and its Restricted Subsidiaries and their performance under this Indenture and that, based upon such review, the Company has fulfilled its obligations hereunder or, if there has been a Default, specifying the Default and its nature and status.

 

(b)           The Company will deliver to the Trustee, as soon as possible and in any event within 30 days after the Company becomes aware or should reasonably become aware of the occurrence of a Default, an Officers’ Certificate setting forth the details of the Default, and the action which the Company proposes to take with respect thereto.

 

Section 4.21.         Suspension of Covenants when Notes Rated Investment Grade.

 

(a)           If on any date following the Issue Date:

 

(1)           the Notes have achieved Investment Grade Status; and

 

(2)           no Default or Event of Default shall have occurred and be continuing on such date, then, beginning on that day and continuing until such time, if any, at which the Notes cease to have Investment Grade Status (such period, the “Suspension Period”), Sections 4.06, 4.07, 4.10, 4.12, 4.14, 4.15, and 4.17 and 5.01(a)(3) (the “Suspended Covenants”) will no longer be applicable to the Notes and any related default provisions of this Indenture will cease to be effective and will not be applicable to the Company and its Restricted Subsidiaries.

 

(b)           The Suspended Covenants will not, however, be of any effect with regard to the actions of the Company and the Restricted Subsidiaries properly taken during the continuance of the Suspension Period; provided that (1) with respect to the Restricted Payments

 

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made after any such reinstatement, the amount of Restricted Payments will be calculated as though Section 4.07 had been in effect prior to, but not during, the Suspension Period and (2) all Indebtedness incurred, or Disqualified Stock issued, during the Suspension Period will be classified to have been incurred or issued pursuant to Section 4.06(b)(3). Upon the occurrence of a Suspension Period, the amount of Excess Proceeds shall be reset at zero.

 

ARTICLE 5
 CONSOLIDATION, MERGER OR SALE OF ASSETS

 

Section 5.01.         Consolidation, Merger or Sale of Assets by the Company.

 

(a)           The Company will not, in a single transaction or through a series of related transactions, consolidate with or merge with or into any other Person or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its properties and assets to any Person or group of Persons, or permit any of its Restricted Subsidiaries to enter into any such transaction or series of transactions, if such transaction or series of transactions, in the aggregate, would result in a sale, assignment, conveyance, transfer, lease or disposition of all or substantially all of the properties and assets of the Company and its Restricted Subsidiaries on a Consolidated basis to any other Person or group of Persons (other than the Company or a Guarantor), unless at the time and after giving effect thereto:

 

(1)           either (A) the Company will be the continuing corporation or (B) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by sale, assignment, conveyance, transfer, lease or disposition all or substantially all of the properties and assets of the Company and its Restricted Subsidiaries on a Consolidated basis (the “Surviving Entity”) will be a corporation, limited liability company or limited partnership (provided that in the event the Surviving Entity is a limited partnership, then a Subsidiary of the Surviving Entity that is a corporation or limited liability company shall execute a supplement to this Indenture pursuant to which it shall become a co-obligor of the Surviving Entity’s obligations under this Indenture and the Notes) duly organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia and the Surviving Entity expressly assumes, by executing a supplement to this Indenture and any other agreements or instruments reasonably satisfactory to the Trustee, all the obligations of the Company under this Indenture, the Notes and the Note Documents to which the Company is a party;

 

(2)           immediately after giving effect to such transaction on a pro forma basis (and treating any Indebtedness not previously an obligation of the Company or any of its Restricted Subsidiaries which becomes the obligation of the Company or any of its Restricted Subsidiaries as a result of such transaction as having been incurred at the time of such transaction), no Default or Event of Default will have occurred and be continuing;

 

(3)           either (x) immediately after giving effect to such transaction on a pro forma basis (on the assumption that the transaction occurred on the first day of the four-quarter period for which financial statements are available ending immediately prior to the consummation of such transaction with the appropriate adjustments with respect to the transaction being included in such pro forma calculation), the Company (or the Surviving Entity

 

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if the Company is not the continuing obligor under this Indenture) (A) could incur $1.00 of additional Indebtedness (other than Permitted Debt) under Section 4.06(a), or (B) would have a Consolidated Fixed Charge Coverage Ratio not less than the Consolidated Fixed Charge Coverage Ratio of the Company immediately prior to such transaction, or (y) immediately after giving effect to such transaction, the Consolidated Net Worth of the Company (or the Surviving Entity if the Company is not the continuing obligor under this Indenture) is no less than the Consolidated Net Worth of the Company immediately prior to such transaction; provided, however, that this clause (3) will be of no effect during any Suspension Period;

 

(4)           unless the Company is the continuing obligor under this Indenture, at the time of the transaction, each Guarantor, if any, unless it is the other party to the transactions described above, will have confirmed, by executing a supplement to this Indenture and any other agreements or instruments reasonably satisfactory to the Trustee, that its Note Guarantee shall apply to the Surviving Entity’s obligations under this Indenture, the Notes and the Note Documents to which such Guarantor is a party;

 

(5)           the Surviving Entity shall take such action (or agree to take such action) as may be reasonably necessary to cause any property or assets that constitute Collateral owned by or transferred to the Surviving Guarantor Entity to continue to constitute Collateral and to be subject to the Parity Liens in the manner and to the extent required under the Note Documents; and

 

(6)           at the time of the transaction, the Company or the Surviving Entity will have delivered, or caused to be delivered, to the Trustee, an Officers’ Certificate and an Opinion of Counsel, each to the effect that such consolidation, merger, transfer, sale, assignment, conveyance, transfer, lease or other transaction and any supplement to this Indenture executed and delivered in connection therewith comply with the terms of this Indenture.

 

(b)           In the event of any transaction (other than a lease) described in and complying with the conditions listed in Section 5.01(a) in which the Company is not the Surviving Entity, the Surviving Entity shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, the Notes and the other Note Documents, and the Company shall be discharged from all obligations and covenants under this Indenture, the Notes and the other Note Documents.

 

(c)           Notwithstanding the foregoing, the Company may merge with an Affiliate incorporated or organized solely for the purpose of reincorporating or reorganizing the Company in another jurisdiction to realize tax or other benefits.

 

Section 5.02.         Consolidation, Merger or Sale of Assets by a Guarantor.

 

(a)           Each Guarantor will not, and the Company will not permit a Guarantor to, in a single transaction or through a series of related transactions, (x) consolidate with or merge with or into any other Person (other than the Company or any other Guarantor) or (y) sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its properties and assets to any Person or group of Persons (other than the Company or any other Guarantor) or permit any of its Restricted Subsidiaries to enter into any such transaction or series of transactions if

 

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such transaction or series of transactions, in the aggregate, in the case of clause (y) would result in a sale, assignment, conveyance, transfer, lease or disposition of all or substantially all of the properties and assets of the Guarantor and its Restricted Subsidiaries on a Consolidated basis to any other Person or group of Persons (other than the Company or any Guarantor), unless at the time and after giving effect thereto:

 

(1)           either (A) the Guarantor or the Company will be the continuing Person in the case of a merger involving the Guarantor or (B) the Person (if other than the Guarantor) formed by such consolidation or into which the Guarantor is merged or the Person which acquires by sale, assignment, conveyance, transfer, lease or disposition all or substantially all of the properties and assets of the Guarantor and its Restricted Subsidiaries on a Consolidated basis (the “Surviving Guarantor Entity”) expressly assumes, by executing a supplement to this Indenture and any other agreements or instruments acceptable to the Trustee, all the obligations of such Guarantor under its Note Guarantee, this Indenture and all Note Documents to which it is a party;

 

(2)           immediately before and immediately after giving effect to such transaction on a pro forma basis, no Default or Event of Default will have occurred and be continuing; and

 

(3)           at the time of the transaction (i) the Surviving Guarantor Entity, if applicable, shall take such action (or agree to take such action) as may be reasonably necessary to cause any property or assets that constitute Collateral owned by or transferred to the Surviving Guarantor Entity to continue to constitute Collateral and to be subject to the Parity Liens in the manner and to the extent required under the Note Documents, and (ii) such Guarantor or the Surviving Guarantor Entity will have delivered, or caused to be delivered, to the Trustee, an Officers’ Certificate and an Opinion of Counsel, each to the effect that such consolidation, merger, transfer, sale, assignment, conveyance, lease or other transaction and any supplement to this Indenture executed and delivered in connection therewith comply with this Indenture; provided, however, that this Section 5.02(a) shall not apply to any Guarantor whose Note Guarantee is terminated in accordance with Section 11.09 of this Indenture.

 

(b)           In the event of any transaction (other than a lease) described in and complying with the conditions listed in Section 5.02(a) in which the Guarantor is not the Surviving Guarantor Entity, the Surviving Guarantor Entity shall succeed to, and be substituted for, and may exercise every right and power of, such Guarantor under this Indenture, and such Guarantor shall be discharged from all obligations and covenants under this Indenture, the Notes and the other Note Documents.

 

(c)           Notwithstanding the foregoing, any Guarantor may merge with an Affiliate incorporated or organized solely for the purpose of reincorporating or reorganizing such Guarantor in another jurisdiction to realize tax or other benefits.

 

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ARTICLE 6
 DEFAULT AND REMEDIES

 

Section 6.01.         Events of Default. An “Event of Default” occurs if:

 

(1)           the Company defaults in the payment of the principal of any Note when the same becomes due and payable at Stated Maturity, upon acceleration or redemption, or otherwise (other than pursuant to an Offer to Purchase);

 

(2)           the Company defaults in the payment of interest on any Note when the same becomes due and payable, and the default continues for a period of 30 days;

 

(3)           the Company fails to make an Offer to Purchase and thereafter accept and pay for Notes tendered when and as required pursuant to Section 4.13 or Section 4.14, or the Company or any Guarantor fails to comply with the provisions of Article 5;

 

(4)           the Company or any Restricted Subsidiary defaults in the performance of or breaches any other covenant or agreement of the Company or such Restricted Subsidiary in this Indenture or the other Note Documents or under the Notes and the default or breach continues for a period of 60 consecutive days after written notice (or 180 consecutive days after written notice in the case of a Reporting Default) to the Company by the Trustee or to the Company and the Trustee by the Holders of 25% or more in aggregate principal amount of the Notes;

 

(5)           there occurs with respect to any Indebtedness of the Company, any Guarantor or any other Significant Subsidiary having an outstanding principal amount of $50.0 million or more in the aggregate for all such Indebtedness of all such Persons (i) an event of default that results in such Indebtedness (including any scheduled installment of principal with respect to such Indebtedness) being due and payable prior to its Stated Maturity or (ii) failure to make a principal, premium (if any) or interest payment when due and such defaulted payment is not made, waived or extended within the applicable grace period, the result of which is to give the holder of such Indebtedness the right to accelerate such Indebtedness;

 

(6)           one or more judgments, orders or decrees of any court or regulatory or administrative agency for the payment of money in excess of $50.0 million (determined net of any amounts covered by insurance policies by insurers believed by the Company in good faith to be credit-worthy), either individually or in the aggregate, shall be rendered against the Company, any Guarantor or any other Significant Subsidiary or any of their respective properties and shall not be discharged and either (i) any creditor shall have commenced an enforcement proceeding upon such judgment, order or decree or (ii) there shall have been a period of 60 consecutive days during which a stay of enforcement of such judgment or order, by reason of an appeal or otherwise, shall not be in effect;

 

(7)           the Company or any Significant Subsidiary institutes or consents to the institution of any proceeding under any Debtor Relief Law with respect to it, or makes an assignment for the benefit of its creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its

 

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property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding;

 

(8)           the Company or any Significant Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts as they become due;

 

(9)           any Note Guarantee ceases to be in full force and effect, other than in accordance the terms of this Indenture, or a Guarantor denies or disaffirms its obligations under its Note Guarantee; or

 

(10)         the occurrence of the following:

 

(a)                                 except as permitted by the Note Documents, any Note Document establishing the Parity Liens ceases for any reason to be enforceable; provided that it will not be an Event of Default under this clause (10)(a) if the sole result of the failure of one or more Note Documents to be fully enforceable is that any Parity Lien purported to be granted under such Note Documents on Collateral, individually or in the aggregate, having a fair market value of not more than $15.0 million, ceases to be an enforceable and perfected Parity Lien; provided further that if such failure is susceptible to cure, no Event of Default shall arise with respect thereto until 30 days after any officer of the Company or any Restricted Subsidiary becomes aware of such failure, which failure has not been cured during such time period;

 

(b)                                 except as permitted by the Note Documents, any Parity Lien purported to be granted under any Note Document on Collateral, individually or in the aggregate, having a fair market value in excess of $15.0 million, ceases to be an enforceable and perfected second priority Lien, subject to the Intercreditor Agreement and Permitted Collateral Liens; provided that if such failure is susceptible to cure, no Event of Default shall arise with respect thereto until 30 days after any officer of the Company or any Restricted Subsidiary becomes aware of such failure, which failure has not been cured during such time period; and

 

(c)                                  the Company or any Guarantor, or any Person acting on behalf of any of them, denies or disaffirms, in writing, any obligation of the Company or any Guarantor set forth in or arising under any Note Document establishing Parity Liens.

 

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Section 6.02.         Acceleration.

 

(a)           If an Event of Default occurs (other than an Event of Default described in Section 6.01(7) with respect to the Company) and is continuing under this Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding, by written notice to the Company (and to the Trustee if the notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued interest on the Notes to be immediately due and payable. Upon a declaration of acceleration, such principal and interest will become immediately due and payable; provided, however, that if an Event of Default under Section 6.01(7) with respect to the Company occurs and is continuing, the principal of, premium, if any, and accrued interest on the Notes then outstanding will become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

 

(b)           The Holders of a majority in aggregate principal amount of the outstanding Notes by written notice to the Company and to the Trustee may waive all past defaults and rescind and annul a declaration of acceleration and its consequences if:

 

(1)           all existing Events of Default, other than the nonpayment of the principal of, premium, if any, and interest on the Notes that have become due solely by the declaration of acceleration, have been cured or waived, and

 

(2)           the rescission would not conflict with any judgment or decree of a court of competent jurisdiction.

 

Section 6.03.         Other Remedies. If an Event of Default occurs and is continuing, subject to the Intercreditor Agreement, the Trustee may pursue, in its own name or as trustee of an express trust, any available remedy by proceeding at law or in equity to collect the payment of principal of and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding.

 

Section 6.04.         Waiver of Past Defaults. Except as otherwise provided in Sections 6.02, 6.07 and 9.02, the Holders of a majority in aggregate principal amount of the outstanding Notes may, by notice to the Trustee, waive an existing Default and its consequences. Upon such waiver, the Default will cease to exist, and any Event of Default arising therefrom will be deemed to have been cured, but no such waiver will extend to any subsequent or other Default or impair any right consequent thereon.

 

Section 6.05.         Control by Majority. The Holders of a majority in aggregate principal amount of the outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or the other Note Documents, that may involve the Trustee in personal liability, or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders of Notes not joining in the giving of such direction, and may take any other action it deems proper that is not inconsistent with any such direction received from Holders of Notes.

 

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Section 6.06.         Limitation on Suits. A Holder may not institute any proceeding, judicial or otherwise, with respect to this Indenture or the other Note Documents, or for the appointment of a receiver or trustee, or for any other remedy under this Indenture or the other Note Documents (subject to the Intercreditor Agreement), unless:

 

(1)           the Holder has previously given to the Trustee written notice of a continuing Event of Default;

 

(2)           Holders of at least 25% in aggregate principal amount of outstanding Notes have made written request to the Trustee to institute proceedings in respect of the Event of Default in its own name as Trustee under this Indenture;

 

(3)           Holders have offered to the Trustee security or indemnity reasonably satisfactory to the Trustee against any costs, liabilities or expenses to be incurred in compliance with such request;

 

(4)           the Trustee for 60 days after its receipt of such notice, request and offer of security or indemnity has failed to institute any such proceeding; and

 

(5)           during such 60-day period, the Holders of a majority in aggregate principal amount of the outstanding Notes have not given the Trustee a direction that is inconsistent with such written request.

 

Section 6.07.         Rights of Holders to Receive Payment. Notwithstanding anything to the contrary, the right of a Holder of a Note to receive payment of principal of, premium, if any, or interest on its Note on or after the Stated Maturity thereof, or to bring suit for the enforcement of any such payment on or after such date, may not be impaired or affected without the consent of that Holder.

 

Section 6.08.         Collection Suit by Trustee. If an Event of Default in payment of principal or interest specified in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust for the whole amount of principal and accrued interest remaining unpaid, together with interest on overdue principal and, to the extent lawful, overdue installments of interest, in each case at the rate specified in the Notes, and such further amount as is sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee hereunder.

 

Section 6.09.         Trustee May File Proofs of Claim. The Trustee may file proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee hereunder) and the Holders allowed in any judicial proceedings relating to the Company or any Guarantor or their respective creditors or property, and is entitled and empowered to collect, receive and distribute any money, securities or other property payable or deliverable upon conversion or exchange of the Notes or upon any such claims. Any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, if the Trustee consents to the making of such

 

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payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agent and counsel, and any other amounts due the Trustee hereunder. Nothing in this Indenture will be deemed to empower the Trustee to authorize or consent to, or accept or adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

Section 6.10.         Priorities. Subject to the Intercreditor Agreement, 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 and the Collateral Trustee for all amounts due to each under the Note Documents;

 

Second: to Holders for amounts then due and unpaid for principal of and interest on the Notes, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest; and

 

Third: to the Company or as a court of competent jurisdiction may direct.

 

The Trustee, upon written notice to the Company, may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10. At least 15 days before such record date, the Trustee shall mail to each Holder and the Company a notice that states the record date, the payment date and amount to be paid.

 

Section 6.11.         Restoration of Rights and Remedies. If the Trustee or any Holder has instituted a proceeding to enforce any right or remedy under this Indenture and the proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to the Holder, then, subject to any determination in the proceeding, the Company, any Guarantors, the Trustee and the Holders will be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Company, any Guarantors, the Trustee and the Holders will continue as though no such proceeding had been instituted.

 

Section 6.12.         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 may require any party litigant in such suit (other than the Trustee) to file an undertaking to pay the costs of the suit, and the court may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant (other than the Trustee) in the suit having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.12 does not apply to a suit by a Holder to enforce payment of principal of or interest on any Note on the respective due dates, or a suit by Holders of more than 10% in aggregate principal amount of the outstanding Notes.

 

Section 6.13.         Rights and Remedies Cumulative. No right or remedy conferred or reserved to the Trustee or to the Holders under this Indenture is intended to be exclusive of any other right or remedy, and all such rights and remedies are, to the extent permitted by law,

 

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cumulative and in addition to every other right and remedy hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or exercise of any right or remedy hereunder, or otherwise, will not prevent the concurrent assertion or exercise of any other right or remedy.

 

Section 6.14.         Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default will impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

Section 6.15.         Waiver of Stay, Extension or Usury Laws. The Company and each Guarantor covenants, to the extent that it may lawfully do so, that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Company or the Guarantor from paying all or any portion of the principal of, or interest on, the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of this Indenture. The Company and each Guarantor hereby expressly waives, to the extent that it may lawfully do so, all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

ARTICLE 7
 THE TRUSTEE

 

Section 7.01.         General.

 

(a)           The duties and responsibilities of the Trustee are as provided by the Trust Indenture Act and as set forth herein. Whether or not expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee is subject to this Article 7.

 

(b)           Except during the continuance of an Event of Default, the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations will be read into this Indenture against the Trustee. In case an Event of Default has occurred and is continuing, the Trustee shall exercise those rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

 

(c)           No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct.

 

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Section 7.02.                          Certain Rights of Trustee. Subject to Trust Indenture Act Sections 315(a) through (d):

 

(1)                                 In the absence of bad faith on its part, the Trustee may rely, and will be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document, but, in the case of any document which is specifically required to be furnished to the Trustee pursuant to any provision hereof, the Trustee shall examine the document to determine whether it conforms to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). The Trustee, in its discretion, may make further inquiry or investigation into such facts or matters as it sees fit.

 

(2)                                 Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel conforming to Section 12.05 and the Trustee will not be liable for any action it takes or omits to take in good faith in reliance on the certificate or opinion.

 

(3)                                 The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.

 

(4)                                 The Trustee will be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders, unless such Holders have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.

 

(5)                                 The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers or for any action it takes or omits to take in accordance with the direction of the Holders in accordance with Section 6.05 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture.

 

(6)                                 The Trustee may consult with counsel, and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

 

(7)                                 No provision of this Indenture will require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties hereunder, or in the exercise of its rights or powers, unless it is offered reasonable security or indemnity against any loss, liability or expense.

 

Section 7.03.                          Individual Rights of Trustee. The Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not the Trustee. Any Agent may do

 

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the same with like rights. However, the Trustee is subject to Trust Indenture Act Sections 310(b) and 311. For purposes of Trust Indenture Act Section 311(b)(4) and (6):

 

(a)                                 “cash transaction” means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; and

 

(b)                                 “self-liquidating paper” means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation.

 

Section 7.04.                          Trustee’s Disclaimer. The Trustee (i) makes no representation as to the validity or adequacy of this Indenture or the Notes, (ii) is not accountable for the Company’s use or application of the proceeds from the Notes and (iii) is not responsible for any statement in the Notes other than its certificate of authentication.

 

Section 7.05.                          Notice of Default. If any Default occurs and is continuing and is known to the Trustee, the Trustee will send notice of the Default to each Holder within 90 days after it occurs, unless the Default has been cured; provided that, except in the case of a default in the payment of the principal of or interest on any Note, the Trustee may withhold the notice if and so long as the board of directors, the executive committee or a trust committee of directors of the Trustee in good faith determines that withholding the notice is in the interest of the Holders. Notice to Holders under this Section 7.05 will be given in the manner and to the extent provided in Trust Indenture Act Section 313(c).

 

Section 7.06.                          Reports by Trustee to Holders. Within 60 days after each May 15, beginning with May 15, 2016, the Trustee will mail to each Holder, as provided in Trust Indenture Act Section 313(c), a brief report dated as of such May 15, if required by Trust Indenture Act Section 313 (a), and file such reports with each stock exchange upon which its Notes are listed and with the SEC as required by Trust Indenture Act Section 313(d).

 

Section 7.07.                          Compensation and Indemnity.

 

(a)                                 The Company will pay the Trustee compensation as agreed upon in writing for its services. The compensation of the Trustee is not limited by any law on compensation of a Trustee of an express trust. The Company will reimburse the Trustee upon request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by the Trustee, including the reasonable compensation and expenses of the Trustee’s agents and counsel.

 

(b)                                 The Company will indemnify the Trustee for, and hold it harmless against, any loss or liability or expense incurred by it without negligence or bad faith on its part arising

 

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out of or in connection with the acceptance or administration of this Indenture and its duties under this Indenture and the Notes, including the costs and expenses of defending itself against any claim or liability and of complying with any process served upon it or any of its officers in connection with the exercise or performance of any of its powers or duties under this Indenture and the Notes.

 

(c)                                  To secure the Company’s payment obligations in this Section 7.07, the Trustee will have a lien prior to the Notes on all money or property held or collected by the Trustee, in its capacity as Trustee, except money or property held in trust to pay principal of, and interest on, particular Notes.

 

Section 7.08.                          Replacement of Trustee.

 

(a)                                 (1)                                 The Trustee may resign at any time by written notice to the Company.

 

(2)                                 The Holders of a majority in aggregate principal amount of the outstanding Notes may remove the Trustee by written notice to the Trustee.

 

(3)                                 If the Trustee is no longer eligible under Section 7.10 or in the circumstances described in Trust Indenture Act Section 310(b), any Holder that satisfies the requirements of Trust Indenture Act Section 310(b) may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

(4)                                 The Company may remove the Trustee if: (i) the Trustee is no longer eligible under Section 7.10; (ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or other public officer takes charge of the Trustee or its property; or (iv) the Trustee becomes incapable of acting.

 

A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.

 

(b)                                 If the Trustee has been removed by the Holders, Holders of a majority in aggregate principal amount of the Notes may appoint a successor Trustee with the consent of the Company. Otherwise, if the Trustee resigns or is removed, or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee. If the successor Trustee does not deliver its written acceptance within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in aggregate principal amount of the outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

(c)                                  Upon delivery by the successor Trustee of a written acceptance of its appointment to the retiring Trustee and to the Company, (i) the retiring Trustee will transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07(c), (ii) the resignation or removal of the retiring Trustee will become effective, and (iii) the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. Upon request of any successor Trustee, the Company will execute any and all instruments for

 

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fully and vesting in and confirming to the successor Trustee all such rights, powers and trusts. The Company will give notice of any resignation and any removal of the Trustee and each appointment of a successor Trustee to all Holders, and include in the notice the name of the successor Trustee and the address of its Corporate Trust Office.

 

(d)                                 Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations under Section 7.07 will continue for the benefit of the retiring Trustee.

 

(e)                                  The Trustee agrees to give the notices provided for in, and otherwise comply with, Trust Indenture Act Section 310(b).

 

Section 7.09.                          Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or national banking association, the resulting, surviving or transferee corporation or national banking association without any further act will be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee in this Indenture.

 

Section 7.10.                          Eligibility. This Indenture must always have a Trustee that satisfies the requirements of Trust Indenture Act Section 310(a) and has a combined capital and surplus of at least $25.0 million as set forth in its most recent published annual report of condition.

 

Section 7.11.                          Money Held in Trust. The Trustee will not be liable for interest on any money received by it except as it may agree with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law and except for money held in trust under Article 8.

 

Section 7.12.                          Trustee in Other Capacities. References to the Trustee in Sections 7.01(b), 7.02, 7.03, 7.04, 7.07 and 7.08 shall be understood to include the Trustee when acting in other capacities under the Note Documents, including, without limitation, as Collateral Trustee and Paying Agent. Without limiting the foregoing, and for the avoidance of doubt, such Sections shall be read to apply to the Collateral Trustee and the Security Documents, mutatis mutandis, in addition to this Indenture. The privileges, rights, indemnities and exculpatory provisions contained in this Indenture shall apply to the Trustee, wherever it is acting under the Note Documents.

 

ARTICLE 8
 DEFEASANCE AND DISCHARGE

 

Section 8.01.                          Discharge of Company’s Obligations.

 

(a)                                 Subject to paragraph (b), the Company’s obligations under the Notes ,this Indenture and the other Note Documents, and each Guarantor’s obligations under its Note Guarantee and the other Note Documents, will terminate if:

 

(1)                                 all Notes previously authenticated and delivered (other than (i) destroyed, lost or stolen Notes that have been replaced or (ii) Notes that are paid pursuant to Section 4.01 or (iii) Notes for whose payment money or U.S. Government Obligations have been

 

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held in trust and then repaid to the Company pursuant to Section 8.05) have been delivered to the Trustee for cancellation and the Company has paid all sums payable by it hereunder; or

 

(2)                                 (A)                               the Notes mature within 60 days, or all of them are to be called for redemption within 60 days under arrangements satisfactory to the Trustee for giving the notice of redemption,

 

(B)                               the Company irrevocably deposits in trust with the Trustee, as trust funds solely for the benefit of the Holders, money or U.S. Government Obligations or a combination thereof sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certificate delivered to the Trustee, without consideration of any reinvestment, to pay principal of and interest on the Notes to final Stated Maturity or redemption, as the case may be, and to pay all other sums payable by it hereunder, and

 

(C)                               the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the satisfaction and discharge of this Indenture have been complied with.

 

(b)                                 After satisfying the conditions in clause (a)(1), only the Company’s obligations under Section 7.07 will survive. After satisfying the conditions in clause (a)(2), only the Company’s obligations in Article 2 and Sections 4.02, 7.07, 7.08 , 8.05 and 8.06 will survive. In either case, the Trustee upon request will acknowledge in writing the discharge of the Company’s obligations under the Notes, this Indenture and the other Note Documents other than the surviving obligations. The Collateral will be released from the Lien securing the Notes and the Note Guarantees, as provided in Section 13.06 upon discharge in accordance with the provisions of this Section 8.01.

 

Section 8.02.                          Legal Defeasance. After the 91st day following the deposit referred to in clause (1) of this Section 8.02, the Company will be deemed to have paid and will be discharged from its obligations in respect of the Notes, this Indenture and the other Note Documents, other than its obligations in Article 2 and Sections 4.02, 4.03, 7.07, 7.08 , 8.05 and 8.06, and each Guarantor’s obligations under its Note Guarantee will terminate, and the Collateral will be released from the Lien securing the Notes and the Note Guarantees, provided the following conditions have been satisfied:

 

(1)                                 The Company has irrevocably deposited in trust with the Trustee, as trust funds solely for the benefit of the Holders, money or U.S. Government Obligations or a combination thereof sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certificate thereof delivered to the Trustee, without consideration of any reinvestment, to pay principal of and interest on the Notes to final Stated Maturity or redemption, as the case may be, provided that any redemption before maturity has been irrevocably provided for under arrangements satisfactory to the Trustee.

 

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(2)                                 No Default has occurred and is continuing on the date of the deposit or occurs at any time during the 91-day period following the deposit (other than a Default relating to the borrowing of funds to make such deposit).

 

(3)                                 The deposit will not result in a breach or violation of, or constitute a default under any agreement or instrument (other than this Indenture and the other Note Documents) to which the Company is a party or by which it is bound.

 

(4)                                 The Company has delivered to the Trustee either (x) a ruling received from the Internal Revenue Service to the effect that the Holders will not recognize income, gain or loss for federal income tax purposes as a result of the defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would otherwise have been the case or (y) an Opinion of Counsel, based on a change in applicable federal income tax law after the date of this Indenture, to the same effect as the ruling described in clause (x).

 

(5)                                 The Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the defeasance have been complied with.

 

Prior to the end of the 91-day period, none of the Company’s obligations under this Indenture will be discharged. Thereafter, the Trustee upon request will acknowledge in writing the discharge of the Company’s obligations under the Notes, this Indenture and the other Note Documents except for the surviving obligations specified above.

 

Section 8.03.                          Covenant Defeasance. After the 91st day following the deposit referred to in clause (1) of this Section 8.03, the Company’s obligations set forth in Sections 4.06, 4.07, 4.08, 4.10, 4.12, 4.13, 4.14, 4.15, 4.17, clauses (a), (b) and (c) of Section 4.19, and clauses (3) and (5) of Section 5.01(a), and each Guarantor’s obligations under its Note Guarantee, will terminate, and the Collateral will be released from the Lien securing the Notes and the Note Guarantees, and clauses (3), (4), (5), (6), (9) and (10) of Section 6.01 will no longer constitute Events of Default, provided the following conditions have been satisfied:

 

(1)                                 The Company has complied with clauses (1), (2), (3) and (5) of Section 8.02; and

 

(2)                                 the Company has delivered to the Trustee either a ruling received from the Internal Revenue Service or an Opinion of Counsel, in either case, to the effect that the Holders will not recognize income, gain or loss for federal income tax purposes as a result of the defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would otherwise have been the case.

 

Except as specifically stated above, none of the Company’s obligations under this Indenture, or any Guarantor’s obligations under its Note Guarantee, will be discharged.

 

Section 8.04.                          Application of Trust Money. Subject to Section 8.05, the Trustee will hold in trust the money or U.S. Government Obligations deposited with it pursuant to Sections 8.01 8.02 or 8.03, and apply the deposited money and the proceeds from deposited U.S. Government

 

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Obligations to the payment of principal of and interest on the Notes in accordance with the Notes and this Indenture. Such money and U.S. Government Obligations need not be segregated from other funds except to the extent required by law.

 

Section 8.05.                          Repayment to Company. Subject to Sections 7.08, 8.01, 8.02 and 8.03, the Trustee will promptly pay to the Company upon request any excess money held by the Trustee at any time and thereupon be relieved from all liability with respect to such money. The Trustee will pay to the Company upon request any money held for payment with respect to the Notes that remains unclaimed for two years, provided that, if any Certificated Note is then outstanding, before making such payment the Trustee may at the expense and written direction of the Company publish once in a newspaper of general circulation in New York City, or send to each Holder entitled to such money, notice that the money remains unclaimed and that after a date specified in the notice (at least 30 days after the date of the publication or notice) any remaining unclaimed balance of money will be repaid to the Company. After payment to the Company, Holders entitled to such money must look solely to the Company for payment, unless applicable law designates another Person, and all liability of the Trustee with respect to such money will cease.

 

Section 8.06.                          Reinstatement. If and for so long as the Trustee is unable to apply any money or U.S. Government Obligations held in trust pursuant to Sections 8.01, 8.02 or 8.03 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 Notes will be reinstated as though no such deposit in trust had been made. If the Company makes any payment of principal of or interest on any Notes because of the reinstatement of its obligations, it will be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held in trust.

 

ARTICLE 9
 AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

Section 9.01.                          Amendments Without Consent of Holders. The Company, the Guarantors, the Trustee and the Collateral Trustee (in the case of this Indenture, the Security Documents, the Intercreditor Agreement and the Collateral Trust Agreement) may amend or supplement the Note Documents without notice to or the consent of any Noteholder:

 

(1)                                 to cure any ambiguity, defect or inconsistency in this Indenture or the other Note Documents;

 

(2)                                 to comply with Article 5;

 

(3)                                 to evidence and provide for the acceptance of an appointment of a successor Trustee or successor Collateral Trustee;

 

(4)                                 to provide for uncertificated Notes in addition to or in place of certificated Notes;

 

(5)                                 to provide for any Guarantee of the Notes;

 

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(6)                                 to provide for or confirm the issuance of Additional Notes;

 

(7)                                 to make, complete or confirm any grant of Collateral permitted or required by this Indenture or any of the other Note Documents;

 

(8)                                 to release or subordinate Liens on Collateral in accordance with the Note Documents;

 

(9)                                 with respect to the Note Documents, as provided in the Intercreditor Agreement and the Collateral Trust Agreement;

 

(10)                          to conform the text of this Indenture or any other Note Documents to any provision of the “Description of Notes” section of the Offering Memorandum to the extent that such provision in such “Description of Notes” section was intended to be a verbatim recitation of a provision of this Indenture or any other Note Document;

 

(11)                          to make any other change that does not materially and adversely affect the rights of any Holder; or

 

(12)                          to confirm and evidence the release, termination or discharge of any Lien with respect to or securing the Notes or the Note Guarantees when such release, termination or discharge is provided for in accordance with the terms of this Indenture, the Security Documents, the Intercreditor Agreement or the Collateral Trust Agreement.

 

In addition, the Intercreditor Agreement and the Collateral Trust Agreement may be amended in accordance with their terms and without the consent of any Holder or the Trustee with the consent of the parties thereto or otherwise in accordance with their terms, including to add additional Indebtedness as Priority Lien Debt, Parity Lien Debt or Junior Lien Debt and add other parties (or any authorized agent thereof or trustee therefor) holding such Indebtedness thereto and to establish that the Liens on any Collateral securing such Indebtedness shall rank equally with the Liens on such Collateral securing the other Priority Lien Debt, Parity Lien Debt or Junior Lien Debt, as applicable, then outstanding, in each case to the extent permitted by the Secured Debt Documents. The Security Documents may be amended automatically without the consent of Holders of Notes, the Trustee or the Collateral Trustee in connection with any amendments to corresponding security documents creating Priority Liens. Any such additional party and the Credit Agreement Agent, Trustee and the Collateral Trustee shall be entitled to rely upon an Officers’ Certificate certifying that such Parity Lien Obligations, Priority Lien Obligations or Junior Lien Obligations, as the case may be, were issued or borrowed in compliance with the Senior Credit Facility, this Indenture, the Intercreditor Agreement and the Security Documents and no Opinion of Counsel shall be required in connection therewith.

 

Section 9.02.                          Amendments With Consent of Holders.

 

(a)                                 Except as otherwise provided in Sections 6.02, 6.04 and 6.07 or 9.02(b), the Company, the Guarantors and the Trustee may amend, modify or supplement this Indenture and the other Note Documents with the consent of the Holders of a majority in aggregate principal amount of the outstanding Notes and the Holders of a majority in aggregate principal amount of the outstanding Notes may waive future compliance by the Company with any

 

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provision of this Indenture or the other Note Documents, in each case in addition to any required consent of holders of other Parity Lien Obligations required with respect to any amendment or waiver under any Note Document. Such an amendment, modification, supplement or waiver shall become effective upon receipt by the Trustee of evidence of the requisite consents, and in relation to any Notes evidenced by Global Notes, such consents need not be in written form and may be evidenced by any electronic transmissions that comport with the procedures of the Depositary.

 

(b)                                 Notwithstanding Section 9.02(a), without the consent of each Holder affected, an amendment, modification, supplement or waiver may not (with respect to any notes held by a non-consenting Holder):

 

(1)                                 reduce the principal amount of or change the Stated Maturity of any installment of principal of any Note,

 

(2)                                 reduce the rate of or change the Stated Maturity of any interest payment on any Note,

 

(3)                                 reduce the amount payable upon the optional redemption of any Note or change the times at which any Note may be redeemed or, once notice of redemption has been given, the time at which it must thereupon be redeemed,

 

(4)                                 after the time an Offer to Purchase is required to have been made, reduce the purchase amount or purchase price, or extend the latest expiration date or purchase date thereunder,

 

(5)                                 make any Note payable in money other than that stated in the Note,

 

(6)                                 impair the right of any Holder of Notes to receive any principal payment or interest payment on such Holder’s Notes, on or after the Stated Maturity thereof, or to institute suit for the enforcement of any such payment,

 

(7)                                 make any change in the percentage of the principal amount of the Notes required for amendments or waivers,

 

(8)                                 modify or change any provision of this Indenture affecting the ranking of the Notes or any Note Guarantee in a manner adverse to the Holders or

 

(9)                                 make any change in any Note Guarantee that would adversely affect the Noteholders.

 

(c)                                  In addition, the consent of Holders representing at least 66.67% of outstanding Notes will be required to release the Liens for the benefit of the Holders on all or substantially all of the Collateral, other than in accordance with the Note Documents.

 

(d)                                 It is not necessary for Noteholders to approve the particular form of any proposed amendment, modification, supplement or waiver, but is sufficient if their consent approves the substance thereof.

 

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(e)                                  An amendment, modification, supplement or waiver under this Section 9.02 will become effective on receipt by the Trustee of consents from the Holders of the requisite percentage in principal amount of the outstanding Notes. After an amendment, modification, supplement or waiver under this Section 9.02 becomes effective, the Company will send to the Holders affected thereby a notice briefly describing the amendment, modification, supplement or waiver. The Company will send copies of any documents pursuant to which any such amendment, modification, supplement or waiver has been effected to Holders upon request. Any failure of the Company to send such notice or copies, or any defect therein, will not, however, in any way impair or affect the validity of any such amendment, modification, supplement or waiver.

 

(f)                                   Neither the Company nor any of its Restricted Subsidiaries may, 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, amendment or modification of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid or agreed to be paid to all Holders of the Notes that are “qualified institutional buyers” within the meaning of Rule 144A of the Securities Act, who, upon request, confirm that they are “qualified institutional buyers,” consent, waive or agree to amend or modify such term or provision within the time period set forth in the solicitation documents relating to the consent, waiver, amendment or modification.

 

Section 9.03.                          Effect of Consent.

 

(a)                                 After an amendment, modification, supplement or waiver becomes effective, it will bind every Holder unless it is of the type requiring the consent of each Holder affected. If the amendment, modification, supplement or waiver is of the type requiring the consent of each Holder affected, the amendment, modification, supplement or waiver will bind each Holder that has consented to it and every subsequent Holder of a Note that evidences the same debt as the Note of the consenting Holder.

 

(b)                                 If an amendment, modification, supplement or waiver changes the terms of a Note, the Trustee may require the Holder to deliver it to the Trustee so that the Trustee may place an appropriate notation of the changed terms on the Note and return it to the Holder, or exchange it for a new Note that reflects the changed terms. The Trustee may also place an appropriate notation on any Note thereafter authenticated. However, the effectiveness of the amendment, modification, supplement or waiver is not affected by any failure to annotate or exchange Notes in this fashion.

 

Section 9.04.                          Trustee’s Rights and Obligations. The Trustee is entitled to receive, and will be fully protected in relying upon, an Opinion of Counsel stating that the execution of any amendment, modification, supplement or waiver authorized pursuant to this Article is authorized or permitted by this Indenture. If the Trustee has received such an Opinion of Counsel, it shall sign the amendment, modification, supplement or waiver so long as the same does not adversely affect the rights of the Trustee. The Trustee may, but is not obligated to, execute any amendment, modification, supplement or waiver that affects the Trustee’s own rights, duties or immunities under this Indenture.

 

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Section 9.05.                          [Reserved].

 

Section 9.06.                          Payments for Consents. Neither the Company nor any of its Restricted Subsidiaries may, 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, amendment or modification of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid or agreed to be paid to all Holders that consent, waive or agree to amend or modify such term or provision within the time period set forth in the solicitation documents relating to the consent, waiver, amendment or modification.

 

ARTICLE 10
 RESERVED

 

ARTICLE 11
 GUARANTEES

 

Section 11.01.                   The Guarantees. Subject to the provisions of this Article 11, each Guarantor hereby fully and unconditionally Guarantees, jointly and severally, on an unsecured senior basis, the full and punctual payment (whether at Stated Maturity, upon redemption, purchase pursuant to an Offer to Purchase or acceleration, or otherwise) of the principal of, premium, if any, and interest on, and all other amounts payable under, each Note, and the full and punctual payment of all other amounts payable by the Company under this Indenture. Upon failure by the Company to pay punctually any such amount, each Guarantor shall forthwith on demand pay the amount not so paid at the place and in the manner specified in this Indenture.

 

Section 11.02.                   Guarantee Unconditional. The obligations of each Guarantor hereunder are unconditional and absolute and, without limiting the generality of the foregoing, will not be released, discharged or otherwise affected by:

 

(1)                                 any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Company under this Indenture or any Note, by operation of law or otherwise;

 

(2)                                 any modification or amendment of or supplement to this Indenture or any Note;

 

(3)                                 any change in the corporate existence, structure or ownership of the Company, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or its assets or any resulting release or discharge of any obligation of the Company contained in this Indenture or any Note;

 

(4)                                 the existence of any claim, set off or other rights which the Guarantor may have at any time against the Company, the Trustee or any other Person, whether in connection with this Indenture or any unrelated transactions, provided that nothing herein prevents the assertion of any such claim by separate suit or compulsory counterclaim;

 

(5)                                 any invalidity or unenforceability relating to or against the Company for any reason of this Indenture or any Note, or any provision of applicable law or

 

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regulation purporting to prohibit the payment by the Company of the principal of or interest on any Note or any other amount payable by the Company under this Indenture; or

 

(6)                                 any other act or omission to act or delay of any kind by the Company, the Trustee or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to such Guarantor’s obligations hereunder, other than payment in full of the principal of, premium, if any, and interest on the Notes and all other amounts payable by the Company under this Indenture.

 

Section 11.03.                   Discharge; Reinstatement. Subject to Section 11.09, each Guarantor’s obligations hereunder will remain in full force and effect until the principal of, premium, if any, and interest on the Notes and all other amounts payable by the Company under this Indenture have been paid in full. If at any time any payment of the principal of, premium, if any, or interest on any Note or any other amount payable by the Company under this Indenture is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or otherwise, each Guarantor’s obligations hereunder with respect to such payment will be reinstated as though such payment had been due but not made at such time.

 

Section 11.04.                   Waiver by the Guarantors. Each Guarantor irrevocably waives, to the fullest extent permitted by applicable law, acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Company or any other Person.

 

Section 11.05.                   Subrogation and Contribution. Upon making any payment with respect to any obligation of the Company under this Article 11, the Guarantor making such payment will be subrogated to the rights of the payee against the Company with respect to such obligation, provided that the Guarantor may not enforce either any right of subrogation, or any right to receive payment in the nature of contribution, or otherwise, from any other Guarantor, with respect to such payment so long as any amount payable by the Company hereunder or under the Notes remains unpaid.

 

Section 11.06.                   Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Company under this Indenture or the Notes is stayed upon the insolvency, bankruptcy or reorganization of the Company, all such amounts otherwise subject to acceleration under the terms of this Indenture are nonetheless payable by the Guarantors hereunder forthwith on demand by the Trustee or the Holders.

 

Section 11.07.                   Limitation on Amount of Guarantee. Notwithstanding anything to the contrary in this Article 11, each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent conveyance under applicable fraudulent conveyance provisions of the United States Bankruptcy Code or any comparable provision of state law. To effectuate that intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each Guarantor under its Note Guarantee are limited to the maximum amount that would not render the Guarantor’s obligations subject to avoidance under applicable fraudulent

 

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conveyance provisions of the United States Bankruptcy Code or any comparable provision of state law.

 

Section 11.08.                   Delivery of Guarantee. The execution by each Guarantor of this Indenture (or a Supplemental Indenture) evidences the Note Guarantee of such Guarantor, whether or not the person signing as an officer of the Guarantor still holds that office at the time of authentication of any Note. The delivery of any Note by the Trustee after authentication constitutes due delivery of the Note Guarantee set forth in this Indenture on behalf of each Guarantor.

 

Section 11.09.                   Release of Note Guarantee. The Note Guarantee of a Guarantor will terminate upon:

 

(1)                                 a sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of consolidation or merger) to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary, if the sale or other disposition is permitted by this Indenture;

 

(2)                                 a sale or other disposition of Capital Stock of that Guarantor to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary, if the sale or other disposition is permitted by this Indenture and as a result of such transaction the Guarantor no longer qualifies as a Restricted Subsidiary of the Company;

 

(3)                                 if the Note Guarantee was required pursuant to the terms of this Indenture, the cessation of the circumstances requiring the Note Guarantee;

 

(4)                                 the designation in accordance with this Indenture of the Guarantor as an Unrestricted Subsidiary;

 

(5)                                 the liquidation or dissolution of such Guarantor provided no Default or Event of Default has occurred or is continuing; or

 

(6)                                 defeasance or discharge of the Notes, as provided in Article 8.

 

Upon delivery by the Company to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the foregoing effect, the Trustee will execute any documents reasonably required in order to evidence the release of the Guarantor from its obligations under its Note Guarantee.

 

ARTICLE 12
 MISCELLANEOUS

 

Section 12.01.                   Trust Indenture Act of 1939. Except as otherwise provided for herein, this Indenture shall not be governed by the provisions of the Trust Indenture Act, including any requirements to deliver annual opinions with respect to perfection of security interests or opinions with respect to release of Collateral in accordance with this Indenture, the Collateral Trust Agreement or the Intercreditor Agreement.

 

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Section 12.02.                   Noteholder Communications; Noteholder Actions.

 

(a)                                 The rights of Holders to communicate with other Holders with respect to this Indenture or the Notes are as provided by the Trust Indenture Act, and the Company and the Trustee shall comply with the requirements of Trust Indenture Act Sections 312(a) and 312(b). Neither the Company nor the Trustee will be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.

 

(b)                                 (1)                                 Any request, demand, authorization, direction, notice, consent to amendment, supplement, modification or waiver or other action provided by this Indenture to be given or taken by a Holder (an “act”) may be evidenced by an instrument signed by the Holder delivered to the Trustee. The fact and date of the execution of the instrument, or the authority of the person executing it, may be proved in any manner that the Trustee deems sufficient.

 

(2)                                 The Trustee may make reasonable rules for action by or at a meeting of Holders, which will be binding on all the Holders.

 

(c)                                  Any act by the Holder of any Note binds that Holder and every subsequent Holder of a Note that evidences the same debt as the Note of the acting Holder, even if no notation thereof appears on the Note. Subject to paragraph (d), a Holder may revoke an act as to its Notes, but only if the Trustee receives the notice of revocation before the date the amendment or waiver or other consequence of the act becomes effective.

 

(d)                                 The Company may, but is not obligated to, fix a record date (which need not be within the time limits otherwise prescribed by Trust Indenture Act Section 316(c)) for the purpose of determining the Holders entitled to act with respect to any amendment or waiver or in any other regard, except that during the continuance of an Event of Default, only the Trustee may set a record date as to notices of default, any declaration or acceleration or any other remedies or other consequences of the Event of Default. If a record date is fixed, those Persons that were Holders at such record date and only those Persons will be entitled to act, or to revoke any previous act, whether or not those Persons continue to be Holders after the record date. No act will be valid or effective for more than 90 days after the record date.

 

Section 12.03.                   Notices.

 

(a)                                 Any notice or communication to the Company will be deemed given if in writing in the English language (i) when delivered in person or (ii) five days after mailing when mailed by first class mail, or (iii) when sent by facsimile transmission, with transmission confirmed. Notices or communications to a Guarantor will be deemed given if given to the Company. Any notice to the Trustee will be effective only upon receipt. In each case the notice or communication should be addressed as follows:

 

if to the Company:

 

SandRidge Energy, Inc.
 123 Robert S. Kerr Avenue
 Oklahoma City, Oklahoma 73102

 

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Attention: General Counsel
 Facsimile: (405) 429-5983

 

if to the Trustee:

 

U.S. Bank National Association

Corporate Trust Services

EX-TX-WSFH

5555 San Felipe Street, 11th Floor

Houston, Texas 77056

Facsimile: (713) 235-9213

Attention: Mauri J. Cowen

 

The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

 

(b)                                 Except as otherwise expressly provided with respect to published notices, any notice or communication to a Holder will be deemed given when mailed to the Holder at its address as it appears on the Register by first class mail or, as to any Global Note registered in the name of DTC or its nominee, as agreed by the Company, the Trustee and DTC. Copies of any notice or communication to a Holder, if given by the Company, will be mailed to the Trustee at the same time. Defect in mailing a notice or communication to any particular Holder will not affect its sufficiency with respect to other Holders.

 

(c)                                  Where this Indenture provides for notice, the notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and the waiver will be the equivalent of the notice. Waivers of notice by Holders must be filed with the Trustee, but such filing is not a condition precedent to the validity of any action taken in reliance upon such waivers.

 

Section 12.04.                   Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company will furnish to the Trustee:

 

(1)                                 an Officers’ Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

(2)                                 an Opinion of Counsel stating that all such conditions precedent have been complied with.

 

Section 12.05.                   Statements Required in Certificate or Opinion. Each Officers’ Certificate or Opinion of Counsel with respect to compliance with a condition or covenant provided for in this Indenture must include:

 

(1)                                 a statement that each person signing the Officers’ Certificate or Opinion of Counsel has read the covenant or condition and the related definitions;

 

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(2)                                 a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in the Officers’ Certificate or Opinion of Counsel is based;

 

(3)                                 a statement that, in the opinion of each such person, that person has made such examination or investigation as is necessary to enable the person to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(4)                                 a statement as to whether or not, in the opinion of each such person, such condition or covenant has been complied with, provided that an Opinion of Counsel may rely on an Officers’ Certificate or certificates of public officials with respect to matters of fact.

 

Section 12.06.                   Payment Date Other Than a Business Day. If any payment with respect to a payment of any principal of, premium, if any, or interest on any Note (including any payment to be made on any date fixed for redemption or purchase of any Note) is due on a day which is not a Business Day, then the payment need not be made on such date, but may be made on the next Business Day with the same force and effect as if made on such date, and no interest will accrue for the intervening period.

 

Section 12.07.                   Governing Law. This Indenture, including any Note Guarantees and the Notes, shall be governed by, and construed in accordance with, the laws of the State of New York.

 

Section 12.08.                   No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture or loan or debt agreement of the Company or any Subsidiary of the Company, and no such indenture or loan or debt agreement may be used to interpret this Indenture.

 

Section 12.09.                   Successors. All agreements of the Company or any Guarantor in this Indenture and the Notes will bind its successors. All agreements of the Trustee in this Indenture will bind its successor.

 

Section 12.10.                   Duplicate 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. This Indenture may be executed by facsimile or other electronic transmission.

 

Section 12.11.                   Separability. In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

 

Section 12.12.                   Table of Contents and Headings. The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and in no way modify or restrict any of the terms and provisions of this Indenture.

 

Section 12.13.                   No Liability of Directors, Officers, Employees, Incorporators, Members, Partners and Stockholders. No director, officer, employee, incorporator, member, partner or

 

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stockholder of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or such Guarantor under the Notes, any Note Guarantee, this Indenture or any Note Document or for any claim based on, in respect of, or by reason of, such obligations. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

 

ARTICLE 13
 COLLATERAL AND SECURITY

 

Section 13.01.                   Security Interest.

 

(a)                                 The due and punctual payment of the Obligations on the Notes and the Obligations of the Guarantors under the Note Guarantees, when and as the same shall be due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest (to the extent permitted by law), on the Notes, the Note Guarantees and performance and payment of all other obligations of the Company and the Guarantors to the Holders or the Trustee and/or the Collateral Trustee under the Note Documents, according to the terms hereunder or thereunder (collectively, the “Notes Obligations”), are secured, as provided in the Security Documents. The Company and each of the Guarantors consent and agree to be bound by the terms of the Security Documents to which they are parties, as the same may be in effect from time to time, and agree to perform their obligations thereunder in accordance therewith. The Company and the Guarantors hereby agree that the Collateral Trustee shall hold the Collateral on behalf of and for the benefit of all of the Holders and the other holders of Parity Lien Obligations.

 

(b)                                 Each Holder of Notes, by its acceptance thereof and of the Note Guarantees, consents and agrees to the terms of the Intercreditor Agreement, the Collateral Trust Agreement and the Security Documents (including, without limitation, the provisions providing for foreclosure and release of Collateral and amendments to the Security Documents) as the same may be in effect or may be amended from time to time in accordance with their terms and authorizes and appoints U.S. Bank National Association as the Trustee and as the Collateral Trustee. The Trustee hereby authorizes and appoints U.S. Bank National Association as Collateral Trustee and each Holder of Notes and the Trustee direct the Collateral Trustee to enter into the Security Documents (including any amendments thereto contemplated by Section 7.1 of the Collateral Trust Agreement and any security documents to secure additional Parity Lien Debt in accordance with Section 5.3 of the Collateral Trust Agreement, all as more particularly described in the Collateral Trust Agreement) and to perform its obligations and exercise its rights thereunder in accordance therewith, subject to the terms and conditions thereof, including, without limitation, the limitations on duties of the Collateral Trustee provided in Section 5.12 of the Collateral Trust Agreement. The Trustee, the Collateral Trustee and each Holder of Notes, by accepting the Notes and the Note Guarantees of the Guarantors, acknowledges that, as more fully set forth in the Security Documents, the Collateral as now or hereafter constituted shall be held, subject to the Intercreditor Agreement, for the benefit of all the holders of Parity Lien Obligations, the Collateral Trustee and the Trustee, and the Lien of this Indenture and the Security Documents is subject to and qualified and limited in all respects by the Intercreditor

 

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Agreement, the Collateral Trust Agreement, the Security Documents and actions that may be taken thereunder.

 

Section 13.02.                   Post-Issue Date Collateral Requirements.

 

(a)                                 Within 60 days of the Issue Date, the Company shall, or shall cause the applicable Guarantor to, (i) execute and deliver to the Collateral Trustee, as mortgagee or beneficiary, as applicable, such Mortgages or other Security Documents, together with satisfactory evidence of the completion (or satisfactory arrangements for the completion) of all recordings and filings of such Mortgages or other Security Documents in the proper recorders’ offices or appropriate public records (and payment of any taxes or fees in connection therewith) as may be necessary to create a valid, perfected second-priority Lien (subject to the Intercreditor Agreement and to Permitted Collateral Liens), against the Oil and Gas Properties or other property or assets of the Company and the Guarantors that are subject to Liens securing the Priority Lien Obligations on the Issue Date and (ii) on the date that each such Mortgage is so filed or recorded, cause its counsel for the jurisdiction in which the relevant Oil and Gas Properties are located to execute and deliver to the Collateral Trustee a favorable legal opinion with respect thereto in form and substance reasonably satisfactory to the Collateral Trustee.

 

(b)                                 Any Security Documents entered into after the Issue Date shall be substantially in the form of the corresponding security document securing the Priority Liens Obligations, or to the extent there is no such corresponding security document, the corresponding security documents securing the Priority Lien Obligations in place on the Issue Date, in each case, with such changes as are reasonably necessary to reflect the terms of the Intercreditor Agreement and with such deletions or modifications of representations, warranties and covenants as are customary with respect to security documents establishing Liens securing publicly traded debt securities, all as certified to the Collateral Trustee pursuant to an Officers’ Certificate of the Company.

 

Section 13.03.                   Further Assurances; Liens on Additional Property.

 

(a)                                 The Company and each of the Guarantors shall do or cause to be done all acts and things that may be required, or that the Collateral Trustee from time to time may reasonably request, to assure and confirm that the Collateral Trustee holds, for the benefit of the holders of Parity Lien Obligations, duly created and enforceable and perfected second priority Liens upon the Collateral (subject to the Intercreditor Agreement and Permitted Collateral Liens) (including any acquired Property or other Property required by any Parity Lien Document to become, Collateral after the Issue Date), in each case, as contemplated by, and with the Lien priority required under, the Parity Lien Documents, and in connection with any merger, consolidation or sale of assets of the Company or any Guarantor, the property and assets of the Person which is consolidated or merged with or into the Company or any Guarantor, to the extent that they are property or assets of the types which would constitute Collateral under the Security Documents, shall be treated as after-acquired property and the Company or such Guarantor shall take such action as may be reasonably necessary to cause such property and assets to be made subject to the Parity Liens, in the manner and to the extent required under the Parity Lien Documents.

 

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(b)                                 Upon the reasonable request of the Collateral Trustee or any Parity Lien Representative at any time and from time to time, the Company and each of the Guarantors shall promptly execute, acknowledge and deliver such Security Documents, instruments, certificates, financing statements, notices and other documents, and take such other actions as shall be reasonably required, or that the Collateral Trustee may reasonably request, to create, perfect, protect, assure or enforce the Liens and benefits intended to be conferred, in each case as contemplated by the Parity Lien Documents for the benefit of the holders of Parity Lien Obligations; provided, that no such Security Document, instrument or other document shall be materially more burdensome upon the Company and the Guarantors than the Parity Lien Documents executed and delivered (or required to be executed and delivered promptly after the Issue Date, including pursuant to Section 13.02) by the Company and the Guarantors in connection with the issuance of the Notes on or about the Issue Date.

 

(c)                                  From and after the Issue Date, if the Company or any Guarantor acquires any Property that constitutes collateral for the Priority Lien Debt or Junior Lien Debt, if and to the extent that any Priority Lien Document or Junior Lien Document, as applicable, requires any supplemental Security Document for such collateral or other actions to achieve a perfected Lien on such collateral, the Company shall, or shall cause the applicable Guarantor to, promptly (but not in any event no later than the date that is 20 Business Days after which such supplemental Security Documents are executed and delivered (or other action taken) under such Priority Lien Documents or Junior Lien Documents, as applicable), to the extent permitted by applicable law, execute and deliver to the Collateral Trustee appropriate Security Documents (or amendments thereto) in such form as shall be necessary in the Collateral Trustee’s reasonable discretion to grant the Collateral Trustee a valid and enforceable perfected second-priority Lien (subject to the Intercreditor Agreement and to Permitted Collateral Liens) on such Collateral or take such other actions in favor of the Collateral Trustee as shall be reasonably necessary to grant a valid and enforceable perfected second-priority Lien (subject to the Intercreditor Agreement and to Permitted Collateral Liens) on such Collateral to the Collateral Trustee, for the benefit of the Holders and holders of any other Parity Lien Obligations, subject to the terms of this Indenture, the Intercreditor Agreement and the other Note Documents. Additionally, subject to this Indenture, the Intercreditor Agreement and the other Note Documents, if the Company or any Guarantor creates any additional Lien upon any Property that would constitute Collateral, or takes any additional actions to perfect any existing Lien on Collateral, in each case for the benefit of the holders of the Priority Lien Debt or the holders of Junior Lien Debt, after the Issue Date, the Company or such Guarantor, as applicable, must, to the extent permitted by applicable law, within 20 Business Days after such Lien is granted or other action taken, grant a valid and enforceable perfected second-priority Lien (subject to the Intercreditor Agreement and to Permitted Collateral Liens) upon such property or asset, or take such additional perfection actions, as applicable, for the benefit of the Holders and obtain all related deliverables as those delivered to the Priority Lien Representative or Junior Lien Agent, as applicable, in each case as security for the Notes Obligations. Notwithstanding the foregoing, to the extent that any Lien on any Collateral is perfected by the possession or control of such Collateral or of any account in which such Collateral is held, and if such Collateral or any such account is in fact in the possession or under the control of the Priority Lien Representative, or of agents or bailees of the Priority Lien Representative, the perfection actions and related deliverables described in this Section 13.03(c) shall not be required.

 

98

 

(d)                                 Notwithstanding anything herein or in the other Note Documents to the contrary, neither the Company nor any Guarantor will be required to grant a security interest in, and the Collateral shall not include, any collateral securing Priority Lien Obligations that is or may be provided to certain issuers of letters of credit pursuant to the Priority Lien Documents rather than generally to the holders of Priority Lien Obligations or to the Priority Lien Collateral Agent for the benefit of the holders of Priority Lien Obligations as a whole. In addition, the Collateral shall not include Excluded Property, except to the extent such assets or property are subject to a Priority Lien generally in favor of the holders of Priority Lien Obligations or to the Priority Lien Collateral Agent for the benefit of the holders of Priority Lien Obligations as whole. Notwithstanding anything to the contrary contained herein or in any other Note Document, Lariat Services, Inc. shall not be required to become a party to the Security Documents or grant Liens on its assets or properties for the benefit of the holders of the Parity lien Obligations.

 

(e)                                  The Company will deliver to the Trustee and the Collateral Trustee semi-annually on or before May 1 and November 1 in each calendar year, beginning November 1, 2015, an Officers’ Certificate certifying that, as of the date of such certificate, the Collateral includes Oil and Gas Properties that include not less than 80% of the total discounted present value of proved reserves attributable to the Oil and Gas Properties of the Company and its Restricted Subsidiaries (excluding any proved reserves attributable to interests owned by any “variable interest entity”), as evaluated in the most recent Reserve Report, after giving effect to exploration and production activities, acquisitions, dispositions and production since the date of such Reserve Report (the “minimum collateral requirement”). In the event that the Collateral does not represent at least 80% of such value, then the Company shall, or shall cause the applicable Guarantor to, within thirty (30) days of delivery of the certificate required under this Section 13.03(e), execute and deliver to the Collateral Trustee: (i) such executed Mortgages or amendments or supplements to prior Mortgages naming the Collateral Trustee, as mortgagee or beneficiary, as may be necessary to cause the minimum collateral requirement to be satisfied, (ii) satisfactory evidence of the completion of all recordings and filings of such Mortgages, amendments or supplements in the proper recorders’ offices or appropriate public records (and payment of any taxes or fees in connection therewith) and (iii) local counsel opinion or opinions (each, subject to customary assumptions and qualifications) to the effect that the Collateral Trustee has a valid and perfected second-priority Lien (subject to the Intercreditor Agreement and to Permitted Collateral Liens) with respect to the real property that is subject to the applicable Mortgage; provided that, (x) to the extent corresponding mortgages securing the Priority Lien Obligations are being delivered and (y) Mortgages have previously been recorded in the public records of the state applicable to such additional Mortgages or amendments or supplements to prior Mortgages, no such opinion shall be required unless a corresponding opinion will be delivered to the Priority Lien Collateral Agent.

 

(f)                                   The Company will deliver to the Trustee copies of all documents delivered to the Collateral Trustee pursuant to the Security Documents.

 

Section 13.04.                   Intercreditor Agreement. This Article 13 and the provisions of each other Security Document are subject to the terms, conditions and benefits set forth in the Intercreditor Agreement. The Company and each Guarantor consents to, and agrees to be bound by, the terms of the Intercreditor Agreement, as the same may be in effect from time to time, and to perform its

 

99

 

obligations thereunder in accordance with the terms thereof. Each Holder of Notes, by its acceptance of the Notes (a) consents to the subordination of Liens provided for in the Intercreditor Agreement, (b) agrees that it will be bound by, and will take no actions contrary to, the provisions of the Intercreditor Agreement and (c) authorizes and instructs the Collateral Trustee on behalf of each Holder to enter into the Intercreditor Agreement as Second Lien Collateral Trustee (as defined in the Intercreditor Agreement) on behalf of such Holders as Second Lien Secured Parties (as defined in the Intercreditor Agreement). In addition, each Holder authorizes and instructs the Collateral Trustee to enter into any amendments or joinders to the Intercreditor Agreement, without the consent of any Holder or the Trustee, to add additional Indebtedness as Priority Lien Debt, Parity Lien Debt or Junior Lien Debt and add other parties (or any authorized agent or trustee therefor) holding such Indebtedness thereto and to establish that the Lien on any Collateral securing such Indebtedness ranks equally with the Liens on such Collateral securing the other Priority Lien Debt, Parity Lien Debt or Junior Lien Debt, as applicable, then outstanding. The foregoing provisions are intended as an inducement to the lenders under the Senior Credit Facility to extend credit to the Company and certain of its Subsidiaries, and such lenders are intended third party beneficiaries of such provisions and the provisions of the Intercreditor Agreement.

 

Section 13.05.                   Collateral Trust Agreement. This Article 13 and the provisions of each Security Document are subject to the terms, conditions and benefits set forth in the Collateral Trust Agreement. The Company and each Guarantor consents to, and agrees to be bound by, the terms of the Collateral Trust Agreement, as the same may be in effect from time to time, and to perform its obligations thereunder in accordance with the terms therewith. Each Holder of Notes, by its acceptance of the Notes (a) agrees that it will be bound by, and will take no actions contrary to, the provisions of the Collateral Trust Agreement and (b) authorizes and instructs the Collateral Trustee on behalf of the Holders and each other holder of Parity Lien Obligations to enter into the Collateral Trust Agreement as Collateral Trustee on behalf of such holders of Parity Lien Obligations.

 

Section 13.06.                   Release of Liens in Respect of Notes. The Collateral Trustee’s Parity Liens upon the Collateral will no longer secure the Notes outstanding under this Indenture or any other Notes Obligations, and the right of the Holders to the benefits and proceeds of the Collateral Trustee’s Liens on the Collateral will terminate and be discharged:

 

(a)                                 upon satisfaction and discharge of this Indenture in accordance with Article 8 hereof;

 

(b)                                 upon a legal defeasance or covenant defeasance of the Notes in accordance with Article 8 hereof;

 

(c)                                  upon payment in full in cash and discharge of all Notes outstanding under this Indenture and all other Notes Obligations that are outstanding, due and payable under this Indenture and the other Note Documents at the time the Notes are paid in full in cash and discharged (other than contingent indemnity obligations for which no claim has been made);

 

(d)                                 as to any Collateral of the Company or a Guarantor that is sold, transferred or otherwise disposed of by the Company or any Guarantor to a Person that is not (either before

 

100

 

or after such sale, transfer or disposition) the Company or a Restricted Subsidiary of the Company in a transaction or other circumstance that complies with Section 4.14 (other than the obligation to apply proceeds of such Asset Sale as provided in such provision) and is permitted by all of the other Note Documents, at the time of such sale, transfer or other disposition or to the extent of the interest sold, transferred or otherwise disposed of; provided that the Collateral Trustee’s Liens upon the Collateral will not be released if the sale or disposition is subject to Article 5;

 

(e)                                  in whole or in part, with the consent of the Holders of the requisite aggregate principal amount of Notes in accordance with Article 9 hereof;

 

(f)                                   with respect to the assets of any Guarantor, at the time that such Guarantor is released from its Guarantee in accordance with Section 11.09; or

 

(g)                                  if and to the extent required by Section 4.01(a) of the Intercreditor Agreement.

 

In addition, the Collateral Trustee’s Liens on the Collateral will be released upon the terms and subject to the conditions set forth in Section 4.1 of the Collateral Trust Agreement.

 

Section 13.07.                   Collateral Trustee.

 

(a)                                 The Collateral Trustee will hold (directly or through co-trustees or agents) and, subject to the terms of the Intercreditor Agreement, will be entitled to enforce all Liens on the Collateral created by the Security Documents.

 

(b)                                 Except as provided in the Collateral Trust Agreement or as directed by an Act of Parity Lien Debtholders in accordance with the Collateral Trust Agreement, the Collateral Trustee will not be obligated:

 

(i)                                     to act upon directions purported to be delivered to it by any Person;

 

(ii)                                  to foreclose upon or otherwise enforce any Lien; or

 

(iii)                               to take any other action whatsoever with regard to any or all of the Security Documents, the Liens created thereby or the Collateral.

 

Section 13.08.                   Insurance. Upon the request of the Collateral Trustee, the Company and the Guarantors will furnish to the Collateral Trustee information as to their property and liability insurance carriers. Within 60 days of making any change in coverage or carrier with respect to any such policy, the Company will use its reasonable efforts to cause the Collateral Trustee to be named as an additional insured on all liability insurance policies of the Company and the Guarantors, and the Collateral Trustee to be named as loss payee on all property and casualty insurance policies of the Company and the Guarantors that insure the Collateral.

 

[Signature page to follow]

 

101

 

SIGNATURES

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first written above.

 

	
 
    	
SANDRIDGE ENERGY, INC.,
    
	
 
    	
as Issuer
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Eddie M. LeBlanc
    
	
 
    	
Name:
    	
Eddie M. LeBlanc
    
	
 
    	
Title:
    	
Executive Vice President and Chief Financial   Officer
    
	
 
    	
 
    
	
 
    	
SANDRIDGE OPERATING COMPANY,
    
	
 
    	
INTEGRA ENERGY, L.L.C.,
    
	
 
    	
LARIAT SERVICES, INC.,
    
	
 
    	
SANDRIDGE EXPLORATION AND PRODUCTION, LLC,
    
	
 
    	
SANDRIDGE MIDSTREAM, INC.,
    
	
 
    	
SANDRIDGE HOLDINGS, INC.,
    
	
 
    	
SANDRIDGE GATHERING LLC,
    
	
 
    	
as Guarantors
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Eddie M. LeBlanc
    
	
 
    	
Name:
    	
Eddie M. LeBlanc
    
	
 
    	
Title:
    	
Executive Vice President and Chief Financial   Officer
    

 

[SIGNATURE PAGE TO INDENTURE]

 

 

	
 
    	
U.S. BANK NATIONAL ASSOCIATION, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mauri J. Cowen
    
	
 
    	
Name:
    	
Mauri J. Cowen
    
	
 
    	
Title:
    	
Vice President
    

 

[SIGNATURE PAGE TO INDENTURE]

 

 

EXHIBIT A

 

[FACE OF NOTE]

 

SANDRIDGE ENERGY, INC.

 

8.75% Senior Secured Note due 2020

 

[CUSIP] [ISIN]               

 

No.

 

[Initially](1) $         

 

SANDRIDGE ENERGY, INC., a Delaware corporation (the “Company”, which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to                    , or its registered assigns, the principal sum of                         DOLLARS ($                        ) [or such other amount as indicated on the Schedule of Exchange of Notes attached hereto,](2) on June 1, 2020; provided, however that if on October 15, 2019, the aggregate outstanding principal amount of the Company’s 8.75% Senior Notes due 2020 that shall not have been cancelled or retired as a result of redemption, repurchase, or other acquisition or shall have not otherwise been discharged or defeased exceeds $100.0 million, on October 16, 2019.

 

Interest Payment Dates: June 1 and December 1, commencing December 1, 2015.

 

Regular Record Dates: May 15 and November 15.

 

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which will for all purposes have the same effect as if set forth at this place.

 

(1)                                 For Global Notes.

(2)                                 For Global Notes.

 

EXHIBIT A - 1

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by a duly authorized officer.

 

	
Date:
    	
SANDRIDGE ENERGY, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

EXHIBIT A - 2

 

(Form of Trustee’s Certificate of Authentication)

 

This is one of the 8.75% Senior Secured Notes due 2020 described in the Indenture referred to in this Note.

 

	
 
    	
U.S. BANK NATIONAL ASSOCIATION, as   Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

EXHIBIT A - 3

 

[REVERSE SIDE OF NOTE]

 

SANDRIDGE ENERGY, INC.

 

8.75% Senior Secured Note due 2020

 

1.                                      Principal.

 

The Company promises to pay the principal of this Note on June 1, 2020; provided, however, that if on October 15, 2019, the aggregate outstanding principal amount of the Company’s 8.75% Senior Notes due 2020 that shall not have been cancelled or retired as a result of redemption, repurchase, or other acquisition or shall have not otherwise been discharged or defeased exceeds $100.0 million, on October 16, 2019.

 

2.                                      Interest.

 

Interest on this Note will be payable, at the rate of 8.75% per annum, semiannually to the Holders of record of the Notes at the close of business on the Regular Record Date immediately preceding each Interest Payment Date (whether or not a Business Day) on each Interest Payment Date, commencing December 1, 2015, even if such Note is canceled after such Regular Record Date and on or before such Interest Payment Date.

 

Interest on this Note will accrue from the most recent date to which interest has been paid on this Note (or, if there is no existing default in the payment of interest and if this Note is authenticated between a Regular Record Date and the next Interest Payment Date, from such Interest Payment Date) or, if no interest has been paid, from (x) the date this Note was issued or (y) if this Note is an Initial Note, from June 10, 2015. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.

 

The Company will, to the extent lawful, pay interest on overdue principal (without regard to any applicable grace periods) at a rate per annum of 8.75%. Interest not paid when due and any interest on principal, premium or interest not paid when due will be paid to the Persons that are Holders on a special record date, which will be the 15th day preceding the date fixed by the Company for the payment of such interest, whether or not such day is a Business Day. At least 15 days before a special record date, the Company will send to each Holder and to the Trustee a notice that sets forth the special record date, the payment date and the amount of interest to be paid.

 

3.                                      Indentures; Note Guarantee.

 

This is one of the Notes issued under an Indenture dated as of June 10, 2015 (as amended from time to time, the “Indenture”), among the Company, the Guarantors party thereto and U.S. Bank National Association, as Trustee. Capitalized terms used herein are used as defined in the Indenture unless otherwise indicated. The terms of the Notes include those stated in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of all such terms. To the extent permitted by applicable law, in the event of any 

 

EXHIBIT A - 4

 

inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture will control.

 

The Indenture limits the initial aggregate principal amount of the Notes to $1,250,000,000, but Additional Notes may be issued pursuant to the Indenture, and the originally issued Notes and all such Additional Notes will vote together for all purposes as a single class. This Note is guaranteed as set forth in the Indenture.

 

4.                                      Optional Redemption; Redemption with Proceeds of Equity Offering.

 

Except as set forth in this section and Section 4.13(c) of the Indenture, the Notes will not be redeemable at the option of the Company.

 

(a)                                 At any time and from time to time on or after June 1, 2017, the Company may redeem the Notes, in whole or in part, in amounts of $1,000 or whole multiples of $1,000 in excess thereof, at redemption price equal to the percentage of the principal amount set forth below plus accrued and unpaid interest to the redemption date (subject to the rights of Holders of record on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date), if redeemed during the 12-month period beginning on June 1 of each of the years indicated below:

 

	
Year
    	
 
    	
Redemption Price
    	
 
    
	
2017
    	
 
    	
104.375
    	
%
    
	
2018
    	
 
    	
102.188
    	
%
    
	
2019 and   thereafter
    	
 
    	
100.000
    	
%
    

 

(b)                                 If fewer than all of the Notes are being redeemed, the Trustee will select the Notes to be redeemed pro rata, by lot or by any other method the Trustee in its sole discretion deems fair and appropriate (or, in the case of Notes represented by global certificates, in such manner as DTC may require), in denominations of $1,000 principal amount and multiples thereof. Upon surrender of any Note redeemed in part, the Holder will receive a new Note equal in principal amount to the unredeemed portion of the surrendered Note. Once notice of redemption is sent to the Holders, subject to any condition precedent contained in any notice of redemption, Notes called for redemption become due and payable at the redemption price on the redemption date, and, commencing on the redemption date, Notes redeemed will cease to accrue interest.

 

(c)                                  In addition, at any time and from time to time prior to June 1, 2017, the Company may use up to an amount equal to the net proceeds of one or more Equity Offerings to redeem up to an aggregate of 35% of the aggregate principal amount of Notes issued under the Indenture (including the principal amount of any Additional Notes issued under the Indenture) at a redemption price equal to 108.750% of the aggregate principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to the redemption date (subject to the rights of Holders of record on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date); provided that this redemption provision shall not be applicable with respect to any transaction that results in a Change of Control. At least 65% of the aggregate principal amount of Notes (including the principal amount of any Additional Notes issued under the Indenture) must remain outstanding immediately after the occurrence of such redemption. In 

 

EXHIBIT A - 5

 

order to effect this redemption, the Company must complete such redemption within 120 days of the closing of the Equity Offering.

 

(d)                                 Prior to June 1, 2017, the Company will be entitled at its option to redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus the Applicable Premium as of, and accrued and unpaid interest if any, to, the redemption date (subject to the rights of Holders of record on the relevant Regular Record Date to receive interest due on the relevant Interest Payment Date).

 

“Adjusted Treasury Rate” means, with respect to any redemption date, the sum of (a) the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) which has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source or similar market data)) most nearly equal to the period from the redemption date to June 1, 2017; provided, however, that if the period from the redemption date to June 1, 2017 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the redemption date to June 1, 2017 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used, plus (b) 0.50%.

 

“Applicable Premium” means at any redemption date, the greater of (i) 1.00% of the principal amount of any Note to be redeemed on such date and (ii) the excess of (A) the present value at such redemption date of (1) the redemption price of such Note on June 1, 2017 (as set forth in the table appearing in clause (a) above) exclusive of any accrued interest, plus (2) all required remaining scheduled interest payments due on such Note through June 1, 2017, (but excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such Note on such redemption date. The Company will calculate the Applicable Premium and provide the Trustee prior to the applicable redemption date with a written statement showing the Applicable Premium and the calculation thereof in reasonable detail.

 

(e)                                  The Company is also entitled at its option to redeem the Notes in whole as provided in Section 4.13(c) of the Indenture.

 

(f)                                   All redemptions of the Notes will be made upon not less than 15 days’ nor more than 60 days’ prior notice, except that a redemption notice may be made more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance or discharge of the Notes as provided in Article 8 of the Indenture.

 

(g)                                  Notice of any redemption of the Notes (including upon an Equity Offering or in connection with a transaction (or series of related transactions) or an event that constitutes a Change of Control) may, at the Company’s discretion, be given prior to the completion or the occurrence thereof and any such redemption or notice may, at the Company’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion or 

 

EXHIBIT A - 6

 

occurrence of the related transaction or event, as the case may be. In addition, if such redemption or purchase is subject to satisfaction of one or more conditions precedent, such notice shall describe each such condition, and if applicable, shall state that, in the Company’s discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption or purchase may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date as so delayed, or such notice may be rescinded at any time in the Company’s discretion if in the good faith judgment of the Company any or all of such conditions will not be satisfied. In addition, the Company may provide in such notice that payment of the redemption price and performance of the Company’s obligations with respect to such redemption may be performed by another Person. In no event shall the Trustee be responsible for monitoring, or charged with knowledge of, the maximum aggregate amount of the Notes eligible under the Indenture to be redeemed.

 

5.                                      Redemption and Repurchase; Discharge Prior to Redemption or Maturity.

 

This Note is subject to optional redemption, and may be the subject of an Offer to Purchase, as further described in the Indenture. There is no sinking fund or mandatory redemption applicable to this Note.

 

If the Company deposits with the Trustee money or U.S. Government Obligations sufficient to pay the then outstanding principal of, premium, if any, and accrued interest on the Notes to final Stated Maturity or redemption, the Company may in certain circumstances be discharged from the Indenture and the Notes or may be discharged from certain of its obligations under certain provisions of the Indenture.

 

6.                                      Registered Form; Denominations; Transfer; Exchange.

 

The Notes are in registered form without coupons in denominations of $1,000 principal amount and any multiple of $1,000 in excess thereof. A Holder may register the transfer or exchange of Notes in accordance with the Indenture. The Trustee may require a Holder to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. Pursuant to the Indenture, there are certain periods during which the Trustee will not be required to issue, register the transfer of or exchange any Note or certain portions of a Note.

 

7.                                      Defaults and Remedies.

 

Subject to the Intercreditor Agreement, if an Event of Default (other than a bankruptcy or insolvency default with respect to the Company), as defined in the Indenture, occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding, by written notice to the Company (and to the Trustee if the notice is given by such Holders), may, and the Trustee at the request of such Holders shall, declare the principal of and accrued interest on the Notes to be immediately due and payable. If a bankruptcy or insolvency default with respect to the Company occurs and is continuing, the Notes automatically become due and payable. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may require indemnity satisfactory to it 

 

EXHIBIT A - 7

 

before it enforces the Indenture or the Notes. Subject to certain limitations and the Intercreditor Agreement, Holders of a majority in aggregate principal amount of the Notes then outstanding may direct the Trustee in its exercise of remedies.

 

Subject to certain limited exceptions, pursuant to the terms of the Intercreditor Agreement, so long as the Senior Credit Facility is secured, the Credit Agreement Agent will determine the time and method by which the security interests in the Collateral will be enforced.

 

8.                                      Amendment and Waiver.

 

Subject to certain exceptions, the Indenture, the Notes and the other Note Documents may be amended, or default may be waived, with the consent of the Holders of a majority in aggregate principal amount of the outstanding Notes. Without notice to or the consent of any Holder, the Company, the Guarantors and the Trustee (in the case of the Indenture, the Security Documents, the Intercreditor Agreement and the Collateral Trust Agreement) may amend or supplement the Indenture or the other Note Documents to, among other things, cure any ambiguity, defect or inconsistency.

 

9.                                      Authentication.

 

This Note is not valid until the Trustee (or Authenticating Agent) signs the certificate of authentication on the other side of this Note.

 

10.                               Governing Law.

 

This Note shall be governed by, and construed in accordance with, the laws of the State of New York.

 

EXHIBIT A - 8

 

11.                               Security.

 

The Notes and the Note Guarantees will be secured by second priority Liens on the Collateral on the terms and conditions set forth in the Indenture and the Security Documents, including the Collateral Trust Agreement and the Intercreditor Agreement.  The rights of the Holders with respect to the Collateral will be subject to the terms of the Intercreditor Agreement and the Collateral Trust Agreement. The Trustee and the Collateral Trustee, as the case may be, hold the Collateral in trust for the benefit of the Holders, in each case pursuant to the Security Documents, including the Intercreditor Agreement and the Collateral Trust Agreement. Each Holder, by accepting this Note, consents and agrees to the terms of the Security Documents (including the provisions providing for the foreclosure and release of Collateral), the Intercreditor Agreement and the Collateral Trust Agreement as the same may be in effect or may be amended from time to time in accordance with their terms and the Indenture and authorizes and directs the Collateral Trustee to enter into the Security Documents, the Intercreditor Agreement and the Collateral Trust Agreement on the Issue Date, and at any time after the Issue Date, if applicable and to perform its obligations and exercise its rights thereunder in accordance therewith.

 

12.                               Abbreviations.

 

Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A/ (= Uniform Gifts to Minors Act).

 

The Company will furnish a copy of the Indenture to any Holder upon written request and without charge.

 

EXHIBIT A - 9

 

TRANSFER NOTICE

 

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

 

Insert Taxpayer Identification No.

 

 

Please print or typewrite name and address including zip code of assignee

 

the within Note and all rights thereunder, hereby irrevocably constituting and appointing

 

attorney to transfer said Note on the books of the Company with full power of substitution in the premises.

 

EXHIBIT A - 10

 

[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL CERTIFICATES BEARING A RESTRICTED LEGEND]

 

In connection with any transfer of this Note occurring prior to                    , the undersigned confirms that such transfer is made without utilizing any general solicitation or general advertising and further as follows:

 

Check One

 

o (1) This Note is being transferred to a “qualified institutional buyer” in compliance with Rule 144A under the Securities Act of 1933, as amended and certification in the form of Exhibit F to the Indenture is being furnished herewith.

 

or

 

 ̈ (2) This Note is being transferred to a Non-U.S. Person in compliance with the exemption from registration under the Securities Act of 1933, as amended, provided by Regulation S thereunder, and certification in the form of Exhibit E to the Indenture is being furnished herewith.

 

or

 

 ̈ (3) This Note is being transferred other than in accordance with (1) or (2) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture.

 

If none of the foregoing boxes is checked, the Trustee is not obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in the Indenture have been satisfied.

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Seller
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
NOTICE: The signature to this assignment   must correspond with the name as written upon the face of the within   mentioned instrument in every particular, without alteration or any change   whatsoever.
    

 

Signature Guarantee:(3)

 

(3)                                 Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Securities Transfer Association Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

EXHIBIT A - 11

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you wish to have all of this Note purchased by the Company pursuant to Section 4.13 or Section 4.14 of the Indenture, check here:

 

If you wish to have a portion of this Note purchased by the Company pursuant to Section 4.13 or Section 4.14 of the Indenture, state the principal amount below:

 

$

 

	
Date:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Your Signature:
    	
 
    	
 
    
	
(Sign exactly as your name appears on the   other side of this Note)
    
	
 
    	
 
    
	
Signature Guarantee:(4)
    	
 
    	
 
    
					

 

(4)                                 Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Securities Transfer Association Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

EXHIBIT A - 12

 

SCHEDULE OF EXCHANGES OF NOTES(1)

 

The following exchanges of a part of this Global Note for Certificated Notes or a part of another Global Note have been made:

 

	
Date of Exchange
    	
 
    	
Amount of
   decrease
   in principal
   amount
   of this Global Note
    	
 
    	
Amount of increase
   in principal
   amount
   of this Global Note
    	
 
    	
Principal amount
   of this Global Note
   following such
   decrease (or
   increase)
    	
 
    	
Signature of
   authorized officer
   of Trustee
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(1)                                 For Global Notes.

 

EXHIBIT A - 13

 

EXHIBIT B

 

SUPPLEMENTAL INDENTURE

 

Dated as of                 ,         

 

Among

 

SANDRIDGE ENERGY, INC.

 

the Guarantor(s) Party Hereto

 

and

 

U.S. BANK NATIONAL ASSOCIATION

 

as Trustee

 

 

8.75% SENIOR SECURED NOTES DUE 2020

 

EXHIBIT B - 1

 

THIS SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), entered into as of                          ,           , among SANDRIDGE ENERGY, INC., a Delaware corporation (the “Company”), [insert each Guarantor executing this Supplemental Indenture and its jurisdiction of organization] (each an “Undersigned”) and U.S. BANK NATIONAL ASSOCIATION, as trustee (the “Trustee”).

 

RECITALS

 

WHEREAS, the Company, the Guarantors party thereto and the Trustee entered into the Indenture, dated as of June 10, 2015 (the “Indenture”), relating to the Company’s 8.75% Senior Secured Notes due 2020 (the “Notes”);

 

WHEREAS, as a condition to the Trustee entering into the Indenture and the purchase of the Notes by the Holders, the Company agreed pursuant to the Indenture to cause any newly acquired or created Restricted Subsidiaries (other than Foreign Subsidiaries and Immaterial Subsidiaries) to provide Guarantees.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and intending to be legally bound, the parties to this Supplemental Indenture hereby agree as follows:

 

Section 1.                                           Capitalized terms used herein and not otherwise defined herein are used as defined in the Indenture.

 

Section 2.                                           Each Undersigned, by its execution of this Supplemental Indenture, agrees to be a Guarantor under the Indenture and to be bound by the terms of the Indenture applicable to Guarantors, including, but not limited to, Article 11 thereof, subject to any limitations therein.

 

Section 3.                                           This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.

 

Section 4.                                           This Supplemental Indenture may be signed in various counterparts which together will constitute one and the same instrument.

 

Section 5.                                           This Supplemental Indenture is an amendment supplemental to the Indenture and the Indenture and this Supplemental Indenture will henceforth be read together.

 

EXHIBIT A - 2

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.

 

	
 
    	
SANDRIDGE ENERGY, INC., as Issuer
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[GUARANTOR]
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL ASSOCIATION, as   Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

EXHIBIT A - 3

 

EXHIBIT C

 

RESTRICTED LEGEND

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED NOTES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS [IN THE CASE OF RULE 144A NOTES: ONE YEAR] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE COMPANY OR ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE NOTE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE NOTES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C), (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

EXHIBIT C - 1

 

EXHIBIT D

 

DTC LEGEND

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN 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 A BENEFICIAL INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE INDENTURE.

 

EXHIBIT D - 1

 

EXHIBIT E

 

Regulation S Certificate

 

,        

 

U.S. Bank National Association 
 5555 San Felipe Street, 11th Floor

Houston, Texas 77056

EX-TX-WSFH

Attention: Corporate Trust Services

Facsimile: (713) 235-9213

 

Re:                             SANDRIDGE ENERGY, INC.
 Senior Secured Notes due 2020
 (the “Notes”)
 Issued under the Indenture (the “Indenture”) dated as
  as of June 10, 2015 relating to the Notes

 

Ladies and Gentlemen:

 

Terms are used in this Certificate as used in Regulation S (“Regulation S”) under the Securities Act of 1933, as amended (the “Securities Act”), except as otherwise stated herein.

 

[CHECK A OR B AS APPLICABLE.]

 

o                                    (1)                                 This Certificate relates to our proposed transfer of $ principal amount of Notes issued under the Indenture. We hereby certify as follows:

 

1.                                      The offer and sale of the Notes was not and will not be made to a person in the United States (unless such person is excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(vi) or the account held by it for which it is acting is excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(i) under the circumstances described in Rule 902(h)(3)) and such offer and sale was not and will not be specifically targeted at an identifiable group of U.S. citizens abroad.

 

2.                                      Unless the circumstances described in the parenthetical in paragraph 1 above are applicable, either (a) at the time the buy order was originated, the buyer was outside the United States or we and any person acting on our behalf reasonably believed that the buyer was outside the United States or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market, and neither we nor any person acting on our behalf knows that the transaction was pre-arranged with a buyer in the United States.

 

3.                                      Neither we, any of our affiliates, nor any person acting on our or their behalf has made any directed selling efforts in the United States with respect to the Notes.

 

EXHIBIT E - 1

 

4.                                      The proposed transfer of Notes is not part of a plan or scheme to evade the registration requirements of the Securities Act.

 

5.                                      If we are a dealer or a person receiving a selling concession, fee or other remuneration in respect of the Notes, and the proposed transfer takes place during the Restricted Period (as defined in the Indenture), or we are an officer or director of the Company (as defined in the Indenture), we certify that the proposed transfer is being made in accordance with the provisions of Rule 904 (b) of Regulation S.

 

o                                    (2)                                 This Certificate relates to our proposed exchange of $              principal amount of Notes issued under the Indenture for an equal principal amount of Notes to be held by us. We hereby certify as follows:

 

6.                                      At the time the offer and sale of the Notes was made to us, either (i) we were not in the United States or (ii) we were excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(vi) or the account held by us for which we were acting was excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(i) under the circumstances described in Rule 902(h)(3); and we were not a member of an identifiable group of U.S. citizens abroad.

 

7.                                      Unless the circumstances described in paragraph 1(ii) above are applicable, either (a) at the time our buy order was originated, we were outside the United States or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market and we did not pre-arrange the transaction in the United States.

 

8.                                      The proposed exchange of Notes is not part of a plan or scheme to evade the registration requirements of the Securities Act.

 

You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

 

	
 
    	
 
    	
Very truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[NAME OF SELLER (FOR TRANSFERS) OR OWNER   (FOR EXCHANGES)]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    

 

EXHIBIT E - 2

 

EXHIBIT F

 

Rule 144A Certificate

 

,        

 

U.S. Bank National Association
 5555 San Felipe Street, 11th Floor

Houston, Texas 77056

EX-TX-WSFH

Attention: Corporate Trust Services

Facsimile: (713) 235-9213

 

Re:                             SANDRIDGE ENERGY, INC.
 Senior Secured Notes due 2020
 (the “Notes”)
 Issued under the Indenture (the “Indenture”) dated as
  as of June 10, 2015 relating to the Notes

 

Ladies and Gentlemen:

 

This Certificate relates to:

 

[CHECK A OR B AS APPLICABLE.]

 

o                                    A.                                    Our proposed purchase of $             principal amount of Notes issued under the Indenture.

 

 ̈                                    B.                                    Our proposed exchange of $            principal amount of Notes issued under the Indenture for an equal principal amount of Notes to be held by us.

 

We and, if applicable, each account for which we are acting in the aggregate owned and invested more than $100,000,000 in securities of issuers that are not affiliated with us (or such accounts, if applicable), as of           , 20  , which is a date on or since close of our most recent fiscal year. We and, if applicable, each account for which we are acting, are a qualified institutional buyer within the meaning of Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended (the “Securities Act”). If we are acting on behalf of an account, we exercise sole investment discretion with respect to such account. We are aware that the transfer of Notes to us, or such exchange, as applicable, is being made in reliance upon the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. Prior to the date of this Certificate we have received such information regarding the Company as we have requested pursuant to Rule 144A(d)(4) or have determined not to request such information.

 

You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

 

EXHIBIT F - 1

 

	
 
    	
 
    	
Very truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[NAME OF PURCHASER (FOR TRANSFERS)
    
	
 
    	
 
    	
OR OWNER
    
	
 
    	
 
    	
(FOR EXCHANGES)]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    

 

EXHIBIT F - 2

 

EXHIBIT G

 

Institutional Accredited Investor Certificate

 

,       

 

U.S. Bank National Association
 5555 San Felipe Street, 11th Floor

Houston, Texas 77056

EX-TX-WSFH

Attention: Corporate Trust Services

Facsimile: (713) 235-9213

 

Re:                             SANDRIDGE ENERGY, INC.
 Senior Secured Notes due 2020
 (the “Notes”)
 Issued under the Indenture (the “Indenture”) dated as
  as of June 10, 2015 relating to the Notes

 

Ladies and Gentlemen:

 

This Certificate relates to:

 

[CHECK A OR B AS APPLICABLE.]

 

 ̈                                    A. Our proposed purchase of $                   principal amount of Notes issued under the Indenture.

 

 ̈                                    B. Our proposed exchange of $                  principal amount of Notes issued under the Indenture for an equal principal amount of Notes to be held by us.

 

We hereby confirm that:

 

1.                                      We are an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”) (an “Institutional Accredited Investor”).

 

2.                                      Any acquisition of Notes by us will be for our own account or for the account of one or more other Institutional Accredited Investors as to which we exercise sole investment discretion.

 

3.                                      We have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of an investment in the Notes and we and any accounts for which we are acting are able to bear the economic risks of and an entire loss of our or their investment in the Notes.

 

4.                                      We are not acquiring the Notes with a view to any distribution thereof in a transaction that would violate the Securities Act or the securities laws of any State

 

EXHIBIT G - 1

 

of the United States or any other applicable jurisdiction; provided that the disposition of our property and the property of any accounts for which we are acting as fiduciary will remain at all times within our and their control.

 

5.                                      We acknowledge that the Notes have not been registered under the Securities Act and that the Notes may not be offered or sold within the United States or to or for the benefit of U.S. persons except as set forth below.

 

6.                                      The principal amount of Notes to which this Certificate relates is at least equal to $250,000.

 

We agree for the benefit of the Company, on our own behalf and on behalf of each account for which we are acting, that such Notes may be offered, sold, pledged or otherwise transferred only in accordance with the Securities Act and any applicable securities laws of any State of the United States and only (a) to the Company or its subsidiaries, (b) pursuant to a registration statement which has become effective under the Securities Act, (c) to a qualified institutional buyer in compliance with Rule 144A under the Securities Act, (d) in an offshore transaction in compliance with Rule 904 of Regulation S under the Securities Act, (e) in a principal amount of not less than $250,000, to an Institutional Accredited Investor that, prior to such transfer, delivers to the Trustee a duly completed and signed certificate (in the same form as this Certificate) relating to the restrictions on transfer of the Notes or (f) pursuant to an exemption from registration provided by Rule 144 under the Securities Act or any other available exemption from the registration requirements of the Securities Act.

 

Prior to the registration of any transfer in accordance with (c), (d), (e) or (f) above, we acknowledge that the Company reserves the right to require the delivery of such legal opinions, certifications or other evidence as may reasonably be required in order to determine that the proposed transfer is being made in compliance with the Securities Act and applicable state securities laws. We acknowledge that no representation is made as to the availability of any Rule 144 exemption from the registration requirements of the Securities Act.

 

We understand that the Trustee will not be required to accept for registration of transfer any Notes acquired by us, except upon presentation of evidence satisfactory to the Company and the Trustee that the foregoing restrictions on transfer have been complied with. We further understand that the Notes acquired by us may be in the form of definitive physical certificates and that any such certificates will bear a legend reflecting the substance of the preceding paragraph. We further agree to provide to any person acquiring any of the Notes from us a notice advising such person that resales of the Notes are restricted as stated herein and that certificates representing the Notes will bear a legend to that effect.

 

We agree to notify you promptly in writing if any of our acknowledgments, representations or agreements herein ceases to be accurate and complete.

 

We represent to you that we have full power to make the foregoing acknowledgments, representations and agreements on our own behalf and on behalf of any account for which we are acting.

 

EXHIBIT G - 2

 

You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

 

	
 
    	
 
    	
Very truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[NAME OF PURCHASER (FOR TRANSFERS) OR OWNER   (FOR EXCHANGES)]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    

 

EXHIBIT G - 3

 

Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:

 

	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Taxpayer ID number:
    	
 
    	
 
    
				

 

EXHIBIT G - 4

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