As filed with the Securities and
Exchange Commission on May 18, 2011
Registration No.
333-
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
APPROACH RESOURCES
INC.*
(Exact name of registrant as
specified in its charter)
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Delaware
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51-0424817
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. employer identification
number)
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One Ridgmar Centre
6500 West Freeway, Suite 800
Fort Worth, Texas 76116
(817) 989-9000
(Address, including zip
code, and telephone number,
including area code, of registrants principal executive
offices)
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J. Curtis Henderson
Executive Vice President and General Counsel
Approach Resources Inc.
One Ridgmar Centre
6500 West Freeway, Suite 800
Fort Worth, Texas 76116
(817) 989-9000
(Name, address, including
zip code, and
telephone number, including area code, of agent for service)
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Copy to:
Wesley P. Williams
Jessica W. Hammons
Thompson & Knight LLP
One Arts Plaza
1722 Routh Street, Suite 1500
Dallas, Texas
75201-2533
(214) 969-1700
Approximate date of commencement of proposed sale to the
public:
From time to time after the effective date of this
registration statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box.
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If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box.
þ
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering.
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If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
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If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that
shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the
following
box.
þ
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed
to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities
Act, check the following
box.
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Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2
of the Exchange Act.
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Large accelerated
filer
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Accelerated
filer
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Non-accelerated
filer
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Smaller reporting
company
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(Do not check if smaller reporting company)
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CALCULATION
OF REGISTRATION FEE
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Title of Each Class of
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Amount to be
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Proposed Maximum
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Proposed Maximum
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Amount of
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Securities to be Registered(1)
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Registered(2)
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Offering Price Per Unit
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Aggregate Offering Price
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Registration Fee(3)
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Common Stock, $0.01 par value per share
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Preferred Stock, $0.01 par value per share
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Depositary Shares(4)
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Warrants
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Rights
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Debt Securities
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Guarantee of Debt Securities(5)
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(1)
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Any securities registered hereunder
may be sold separately or as units with the other securities
registered hereunder.
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(2)
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There is to be registered hereunder
such indeterminate number or amount of securities of each
identified class as may from time to time be issued by the
registrant at indeterminate prices and as may be issuable upon
conversion, redemption, exchange, exercise or settlement of any
securities registered hereunder, including under any applicable
anti-dilution provisions.
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(3)
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In accordance with
Rules 456(b) and 457(r) of the Securities Act of 1933, as
amended, which we refer to as the Securities Act, the registrant
is deferring payment of all of the registration fee, except for
$3,033 that has already been paid with respect to
$150 million aggregate initial offering price of securities
that were previously registered pursuant to Registration
Statement
No. 333-164371
and were not sold thereunder.
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(4)
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Each depositary share will be
issued under a depository agreement and will be evidenced by a
depositary receipt. If Approach Resources Inc. elects to offer
fractional interests in shares of preferred stock to the public,
depositary receipts will be distributed to the investors
purchasing the fractional interests, and the shares will be
issued to the depositary under the depositary agreement.
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(5)
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Subsidiaries of Approach Resources
Inc. named as co-registrants may fully, irrevocably and
unconditionally guarantee on an unsecured basis the
non-convertible debt securities of Approach Resources Inc. No
additional consideration will be received for the guarantees and
in accordance with Rule 457(n) of the Securities Act, no
additional fee is required.
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*ADDITIONAL
SUBSIDIARY GUARANTOR REGISTRANTS
Each of the following subsidiaries and each other subsidiary of
Approach Resources Inc. that becomes a guarantor of certain of
the securities registered hereby, is hereby deemed to be a
registrant.
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Jurisdiction of Incorporation
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I.R.S. Employer
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Exact Name as Specified in their Charters
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or Organization
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Identification Number
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Approach Resources I, LP
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Texas
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20-0415316
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Approach Oil & Gas Inc.
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Delaware
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20-1997957
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Approach Operating, LLC
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Delaware
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54-2131981
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Approach Delaware, LLC
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Delaware
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20-0507483
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Approach Services, LLC
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Delaware
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PROSPECTUS
APPROACH
RESOURCES INC.
Common Stock
Preferred Stock
Depositary Shares
Warrants
Rights
Debt Securities
Guarantee of Debt Securities of Approach Resources Inc.
by:
Approach Resources I, LP
Approach Oil & Gas Inc.
Approach Operating, LLC
Approach Delaware, LLC
Approach Services, LLC
We may offer and sell the securities listed above from time to
time in one or more transactions. Any non-convertible debt
securities we issue under this prospectus may be guaranteed by
one or more of our subsidiaries.
The securities:
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will be offered at prices and on terms to be set forth in an
accompanying prospectus supplement;
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may be offered separately or together, or in separate series;
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may be convertible into or exchangeable for other securities;
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may be guaranteed by certain of our domestic
subsidiaries; and
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may be listed on a national securities exchange, if specified in
an accompanying prospectus supplement
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We will provide the specific terms of the securities in
supplements to this prospectus. This prospectus may be used to
offer and sell securities only if it is accompanied by a
prospectus supplement. The prospectus supplement will contain
more specific information about the offering and the terms of
the securities being offered, including any guarantees by our
domestic subsidiaries. A prospectus supplement may also add,
update or change information contained in this prospectus. This
prospectus may not be used to offer or sell securities without a
prospectus supplement describing the method and terms of the
offering.
We may sell these securities directly or through agents,
underwriters or dealers or through a combination of these
methods. See Plan of Distribution. The prospectus
supplement will list any agents, underwriters or dealers that
may be involved and the compensation they will receive. The
prospectus supplement will also show you the net proceeds that
we expect to receive from selling the securities being offered.
You should carefully read this prospectus and any accompanying
prospectus supplement, together with the documents we
incorporate by reference, before you invest in any of our
securities.
Investing in any of our securities involves
risk. Please read carefully the information included
and incorporated by reference in this prospectus and in any
applicable prospectus supplement for a discussion of the factors
you should consider before deciding to purchase our securities.
See Risk Factors beginning on page 5 of this
prospectus.
Our common stock is traded on the NASDAQ Global Select Market
under the symbol AREX.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
This
prospectus is dated May 18, 2011.
TABLE OF
CONTENTS
You should rely only on the information contained in this
prospectus, any prospectus supplement and the documents we have
incorporated by reference. We have not authorized anyone to
provide you with different information. We are not making an
offer of these securities in any state where the offer is not
permitted. You should not assume that the information contained
in this prospectus or any prospectus supplement, as well as
information we previously filed with the Securities and Exchange
Commission that is incorporated by reference herein, is accurate
as of any date other than its respective date.
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ABOUT
THIS PROSPECTUS
This prospectus is a part of a registration statement that we
filed with the Securities and Exchange Commission, which we
refer to as the SEC, utilizing a shelf registration
process. Under this shelf registration process, we may sell any
combination of the securities described in this prospectus in
one or more offerings. This prospectus provides you with a
general description of the securities we may offer. Each time we
sell securities under this shelf registration, we will provide a
prospectus supplement that will contain specific information
about the terms of that offering and the securities offered by
us in that offering. The prospectus supplement may also add,
update or change information contained in this prospectus. Any
statement that we make in this prospectus will be modified or
superseded by any inconsistent statement made by us in a
prospectus supplement. You should read both this prospectus and
any prospectus supplement together with additional information
described under the heading Where You Can Find More
Information before making an investment in our securities.
You should not assume that the information in this prospectus,
any accompanying prospectus supplement or any document
incorporated herein by reference is accurate as of any date
other than the date of such document.
In this prospectus, the Company, we,
us, our or ours refer to
Approach Resources Inc. and its subsidiaries, unless we state
otherwise or the context indicates otherwise.
APPROACH
RESOURCES INC.
Approach Resources Inc. is an independent energy company engaged
in the exploration, development, production and acquisition of
oil and gas properties. Our core properties are located in the
Permian Basin in West Texas (Clearfork, Wolfcamp Shale, Canyon
Sands, Strawn and Ellenburger target formations). We also own
interests in the East Texas Basin (Cotton Valley Sands and
Cotton Valley Lime target formations) and in the Chama Basin in
Northern New Mexico (Mancos Shale target formation). The Company
was incorporated in Delaware in 2002. Our principal executive
offices are located at One Ridgmar Centre, 6500 West
Freeway, Suite 800, Fort Worth, Texas 76116, and our
telephone number is
(817) 989-9000.
THE
SUBSIDIARY GUARANTORS
Certain of our domestic subsidiaries, which we refer to as the
Subsidiary Guarantors in this prospectus, may fully and
unconditionally guarantee our payment obligations under any
series of debt securities offered by this prospectus. Financial
information concerning our Subsidiary Guarantors and any
non-guarantor subsidiaries will be included in our consolidated
financial statements filed as part of our periodic reports filed
pursuant to the Securities Exchange Act of 1934, as amended,
which we refer to as the Exchange Act, to the extent required by
the rules and regulations of the SEC.
Additional information concerning our subsidiaries and us is
included in reports and other documents incorporated by
reference in this prospectus. See Where You Can Find More
Information.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other
information with the SEC (File
No. 001-33801)
pursuant to the Exchange Act. You may read and copy any
documents that are filed at the SECs public reference room
at 100 F Street, N.E., Washington, D.C. 20549.
You may also obtain copies of these documents at prescribed
rates from the public reference section of the SEC at its
Washington address. Please call the SEC at
1-800-SEC-0330
for further information.
Our filings are also available to the public through the
SECs website at
http://www.sec.gov
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The SEC allows us to incorporate by reference
information that we file with it, which means that we can
disclose important information to you by referring you to
documents previously filed with the SEC. The information
incorporated by reference is an important part of this
prospectus, and the information that we later
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file with the SEC will automatically update and supersede this
information. The following documents we have filed with the SEC
pursuant to the Exchange Act are incorporated herein by
reference:
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our Annual Report on
Form 10-K
for the year ended December 31, 2010;
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our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2011;
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our Current Reports on
Form 8-K
filed on January 6, 2011, January 14, 2011,
January 28, 2011, March 1, 2011 (as such Current
Report on Form 8-K was amended by the Form 8-K/A with the SEC on
April 21, 2011), April 8, 2011 and May 4,
2011; and
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the description of our common stock contained in our
registration statement on Form
8-A12B
filed
on November 5, 2007, including any amendment to that form
that we may file in the future for the purpose of updating the
description of our common stock.
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These reports contain important information about us, our
financial condition and our results of operations.
All future documents filed pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act (excluding any
information furnished pursuant to Item 2.02 or
Item 7.01 on any Current Report on
Form 8-K)
before the termination of each offering under this prospectus
shall be deemed to be incorporated in this prospectus by
reference and to be a part hereof from the date of filing of
such documents. Any statement contained herein, or in a document
incorporated or deemed to be incorporated by reference herein,
shall be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained herein
or in any subsequently filed document that also is or is deemed
to be incorporated by reference herein, modifies or supersedes
such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
You may request a copy of these filings at no cost by writing or
telephoning us at the following address or telephone number:
Approach
Resources Inc.
One Ridgmar Centre
6500 West Freeway, Suite 800
Fort Worth, Texas 76116
Attention: Executive Vice President and General Counsel
(817) 989-9000
We also maintain a website at
http://www.approachresources.com
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The information on our website is not part of this prospectus.
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CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Various statements contained in this prospectus, any prospectus
supplement and in the documents incorporated herein by
reference, including those that express a belief, expectation or
intention, as well as those that are not statements of
historical fact, are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as
amended, which we refer to as the Securities Act, and
Section 21E of the Exchange Act. The forward-looking
statements may include projections and estimates concerning the
timing and success of specific projects, typical well economics
and our future reserves, production, revenues, costs, income,
capital spending,
3-D
seismic
operations, interpretation and results and obtaining permits and
regulatory approvals. When we use the words will,
believe, intend, expect,
may, should, anticipate,
could, estimate, plan,
predict, project, potential
or their negatives, other similar expressions or the statements
that include those words, they are intended to identify a
forward-looking statement, although not all forward-looking
statements contain such identifying words.
These forward-looking statements are largely based on our
expectations, which reflect estimates and assumptions made by
our management. These estimates and assumptions reflect our best
judgment based on currently known market conditions and other
factors. Although we believe such estimates and assumptions to
be reasonable, they are inherently uncertain and involve a
number of risks and uncertainties that are beyond our control.
In addition, managements assumptions about future events
may prove to be inaccurate. We caution all readers that the
forward-looking statements contained in this prospectus are not
guarantees of future performance, and we cannot assure any
reader that such statements will be realized or the
forward-looking events and circumstances will occur. Actual
results may differ materially from those anticipated or implied
in the forward-looking statements due to the factors detailed
below and discussed in our Annual Report on
Form 10-K
for the year ended December 31, 2010, and our subsequent
SEC filings. All forward-looking statements contained in this
prospectus speak only as of the date of this prospectus, and all
forward-looking statements incorporated by reference into this
prospectus speak only as of the dates such statements were
issued. We expressly disclaim all responsibility to publicly
update or revise any forward-looking statements as a result of
new information, future events or otherwise. These cautionary
statements qualify all forward-looking statements attributable
to us, or persons acting on our behalf. The risks, contingencies
and uncertainties relate to, among other matters, the following:
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our business strategy, including our ability to recover oil and
gas in place associated with our Wolffork oil resource play in
the Permian Basin;
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estimated quantities of oil, natural gas liquids, which we refer
to as NGLs, and gas reserves;
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uncertainty of commodity prices in oil, gas and NGLs;
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overall United States and global economic and financial market
conditions;
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domestic and foreign demand and supply for oil, gas, NGLs and
the products derived from such hydrocarbons;
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disruption of credit and capital markets;
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our financial position;
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our cash flow and liquidity;
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replacing our oil and natural gas reserves;
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our inability to retain and attract key personnel;
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uncertainty regarding our future operating results;
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uncertainties in exploring for and producing oil and gas;
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high costs, shortages, delivery delays or unavailability of
drilling and completion, equipment, materials, labor or other
services;
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disruptions to, capacity constraints in or other limitations on
the pipeline systems that deliver our gas and NGLs and other
processing and transportation considerations;
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our inability to obtain additional financing necessary to fund
our operations and capital expenditures and to meet our other
obligations;
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competition in the oil and gas industry;
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marketing of oil, gas and NGLs;
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interpretation of
3-D
seismic
data;
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development of our current asset base or property acquisitions;
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the effects of government regulation and permitting and other
legal requirements;
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plans, objectives, expectations and intentions contained in this
prospectus, any prospectus supplement and the documents we
incorporate herein by reference that are not historical; and
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the other risks described in this prospectus, any prospectus
supplement and the documents we incorporate herein by reference.
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4
RISK
FACTORS
You should carefully consider the risk factors set forth under
the heading Risk Factors in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010, as well as in
any of our filings with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act incorporated herein by
reference, and those risk factors that may be included in any
applicable prospectus supplement, together with all of the other
information included in this prospectus, any prospectus
supplement and the documents we incorporate by reference, before
investing in our securities. If any of the risks discussed in
the foregoing documents were to occur, our business, financial
condition, results of operations and cash flows could be
materially adversely affected.
RATIOS OF
EARNINGS TO FIXED CHARGES
The following table contains our consolidated ratio of earnings
to fixed charges for the periods indicated. You should read
these ratios of earnings to fixed charges in connection with our
consolidated financial statements, including the notes to those
statements, incorporated by reference into this prospectus.
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Three Months Ended
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Years Ended December 31,
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March 31, 2011
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2010
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2009
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2008
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2007
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2006
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Ratio of (loss) earnings to fixed charges(1)
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5.35
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6.21
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x
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(2)
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27.89
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x
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1.47
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x
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9.73
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x
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(1)
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The ratio has been computed by dividing (loss) earnings by fixed
charges. For purposes of computing the ratio, (i) (loss)
earnings consist of (loss) income before income taxes, and
(ii) fixed charges consist of interest expense and a
portion of rentals representative of an implicit interest factor
for such rentals.
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(2)
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Due to our net loss for the year ended December 31, 2009,
the coverage ratio for this period was less than 1:1. To achieve
a coverage ratio of 1:1, we would have needed additional
earnings of approximately $4.2 million for the year ended
December 31, 2009.
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We did not have any preferred stock outstanding and there were
no preferred stock dividends paid or accrued during the periods
presented above.
USE OF
PROCEEDS
Except as may be stated in the applicable prospectus supplement,
we intend to use the net proceeds from any sales of securities
by us under this prospectus and any applicable prospectus
supplement for general corporate purposes. These purposes may
include repayment or refinancing of borrowings, working capital,
capital expenditures, investments and acquisitions. Pending any
specific application, we may initially invest funds in
short-term marketable securities.
DESCRIPTION
OF CAPITAL STOCK
The following description is based on relevant provisions of the
Delaware General Corporation Law, which we refer to as the DGCL,
our restated certificate of incorporation, which we refer to as
our certificate of incorporation, and our amended and restated
bylaws, which we refer to as our bylaws. This summary does not
purport to be complete and is qualified in its entirety by
reference to the provisions of DGCL and to our certificate of
incorporation and bylaws.
Our authorized capital stock consists of 90,000,000 shares
of common stock, $0.01 par value per share, and
10,000,000 shares of preferred stock, $0.01 par value
per share. Under the DGCL, our stockholders shall not be
personally liable for our debts or obligations except as they
may be liable by reason of their own conduct or acts.
5
Common
Stock
As of May 11, 2011, we had a total of
28,462,505 shares of common stock issued and outstanding,
including 874,536 shares of restricted stock. The shares of
restricted stock have voting rights, rights to receive dividends
and are subject to certain forfeiture restrictions.
Additionally, options to purchase 302,775 shares of common
stock are currently outstanding and have been granted to certain
members of our management and other employees. We have reserved
10% of our outstanding shares of common stock for grant of
awards under our 2007 Stock Incentive Plan (which are adjusted
each year to remain at 10% of the outstanding shares of our
common stock), plus all shares of common stock that remain
available for grant of awards under a prior plan, plus shares of
common stock subject to outstanding awards under the prior plan
that later cease to be subject to those awards for any reason
other than those awards having been exercised.
Holders of our common stock are entitled to one vote for each
share held on all matters submitted to a vote of stockholders.
Because holders of common stock do not have cumulative voting
rights, the holders of a majority of the shares of common stock
can elect all of the members of the board of directors standing
for election.
Holders of our common stock are entitled to receive dividends if
and when such dividends are declared by our board of directors
out of assets legally available therefor after payment of
dividends required to be paid on shares of preferred stock, if
any. Upon our dissolution, liquidation or winding up, and
subject to any prior rights of outstanding preferred stock, the
holders of our common stock will be entitled to share pro rata
in the distribution of all our assets available for distribution
to our stockholders after satisfaction of our debts and other
liabilities and the payment of the liquidation preference of any
preferred stock that may be outstanding. There are no redemption
or sinking fund provisions applicable to the common stock. All
outstanding shares of common stock are fully paid and
nonassessable. The holders of our common stock have no
preemptive, conversion, redemption or other subscription rights.
The rights, preferences and privileges of holders of common
stock are subject to, and may be adversely affected by, the
rights of holders of shares of any series of preferred stock
that we may designate and issue in the future.
Our common stock is listed on the NASDAQ Global Select Market
under the symbol AREX. As of May 11, 2011,
there were 80 holders of record of our common stock.
Preferred
Stock
Subject to the provisions of our certificate of incorporation
and limitations prescribed by law, our board of directors is
authorized, without further stockholder approval, to establish
and to issue from time to time one or more classes or series of
preferred stock, par value $0.01 per share, covering up to an
aggregate of 10,000,000 shares of preferred stock. Each
class or series of preferred stock will cover the number of
shares and will have preferences, voting powers, qualifications
and special or relative rights or privileges as is determined by
the board of directors, which may include, among others,
dividend rights, liquidation preferences, voting rights,
conversion rights, preemptive rights and redemption rights.
The rights of the holders of common stock will be subject to the
rights of holders of any preferred stock issued in the future.
The issuance of preferred stock could adversely affect the
voting power of holders of common stock and reduce the
likelihood that common stockholders will receive dividend
payments and payments upon liquidation. The issuance of
preferred stock could also have the effect of decreasing the
market price of the common stock and could delay, deter or
prevent a change in control of our company.
The existence of authorized but unissued shares of preferred
stock could have anti-takeover effects because we could issue
preferred stock with special dividend or voting rights that
could discourage potential bidders. For example, a business
combination could be impeded by the issuance of a series of
preferred stock containing class voting rights that would enable
the holder or holders of such series to block any such
transaction. Alternatively, a business combination could be
facilitated by the issuance of a series of preferred stock
having sufficient voting rights to provide a required percentage
vote of our stockholders. In addition, under some circumstances,
the issuance of preferred stock could adversely affect the
voting power and other rights of the holders of common stock and
could also affect the likelihood that holders of our common
stock
6
will receive dividend payments and payments on liquidation.
Although prior to issuing any series of preferred stock our
board of directors will be required to make a determination as
to whether the issuance is in the best interest of our
stockholders, our board of directors could act in a manner that
would discourage an acquisition attempt or other transaction
that some, or a majority, of our stockholders might believe to
be in their best interests or in which our stockholders might
receive a premium for their stock over prevailing market prices
of such stock. Our board of directors does not at present intend
to seek stockholder approval prior to any issuance of currently
authorized preferred stock, unless otherwise required by law or
applicable stock exchange requirements.
It is not possible to state the actual effect of the issuance of
any shares of preferred stock upon the rights of holders of the
common stock until the board of directors determines the
specific rights of the holders of the preferred stock. We
currently have no shares of preferred stock outstanding.
Anti-Takeover
Effects of Provisions of Delaware Law, Our Certificate of
Incorporation and Bylaws
A number of provisions in our certificate of incorporation, our
bylaws and the DGCL may make it more difficult to acquire
control of us. These provisions could deprive our stockholders
of opportunities to realize a premium on the shares of common
stock owned by them. In addition, these provisions may adversely
affect the prevailing market price of our common stock. These
provisions are intended to:
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enhance the likelihood of continuity and stability in the
composition of the board of directors and in the policies
formulated by the board of directors;
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discourage transactions which may involve an actual or
threatened change in control of us;
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discourage tactics that may be involved in proxy fights; and
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encourage persons seeking to acquire control of our company to
consult first with the board of directors to negotiate the terms
of any proposed business combination or offer.
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Written consent of stockholders.
Our
certificate of incorporation and bylaws provide that any action
required or permitted to be taken by our stockholders must be
taken at a duly called meeting of stockholders and not by
written consent.
Call of special stockholder meetings.
Our
bylaws provide that stockholders are not permitted to call
special meetings of stockholders. Only our board of directors,
chairman or Chief Executive Officer is permitted to call a
meeting of stockholders.
Amending the bylaws.
Our certificate of
incorporation permits our board of directors to adopt, alter or
repeal any provision of the bylaws or to make new bylaws. Our
certificate of incorporation also provides that our bylaws may
be amended by the affirmative vote of at least 67% of the voting
power of the outstanding shares of our capital stock.
Classified board.
Our certificate of
incorporation provides that our board of directors is divided
into three classes of directors, with the classes to be as
nearly equal in number as possible. As a result, approximately
one-third of our board of directors will be elected each year.
The classification of directors has the effect of making it more
difficult for stockholders to change the composition of our
board of directors. Our certificate of incorporation and bylaws
provide that the number of directors will be fixed from time to
time pursuant to a resolution adopted by the board of directors.
Advance notice procedures for stockholder proposals and
director nominations.
Our bylaws provide that
stockholders seeking to bring business before an annual meeting
of stockholders, or to nominate candidates for election as
directors at an annual meeting of stockholders, must provide
timely notice thereof in writing. To be timely, a
stockholders notice generally must be delivered to or
mailed and received at our principal executive offices not less
than 90 and no more than 120 calendar days before the first
anniversary of the date on which we first mailed our proxy
materials for the preceding years annual meeting of
stockholders. In addition, our bylaws specify requirements for
the form and content of a stockholders notice. These
provisions may preclude
7
stockholders from bringing matters before an annual meeting of
stockholders or from making nominations for directors at an
annual meeting of stockholders.
Filling board of directors vacancies;
removal.
Our certificate of incorporation
provides that vacancies and newly created directorships
resulting from any increase in the authorized number of
directors may be filled by the affirmative vote of a majority of
our directors then in office, though less than a quorum. Each
director will hold office until his or her successor is elected
and qualified, or until the directors earlier death,
resignation, retirement or removal from office. Any director may
resign at any time upon written notice to us. Our certificate of
incorporation provides, in accordance with the DGCL, that the
stockholders may remove directors only for cause and by the
affirmative vote of at least 67% of the voting power of all of
the then-outstanding shares of our common stock. We believe that
the removal of directors by the stockholders only for cause,
together with the classification of the board of directors, will
promote continuity and stability in our management and policies
and that this continuity and stability will facilitate
long-range planning.
No cumulative voting.
The DGCL provides that
stockholders are not entitled to use cumulative voting in the
election of directors unless our restated certificate of
incorporation provides otherwise. Under cumulative voting, a
majority stockholder holding a sufficient percentage of a class
of shares may be able to ensure the election of one or more
directors. Our certificate of incorporation expressly precludes
cumulative voting.
Authorized but unissued shares.
Our
certificate of incorporation provides that the authorized but
unissued shares of preferred stock are available for future
issuance without stockholder approval. These additional shares
may be utilized for a variety of corporate purposes, including
future public offerings to raise additional capital, corporate
acquisitions and employee benefit plans. The existence of
authorized but unissued shares of common stock and preferred
stock could discourage an attempt to obtain control of us by
means of a proxy contest, tender offer, merger or otherwise.
Delaware Business Combination Statute.
We are
subject to Section 203 of the DGCL regulating corporate
takeovers. This section prevents a Delaware corporation from
engaging in a business combination that includes a merger or
sale of more than 10% of the corporations assets with a
stockholder who owns 15% or more of the corporations
outstanding voting stock, as well as affiliates and associates
of any of those persons. That prohibition extends for three
years following the date that stockholder acquired that amount
of stock unless:
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the transaction in which that stockholder acquired the stock is
approved by the board of directors prior to that date;
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upon completion of the transaction that resulted in the
acquisition of the stock, the stockholder owned at least 85% of
the voting stock of the corporation outstanding at the time the
transaction commenced, excluding those shares owned by various
employee benefit plans or persons who are directors and also
officers; or
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on or after the date the stockholder acquired the stock, the
business combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders by
the affirmative vote of at least two-thirds of the outstanding
voting stock that is not owned by the stockholder.
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Stockholders may, by adopting an amendment to our certificate of
incorporation or our bylaws, elect for the corporation not to be
governed by Section 203 of the DGCL. Such amendment shall
not become effective until 12 months after the date it is
adopted or applies to a stockholder. Neither our certificate of
incorporation nor our bylaws exempt us from the restrictions
imposed under Section 203. It is anticipated that the
provisions of Section 203 may encourage companies
interested in acquiring us to negotiate in advance with our
board of directors. Section 203 will not apply to a
business combination between us and Yorktown Energy
Partners V, L.P., Yorktown Energy Partners VI, L.P. or
Yorktown Energy Partners VII, L.P., or collectively, Yorktown,
which are under common management, or a Yorktown affiliate
because Yorktown held more than 15% of our stock prior to the
effective date of our certificate of incorporation.
Limitation of liability of directors and officers;
indemnification.
Our certificate of incorporation
provides that to the fullest extent permitted by Delaware law,
as that law may be amended and supplemented from time
8
to time, our directors shall not be personally liable to us or
our stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach
of the directors duty of loyalty to the company or our
stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct, fraud or a knowing
violation of law, (iii) the payment of dividends in
violation of Section 174 of the DGCL, or (iv) for any
transaction from which the director derived any improper
personal benefit. The effect of the provision of our certificate
of incorporation is to eliminate the rights of the company and
our stockholders (through stockholders derivative suits on
our behalf) to recover monetary damages against a director for
breach of the fiduciary duty of care as a director (including
breaches resulting from negligent behavior) except in the
situations described in clauses (i) through
(iv) above. Our bylaws also set forth certain
indemnification provisions and provide for the advancement of
expenses incurred by a director in defending a claim by reason
of the fact that he was one of our directors (or was serving as
a director or officer of another entity at our request),
provided that the director agrees to repay the amounts advanced
if the director is not entitled to be indemnified by us under
the provisions of the DGCL. The indemnification provisions of
our certificate of incorporation may reduce the likelihood of
derivative litigation against directors and may discourage or
deter stockholders or management from bringing a lawsuit against
directors for breaches of their fiduciary duties, even though an
action, if successful, otherwise might have benefited us and our
stockholders.
The right to indemnification and advancement of expenses are not
exclusive of any other rights to indemnification our directors
or officers may be entitled to under any agreement, vote of
stockholders or disinterested directors or otherwise. We have
entered into indemnification agreements with each of our
directors and some of our officers pursuant to which we agree to
indemnify the director or officer against expenses, judgments,
fines or amounts paid in settlement incurred by the director or
officer and arising in his capacity as a director, officer,
employee
and/or
agent
of the Company or other enterprise of which he is a director,
officer, employee or agent acting at our request to the maximum
extent permitted by applicable law, subject to certain
limitations. Additionally, under Delaware law, we may purchase
and maintain insurance for the benefit and on behalf of our
directors and officers insuring against all liabilities that may
be incurred by the director or officer in or arising out of his
capacity as our director, officer, employee
and/or
agent.
Business
Opportunities Renunciation
All of our non-employee directors and certain of our
stockholders may from time to time have investments in other
exploration and production companies that may compete with us.
Section 122(17) of the DGCL permits a Delaware corporation,
such as the Company, to renounce in its certificate of
incorporation or by action of its board of directors any
interest or expectancy of the corporation in certain
opportunities, effectively eliminating the ambiguity in a
Delaware corporations ability to do so in advance arising
out of prior Delaware case law. Under corporate law concepts of
fiduciary duty, officers and directors generally have a duty to
disclose to us opportunities that are related to our business
and are generally prohibited from pursuing those opportunities
unless we determine that we are not going to pursue them. Our
certificate of incorporation and our business opportunities
agreements provide that so long as any of the parties to the
business opportunities agreements, which we refer to as
designated parties, is serving as a member of our
board of directors, we renounce any interest or expectancy in
any business opportunity, transaction or other matter in and
that involves any aspect of the oil and gas exploration,
exploitation, development and production other than:
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any business opportunity that is brought to the attention of a
designated party solely in such persons capacity as a
director of the Company and with respect to which, at the time
of such presentment, no other designated party has independently
received notice or otherwise identified such opportunity; or
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any business opportunity that is identified by a designated
party solely through the disclosure of information by or on
behalf of us.
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Thus, for example, designated parties may pursue opportunities
in the oil and gas exploration and production industry for their
own account. Our certificate of incorporation provides that the
designated parties have no obligation to offer such
opportunities to us.
9
Pursuant to the business opportunities agreements approved by
our board of directors, each of the designated parties do not
have a duty to inform us of a business opportunity that he
becomes aware of so long as he did not become aware of the
opportunity solely as a consequence of serving as a member of
our board of directors. Furthermore, the designated parties each
are permitted to pursue that opportunity even if it is
competitive with our business. The business opportunities
agreements do not prohibit us from pursuing any business
opportunity to which we have renounced any interest or
expectancy. The business opportunities agreements provide the
designated parties and their respective affiliates with some
certainty that opportunities that they independently pursue will
not be required to be first offered to us.
Transfer
Agent and Registrar
The transfer agent and registrar for our common stock is
American Stock Transfer & Trust Company.
DESCRIPTION
OF DEPOSITARY SHARES
We may, at our option, elect to offer fractional shares of
preferred stock, rather than full shares of preferred stock. If
we do, we will issue to the public receipts for depositary
shares, and each of these depositary shares will represent a
fraction of a share of a particular series of preferred stock.
Description
of Depositary Shares
The shares of any series of preferred stock underlying the
depositary shares will be deposited under a deposit agreement
between us and a bank or trust company selected by us to be the
depositary. Subject to the terms of the deposit agreement, each
owner of a depositary share will be entitled, in proportion to
the applicable fractional interest in shares of preferred stock
underlying that depositary share, to all the rights and
preferences of the preferred stock underlying that depositary
share.
The depositary shares will be evidenced by depositary receipts
issued pursuant to the deposit agreement. Depositary receipts
will be issued to those persons who purchase the fractional
interests in the preferred stock underlying the depositary
shares, in accordance with the terms of the offering. The
following summary of the deposit agreement, the depositary
shares and the depositary receipts is not complete. You should
refer to the forms of the deposit agreement and depositary
receipts that may be filed as exhibits to the registration
statement of which this prospectus forms a part in the event we
issue depositary shares.
Dividends
and Other Distributions
The depositary will distribute all cash dividends or other cash
distributions received in respect of the preferred stock to the
record holders of depositary shares relating to that preferred
stock in proportion to the number of depositary shares owned by
those holders.
If there is a distribution other than in cash, the depositary
will distribute property received by it to the record holders of
depositary shares that are entitled to receive the distribution,
unless the depositary determines that it is not feasible to make
the distribution. If this occurs, the depositary may, with our
approval, sell the property and distribute the net proceeds from
the sale to the applicable holders.
Redemption
of Depositary Shares
If a series of preferred stock underlying the depositary shares
is subject to redemption, the depositary shares will be redeemed
from the proceeds received by the depositary resulting from the
redemption, in whole or in part, of that series of preferred
stock held by the depositary. The redemption price per
depositary share will be equal to the applicable fraction of the
redemption price per share payable with respect to that series
of the preferred stock. Whenever we redeem shares of preferred
stock that are held by the depositary, the depositary will
redeem, as of the same redemption date, the number of depositary
shares representing the shares of preferred stock so redeemed.
If fewer than all the depositary shares are to be redeemed, the
depositary shares to be redeemed will be selected by lot or pro
rata as determined by the depositary.
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After the date fixed for redemption, the depositary shares
called for redemption will no longer be outstanding, and all
rights of the holders of those depositary shares will cease,
except the right to receive any money, securities or other
property upon surrender to the depositary of the depositary
receipts evidencing those depositary shares.
Voting
the Preferred Stock
Upon receipt of notice of any meeting at which the holders of
preferred stock are entitled to vote, the depositary will mail
the information contained in the notice of meeting to the record
holders of the depositary shares underlying that preferred
stock. Each record holder of those depositary shares on the
record date (which will be the same date as the record date for
the preferred stock) will be entitled to instruct the depositary
as to the exercise of the voting rights pertaining to the amount
of the preferred stock underlying that holders depositary
shares. The depositary will try, as far as practicable, to vote
the number of shares of preferred stock underlying those
depositary shares in accordance with such instructions, and we
will agree to take all action which may be deemed necessary by
the depositary in order to enable the depositary to do so. The
depositary will not vote the shares of preferred stock to the
extent it does not receive specific instructions from the
holders of depositary shares underlying the preferred stock.
Amendment
and Termination of the Depositary Agreement
The form of depositary receipt evidencing the depositary shares
and any provision of the deposit agreement may be amended at any
time by agreement between us and the depositary. However, any
amendment that materially and adversely alters the rights of the
holders of depositary shares will not be effective unless the
amendment has been approved by the holders of at least a
majority of the depositary shares then outstanding. The deposit
agreement may be terminated by us or by the depositary only if
(i) all outstanding depositary shares have been redeemed,
or (ii) there has been a final distribution of the
underlying preferred stock in connection with our liquidation,
dissolution or winding up and the preferred stock has been
distributed to the holders of depositary receipts.
Charges
of Bank Depositary
We will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary
arrangements. We will pay charges of the bank depositary in
connection with the initial deposit of the preferred stock and
any redemption of the preferred stock. Holders of depositary
shares will pay other transfer and other taxes and governmental
charges and any other charges, including a fee for the
withdrawal of shares of preferred stock upon surrender of
depositary receipts, as are expressly provided in the depositary
agreement to be payable by such holders.
Withdrawal
of Preferred Stock
Except as may be provided otherwise in the applicable prospectus
supplement, upon surrender of depositary receipts at the
principal office of the bank depositary, subject to the terms of
the depositary agreement, the owner of the depositary shares may
demand delivery of the number of whole shares of preferred stock
and all money and other property, if any, represented by those
depositary shares. Partial shares of preferred stock will not be
issued. If the depositary receipts delivered by the holder
evidence a number of depositary shares in excess of the number
of depositary shares representing the number of whole shares of
preferred stock to be withdrawn, the bank depositary will
deliver to such holder at the same time a new depositary receipt
evidencing the excess number of depositary shares. Holders of
preferred stock thus withdrawn may not thereafter deposit those
shares under the depositary agreement or receive depositary
receipts evidencing depositary shares therefore.
Resignation
and Removal of Depositary
The depositary may resign at any time by delivering a notice to
us of its election to do so. We may remove the depositary at any
time. Any such resignation or removal will take effect upon the
appointment of a
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successor depositary and its acceptance of its appointment. The
successor depositary must be appointed within 60 days after
delivery of the notice of resignation or removal.
Miscellaneous
The depositary will forward to holders of depository receipts
all reports and communications from us that we deliver to the
depositary and that we are required to furnish to the holders of
the preferred stock.
Neither we nor the depositary will be liable if either of us is
prevented or delayed by law or any circumstance beyond our
control in performing our respective obligations under the
deposit agreement. Our obligations and those of the depositary
will be limited to the performance in good faith of our
respective duties under the deposit agreement. Neither we nor
the depositary will be obligated to prosecute or defend any
legal proceeding in respect of any depositary shares or
preferred stock unless satisfactory indemnity is furnished. We
and the depositary may rely upon written advice of counsel or
accountants, or upon information provided by persons presenting
preferred stock for deposit, holders of depositary receipts or
other persons believed to be competent and on documents believed
to be genuine.
DESCRIPTION
OF WARRANTS
We may issue warrants for the purchase of our common stock.
Warrants may be issued independently or together with debt
securities, preferred stock or common stock offered by any
prospectus supplement and may be attached to or separate from
any such offered securities. Each series of warrants will be
issued under a separate warrant agreement to be entered into
between us and a bank or trust company, as warrant agent, all as
set forth in the prospectus supplement relating to the
particular issue of warrants. The warrant agent will act solely
as our agent in connection with the warrants and will not assume
any obligation or relationship of agency or trust for or with
any holders of warrants or beneficial owners of warrants. The
following summary of certain provisions of the warrants does not
purport to be complete and is subject to, and is qualified in
its entirety by reference to, all provisions of the warrant
agreements.
You should refer to the prospectus supplement relating to a
particular issue of warrants for the terms of and information
relating to the warrants, including, where applicable:
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the number of shares of common stock purchasable upon exercise
of the warrants and the price at which such number of shares of
common stock may be purchased upon exercise of the warrants;
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the date on which the right to exercise the warrants commences
and the date on which such right expires, which we refer to as
the expiration date;
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United States federal income tax consequences applicable to the
warrants;
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the amount of the warrants outstanding as of the most recent
practicable date; and
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any other terms of the warrants.
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Warrants will be offered and exercisable for United States
dollars only. Warrants will be issued in registered form only.
Each warrant will entitle its holder to purchase such number of
shares of common stock at such exercise price as is in each case
set forth in, or calculable from, the prospectus supplement
relating to the warrants. The exercise price may be subject to
adjustment upon the occurrence of events described in such
prospectus supplement. After the close of business on the
expiration date (or such later date to which we may extend such
expiration date), unexercised warrants will become void. The
place or places where, and the manner in which, warrants may be
exercised will be specified in the prospectus supplement
relating to such warrants.
Prior to the exercise of any warrants, holders of the warrants
will not have any of the rights of holders of common stock,
including the right to receive payments of any dividends on the
common stock purchasable upon exercise of the warrants, or to
exercise any applicable right to vote.
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DESCRIPTION
OF RIGHTS
We may issue rights to purchase preferred stock, common stock or
other securities that are being registered hereunder. These
rights may be issued independently or together with any other
security offered hereby and may or may not be transferable by
the stockholder receiving the rights in such offering. In
connection with any offering of such rights, we may enter into a
standby arrangement with one or more underwriters or other
purchasers pursuant to which the underwriters or other
purchasers may be required to purchase any securities remaining
unsubscribed for after such offering.
Each series of rights will be issued under a separate rights
agreement which we will enter into with a bank or trust company,
as rights agent, all as set forth in the applicable prospectus
supplement. The rights agent will act solely as our agent in
connection with the certificates relating to the rights and will
not assume any obligation or relationship of agency or trust
with any holders of rights certificates or beneficial owners of
rights. We will file the rights agreement and the rights
certificates relating to each series of rights with the SEC, and
incorporate them by reference as an exhibit to the registration
statement of which this prospectus is a part on or before the
time we issue a series of rights.
The applicable prospectus supplement will describe the specific
terms of any offering of rights for which this prospectus is
being delivered, including the following:
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the date of determining the stockholders entitled to the rights
distribution;
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the number of rights issued or to be issued to each stockholder;
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the exercise price payable for each share preferred stock,
common stock or other securities upon the exercise of the rights;
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the number and terms of the shares preferred stock, common stock
or other securities which may be purchased per each right;
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the extent to which the rights are transferable;
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the date on which the holders ability to exercise the
rights shall commence, and the date on which the rights shall
expire;
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the extent to which the rights may include an over-subscription
privilege with respect to unsubscribed securities;
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if applicable, the material terms of any standby underwriting or
purchase arrangement entered into by us in connection with the
offering of such rights; and
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any other terms of the rights, including the terms, procedures,
conditions and limitations relating to the exchange and exercise
of the rights.
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The description in the applicable prospectus supplement of any
rights that we may offer will not necessarily be complete and
will be qualified in its entirety by reference to the applicable
rights certificate, which will be filed with the SEC.
DESCRIPTION
OF DEBT SECURITIES
The following description of debt securities sets forth certain
general terms and provisions of the debt securities to which
this prospectus and any prospectus supplement may relate. The
particular term of any series of debt securities and the extent
to which the general provisions may apply to a particular series
of debt securities will be described in a prospectus supplement
relating to that series. The debt securities will be issued
under one or more separate indentures between us and a trustee
to be named in the prospectus supplement.
The debt securities will be either senior debt securities or
subordinated debt securities. The senior and subordinated debt
securities will be issued under separate indentures among us,
the subsidiary guarantors of the debt securities, if any, and a
trustee to be determined. Senior debt securities will be issued
under a senior
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indenture and subordinated debt securities will be issued
under a subordinated indenture. Together, the senior
indenture and the subordinated indenture are called
indentures.
Unless the debt securities are guaranteed by our subsidiaries as
described below, the rights of the Company and our creditors,
including holders of the debt securities, to participate in the
assets of any subsidiary upon the latters liquidation or
reorganization, will be subject to the prior claims of the
subsidiarys creditors, except to the extent that we may
ourselves be a creditor with recognized claims against such
subsidiary.
We have summarized selected provisions of the indentures below.
The summary is not complete. The form of each indenture has been
filed with the SEC as an exhibit to the registration statement
of which this prospectus is a part, and you should read the
indentures for provisions that may be important to you.
General
The indentures provide that debt securities in separate series
may be issued thereunder from time to time without limitation as
to aggregate principal amount. We may specify a maximum
aggregate principal amount for the debt securities of any
series. We will determine the terms and conditions of the debt
securities, including the maturity, principal and interest, but
those terms must be consistent with the Indenture. Unless
otherwise indicated in the applicable prospectus supplement, the
debt securities will be our direct, unsecured obligations.
The subordinated debt securities will be subordinated in right
of payment to the prior payment in full of all of our senior
debt as described in this prospectus under
Subordination of Subordinated Debt
Securities and in the prospectus supplement applicable to
any subordinated debt securities. If the prospectus supplement
so indicates, the debt securities will be convertible into our
common stock.
If specified in the prospectus supplement respecting a
particular series of debt securities, certain subsidiaries of
the Company, each referred to as a subsidiary guarantor, will
fully and unconditionally guarantee that series as described in
this prospectus under Subsidiary
Guarantee and in the prospectus supplement. Each
subsidiary guarantee will be an unsecured obligation of the
subsidiary guarantor. A subsidiary guarantee of subordinated
debt securities will be subordinated to the senior debt of the
subsidiary guarantor on the same basis as the subordinated debt
securities are subordinated to our senior debt.
The applicable prospectus supplement and a supplemental
indenture relating to any series of debt securities being
offered will set forth the price or prices at which the debt
securities to be issued will be offered for sale and will
describe the following terms of such debt securities:
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the title of the debt securities;
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whether the debt securities are senior debt securities or
subordinated debt securities and, if subordinated debt
securities, the related subordination terms;
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whether any subsidiary guarantor will provide a subsidiary
guarantee of the debt securities, and the terms of any
subordination of such guarantee;
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any limit on the aggregate principal amount of the debt
securities;
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each date on which the principal of the debt securities will be
payable;
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the interest rate or rates, or the method of determination
thereof, that the debt securities will bear and the interest
payment dates for the debt securities;
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each place where payments of the principal, premium, if any, and
interest may be made on the debt securities;
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any terms upon which the debt securities may be redeemed, in
whole or in part, at our option;
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any sinking fund, amortization or other provisions that would
obligate us to redeem, repurchase or otherwise repay some or all
of the debt securities;
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the portion of the principal amount, if less than all, of the
debt securities that will be payable upon declaration of
acceleration of the maturity of the debt securities;
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any index or other method used to determine the amount of
payment of principal of (and premium, if any)
and/or
interest on the debt securities;
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whether the debt securities will be subject to certain optional
interest rate reset provisions;
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whether any portion of the principal amount of such debt
securities is payable upon declaration of the acceleration of
the maturity thereof;
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any additional means of satisfaction or discharge of the debt
securities;
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whether the debt securities are defeasible;
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any deletions, modifications, additions to or changes in the
events of default or covenants pertaining to the debt securities
or made for the benefit of the holders thereof;
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whether the debt securities are convertible into our common
stock and, if so, the terms and conditions upon which conversion
will be effected, including the initial conversion price or
conversion rate and any adjustments thereto and the conversion
period;
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any addition to or change in the covenants in the indenture
applicable to the debt securities;
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whether the debt securities will be issued as a global debt
security and, in that case, the identity of the depository for
the debt securities; and
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any other terms of the debt securities not inconsistent with the
provisions of the indenture.
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Neither of the indentures limits the amount of debt securities
that may be issued. Each indenture allows debt securities to be
issued up to the principal amount that may be authorized
by us.
Original
Issue Discount
Debt securities, including any debt securities that provide for
an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity
thereof, or original issue discount securities, may
be sold at a substantial discount below their principal amount.
Special United States federal income tax considerations
applicable to debt securities sold at an original issue discount
may be described in the applicable prospectus supplement. In
addition, special United States federal income tax or other
considerations applicable to any debt securities that are
denominated in a currency or currency unit other than United
States dollars may be described in the applicable prospectus
supplement.
Subordination
of Subordinated Debt Securities
The indebtedness evidenced by the subordinated debt securities
will, to the extent set forth in the subordinated indenture with
respect to each series of subordinated debt securities, be
subordinated in right of payment to the prior payment in full of
all of our senior debt, including the senior debt securities,
and it may also be senior in right of payment to all of our
subordinated debt. The prospectus supplement relating to any
subordinated debt securities will summarize the subordination
provisions of the subordinated indenture applicable to that
series including:
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the applicability and effect of such provisions upon any payment
or distribution respecting that series following any
liquidation, dissolution or other
winding-up,
or any assignment for the benefit of creditors or other
marshalling of assets or any bankruptcy, insolvency or similar
proceedings;
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the applicability and effect of such provisions in the event of
specified defaults with respect to any senior debt, including
the circumstances under which and the periods during which we
will be prohibited from making payments on the subordinated debt
securities; and
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the definition of senior debt applicable to the subordinated
debt securities of that series and, if the series is issued on a
senior subordinated basis, the definition of subordinated debt
applicable to that series.
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The prospectus supplement will also describe as of a recent date
the approximate amount of senior debt to which the subordinated
debt securities of that series will be subordinated.
The failure to make any payment on any of the subordinated debt
securities by reason of the subordination provisions of the
subordinated indenture described in the prospectus supplement
will not be construed as preventing the occurrence of an event
of default with respect to the subordinated debt securities
arising from any such failure to make payment.
The subordination provisions described above will not be
applicable to payments in respect of the subordinated debt
securities from a defeasance trust established in connection
with any legal defeasance or covenant defeasance of the
subordinated debt securities as described in this prospectus
under Legal Defeasance and Covenant
Defeasance.
Subsidiary
Guarantees
Our payment obligations under any series of the debt securities
may be jointly and severally guaranteed by one or more of our
domestic subsidiaries. If a series of debt securities is so
guaranteed by any of our subsidiaries, such subsidiaries will
execute a supplemental indenture or notation of guarantee as
further evidence of their guarantee. Unless otherwise indicated
in the prospectus supplement, the following provisions will
apply to the subsidiary guarantee of the subsidiary guarantors.
Subject to the limitations described below and in the prospectus
supplement, one or more of the subsidiary guarantors will
jointly and severally, fully and unconditionally guarantee the
punctual payment when due, whether at maturity, by acceleration
or otherwise, of all our payment obligations under the
indentures and the debt securities of a series, whether for
principal of, premium, if any, or interest on the debt
securities or otherwise (all such obligations guaranteed by a
subsidiary guarantor being herein called the guaranteed
obligations). The subsidiary guarantors will also pay all
expenses (including reasonable counsel fees and expenses)
incurred by the trustee in enforcing any rights under a
subsidiary guarantee with respect to a subsidiary guarantor.
In the case of subordinated debt securities, a subsidiary
guarantors subsidiary guarantee will be subordinated in
right of payment to the senior debt of such subsidiary guarantor
on the same basis as the subordinated debt securities are
subordinated to our senior debt. No payment will be made by any
subsidiary guarantor under its subsidiary guarantee during any
period in which payments by us on the subordinated debt
securities are suspended by the subordination provisions of the
subordinated indenture.
Each subsidiary guarantee will be limited in amount to an amount
not to exceed the maximum amount that can be guaranteed by the
relevant subsidiary guarantor without rendering such subsidiary
guarantee voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.
Each subsidiary guarantee will be a continuing guarantee and
will:
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remain in full force and effect until either (i) payment in
full of all the applicable debt securities (or such debt
securities are otherwise satisfied and discharged in accordance
with the provisions of the applicable indenture), or
(ii) released as described in the following paragraph;
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be binding upon each subsidiary guarantor; and
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inure to the benefit of and be enforceable by the trustee, the
debt securities holders and their successors, transferees and
assigns.
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In the event that (i) a subsidiary guarantor ceases to be a
subsidiary, (ii) either legal defeasance or covenant
defeasance occurs with respect to the series or (iii) all
or substantially all of the assets or all of the capital stock
of such subsidiary guarantor is sold, including by way of sale,
merger, consolidation or otherwise,
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such subsidiary guarantor will be released and discharged of its
obligations under its subsidiary guarantee without any further
action required on the part of the trustee or any debt
securities holder, and no other person acquiring or owning the
assets or capital stock of such subsidiary guarantor will be
required to enter into a subsidiary guarantee. In addition, the
prospectus supplement may specify additional circumstances under
which a subsidiary guarantor can be released from its subsidiary
guarantee.
Form,
Exchange and Transfer
The debt securities of each series will be issuable only in
fully registered form, without coupons, and, unless otherwise
specified in the applicable prospectus supplement, only in
denominations of $1,000 and integral multiples thereof.
At the option of the debt securities holder, subject to the
terms of the applicable indenture and the limitations applicable
to global securities, debt securities of each series will be
exchangeable for other debt securities of the same series of any
authorized denomination and of a like tenor and aggregate
principal amount.
Subject to the terms of the applicable indenture and the
limitations applicable to global securities, debt securities may
be presented for exchange as provided above or for registration
of transfer (duly endorsed or with the form of transfer endorsed
thereon duly executed) at the office of the security registrar
or at the office of any transfer agent designated by us for such
purpose. No service charge will be made for any registration of
transfer or exchange of debt securities, but we may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in that connection. Such transfer or
exchange will be effected upon the security registrar or such
transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the
request. The security registrar and any other transfer agent
initially designated by us for any debt securities will be named
in the applicable prospectus supplement. We may at any time
designate additional transfer agents or rescind the designation
of any transfer agent or approve a change in the office through
which any transfer agent acts, except that we will be required
to maintain a transfer agent in each place of payment for the
debt securities of each series.
If the debt securities of any series (or of any series and
specified tenor) are to be redeemed in part, we will not be
required to (i) issue, register the transfer of or exchange
any debt security of that series (or of that series and
specified tenor, as the case may be) during a period beginning
at the opening of business 15 days before the day of
mailing of a notice of redemption of any such debt security that
may be selected for redemption and ending at the close of
business on the day of such mailing or (ii) register the
transfer of or exchange any debt security so selected for
redemption, in whole or in part, except the unredeemed portion
of any such debt security being redeemed in part.
Global
Securities
Some or all of the debt securities of any series may be
represented, in whole or in part, by one or more global
securities that will have an aggregate principal amount equal to
that of the debt securities they represent. Each global security
will be registered in the name of a depositary or its nominee
identified in the applicable prospectus supplement, will be
deposited with such depositary or nominee or its custodian and
will bear a legend regarding the restrictions on exchanges and
registration of transfer thereof referred to below and any such
other matters as may be provided for pursuant to the applicable
indenture.
Notwithstanding any provision of the indentures or any debt
security described in this prospectus, no global security may be
exchanged in whole or in part for debt securities registered,
and no transfer of a global security in whole or in part may be
registered, in the name of any person other than the depositary
for such global security or any nominee of such depositary
unless:
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the depositary has notified us that it is unwilling or unable to
continue as depositary for such global security or has ceased to
be qualified to act as such as required by the applicable
indenture, and in either case we fail to appoint a successor
depositary within 90 days;
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an event of default with respect to the debt securities
represented by such global security has occurred and is
continuing and the trustee has received a written request from
the depositary to issue certificated debt securities;
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subject to the rules of the depositary, we shall have elected to
terminate the book-entry system through the depositary; or
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other circumstances exist, in addition to or in lieu of those
described above, as may be described in the applicable
prospectus supplement.
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All certificated debt securities issued in exchange for a global
security or any portion thereof will be registered in such names
as the depositary may direct.
As long as the depositary, or its nominee, is the registered
holder of a global security, the depositary or such nominee, as
the case may be, will be considered the sole owner and debt
securities holder of such global security and the debt
securities that it represents for all purposes under the debt
securities and the applicable indenture. Except in the limited
circumstances referred to above, owners of beneficial interests
in a global security will not be entitled to have such global
security or any debt securities that it represents registered in
their names, will not receive or be entitled to receive physical
delivery of certificated debt securities in exchange for those
interests and will not be considered to be the owners or holders
of such global security or any debt securities that it
represents for any purpose under the debt securities or the
applicable indenture. All payments on a global security will be
made to the depositary or its nominee, as the case may be, as
the holder of the security. The laws of some jurisdictions may
require that some purchasers of debt securities take physical
delivery of such debt securities in certificated form. These
laws may impair the ability to transfer beneficial interests in
a global security.
Ownership of beneficial interests in a global security will be
limited to institutions that have accounts with the depositary
or its nominee, or participants, and to persons that
may hold beneficial interests through participants. In
connection with the issuance of any global security, the
depositary will credit, on its book-entry registration and
transfer system, the respective principal amounts of debt
securities represented by the global security to the accounts of
its participants. Ownership of beneficial interests in a global
security will be shown only on, and the transfer of those
ownership interests will be effected only through, records
maintained by the depositary (with respect to participants
interests) or any such participant (with respect to interests of
persons held by such participants on their behalf). Payments,
transfers, exchanges and other matters relating to beneficial
interests in a global security may be subject to various
policies and procedures adopted by the depositary from time to
time. None of us, the subsidiary guarantors, the trustees or the
agents of us, the subsidiary guarantors or the trustees will
have any responsibility or liability for any aspect of the
depositarys or any participants records relating to,
or for payments made on account of, beneficial interests in a
global security, or for maintaining, supervising or reviewing
any records relating to such beneficial interests.
Payment
and Paying Agents
Unless otherwise indicated in the applicable prospectus
supplement, payment of interest on a debt security on any
interest payment date will be made to the person in whose name
such debt security (or one or more predecessor securities) is
registered at the close of business on the record date for such
interest.
Unless otherwise indicated in the applicable prospectus
supplement, principal of and any premium and interest on the
debt securities of a particular series will be payable at the
office of such paying agent or agents as we may designate for
such purpose from time to time, except that at our option
payment of any interest on debt securities in certificated form
may be made by check mailed to the address of the person
entitled thereto as such address appears in the security
register. Unless otherwise indicated in the applicable
prospectus supplement, the corporate trust office of the trustee
under the senior indenture in the City of New York will be
designated as sole paying agent for payments with respect to
senior debt securities of each series, and the corporate trust
office of the trustee under the subordinated indenture in the
City of New York will be designated as the sole paying agent for
payment with respect to subordinated debt securities of each
series. Any other paying agents initially designated by us for
the debt securities of a particular series will be named
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in the applicable prospectus supplement. We may at any time
designate additional paying agents or rescind the designation of
any paying agent or approve a change in the office through which
any paying agent acts, except that we will be required to
maintain a paying agent in each place of payment for the debt
securities of a particular series.
All money paid by us to a paying agent for the payment of the
principal of or any premium or interest on any debt security
which remains unclaimed at the end of two years after such
principal, premium or interest has become due and payable will
be repaid to us, and the holder of such debt security thereafter
may look only to us for payment.
Consolidation,
Merger and Sale of Assets
Unless otherwise specified in the prospectus supplement, we may
not consolidate with or merge into, or transfer, lease or
otherwise dispose of all or substantially all of our assets to,
any person, which we refer to as a successor person, and may not
permit any person to consolidate with or merge into us, unless:
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the successor person (if not us) is a corporation, partnership,
trust or other entity organized and validly existing under the
laws of any domestic jurisdiction and assumes our obligations on
the debt securities and under the indentures;
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immediately before and after giving pro forma effect to the
transaction, no event of default, and no event which, after
notice or lapse of time or both, would become an event of
default, has occurred and is continuing; and
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several other conditions, including any additional conditions
with respect to any particular debt securities specified in the
applicable prospectus supplement, are met.
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The successor person (if not us) will be substituted for us
under the applicable indenture with the same effect as if it had
been an original party to such indenture, and, except in the
case of a lease, we will be relieved from any further
obligations under such indenture and the debt securities.
Events of
Default
Unless otherwise specified in the prospectus supplement, each of
the following will constitute an event of default under the
applicable indenture with respect to debt securities of any
series:
1. failure to pay principal of or any premium on any debt
security of that series when due, whether or not, in the case of
subordinated debt securities, such payment is prohibited by the
subordination provisions of the subordinated indenture;
2. failure to pay any interest on any debt securities of
that series when due, continued for 30 days, whether or
not, in the case of subordinated debt securities, such payment
is prohibited by the subordination provisions of the
subordinated indenture;
3. failure to deposit any sinking fund payment, when due,
in respect of any debt security of that series, whether or not,
in the case of subordinated debt securities, such deposit is
prohibited by the subordination provisions of the subordinated
indenture;
4. failure to perform or comply with the provisions
described in this prospectus under
Consolidation, Merger and Sale of Assets;
5. failure to perform any of our other covenants in such
indenture (other than a covenant included in such indenture
solely for the benefit of a series other than that series),
continued for 60 days after written notice has been given
by the trustee, or the holders of at least 25% in principal
amount of the outstanding debt securities of that series, as
provided in such indenture;
6. any debt of ourselves, any significant subsidiary or, if
a subsidiary guarantor has guaranteed the series, such
subsidiary guarantor, is not paid within any applicable grace
period after final maturity or is
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accelerated by its holders because of a default and the total
amount of such debt unpaid or accelerated exceeds
$20 million;
7. any judgment or decree for the payment of money in
excess of $20 million is entered against us, any
significant subsidiary or, if a subsidiary guarantor has
guaranteed the series, such subsidiary guarantor, remains
outstanding for a period of 60 consecutive days following entry
of such judgment and is not discharged, waived or stayed;
8. certain events of bankruptcy, insolvency or
reorganization affecting us, any significant subsidiary or, if a
subsidiary guarantor has guaranteed the series, such subsidiary
guarantor; and
9. if any subsidiary guarantor has guaranteed such series,
the subsidiary guarantee of any such subsidiary guarantor is
held by a final non-appealable order or judgment of a court of
competent jurisdiction to be unenforceable or invalid or ceases
for any reason to be in full force and effect (other than in
accordance with the terms of the applicable indenture) or any
subsidiary guarantor or any person acting on behalf of any
subsidiary guarantor denies or disaffirms such subsidiary
guarantors obligations under its subsidiary guarantee
(other than by reason of a release of such subsidiary guarantor
from its subsidiary guarantee in accordance with the terms of
the applicable indenture).
If an event of default (other than an event of default with
respect to Approach Resources Inc. described in clause (8)
above) with respect to the debt securities of any series at the
time outstanding occurs and is continuing, either the trustee or
the holders of at least 25% in principal amount of the
outstanding debt securities of that series by notice as provided
in the indenture may declare the principal amount of the debt
securities of that series (or, in the case of any debt security
that is an original issue discount debt security, such portion
of the principal amount of such debt security as may be
specified in the terms of such debt security) to be due and
payable immediately, together with any accrued and unpaid
interest thereon. If an event of default with respect to
Approach Resources Inc. described in clause (8) above with
respect to the debt securities of any series at the time
outstanding occurs, the principal amount of all the debt
securities of that series (or, in the case of any such original
issue discount security, such specified amount) will
automatically, and without any action by the trustee or any
holder, become immediately due and payable, together with any
accrued and unpaid interest thereon. After any such acceleration
and its consequences, but before a judgment or decree based on
acceleration, the holders of a majority in principal amount of
the outstanding debt securities of that series may, under
certain circumstances, rescind and annul such acceleration if
all events of default with respect to that series, other than
the non-payment of accelerated principal (or other specified
amount), have been cured or waived as provided in the applicable
indenture. For information as to waiver of defaults, see
Modification and Waiver below.
Subject to the provisions of the indentures relating to the
duties of the trustees in case an event of default has occurred
and is continuing, no trustee will be under any obligation to
exercise any of its rights or powers under the applicable
indenture at the request or direction of any of the holders,
unless such holders have offered to such trustee reasonable
security or indemnity. Subject to such provisions for the
indemnification of the trustees, the holders of a majority in
principal amount of the outstanding debt securities of any
series will have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the
trustee or exercising any trust or power conferred on the
trustee with respect to the debt securities of that series.
No holder of a debt security of any series will have any right
to institute any proceeding with respect to the applicable
indenture, or for the appointment of a receiver or a trustee, or
for any other remedy thereunder, unless:
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such holder has previously given to the trustee under the
applicable indenture written notice of a continuing event of
default with respect to the debt securities of that series;
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the holders of at least 25% in principal amount of the
outstanding debt securities of that series have made written
request, and such holder or holders have offered reasonable
security or indemnity, to the trustee to institute such
proceeding as trustee; and
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the trustee has failed to institute such proceeding, and has not
received from the holders of a majority in principal amount of
the outstanding debt securities of that series a direction
inconsistent with such request, within 60 days after such
notice, request and offer.
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However, such limitations do not apply to a suit instituted by a
holder of a debt security for the enforcement of payment of the
principal of or any premium or interest on such debt security on
or after the applicable due date specified in such debt security
or, if applicable, to convert such debt security.
We will be required to furnish to each trustee annually a
statement by certain of our officers as to whether or not we, to
their knowledge, are in default in the performance or observance
of any of the terms, provisions and conditions of the applicable
indenture and, if so, specifying all such known defaults.
Modification
and Waiver
We may modify or amend an indenture without the consent of any
holders of the debt securities in certain circumstances,
including:
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to evidence the succession under the indenture of another person
to us or any subsidiary guarantor and to provide for its
assumption of our or such subsidiary guarantors
obligations to holders of debt securities;
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to make any changes that would add any additional covenants of
us or the subsidiary guarantors for the benefit of the holders
of debt securities or that do not adversely affect the rights
under the indenture of the holders of debt securities in any
material respect;
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to add any additional events of default;
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to provide for uncertificated notes in addition to or in place
of certificated notes;
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to secure the debt securities;
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to establish the form or terms of any series of debt securities;
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to evidence and provide for the acceptance of appointment under
the indenture of a successor trustee;
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to cure any ambiguity, defect or inconsistency;
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to add subsidiary guarantors; or
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in the case of any subordinated debt security, to make any
change in the subordination provisions that limits or terminates
the benefits applicable to any holder of senior debt.
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Other modifications and amendments of an indenture may be made
by us, the subsidiary guarantors, if applicable, and the
applicable trustee with the consent of the holders of not less
than a majority in principal amount of the outstanding debt
securities of each series affected by such modification or
amendment; provided, however, that no such modification or
amendment may, without the consent of the holder of each
outstanding debt security affected thereby:
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change the stated maturity of the principal of, or any
installment of principal of or interest on, any debt security;
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reduce the principal amount of, or any premium or interest on,
any debt security;
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reduce the amount of principal of an original issue discount
security or any other debt security payable upon acceleration of
the maturity thereof;
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change the place or currency of payment of principal of, or any
premium or interest on, any debt security;
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impair the right to institute suit for the enforcement of any
payment due on or any conversion right with respect to any debt
security;
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modify the subordination provisions in the case of subordinated
debt securities, or modify any conversion provisions, in either
case in a manner adverse to the holders of the subordinated debt
securities;
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except as provided in the applicable indenture, release the
subsidiary guarantee of a subsidiary guarantor;
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reduce the percentage in principal amount of outstanding debt
securities of any series, the consent of whose holders is
required for modification or amendment of the indenture;
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reduce the percentage in principal amount of outstanding debt
securities of any series necessary for waiver of compliance with
certain provisions of the indenture or for waiver of certain
defaults;
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modify such provisions with respect to modification, amendment
or waiver; or
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following the making of an offer to purchase debt securities
from any holder that has been made pursuant to a covenant in
such indenture, modify such covenant in a manner adverse to such
holder.
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The holders of not less than a majority in principal amount of
the outstanding debt securities of any series may waive
compliance by us with certain restrictive provisions of the
applicable indenture. The holders of not less than a majority in
principal amount of the outstanding debt securities of any
series may waive any past default under the applicable
indenture, except a default in the payment of principal, premium
or interest and certain covenants and provisions of the
indenture which cannot be amended without the consent of the
holder of each outstanding debt security of such series.
Each of the indentures provides that in determining whether the
holders of the requisite principal amount of the outstanding
debt securities have given or taken any direction, notice,
consent, waiver or other action under such indenture as of any
date:
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the principal amount of an original issue discount security that
will be deemed to be outstanding will be the amount of the
principal that would be due and payable as of such date upon
acceleration of maturity to such date;
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if, as of such date, the principal amount payable at the stated
maturity of a debt security is not determinable (for example,
because it is based on an index), the principal amount of such
debt security deemed to be outstanding as of such date will be
an amount determined in the manner prescribed for such debt
security;
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the principal amount of a debt security denominated in one or
more foreign currencies or currency units that will be deemed to
be outstanding will be the United States-dollar equivalent,
determined as of such date in the manner prescribed for such
debt security, of the principal amount of such debt security
(or, in the case of a debt security described in clause (1)
or (2) above, of the amount described in such
clause); and
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certain debt securities, including those owned by us, any
subsidiary guarantor or any of our other affiliates, will not be
deemed to be outstanding.
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Except in certain limited circumstances, we will be entitled to
set any day as a record date for the purpose of determining the
holders of outstanding debt securities of any series entitled to
give or take any direction, notice, consent, waiver or other
action under the indenture, in the manner and subject to the
limitations provided in the indenture. In certain limited
circumstances, the trustee will be entitled to set a record date
for action by holders. If a record date is set for any action to
be taken by holders of a particular series, only persons who are
holders of outstanding debt securities of that series on the
record date may take such action. To be effective, such action
must be taken by holders of the requisite principal amount of
such debt securities within a specified period following the
record date. For any particular record date, this period will be
180 days or such other period as may be specified by us (or
the trustee, if it set the record date), and may be shortened or
lengthened (but not beyond 180 days) from time to time.
22
Satisfaction
and Discharge
Each indenture will be discharged and will cease to be of
further effect as to all outstanding debt securities of any
series issued thereunder, when:
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(i)
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all outstanding debt securities of that series that have been
authenticated (except lost, stolen or destroyed debt securities
that have been replaced or paid and debt securities for whose
payment money has theretofore been deposited in trust and
thereafter repaid to us) have been delivered to the trustee for
cancellation; or
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(ii)
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all outstanding debt securities of that series that have been
not delivered to the trustee for cancellation have become due
and payable or will become due and payable at their stated
maturity within one year or are to be called for redemption
within one year under arrangements satisfactory to the trustee
and in any case we have irrevocably deposited with the trustee
as trust funds money in an amount sufficient, without
consideration of any reinvestment of interest, to pay the entire
indebtedness of such debt securities not delivered to the
trustee for cancellation, for principal, premium, if any, and
accrued interest to the stated maturity or redemption date;
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we have paid or caused to be paid all other sums payable by us
under the indenture with respect to the debt securities of that
series; and
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we have delivered an officers certificate and an opinion
of counsel to the trustee stating that all conditions precedent
to satisfaction and discharge of the indenture with respect to
the debt securities of that series have been satisfied.
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Legal
Defeasance and Covenant Defeasance
To the extent indicated in the applicable prospectus supplement,
we may elect, at our option at any time, to have our obligations
discharged under provisions relating to defeasance and discharge
of indebtedness, which we refer to as legal defeasance, or
relating to defeasance of certain restrictive covenants applied
to the debt securities of any series, or to any specified part
of a series, which we refer to as covenant defeasance.
Legal
Defeasance
The indentures provide that, upon our exercise of our option (if
any) to have the legal defeasance provisions applied to any
series of debt securities, we and, if applicable, each
subsidiary guarantor will be discharged from all our
obligations, and, if such debt securities are subordinated debt
securities, the provisions of the subordinated indenture
relating to subordination will cease to be effective, with
respect to such debt securities (except for certain obligations
to convert, exchange or register the transfer of debt
securities, to replace stolen, lost or mutilated debt
securities, to maintain paying agencies and to hold moneys for
payment in trust) upon the deposit in trust for the benefit of
the holders of such debt securities of money or
U.S. government obligations, or both, which, through the
payment of principal and interest in respect thereof in
accordance with their terms, will provide money in an amount
sufficient (in the opinion of a nationally recognized firm of
independent public accountants) to pay the principal of and any
premium and interest on such debt securities on the respective
stated maturities in accordance with the terms of the applicable
indenture and such debt securities. Such defeasance or discharge
may occur only if, among other things:
1. we have delivered to the applicable trustee an opinion
of counsel to the effect that we have received from, or there
has been published by, the United States Internal Revenue
Service a ruling, or there has been a change in tax law, in
either case to the effect that holders of such debt securities
will not recognize gain or loss for federal income tax purposes
as a result of such deposit and legal defeasance and will be
subject to federal income tax on the same amount, in the same
manner and at the same times as would have been the case if such
deposit and legal defeasance were not to occur;
2. no event of default or event that with the passing of
time or the giving of notice, or both, shall constitute an event
of default shall have occurred and be continuing at the time of
such deposit or, with
23
respect to any event of default described in clause (8)
under Events of Default, at any time
until 121 days after such deposit;
3. such deposit and legal defeasance will not result in a
breach or violation of, or constitute a default under, any
agreement or instrument (other than the applicable indenture) to
which we are a party or by which we are bound;
4. in the case of subordinated debt securities, at the time
of such deposit, no default in the payment of all or a portion
of principal of (or premium, if any) or interest on any senior
debt shall have occurred and be continuing, no event of default
shall have resulted in the acceleration of any senior debt and
no other event of default with respect to any senior debt shall
have occurred and be continuing permitting after notice or the
lapse of time, or both, the acceleration thereof; and
5. we have delivered to the trustee an opinion of counsel
to the effect that such deposit shall not cause the trustee or
the trust so created to be subject to the Investment Company Act
of 1940, as amended.
Covenant
Defeasance
The indentures provide that, upon our exercise of our option (if
any) to have the covenant defeasance provisions applied to any
debt securities, we may fail to comply with certain restrictive
covenants (but not with respect to conversion, if applicable),
including those that may be described in the applicable
prospectus supplement, and the occurrence of certain events of
default, which are described above in clause (5) (with respect
to such restrictive covenants) and clauses (6), (7) and
(9) under Events of Default and any that may be
described in the applicable prospectus supplement, will not be
deemed to either be or result in an event of default and, if
such debt securities are subordinated debt securities, the
provisions of the subordinated indenture relating to
subordination will cease to be effective, in each case with
respect to such debt securities. In order to exercise such
option, we must deposit, in trust for the benefit of the holders
of such debt securities, money or U.S. government
obligations, or both, which, through the payment of principal
and interest in respect thereof in accordance with their terms,
will provide money in an amount sufficient (in the opinion of a
nationally recognized firm of independent public accountants) to
pay the principal of and any premium and interest on such debt
securities on the respective stated maturities in accordance
with the terms of the applicable indenture and such debt
securities. Such covenant defeasance may occur only if we have
delivered to the applicable trustee an opinion of counsel to the
effect that holders of such debt securities will not recognize
gain or loss for federal income tax purposes as a result of such
deposit and covenant defeasance and will be subject to federal
income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit and
covenant defeasance were not to occur, and the requirements set
forth in clauses (2), (3), (4) and (5) above are
satisfied. If we exercise this option with respect to any series
of debt securities and such debt securities were declared due
and payable because of the occurrence of any event of default,
the amount of money and U.S. government obligations so
deposited in trust would be sufficient to pay amounts due on
such debt securities at the time of their respective stated
maturities but may not be sufficient to pay amounts due on such
debt securities upon any acceleration resulting from such event
of default. In such case, we would remain liable for such
payments.
If we exercise either our legal defeasance or covenant
defeasance option, any subsidiary guarantee will terminate.
No
Personal Liability of Directors, Officers, Employees and
Stockholders
No director, officer, employee, incorporator, stockholder,
member, partner or trustee of the Company or any subsidiary
guarantor, as such, shall have any liability for any obligations
of the Company or any subsidiary guarantor under the debt
securities, the indentures or any subsidiary guarantees or for
any claim based on, in respect of, or by reason of, such
obligations or their creation. By accepting a debt security,
each holder shall be deemed to have waived and released all such
liability. The waiver and release shall be a part of the
consideration for the issue of the debt securities. The waiver
may not be effective to waive liabilities under the federal
securities laws, and it is the view of the SEC that such a
waiver is against public policy.
24
Notices
Notices to holders of debt securities will be given by mail to
the addresses of such holders as they may appear in the security
register.
Title
We, the subsidiary guarantors, the trustees and any agent of
ours, the subsidiary guarantors or a trustee may treat the
person in whose name a debt security is registered as the
absolute owner of the debt security (whether or not such debt
security may be overdue) for the purpose of making payment and
for all other purposes.
Governing
Law
The indentures and the debt securities will be governed by, and
construed in accordance with, the law of the State of New York.
The
Trustee
We will enter into the indentures with a trustee that is
qualified to act under the Trust Indenture Act of 1939, as
amended, which we refer to as the Trust Indenture Act, and
with any other trustees chosen by us and appointed in a
supplemental indenture for a particular series of debt
securities. We may maintain a banking relationship in the
ordinary course of business with our trustee and one or more of
its affiliates.
Resignation
or Removal of Trustee
If the trustee has or acquires a conflicting interest within the
meaning of the Trust Indenture Act, the trustee must either
eliminate its conflicting interest or resign, to the extent and
in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and the applicable indenture. Any
resignation will require the appointment of a successor trustee
under the applicable indenture in accordance with the terms and
conditions of such indenture.
The trustee may resign or be removed by us with respect to one
or more series of debt securities and a successor trustee may be
appointed to act with respect to any such series. The holders of
a majority in aggregate principal amount of the debt securities
of any series may remove the trustee with respect to the debt
securities of such series.
Limitations
on Trustee if it is Our Creditor
Each indenture will contain certain limitations on the right of
the trustee, in the event that it becomes our creditor, to
obtain payment of claims in certain cases, or to realize on
certain property received in respect of any such claim as
security or otherwise.
Certificates
and Opinions to be Furnished to Trustee
Each indenture will provide that, in addition to other
certificates or opinions that may be specifically required by
other provisions of an indenture, every application by us for
action by the trustee must be accompanied by an officers
certificate and an opinion of counsel stating that, in the
opinion of the signers, all conditions precedent to such action
have been complied with by us.
25
PLAN OF
DISTRIBUTION
We may sell securities pursuant to this prospectus in and
outside the United States (i) through underwriters or
dealers, (ii) directly to purchasers, including our
affiliates and stockholders, (iii) through agents or
(iv) through a combination of any of these methods. The
prospectus supplement will include the following information:
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the terms of the offering;
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the names of any underwriters, dealers or agents;
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the name or names of any managing underwriter or underwriters;
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the purchase price of the securities;
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the estimated net proceeds to us from the sale of the securities;
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any delayed delivery arrangements;
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any underwriting discounts, commissions and other items
constituting underwriters compensation;
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any discounts or concessions allowed or reallowed or paid to
dealers; and
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any commissions paid to agents.
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Sale
Through Underwriters or Dealers
If underwriters are used in the sale, the underwriters will
acquire the securities for their own account for resale to the
public, either on a firm commitment basis or a best efforts
basis. The underwriters may resell the securities from time to
time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying
prices determined at the time of sale. Underwriters may offer
securities to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by
one or more firms acting as underwriters. Unless we inform you
otherwise in the prospectus supplement, the obligations of the
underwriters to purchase the securities will be subject to
certain conditions. The underwriters may change from time to
time any offering price and any discounts or concessions allowed
or reallowed or paid to dealers.
We may also make direct sales through subscription rights
distributed to our existing stockholders on a pro rata basis,
which may or may not be transferable. In any distribution of
subscription rights to our stockholders, if all of the
underlying securities are not subscribed for, we may then sell
the unsubscribed securities directly to third parties or may
engage the services of one or more agents, dealers,
underwriters, including standby underwriters, or remarketing
firms to sell the unsubscribed securities to third parties.
During and after an offering through underwriters, the
underwriters may purchase and sell the securities in the open
market. These transactions may include overallotment and
stabilizing transactions and purchases to cover syndicate short
positions created in connection with the offering. The
underwriters may also impose a penalty bid, which means that
selling concessions allowed to syndicate members or other
broker-dealers for the offered securities sold for their account
may be reclaimed by the syndicate if the offered securities are
repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or
otherwise affect the market price of the offered securities,
which may be higher than the price that might otherwise prevail
in the open market. If commenced, the underwriters may
discontinue these activities at any time.
Some or all of the securities that we offer pursuant to this
prospectus may be new issues of securities with no established
trading market. Any underwriters to whom we sell our securities
for public offering and sale may make a market in those
securities, but they will not be obligated to do so and they may
discontinue any market making at any time without notice.
Accordingly, we cannot assure you of the liquidity of, or
continued trading markets for, any securities that we offer.
If dealers are used, we will sell the securities to them as
principals. The dealers may then resell those securities to the
public at varying prices determined by the dealers at the time
of resale. We will include in the prospectus supplement the
names of the dealers and the terms of the transaction.
26
The maximum commission or discount to be received by any FINRA
member or independent broker/dealer will not be greater than
eight percent (8%) of the gross proceeds received by us for the
sale of any securities being registered pursuant to
Rule 415 under the Securities Act.
If more than 10% of the net proceeds of any offering of
securities made under this prospectus will be received by FINRA
members participating in the offering or affiliates or
associated persons of such FINRA members, the offering will be
conducted in accordance with the National Association of
Securities Dealers Conduct Rule 2710(h).
Direct
Sales and Sales Through Agents
We may sell the offered securities directly. In this case, no
underwriters or agents would be involved. We may also sell the
offered securities through agents designated from time to time.
In the prospectus supplement, we will name any agent involved in
the offer or sale of the offered securities, and we will
describe any commissions payable to the agent. Unless we inform
you otherwise in the prospectus supplement, any agent will agree
to use its reasonable best efforts to solicit purchases for the
period of its appointment.
We may sell the offered securities upon the exercise of rights
that we may issue to our securityholders. We may also sell the
offered securities directly to institutional investors or others
who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any sale of securities. We will
describe the terms of any such sales in the prospectus
supplement.
Remarketing
Arrangements
Offered securities may also be offered and sold, if so indicated
in the applicable prospectus supplement, in connection with a
remarketing upon their purchase, in accordance with a redemption
or repayment pursuant to their terms, or otherwise, by one or
more remarketing firms, acting as principals for their own
accounts or as agents for us. Any remarketing firm will be
identified and the terms of its agreements, if any, with us and
its compensation will be described in the applicable prospectus
supplement. Remarketing firms may be deemed to be underwriters,
as that term is defined in the Securities Act, in connection
with the securities remarketed.
Delayed
Delivery Contracts
If we so indicate in the prospectus supplement, we may authorize
agents, underwriters or dealers to solicit offers from certain
types of institutions to purchase securities from us at the
public offering price under delayed delivery contracts. These
contracts would provide for payment and delivery on a specified
date in the future. The contracts would be subject only to those
conditions described in the prospectus supplement. The
prospectus supplement will describe the commission payable for
solicitation of those contracts.
General
Information
Agents, dealers, underwriters and remarketing firms that
participate in the distribution of the offered securities may be
underwriters as defined in the Securities Act, and any discounts
or commissions received by them from us and any profit on the
resale of the offered securities by them may be treated as
underwriting discounts and commissions under the Securities Act.
Any underwriters or agents will be identified and their
compensation described in a prospectus supplement.
We may have agreements with the agents, dealers, underwriters
and remarketing firms to indemnify them against certain civil
liabilities, including liabilities under the Securities Act, or
to contribute with respect to payments that the agents, dealers,
underwriters or remarketing firms may be required to make.
Agents, dealers, underwriters and remarketing firms may be
customers of, engage in transactions with, or perform services
for us or our subsidiaries in the ordinary course of their
businesses.
27
LEGAL
MATTERS
Certain legal matters in connection with the securities offered
pursuant to this prospectus will be passed upon by
Thompson & Knight LLP, Dallas, Texas, as our counsel.
Underwriters, dealers, agents and remarketing firms, if any, who
we will identify in a prospectus supplement, may have their
counsel pass upon certain legal matters in connection with the
securities offered by this prospectus.
EXPERTS
The (i) consolidated financial statements of Approach
Resources Inc. and subsidiaries incorporated herein by reference
to our Annual Report on
Form 10-K
for the year ended December 31, 2010,
(ii) managements assessment of the effectiveness of
internal control over financial reporting incorporated herein by
reference to our Annual Report on
Form 10-K
for the year ended December 31, 2010, and (iii) the
statement of revenues and direct operating expenses of
properties acquired by Approach Resources Inc. incorporated
herein by reference to our Current Report on Form 8-K/A
filed on April 21, 2011, have been audited by
Hein & Associates LLP, independent registered public
accountants, as stated in their reports appearing in our Annual
Report on
Form 10-K
for the year ended December 31, 2010 and their report
appearing in our Current Report on
Form 8-K/A
filed on April 21, 2011, and have been so included in
reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
Certain estimates of our oil and natural gas reserves and
related information included in this prospectus, any applicable
prospectus supplement or incorporated herein by reference have
been derived from reports prepared by DeGolyer and MacNaughton.
All such information has been so included or incorporated by
reference in reliance upon the authority of DeGolyer and
MacNaughton as experts in these matters.
28
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
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Item 14.
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Other
Expenses of Issuance and Distribution
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Except for the Securities and Exchange Commission registration
fee, all expenses are estimated. All such expenses will be paid
by the registrant.
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Securities and Exchange Commission registration fee
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$
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*
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Accounting fees and expenses
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$
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**
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Legal fees and expenses
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$
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**
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Trustee fees and expenses
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$
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**
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FINRA filing fee
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$
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**
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Printing and engraving expenses
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$
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**
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Blue sky fees and expenses (including legal fees)
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$
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**
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Miscellaneous
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$
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**
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Total
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$
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**
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*
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In accordance with Rules 456(b) and 457(r), the registrant
is deferring payment of all of the registration fee.
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**
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These fees are calculated based on the number of issuances and
amount of securities offered and accordingly cannot be estimated
at this time.
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Item 15.
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Indemnification
of Directors and Officers
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Approach
Resources Inc.
The restated certificate of incorporation of Approach Resources
Inc. (the Company, we, us,
our or ours) provides that no director
or officer will be liable to the Company or any of its
stockholders for damages for breach of fiduciary duty as a
director or officer occurring on or after the date of
incorporation; provided, however, that the foregoing provision
shall not eliminate or limit the liability of a director or
officer (i) for any breach of the directors duty of
loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or that involved intentional
misconduct, fraud or a knowing violation of the law,
(iii) the payment of dividends in violation of
Section 174 of the General Corporation Law of the State of
Delaware (the DGCL) or (iv) for any transaction
from which the director derived an improper personal benefit. In
addition, if the DGCL is amended to authorize corporate action
further eliminating or limiting the personal liability of
directors, then the liability of a director of the Company shall
be eliminated or limited to the fullest extent permitted by the
DGCL, as so amended. Our restated bylaws provide that the
Company will indemnify, and advance expenses to, any officer or
director to the fullest extent authorized by the DGCL.
Section 145 of the DGCL provides that a corporation may
indemnify directors and officers as well as other employees and
individuals against expenses, including attorneys fees,
judgments, fines and amounts paid in settlement in connection
with specified actions, suits and proceedings whether civil,
criminal, administrative or investigative, other than a
derivative action by or in the right of the corporation, if they
acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A
similar standard is applicable in the case of derivative
actions, except that indemnification extends only to expenses,
including attorneys fees, incurred in connection with the
defense or settlement of such action and the statute requires
court approval before there can be any indemnification when the
person seeking indemnification has been found liable to the
corporation. The statute provides that it is not exclusive of
other indemnification that may be granted by a
corporations charter, bylaws, disinterested director vote,
stockholder vote, agreement or otherwise.
II-1
Our restated certificate of incorporation also contains
indemnification rights for our directors and our officers.
Specifically, our restated certificate of incorporation provides
that we shall indemnify our officers and directors to the
fullest extent authorized by the DGCL. Further, we may maintain
insurance on behalf of our officers and directors against
expenses, liability or loss incurred by them in their capacities
as officers and directors.
We maintain directors and officers insurance to
cover directors, officers and certain employees of the Company
and its subsidiaries for certain liabilities.
We have entered into written indemnification agreements with our
directors and executive officers. Under these agreements, if an
officer or director makes a claim of indemnification to us,
either a majority of the independent directors or independent
legal counsel selected by the independent directors must review
the relevant facts and make a determination whether the officer
or director has met the standards of conduct under Delaware law
that would permit (under Delaware law) and require (under the
indemnification agreement) us to indemnify the officer or
director.
The registration rights agreement we entered into in connection
with our initial public offering provides for the
indemnification by certain holders of registrable securities
under such agreement of our officers and directors for certain
liabilities.
Approach
Resources I, LP
Approach Resources I, LP is a Texas limited partnership
organized under the Texas Revised Limited Partnership Act, which
was succeeded by the Texas Business Organizations Code on
January 1, 2010 (as amended from time to time, the
Code). Sections 8.003 and 8.102 of the Code
provide that a limited partnerships certificate of
formation may eliminate all monetary liability of a governing
person to the limited partnership for acts or omissions in the
governing persons capacity as a governing person other
than conduct specifically excluded from protection.
Sections 8.101 and 8.102(b)(3) of the Code provide that
Texas law does not permit any limitation of liability of a
governing person found liable for (i) willful or
intentional misconduct in the performance of the persons
duty to the enterprise, (ii) breaching the duty of loyalty
to the partnership or (iii) an act or omission not
committed in good faith that constitutes a breach of the duty
owed to the partnership.
Section 8.102 of the Code permits a partnership to
indemnify any person who has been or is threatened to be made a
party to a legal proceeding because he is or was a governing
person of the partnership, or because he served at the request
of the partnership as a principal of another business or
employee benefit plan, against any judgments, penalties, fines,
settlements and reasonable expenses actually incurred by him in
connection with the proceeding. However, Section 8.101 of
the Code provides that a partnership may not indemnify a
director in reliance on this part of the Code unless the
governing person (i) conducted himself in good faith,
(ii) reasonably believed that his conduct was in the best
interests of the partnership or, in the case of action not taken
in his official capacity, was not opposed to the best interests
of partnership and (iii) in the case of a criminal
proceeding, had no reasonable cause to believe that his conduct
was unlawful.
Section 8.051(a) of the Code provides that a partnership is
required to indemnify any governing person of the partnership
who has been or is threatened to be made a party to a legal
proceeding by reason of his service to the partnership if the
governing person is successful on the merits or otherwise in the
defense of such proceeding. In addition, Section 8.151(b)
of the Code provides that a partnership may purchase and
maintain on behalf of its governing persons insurance with
respect to any liability asserted against or incurred by such
persons, whether or not the partnership would have the power
under applicable law to indemnify such persons.
Section 8.102(b) of the Code permits a partnership to
indemnify a governing person for reasonable expenses actually
incurred by the governing person in connection with the
proceeding (and not for a judgment, penalty, fine or excise or
similar tax) if the governing person has not been found liable
to the partnership or is found to have received an improper
personal benefit. Section 8.104 of the Code permits a
partnership to pay reasonable expenses of a governing person in
advance of the final disposition of a proceeding for which
indemnification may be provided on the condition that the
partnership first receives (i) a written affirmation by
II-2
the governing person of his good faith belief that he has met
the standard of conduct necessary for indemnification, and
(ii) a written undertaking by or on behalf of the governing
person that he will repay such expenses if it is ultimately
determined that he is not entitled to be indemnified.
Section 8.105 of the Code allows a partnership to indemnify
and advance expenses to its officers, employees and other agents
to the same extent that it allows a partnership to indemnify and
advance expenses to directors.
Neither the certificate of limited partnership of Approach
Resources I, LP nor the limited partnership agreement of
Approach Resources I, LP addresses indemnification or
advancement of expenses of the governing persons of Approach
Resources I, LP.
Approach
Oil & Gas Inc.
Approach Oil & Gas Inc. is a Delaware corporation
organized under the DGCL. The provisions of the DGCL regarding
indemnification of directors and officers and advancement of
expenses of directors and officers discussed above as applying
to the Company also apply to Approach Oil & Gas Inc.
The certificate of incorporation of Approach Oil & Gas
Inc. provides that, to the fullest extent permitted by the DGCL,
no director of the corporation shall be personally liable to the
corporation or its stockholders for monetary damages for breach
of duty as a director. The certificate of incorporation of
Approach Oil & Gas Inc. further provides that no
director of the corporation shall be personally liable to the
corporation or its stockholders for monetary damages for beach
of duty as a director, except for liability (i) for any
breach of the directors duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing
violation of the law, (iii) the payment of dividends in
violation of Section 174 of the DGCL or (iv) for any
transaction from which the director derived an improper personal
benefit. In addition, if the DGCL is amended to authorize
corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the
corporation shall be eliminated or limited to the fullest extent
permitted by the DGCL, as so amended.
Both the certificate of incorporation of Approach
Oil & Gas Inc. and the bylaws of Approach
Oil & Gas Inc. also contain indemnification rights for
the corporations directors and officers. Specifically, the
certificate of incorporation and the bylaws provide that
Approach Oil & Gas Inc. shall indemnify its officers
and directors to the fullest extent authorized by the DGCL.
Further, the certificate of incorporation and the bylaws provide
that Approach Oil & Gas Inc. may maintain insurance on
behalf of its officers and directors against expenses, liability
or loss incurred by them in their capacities as officers and
directors.
Approach
Operating, LLC
Approach Operating, LLC is a Delaware limited liability company
organized under the Delaware Limited Liability Company Act (the
DLLCA).
Section 18-108
of the DLLCA provides that, subject to such standards and
restrictions, if any, as are set forth in its limited liability
company agreement, a limited liability company may, and shall
have the power to, indemnify and hold harmless any member or
manager or other person from and against any and all claims and
demands whatsoever.
Neither the certificate of formation of Approach Operating, LLC
nor the limited liability company agreement of Approach
Operating, LLC directly addresses indemnification of officers
and directors and advancement of expenses of officers and
directors. However, the limited liability company agreement of
Approach Operating, LLC does state that the officers of Approach
Operating, LLC shall be liable for errors or omissions in
performing their duties with respect to Approach Operating, LLC
only in the case of gross negligence, willful misconduct or bad
faith, but not otherwise.
Approach
Delaware, LLC
Approach Delaware, LLC is a Delaware limited liability company
organized under the DLLCA.
Section 18-108
of the DLLCA provides that, subject to such standards and
restrictions, if any, as are set forth in its limited liability
company agreement, a limited liability company may, and shall
have the power to, indemnify and hold harmless any member or
manager or other person from and against any and all claims and
demands whatsoever.
II-3
Neither the certificate of formation of Approach Delaware, LLC
nor the limited liability company agreement of Approach
Delaware, LLC directly addresses indemnification of officers and
directors and advancement of expenses of officers and directors.
However, the limited liability company agreement of Approach
Delaware, LLC does state that the officers of Approach Delaware,
LLC shall be liable for errors or omissions in performing their
duties with respect to Approach Delaware, LLC only in the case
of gross negligence, willful misconduct or bad faith, but not
otherwise.
Approach
Services, LLC
Approach Services, LLC is a Delaware limited liability company
organized under the DLLCA.
Section 18-108
of the DLLCA provides that, subject to such standards and
restrictions, if any, as are set forth in its limited liability
company agreement, a limited liability company may, and shall
have the power to, indemnify and hold harmless any member or
manager or other person from and against any and all claims and
demands whatsoever.
Neither the certificate of formation of Approach Services, LLC
nor the limited liability company agreement of Approach
Services, LLC directly addresses indemnification of officers and
directors and advancement of expenses of officers and directors.
However, the limited liability company agreement of Approach
Services, LLC does state that the officers of Approach Services,
LLC shall be liable for errors or omissions in performing their
duties with respect to Approach Services, LLC only in the case
of gross negligence, willful misconduct or bad faith, but not
otherwise.
(a)
Exhibits
The following documents are filed as exhibits to this
registration statement:
|
|
|
|
|
Exhibit
|
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|
Number
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|
Exhibit Title
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|
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1
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.1**
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|
Form of Underwriting Agreement.
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4
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.1
|
|
Specimen Stock Certificate (filed as Exhibit 4.1 to the
Companys Registration Statement on
Form S-1/A
filed October 18, 2007 (File
No. 333-144512),
and incorporated herein by reference).
|
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4
|
.2*
|
|
Form of Senior Indenture.
|
|
4
|
.3*
|
|
Form of Subordinated Indenture.
|
|
4
|
.4**
|
|
Form of Warrant Agreement.
|
|
4
|
.5**
|
|
Form of Depositary Agreement.
|
|
4
|
.6
|
|
Registration Rights Agreement dated as of November 14,
2007, among Approach Resources Inc. and the investors identified
therein (filed as Exhibit 10.1 to the Companys
Current Report on
Form 8-K/A
filed December 3, 2007, and incorporated herein by
reference).
|
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5
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.1*
|
|
Opinion of Thompson & Knight LLP as to the legality of
the securities being registered.
|
|
12
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.1*
|
|
Statement of Computation of Ratios of Earnings to Fixed Charges.
|
|
23
|
.1*
|
|
Consent of Hein & Associates LLP, independent
registered public accounting firm.
|
|
23
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.2*
|
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Consent of Thompson & Knight LLP (contained in
Exhibit 5.1 hereto).
|
|
23
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.3*
|
|
Consent of DeGolyer and MacNaughton, independent petroleum
engineering consulting firm.
|
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24
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.1*
|
|
Power of Attorney (included on the signature page to this
Registration Statement).
|
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25
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.1***
|
|
Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 respecting the Senior Indenture.
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25
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.2***
|
|
Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 respecting the Subordinated
Indenture.
|
|
|
|
*
|
|
Filed herewith.
|
|
**
|
|
To be filed by amendment, as an exhibit to a report pursuant to
Section 13(a) or 15(d) of the Exchange Act and incorporated
herein by reference or in a post-effective amendment to this
registration statement.
|
|
***
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|
To be filed in accordance with the requirements of
Section 305(b)(2) of the Trust Indenture Act of 1939 and
Rules 5b-1
through 5b-3 thereunder.
|
II-4
(b)
Financial statement schedules
No financial statement schedules are included herein. All other
schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission
are not required under the related instructions, are
inapplicable, or the information is in the consolidated
financial statements, and have therefore been omitted.
(c)
Reports, opinions and appraisals
The following reports, opinions and appraisals are included
herein: None.
Each undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(a) To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933 (the
Securities Act);
(b) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the
Calculation of Registration Fee table in the
effective registration statement;
(c) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs 1(a), 1(b) and 1(c) of
this section do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the Commission
by the registrant pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 (the Exchange Act)
that are incorporated by reference in the registration
statement, or is contained in a form of prospectus filed
pursuant to Rule 424(b) that is part of the registration
statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under
the Securities Act to any purchaser:
(a) Each prospectus filed by the registrant pursuant to
Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was
deemed part of and included in the registration
statement; and
(b) Each prospectus required to be filed pursuant to
Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii) or
(x) for the purpose of providing the information required
by section 10(a) of the Securities Act shall be deemed to
be part of and included in the registration statement as of
II-5
the earlier of the date such form of prospectus is first used
after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer
and any person that is at that date an underwriter, such date
shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however, that no statement
made in a registration statement or prospectus that is part of
the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will,
as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made
in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately
prior to such effective date.
(5) That, for the purpose of determining liability of the
registrant under the Securities Act to any purchaser in the
initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered
or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
(a) Any preliminary prospectus or prospectus of the
undersigned registrant relating to the offering required to be
filed pursuant to Rule 424;
(b) Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used
or referred to by the undersigned registrant;
(c) The portion of any other free writing prospectus
relating to the offering containing material information about
the undersigned registrant or its securities provided by or on
behalf of the undersigned registrant; and
(d) Any other communication that is an offer in the
offering made by the undersigned registrant to the purchaser.
(6) That, for purposes of determining any liability under
the Securities Act, each filing of the registrants annual
report pursuant to section 13(a) or section 15(d) of
the Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(7) To supplement the prospectus, after the expiration of
the subscription period, to set forth the results of the
subscription offer, the transactions by the underwriters during
the subscription period, the amount of unsubscribed securities
to be purchased by the underwriters and the terms of any
subsequent reoffering thereof. If any public offering by the
underwriters is to be made on terms differing from those set
forth on the cover page of the prospectus, a post-effective
amendment will be filed to set forth the terms of such offering.
(8) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether
II-6
such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
(9) To file an application for the purpose of determining
the eligibility of the trustee, both of the subordinated
indenture and of the senior indenture, to act under
subsection (a) of section 310 of the
Trust Indenture Act of 1939, as amended (the
Act), in accordance with the rules and regulations
prescribed by the Commission under section 305(b)(2) of the
Act.
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Fort Worth, State of Texas, on May 18, 2011.
APPROACH RESOURCES INC.
J. Ross Craft
President and Chief Executive Officer
POWER OF
ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints J. Ross Craft, Steven P.
Smart and J. Curtis Henderson, and each of them severally, his
true and lawful attorney or attorneys-in-fact and agents, with
full power to act with or without the others and with full power
of substitution and resubstitution, to execute in his name,
place and stead, in any and all capacities, any or all
amendments (including pre-effective and post-effective
amendments) to this registration statement and any registration
statement for the same offering filed pursuant to Rule 462
under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents and each of them, full power and
authority to do and perform in the name of on behalf of the
undersigned, in any and all capacities, each and every act and
thing necessary or desirable to be done in and about the
premises, to all intents and purposes and as fully as they might
or could do in person, hereby ratifying, approving and
confirming all that said attorneys-in-fact and agents or their
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the dates indicated.
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|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
/s/ J.
Ross Craft
J.
Ross Craft
|
|
President, Chief Executive Officer and Director (Principal
Executive Officer)
|
|
May 18, 2011
|
|
|
|
|
|
/s/ Steven
P. Smart
Steven
P. Smart
|
|
Executive Vice President and Chief Financial Officer (Principal
Financial and Chief Accounting Officer)
|
|
May 18, 2011
|
|
|
|
|
|
/s/ Bryan
H. Lawrence
Bryan
H. Lawrence
|
|
Director and Chairman of the
Board of Directors
|
|
May 18, 2011
|
|
|
|
|
|
/s/ Alan
D. Bell
Alan
D. Bell
|
|
Director
|
|
May 18, 2011
|
|
|
|
|
|
/s/ James
H. Brandi
James
H. Brandi
|
|
Director
|
|
May 18, 2011
|
|
|
|
|
|
/s/ James
C. Crain
James
C. Crain
|
|
Director
|
|
May 18, 2011
|
|
|
|
|
|
/s/ Sheldon
B. Lubar
Sheldon
B. Lubar
|
|
Director
|
|
May 18, 2011
|
|
|
|
|
|
/s/ Christopher
J. Whyte
Christopher
J. Whyte
|
|
Director
|
|
May 18, 2011
|
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each
of the registrants has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Worth, State of Texas, on
May 18, 2011.
APPROACH RESOURCES I, LP
APPROACH OIL & GAS INC.
APPROACH OPERATING, LLC
APPROACH DELAWARE, LLC
APPROACH SERVICES, LLC
J. Ross Craft
President and Chief Executive Officer
POWER OF
ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints J. Ross Craft, Steven P.
Smart and J. Curtis Henderson, and each of them severally, his
true and lawful attorney or attorneys-in-fact and agents, with
full power to act with or without the others and with full power
of substitution and resubstitution, to execute in his name,
place and stead, in any and all capacities, any or all
amendments (including pre-effective and post-effective
amendments) to this registration statement and any registration
statement for the same offering filed pursuant to Rule 462
under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents and each of them, full power and
authority to do and perform in the name of on behalf of the
undersigned, in any and all capacities, each and every act and
thing necessary or desirable to be done in and about the
premises, to all intents and purposes and as fully as they might
or could do in person, hereby ratifying, approving and
confirming all that said attorneys-in-fact and agents or their
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the dates indicated.
|
|
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|
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|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
/s/ J.
Ross Craft
J.
Ross Craft
|
|
President, Chief Executive Officer* and Director (Principal
Executive Officer)
|
|
May 18, 2011
|
|
|
|
|
|
/s/ Steven
P. Smart
Steven
P. Smart
|
|
Executive Vice President and Chief Financial Officer (Principal
Financial and Chief Accounting Officer)
|
|
May 18, 2011
|
|
|
|
*
|
|
J. Ross Craft serves as the President and Chief Executive
Officer of (i) Approach Resources Inc., which is the sole
general partner of Approach Resources I, LP, and
(ii) Approach Oil & Gas Inc., Approach Operating,
LLC, Approach Delaware, LLC and Approach Services, LLC.
|
II-9
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Exhibit
|
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Number
|
|
Exhibit Title
|
|
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1
|
.1**
|
|
Form of Underwriting Agreement.
|
|
4
|
.1
|
|
Specimen Stock Certificate (filed as Exhibit 4.1 to the
Companys Registration Statement on
Form S-1/A
filed October 18, 2007 (File
No. 333-144512),
and incorporated herein by reference).
|
|
4
|
.2*
|
|
Form of Senior Indenture.
|
|
4
|
.3*
|
|
Form of Subordinated Indenture.
|
|
4
|
.4**
|
|
Form of Warrant Agreement.
|
|
4
|
.5**
|
|
Form of Depositary Agreement.
|
|
4
|
.6
|
|
Registration Rights Agreement dated as of November 14,
2007, among Approach Resources Inc. and the investors identified
therein (filed as Exhibit 10.1 to the Companys
Current Report on
Form 8-K/A
filed December 3, 2007, and incorporated herein by
reference).
|
|
5
|
.1*
|
|
Opinion of Thompson & Knight LLP as to the legality of
the securities being registered.
|
|
12
|
.1*
|
|
Statement of Computation of Ratios of Earnings to Fixed Charges.
|
|
23
|
.1*
|
|
Consent of Hein & Associates LLP, independent
registered public accounting firm.
|
|
23
|
.2*
|
|
Consent of Thompson & Knight LLP (contained in
Exhibit 5.1 hereto).
|
|
23
|
.3*
|
|
Consent of DeGolyer and MacNaughton, independent petroleum
engineering consulting firm.
|
|
24
|
.1*
|
|
Power of Attorney (included on the signature page to this
Registration Statement).
|
|
25
|
.1***
|
|
Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 respecting the Senior Indenture.
|
|
25
|
.2***
|
|
Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 respecting the Subordinated
Indenture.
|
|
|
|
*
|
|
Filed herewith.
|
|
**
|
|
To be filed by amendment, as an exhibit to a report pursuant to
Section 13(a) or 15(d) of the Exchange Act and incorporated
herein by reference or in a post-effective amendment to this
registration statement.
|
|
***
|
|
To be filed in accordance with the requirements of
Section 305(b)(2) of the Trust Indenture Act of 1939 and
Rules 5b-1
through 5b-3 thereunder.
|
Exhibit 4.2
APPROACH RESOURCES INC.,
AS ISSUER
AND
ANY SUBSIDIARY GUARANTORS PARTIES HERETO,
AS SUBSIDIARY GUARANTORS
TO
[TRUSTEES NAME],
AS TRUSTEE
SENIOR INDENTURE
DATED AS OF
, 20
TABLE OF CONTENTS
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Page
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ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
|
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1
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SECTION 101. Definitions
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1
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SECTION 102. Compliance Certificates and Opinions
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5
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SECTION 103. Form of Documents Delivered to Trustee
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6
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SECTION 104. Acts of Holders; Record Dates
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6
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SECTION 105. Notices, Etc., to Trustee and Company
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7
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SECTION 106. Notice to Holders; Waiver
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8
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|
SECTION 107. Conflict with Trust Indenture Act
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8
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SECTION 108. Effect of Headings and Table of Contents
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8
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SECTION 109. Successors and Assigns
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8
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SECTION 110. Separability Clause
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8
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SECTION 111. Benefits of Indenture
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8
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SECTION 112. Governing Law
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9
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SECTION 113. Legal Holidays
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9
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SECTION 114. No Recourse Against Others
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9
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ARTICLE TWO SECURITY FORMS
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9
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SECTION 201. Forms Generally
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9
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|
SECTION 202. Form of Face of Security
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9
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|
SECTION 203. Form of Reverse of Security
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10
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|
SECTION 204. Form of Notation of Subsidiary Guarantee
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13
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|
SECTION 205. Form of Legend for Global Securities
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13
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|
SECTION 206. Form of Trustees Certificate of Authentication
|
|
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13
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|
SECTION 207. Form of Conversion Notice
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14
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ARTICLE THREE THE SECURITIES
|
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14
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SECTION 301. Amount Unlimited; Issuable in Series
|
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14
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|
SECTION 302. Denominations
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16
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|
SECTION 303. Execution, Authentication, Delivery and Dating
|
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16
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|
SECTION 304. Temporary Securities
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17
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|
SECTION 305. Registration, Registration of Transfer and Exchange
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18
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|
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities
|
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19
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|
SECTION 307. Payment of Interest; Interest Rights Preserved
|
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19
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|
SECTION 308. Persons Deemed Owners
|
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20
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|
SECTION 309. Cancellation
|
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20
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|
SECTION 310. Computation of Interest
|
|
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20
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ARTICLE FOUR SATISFACTION AND DISCHARGE
|
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21
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SECTION 401. Satisfaction and Discharge of Indenture
|
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21
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|
SECTION 402. Application of Trust Money
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21
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ARTICLE FIVE REMEDIES
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22
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SECTION 501. Events of Default
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22
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|
SECTION 502. Acceleration of Maturity; Rescission and Annulment
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23
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ii
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Page
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SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee
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24
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SECTION 504. Trustee May File Proofs of Claim
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24
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|
SECTION 505. Trustee May Enforce Claims Without Possession of Securities
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24
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SECTION 506. Application of Money Collected
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24
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SECTION 507. Limitation on Suits
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25
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|
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest
|
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25
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|
SECTION 509. Restoration of Rights and Remedies
|
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25
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|
SECTION 510. Rights and Remedies Cumulative
|
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25
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|
SECTION 511. Delay or Omission Not Waiver
|
|
|
26
|
|
SECTION 512. Control by Holders
|
|
|
26
|
|
SECTION 513. Waiver of Past Defaults
|
|
|
26
|
|
SECTION 514. Undertaking for Costs
|
|
|
26
|
|
SECTION 515. Waiver of Usury, Stay or Extension Laws
|
|
|
26
|
|
|
|
|
|
|
ARTICLE SIX THE TRUSTEE
|
|
|
27
|
|
|
|
|
|
|
SECTION 601. Certain Duties and Responsibilities
|
|
|
27
|
|
SECTION 602. Notice of Defaults
|
|
|
27
|
|
SECTION 603. Certain Rights of Trustee
|
|
|
27
|
|
SECTION 604. Not Responsible for Recitals or Issuance of Securities
|
|
|
27
|
|
SECTION 605. May Hold Securities
|
|
|
28
|
|
SECTION 606. Money Held in Trust
|
|
|
28
|
|
SECTION 607. Compensation and Reimbursement
|
|
|
28
|
|
SECTION 608. Conflicting Interests
|
|
|
28
|
|
SECTION 609. Corporate Trustee Required; Eligibility
|
|
|
28
|
|
SECTION 610. Resignation and Removal; Appointment of Successor
|
|
|
29
|
|
SECTION 611. Acceptance of Appointment by Successor
|
|
|
29
|
|
SECTION 612. Merger, Conversion, Consolidation or Succession to Business
|
|
|
30
|
|
SECTION 613. Preferential Collection of Claims Against Company and Subsidiary Guarantors
|
|
|
30
|
|
SECTION 614. Appointment of Authenticating Agent
|
|
|
30
|
|
|
|
|
|
|
ARTICLE SEVEN HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
|
|
|
31
|
|
|
|
|
|
|
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders
|
|
|
31
|
|
SECTION 702. Preservation of Information; Communications to Holders
|
|
|
32
|
|
SECTION 703. Reports by Trustee
|
|
|
32
|
|
SECTION 704. Reports by Company and Subsidiary Guarantors
|
|
|
32
|
|
|
|
|
|
|
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
|
|
|
32
|
|
|
|
|
|
|
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms
|
|
|
32
|
|
SECTION 802. Subsidiary Guarantors May Consolidate, Etc., Only on Certain Terms
|
|
|
33
|
|
SECTION 803. Successor Substituted
|
|
|
33
|
|
|
|
|
|
|
ARTICLE NINE SUPPLEMENTAL INDENTURES
|
|
|
34
|
|
|
|
|
|
|
SECTION 901. Supplemental Indentures Without Consent of Holders
|
|
|
34
|
|
SECTION 902. Supplemental Indentures With Consent of Holders
|
|
|
34
|
|
SECTION 903. Execution of Supplemental Indentures
|
|
|
35
|
|
SECTION 904. Effect of Supplemental Indentures
|
|
|
36
|
|
iii
|
|
|
|
|
|
|
Page
|
|
SECTION 905. Conformity with Trust Indenture Act
|
|
|
36
|
|
SECTION 906. Reference in Securities to Supplemental Indentures
|
|
|
36
|
|
|
|
|
|
|
ARTICLE TEN COVENANTS
|
|
|
36
|
|
|
|
|
|
|
SECTION 1001. Payment of Principal, Premium and Interest
|
|
|
36
|
|
SECTION 1002. Maintenance of Office or Agency
|
|
|
36
|
|
SECTION 1003. Money for Securities Payments to Be Held in Trust
|
|
|
36
|
|
SECTION 1004. Statement by Officers as to Default
|
|
|
37
|
|
SECTION 1005. Existence
|
|
|
37
|
|
SECTION 1006. Maintenance of Properties
|
|
|
38
|
|
SECTION 1007. Payment of Taxes and Other Claims
|
|
|
38
|
|
SECTION 1008. Maintenance of Insurance
|
|
|
38
|
|
SECTION 1009. Waiver of Certain Covenants
|
|
|
38
|
|
|
|
|
|
|
ARTICLE ELEVEN REDEMPTION OF SECURITIES
|
|
|
38
|
|
|
|
|
|
|
SECTION 1101. Applicability of Article
|
|
|
38
|
|
SECTION 1102. Election to Redeem; Notice to Trustee
|
|
|
38
|
|
SECTION 1103. Selection by Trustee of Securities to Be Redeemed
|
|
|
39
|
|
SECTION 1104. Notice of Redemption
|
|
|
39
|
|
SECTION 1105. Deposit of Redemption Price
|
|
|
40
|
|
SECTION 1106. Securities Payable on Redemption Date
|
|
|
40
|
|
SECTION 1107. Securities Redeemed in Part
|
|
|
40
|
|
|
|
|
|
|
ARTICLE TWELVE [INTENTIONALLY OMITTED]
|
|
|
40
|
|
|
|
|
|
|
ARTICLE THIRTEEN SUBSIDIARY GUARANTEES
|
|
|
41
|
|
|
|
|
|
|
SECTION 1301. Applicability of Article
|
|
|
41
|
|
SECTION 1302. Subsidiary Guarantees
|
|
|
41
|
|
SECTION 1303. Execution and Delivery of Notations of Subsidiary Guarantees
|
|
|
42
|
|
SECTION 1304. Release of Subsidiary Guarantors
|
|
|
42
|
|
SECTION 1305. Additional Subsidiary Guarantors
|
|
|
42
|
|
SECTION 1306. Limitation on Liability
|
|
|
43
|
|
|
|
|
|
|
ARTICLE FOURTEEN [INTENTIONALLY OMITTED]
|
|
|
43
|
|
|
|
|
|
|
ARTICLE FIFTEEN DEFEASANCE AND COVENANT DEFEASANCE
|
|
|
43
|
|
|
|
|
|
|
SECTION 1501. Companys Option to Effect Defeasance or Covenant Defeasance
|
|
|
43
|
|
SECTION 1502. Defeasance and Discharge
|
|
|
43
|
|
SECTION 1503. Covenant Defeasance
|
|
|
43
|
|
SECTION 1504. Conditions to Defeasance or Covenant Defeasance
|
|
|
44
|
|
SECTION 1505. Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions
|
|
|
45
|
|
SECTION 1506. Reinstatement
|
|
|
45
|
|
|
|
|
|
|
ARTICLE SIXTEEN SINKING FUNDS
|
|
|
45
|
|
|
|
|
|
|
SECTION 1601. Applicability of Article
|
|
|
45
|
|
SECTION 1602. Satisfaction of Sinking Fund Payments with Securities
|
|
|
46
|
|
SECTION 1603. Redemption of Securities for Sinking Fund
|
|
|
46
|
|
[Schedule I Subsidiary Guarantors]
iv
APPROACH RESOURCES INC.
RECONCILIATION AND TIE OF CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310 THROUGH 318,
INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
|
|
|
|
|
INDENTURE
|
TRUST INDENTURE ACT SECTION
|
|
SECTION
|
Section 310(a)(1)
|
|
609
|
(a)(2)
|
|
609
|
(a)(3)
|
|
Not Applicable
|
(a)(4)
|
|
Not Applicable
|
(b)
|
|
608, 610
|
Section 311(a)
|
|
613
|
(b)
|
|
613
|
Section 312(a)
|
|
701, 702
|
(b)
|
|
702
|
(c)
|
|
702
|
Section 313(a)
|
|
703
|
(b)
|
|
703
|
(c)
|
|
703
|
(d)
|
|
703
|
Section 314(a)
|
|
704
|
(a)(4)
|
|
101, 1004
|
(b)
|
|
Not Applicable
|
(c)(1)
|
|
102
|
(c)(2)
|
|
102
|
(c)(3)
|
|
Not Applicable
|
(d)
|
|
Not Applicable
|
(e)
|
|
102
|
Section 315(a)
|
|
601
|
(b)
|
|
602
|
(c)
|
|
601
|
(d)
|
|
601
|
(e)
|
|
514
|
Section 316(a)
|
|
101
|
(a)(1)(A)
|
|
502, 512
|
(a)(1)(B)
|
|
513
|
(a)(2)
|
|
Not Applicable
|
(b)
|
|
508
|
(c)
|
|
104
|
Section 317(a)(1)
|
|
503
|
(a)(2)
|
|
504
|
(b)
|
|
1003
|
Section 318(a)
|
|
107
|
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
v
INDENTURE
, dated as of
,
20
, among Approach Resources Inc., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the
Company
), having its principal office at One
Ridgmar Centre, 6500 West Freeway, Suite 800, Fort Worth, Texas 76116, each of the Subsidiary
Guarantors (as hereinafter defined) parties hereto and [TRUSTEES NAME], a [ ] duly organized and
existing under the laws of [ ], as Trustee (herein called the
Trustee
).
RECITALS OF THE COMPANY AND THE SUBSIDIARY GUARANTORS
The Company has duly authorized the execution and delivery of this Indenture to provide for
the issuance from time to time of its unsecured debentures, notes or other evidences of
indebtedness (herein called the
Securities
), to be issued in one or more series as in this
Indenture provided.
The Company and the Subsidiary Guarantors are members of the same consolidated group of
companies. The Subsidiary Guarantors will derive direct and indirect economic benefit from the
issuance of the Securities. Accordingly, each Subsidiary Guarantor has duly authorized the
execution and delivery of this Indenture to provide for its full, unconditional and joint and
several guarantee of the Securities to the extent provided in or pursuant this Indenture.
All things necessary to make this Indenture a valid agreement of the Company, in accordance
with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders
thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the
Securities or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101.
Definitions
.
For all purposes of this Indenture, except as otherwise expressly provided or unless the
context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture Act, either directly
or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles, and, except as otherwise herein expressly
provided, the term generally accepted accounting principles with respect to any computation
required or permitted hereunder shall mean such accounting principles as are generally accepted at
the date of this instrument;
(4) unless the context otherwise requires, any reference to an Article or a Section refers
to an Article or a Section, as the case may be, of this Indenture; and
(5) the words herein, hereof, hereunder and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other subdivision.
Act
, when used with respect to any Holder, has the meaning specified in Section 104.
Affiliate
of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with 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
1
such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms controlling and
controlled have meanings correlative to the foregoing; provided that direct or indirect
beneficial ownership of 10% or more of the Voting Stock of a Person shall be deemed to be control.
Authenticating Agent
means any Person authorized by the Trustee pursuant to Section 614 to
act on behalf of the Trustee to authenticate Securities of one or more series.
Board of Directors
means, with respect to the Company, either the board of directors of the
Company or any committee of that board duly authorized to act for it in respect hereof, and with
respect to any Subsidiary Guarantor, either the board of directors of such Subsidiary Guarantor or
any committee of that board duly authorized to act for it in respect hereof.
Board Resolution
means, with respect to the Company or a Subsidiary Guarantor, a copy of a
resolution certified by the Secretary or an Assistant Secretary of the Company or such Subsidiary
Guarantor, as the case may be, to have been duly adopted by its Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the Trustee.
Business Day
, when used with respect to any Place of Payment, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of
Payment are authorized or obligated by law or executive order to close.
Capital Stock
of any Person means any and all shares, interests, participations or other
equivalents (however designated) of corporate stock or other equity participations, including
partnership interests, whether general or limited, of such Person.
Commission
means the Securities and Exchange Commission, from time to time constituted,
created under the Exchange Act, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
Common Stock
means the common stock, $0.01 par value per share, of the Company as the same exists at the
date of execution and delivery of this Indenture or other Capital Stock of the Company into which
such common stock is converted, reclassified or changed from time to time.
Company
means the Person named as the Company in the first paragraph of this instrument
until a successor Person shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter Company shall mean such successor Person.
Company Request
or
Company Order
means a written request or order signed in the name of
the Company by its Chairman of the Board of Directors, its Vice Chairman of the Board of Directors,
its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
Conversion Agent
means any Person authorized by the Company to convert any Securities on
behalf of the Company.
Corporate Trust Office
means the principal office of the Trustee in [ , ] at which at any
particular time its corporate trust business in relation to this Indenture shall be administered,
such office being located at [TRUSTEES ADDRESS].
Corporation
means a corporation, association, limited liability company, joint-stock company
or business trust.
Covenant Defeasance
has the meaning specified in Section 1503.
Debt
of any Person at any date means any obligation created, assumed or guaranteed by such
Person for the repayment of borrowed money.
Defaulted Interest
has the meaning specified in Section 307.
Defeasance
has the meaning specified in Section 1502.
2
Depositary
means, with respect to Securities of any series issuable in whole or in part in
the form of one or more Global Securities, a clearing agency registered under the Exchange Act that
is designated to act as Depositary for such Securities as contemplated by Section 301.
Event of Default
has the meaning specified in Section 501.
Exchange Act
means the Securities Exchange Act of 1934 and any statute successor thereto, in
each case as amended from time to time.
Expiration Date
has the meaning specified in Section 104.
Global Security
means a Security that evidences all or part of the Securities of any series
and bears the legend set forth in Section 205 (or such legend as may be specified as contemplated
by Section 301 for such Securities).
Holder
means a Person in whose name a Security is registered in the Security Register.
Indenture
means this instrument as originally executed and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of
and govern this instrument and any such supplemental indenture, respectively. The term Indenture
shall also include the terms of particular series of Securities established as contemplated by
Section 301.
interest
, when used with respect to an Original Issue Discount Security which by its terms
bears interest only after Maturity, means interest payable after Maturity.
Interest Payment Date
, when used with respect to any Security, means the Stated Maturity of
an installment of interest on such Security.
Investment Company Act
means the Investment Company Act of 1940 and any statute successor
thereto, in each case as amended from time to time.
Maturity
, when used with respect to any Security, means the date on which the principal of
such Security or an installment of principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
Notice of Default
means a written notice of the kind specified in Section 501(5).
Officers Certificate
means a certificate signed by the Chairman of the Board of Directors,
a Vice Chairman of the Board of Directors, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company or a Subsidiary
Guarantor, as the case may be, and delivered to the Trustee. One of the officers signing an
Officers Certificate given pursuant to Section 1004 shall be the principal executive, financial or
accounting officer of the Company.
Opinion of Counsel
means, as to the Company or a Subsidiary Guarantor, a written opinion of
counsel, who may be counsel for the Company or such Subsidiary Guarantor, as the case may be, and
who shall be acceptable to the Trustee.
Original Issue Discount Security
means any Security which provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502.
Outstanding
, when used with respect to Securities, means, as of the date of determination,
all Securities theretofore authenticated and delivered under this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;
(2) Securities for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory
to the Trustee has been made;
3
(3) Securities as to which Defeasance has been effected pursuant to Section 1502; and
(4) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of
which other Securities have been authenticated and delivered pursuant to this Indenture, other than
any such Securities in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; provided, however, that in
determining whether the Holders of the requisite principal amount of the Outstanding
Securities have given, made or taken any request, demand, authorization, direction, notice,
consent, waiver or other action hereunder as of any date, (A) the principal amount of an Original
Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the
principal thereof which would be due and payable as of such date upon acceleration of the Maturity
thereof to such date pursuant to Section 502, (B) if, as of such date, the principal amount payable
at the Stated Maturity of a Security is not determinable, the principal amount of such Security
which shall be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated in one or more
foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S.
dollar equivalent, determined as of such date in the manner provided as contemplated by Section
301, of the principal amount of such Security (or, in the case of a Security described in clause
(A) or (B) above, of the amount determined as provided in such clause), and (D) Securities owned by
the Company, any Subsidiary Guarantor or any other obligor upon the Securities or any Affiliate of
the Company, any Subsidiary Guarantor or of such other obligor shall be disregarded and deemed not
to be Outstanding, except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent, waiver or other action,
only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to
the satisfaction of the Trustee the pledgees right so to act with respect to such Securities and
that the pledgee is not the Company, a Subsidiary Guarantor or any other obligor upon the
Securities or any Affiliate of the Company, a Subsidiary Guarantor or of such other obligor.
Paying Agent
means any Person authorized by the Company to pay the principal of or any
premium or interest on any Securities on behalf of the Company.
Person
means any individual, corporation, partnership, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Place of Payment
, when used with respect to the Securities of any series, means the place or
places where the principal of and any premium and interest on the Securities of that series are
payable as specified as contemplated by Section 301.
Predecessor Security
of any particular Security means every previous Security evidencing all
or a portion of the same debt as that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered under Section 306 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Security.
Redemption Date
, when used with respect to any Security to be redeemed, means the date fixed
for such redemption by or pursuant to this Indenture.
Redemption Price
, when used with respect to any Security to be redeemed, means the price at
which it is to be redeemed pursuant to this Indenture.
Regular Record Date
for the interest payable on any Interest Payment Date on the Securities
of any series means the date specified for that purpose as contemplated by Section 301.
Securities
has the meaning stated in the first recital of this Indenture and more
particularly means any Securities authenticated and delivered under this Indenture.
Securities Act
means the Securities Act of 1933 and any statute successor thereto, in each
case as amended from time to time.
Security Register
and
Security Registrar
have the respective meanings specified in Section
305.
Significant Subsidiary
means, at any date of determination, any Subsidiary that represents
10% or more of the Companys consolidated total assets at the end of the most recent fiscal quarter
for which financial information is available or 10% or more of the Companys consolidated net
revenues or consolidated operating income for the most recent four quarters for which financial
information is available.
4
Special Record Date
for the payment of any Defaulted Interest means a date fixed by the
Trustee pursuant to Section 307.
Stated Maturity
, when used with respect to any Security or any installment of principal
thereof or interest thereon, means the date specified in such Security as the fixed date on which
the principal of such Security or such installment of principal or interest is due and payable.
Subsidiary
of any Person means (1) a corporation more than 50% of the combined voting power
of the outstanding Voting Stock of which is owned, directly or indirectly, by such Person or by one
or more other Subsidiaries of such Person or by such Person and one or more Subsidiaries thereof or
(2) any other Person (other than a corporation) in which such Person, or one or more other
Subsidiaries of such Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies, management and
affairs thereof.
Subsidiary Guarantees
means the guarantees of each Subsidiary Guarantor as provided in
Article Thirteen.
Subsidiary Guarantors
means (i) the subsidiaries listed in
Schedule I
hereto; (ii)
each other Subsidiary of the Company that becomes a Subsidiary Guarantor in accordance with Section
1305 hereof; and (iii) any successor of the foregoing, in each case (i), (ii) and (iii) until such
Subsidiary Guarantor ceases to be such in accordance with Section 1304 hereof.
Trust Indenture Act
means the Trust Indenture Act of 1939 as in force at the date as of
which this instrument was executed; provided, however, that in the event the Trust Indenture Act of
1939 is amended after such date, Trust Indenture Act means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
Trustee
means the Person named as the Trustee in the first paragraph of this instrument
until a successor Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter Trustee shall mean or include each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, Trustee as used with respect to
the Securities of any series shall mean the Trustee with respect to Securities of that series.
U.S. Government Obligation
has the meaning specified in Section 1504.
Vice President
, when used with respect to the Company or the Trustee, means any vice
president, whether or not designated by a number or a word or words added before or after the title
vice president.
Voting Stock
of any Person means Capital Stock of such Person which ordinarily has voting
power for the election of directors (or persons performing similar functions) of such Person,
whether at all times or only so long as no senior class of securities has such voting power by
reason of any contingency.
Wholly Owned Subsidiary
of any Person means a Subsidiary of such Person all of the
outstanding Capital Stock of which (other than directors qualifying shares) shall at the time be
owned by such Person or by one or more Wholly Owned Subsidiaries of such Person or by such Person
and one or more Wholly Owned Subsidiaries of such Person.
SECTION 102.
Compliance Certificates and Opinions
.
Upon any application or request by the Company or any Subsidiary Guarantor to the Trustee to
take any action under any provision of this Indenture, the Company and/or such Subsidiary
Guarantor, as appropriate, shall furnish to the Trustee such certificates and opinions as may be
required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form
of an Officers Certificate, if to be given by an officer of the Company or a Subsidiary Guarantor,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the
Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture shall include:
(1) a statement that each individual signing such certificate or opinion has read such
covenant or condition and the definitions herein relating thereto;
5
(2) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such condition or
covenant has been complied with.
SECTION 103.
Form of Documents Delivered to Trustee
.
In any case where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the Company or a Subsidiary Guarantor may be
based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or representations by, an officer
or officers of the Company or such Subsidiary Guarantor stating that the information with respect
to such factual matters is in the possession of the Company or such Subsidiary Guarantor, unless
such counsel knows, or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.
SECTION 104.
Acts of Holders; Record Dates
.
Whenever in this Indenture it is provided that the Holders of a specified percentage in
aggregate principal amount of the Securities of any or all series may take action (including the
making of any demand or request, the giving of any direction, notice, consent or waiver or the
taking of any other action) the fact that at the time of taking any such action the Holders of such
specified percentage have joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by Holders in person or by agent or proxy appointed in
writing, (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly
called and held in accordance with procedures approved by the Trustee, (c) by a combination of such
instrument or instruments and any such record of such a meeting of Holders or (d) in the case of
Securities evidenced by a Global Security, by any electronic transmission or other message, whether
or not in written format, that complies with the Depositarys applicable procedures. Such evidence
(and the action embodied therein and evidenced thereby) are herein sometimes referred to as the
Act
of the relevant Holders. Proof of execution of any such instrument or of a writing appointing
any such agent or proxy shall be sufficient for any purpose of this Indenture and (subject to
Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in
this Section.
The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Where such execution
is by a signer acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner that the Trustee deems sufficient. The ownership of Securities
shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
Holder of any Security shall bind every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or
6
suffered to be done by the Trustee or the Company
in reliance thereon, whether or not notation of such action is made upon such Security.
The Company may set any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give, make or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided or permitted by this
Indenture to be given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or direction referred to in
the next paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities of the relevant series on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities
of such series on such record date. Nothing in this paragraph shall be construed to prevent the
Company from setting a new record date for any action for which a record date has previously been
set pursuant to this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be
construed to render ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice
of such record date, the proposed action by Holders and the applicable Expiration Date to be given
to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set
forth in Section 106.
The Trustee may set any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of
Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to
institute proceedings referred to in Section 507(2) or (iv) any direction referred to in Section
512, in each case with respect to Securities of such series. If any record date is set pursuant to
this paragraph, the Holders of Outstanding Securities of such series on such record date, and no
other Holders, shall be entitled to join in such notice, declaration, request or direction, whether
or not such Holders remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the
requisite principal amount of Outstanding Securities of such series on such record date. Nothing in
this paragraph shall be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person be cancelled and of
no effect), and nothing in this paragraph shall be construed to render ineffective any action taken
by Holders of the requisite principal amount of Outstanding Securities of the relevant series on
the date such action is taken. Promptly after any record date is set pursuant to this paragraph,
the Trustee, at the Companys expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities of the relevant series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party hereto which sets such
record dates may designate any day as the
Expiration Date
and from time to time may change the
Expiration Date to any earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in writing, and to
each Holder of Securities of the relevant series in the manner set forth in Section 106, on or
prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the party hereto which set such record date shall be
deemed to have initially designated the 180th day after such record date as the Expiration Date
with respect thereto, subject to its right to change the Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day
after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with
regard to any particular Security may do so with regard to all or any part of the principal amount
of such Security or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
SECTION 105.
Notices, Etc., to Trustee and Company
.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or furnished to, or
filed with:
7
(1) the Trustee by any Holder or by the Company or any Subsidiary Guarantor shall be
sufficient for every purpose hereunder if made, given, furnished or filed in writing in the English
language to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Department; or
(2) the Company or any Subsidiary Guarantor by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing
in the English language and mailed, first-class postage prepaid, in the case of the Company
addressed to it at the address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the Trustee by the Company
and, in the case of any Subsidiary Guarantor, to it at the address of the Companys principal
office specified in the first paragraph of this instrument, Attention: Chief Financial Officer, or
at any other address previously furnished in writing to the Trustee by such Subsidiary Guarantor.
SECTION 106.
Notice to Holders; Waiver
.
Where this Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing in the English
language and mailed, first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date (if any), and not
earlier than the earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect
in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either before or after the
event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall
be filed with the Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of any other cause it
shall be impracticable to give such notice by mail, then such notification as shall be made with
the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
SECTION 107.
Conflict with Trust Indenture Act
.
If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture
Act which is required under such Act to be a part of and govern this Indenture, the latter
provision shall control. If any provision of this Indenture modifies or excludes any provision of
the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed
to apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 108.
Effect of Headings and Table of Contents
.
The Article and Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 109.
Successors and Assigns
.
All covenants and agreements in this Indenture by the Company and any Subsidiary Guarantor
shall bind their respective successors and assigns, whether so expressed or not.
SECTION 110.
Separability Clause
.
In case any provision in this Indenture, the Securities or the Subsidiary Guarantees shall be
invalid, illegal or unenforceable, the validity, legality and enforce ability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 111.
Benefits of Indenture
.
Nothing in this Indenture, the Securities or the Subsidiary Guarantees, express or implied,
shall give to any Person, other than the parties hereto and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.
8
SECTION 112.
Governing Law
.
This Indenture, the Securities and the Subsidiary Guarantees shall be governed by and
construed in accordance with the law of the State of New York.
SECTION 113.
Legal Holidays
.
In any case where any Interest Payment Date, Redemption Date, purchase date or Stated Maturity
of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or of the Securities (other than a provision of any Security
which specifically states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date, Redemption Date or purchase date, or at the
Stated Maturity.
SECTION 114.
No Recourse Against Others
.
No director, officer, employee, incorporator, stockholder, member, partner or trustee of the
Company or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the
Company or any Subsidiary Guarantor under the Securities, this Indenture or any Subsidiary
Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their
creation. By accepting a Security, each Holder shall be deemed to have waived and released all such
liability. The waiver and release shall be a part of the consideration for the issue of the
Securities.
ARTICLE TWO
SECURITY FORMS
SECTION 201.
Forms Generally
.
The Securities of each series and, if applicable, the notations of Subsidiary Guarantees to be
endorsed thereon shall be in substantially the form set forth in this Article, or in such other
form as shall be established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon as may be required
to comply with the rules of any securities exchange or Depositary therefor or as may, consistently
herewith, be determined by the officers executing such Securities or notations of Subsidiary
Guarantees, as the case may be, as evidenced by their execution thereof. If the form of Securities
of any series is established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on steel engraved borders
or may be produced in any other manner, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
SECTION 202.
Form of Face of Security
.
[Insert any legend required by the Internal Revenue Code and the regulations thereunder.]
Approach Resources Inc.
Approach Resources Inc., a corporation duly organized and existing under the laws of Delaware
(herein called the Company, 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
[if the Security is to
bear interest prior to Maturity, insert , and to pay interest thereon from
or
from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on
and
9
in each year, commencing
, at
the rate of
% per annum, until the principal hereof is
paid or made available for payment, provided that any principal and premium, and any such
installment of interest, which is overdue shall bear interest at the rate of
% per
annum (to the extent that the payment of such interest shall be legally enforceable),
from the dates such amounts are due until they are paid or made available for payment, and such
interest shall be payable on demand. 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
or
(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
Trustee, 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].
[If the Security is not to bear interest prior to Maturity, insert The principal of this
Security shall not bear interest except in the case of a default in payment of principal upon
acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any
overdue premium shall bear interest at the rate of
% per annum (to the
extent that the payment of such interest shall be legally enforceable), from the dates such amounts
are due until they are paid or made available for payment. Interest on any overdue principal or
premium shall be payable on demand. Any such interest on overdue principal or premium which is not
paid on demand shall bear interest at the rate of
% per annum (to the
extent that the payment of such interest on interest shall be legally enforceable), from the date
of such demand until the amount so demanded is paid or made available for payment. Interest on any
overdue interest shall be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable, insert any such]
interest on this Security will be made at the office or agency of the Company maintained for that
purpose in
, 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; provided, however, that at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall appear in the
Security Register.
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 Company has caused this instrument to be duly executed
[
under its
corporate seal
]
.
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Dated:
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APPROACH RESOURCES INC.
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By:
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[
Attest:
]
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SECTION 203.
Form of Reverse of Security
.
This Security is one of a duly authorized issue of securities of the Company (herein called
the Securities), issued and to be issued in one or more series under an Indenture, dated as of
___, 20___ (herein called the Indenture, which term shall have the meaning assigned to it in such
instrument), among the Company, the Subsidiary Guarantors named therein and [TRUSTEES NAME], as
Trustee (herein called the Trustee, which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
10
Subsidiary Guarantors,
the Trustee 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 [if applicable, insert , limited in aggregate principal amount to $___].
[If applicable, insert The Securities of this series are subject to redemption upon not
less than 30 nor more than 60 days notice by mail,
[if applicable, insert (1) on ___ in any
year commencing with the year ___ and ending with the
year ___ through operation of the sinking
fund for this series at a Redemption Price equal to
100% of the principal amount, and (2)] at any time [if
applicable, insert on or after ___, 20___], as a
whole or in part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [if applicable, insert on or
before
, ___%, and if redeemed] during the 12-month
period beginning
of the years indicated,
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Redemption
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Redemption
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Year
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Price
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Year
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Price
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and thereafter at a Redemption Price equal to
% of the principal
amount, together in the case of any such redemption [if applicable, insert (whether through
operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable
to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert The Securities of this series are subject to redemption upon not
less than 30 nor more than 60 days notice by mail, (1) on
in any year
commencing with the year ___ and ending with the year
___ through operation of
the sinking fund for this series at the Redemption Prices for redemption through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in the table below, and
(2) at any time [if applicable, insert on or after
], as a whole or in part,
at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below: If redeemed during the 12-month period beginning
of the years indicated,
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Redemption Price For Redemption
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Redemption Price For Redemption
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Through Operation of the Sinking
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Otherwise Than Through
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Year
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Fund
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Operation of the Sinking Fund
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and thereafter at a Redemption Price equal to ___% of the principal amount, together in the
case of any such redemption (whether through operation of the sinking fund or otherwise) with
accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant Record Dates referred to
on the face hereof, all as provided in the Indenture.]
[If applicable, insert Notwithstanding the foregoing, the Company may not, prior to
, redeem
any Securities of this series as contemplated by
[if applicable, insert clause (2) of] the preceding paragraph as a part of, or in anticipation
of, any refunding operation by the application, directly or indirectly, of moneys borrowed having
an interest cost to the Company (calculated in accordance with generally accepted financial
practice) of less than
% per annum.]
[If applicable, insert The sinking fund for this series provides for the redemption on
in each
year beginning with the year
and ending with the year
of [if applicable, insert not
less than $
(mandatory sinking fund) and not more than] $ ___aggregate principal amount of
Securities of this series. Securities of this series acquired or redeemed by the Company otherwise
than through [if applicable, insert mandatory] sinking fund payments may be credited against
subsequent [if applicable, insert mandatory] sinking fund payments otherwise required to be made
[if applicable, insert , in the inverse order in which they become due].]
[If the Security is subject to redemption of any kind, insert In the event of redemption of
this Security in part only, a new Security or Securities of this series and of like tenor for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.]
[If the Security is subject to conversion, insert Subject to the provisions of the
Indenture, the Holder has the right to convert the principal amount of this Security into fully
paid and nonassessable shares of Common Stock
11
of the Company at the initial conversion price per
share of Common Stock of $___ (or $___ in principal amount of Securities for each such share of
Common Stock), or at the adjusted conversion price then in effect, if adjustment has been made as
provided in the Indenture, upon surrender of the Security to the Conversion Agent, together with a
fully executed notice in substantially the form attached hereto and, if required by the Indenture,
an amount equal to accrued interest payable on this Security.]
[If applicable, insert As provided in the Indenture and subject to certain limitations
therein set forth, the obligations of the Company under this Security are guaranteed pursuant to
the Indenture as indicated in the notation of Subsidiary Guarantee endorsed hereon. The Indenture
provides that a Subsidiary Guarantor shall be released from its Subsidiary Guarantee upon
compliance with certain conditions.]
[If applicable, insert The Indenture contains provisions for Defeasance at any time of [the
entire indebtedness of this Security] [or] [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 the Security is not an Original Issue Discount Security, insert 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.]
[If the Security is an Original Issue Discount Security, insert If an Event of Default with
respect to Securities of this series shall occur and be continuing, an amount of principal of the
Securities of this series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal to insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable and (ii) of
interest on any overdue principal, premium and interest (in each case to the extent that the
payment of such interest shall be legally enforceable), all of the Companys obligations in respect
of the payment of the principal of and premium and interest, if any, on the Securities of this
series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of a majority 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 Company 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 as Trustee and offered the Trustee
reasonable security or indemnity, 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 [if
applicable, insert or the right to convert this Security in accordance with its terms].
No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, 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 [insert if applicable and to convert such Security in
accordance with its terms].
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 Company in any place where the
principal of and any premium and interest on this Security are
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payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company 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 $___ and any integral multiple 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
Company 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 Company, the
Trustee and any agent of the Company 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 Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
SECTION 204.
Form of Notation of Subsidiary Guarantee
.
NOTATION OF SUBSIDIARY GUARANTEE
Each of the Subsidiary Guarantors (which term includes any successor Person under the
Indenture) has fully, unconditionally and absolutely guaranteed, to the extent set forth in the
Indenture and subject to the provisions in the Indenture, the due and punctual payment of the
principal of, and premium, if any, and interest on the Securities and all other amounts due and
payable under the Indenture and the Securities by the Company.
The obligations of the Subsidiary Guarantors to the Holders of Securities and to the Trustee
pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth in Article Thirteen
of the Indenture and reference is hereby made to the Indenture for the precise terms of the
Subsidiary Guarantee.
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[Insert Names of Subsidiary Guarantors]
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By:
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Title:
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SECTION 205.
Form of Legend for Global Securities
.
Unless otherwise specified as contemplated by Section 301 for the Securities evidenced
thereby, every Global Security authenticated and delivered hereunder shall bear a legend in
substantially the following form:
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.
SECTION 206.
Form of Trustees Certificate of Authentication
.
The Trustees certificates of authentication shall be in substantially the following form:
This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.
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[TRUSTEES NAME],
As Trustee
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By:
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Authorized Officer
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SECTION 207.
Form of Conversion Notice
.
Each convertible Security shall have attached thereto, or set forth on the reverse of the
Security, a notice of conversion in substantially the following form:
Conversion Notice
To: Approach Resources Inc.
The undersigned owner of this Security hereby: (i) irrevocably exercises the option to convert
this Security, or the portion hereof below designated, for shares of Common Stock of Approach
Resources Inc. in accordance with the terms of the Indenture referred to in this Security and (ii)
directs that such shares of Common Stock deliverable upon the conversion, together with any check
in payment for fractional shares and any Security(ies) representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a different name has
been indicated below. If shares are to be delivered registered in the name of a Person other than
the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Any
amount required to be paid by the undersigned on account of interest accompanies this Security.
Fill in for registration of shares if to be delivered, and of Securities if to be issued,
otherwise than to and in the name of the registered holder.
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Social Security or other Taxpayer
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Identification Number
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(Please print name and address)
Principal amount to be converted: (if less than all)
Signature Guarantee*
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*
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Participant in a recognized Signature Guarantee Medallion Program
(or other signature acceptable to the Trustee).
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ARTICLE THREE
THE SECURITIES
SECTION 301.
Amount Unlimited; Issuable in Series
.
The aggregate principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be established in or pursuant
to a Board Resolution and, subject to Section 303, set forth, or determined in the manner provided,
in an Officers Certificate, or established in one or more indentures supplemental hereto, prior to
the issuance of Securities of any series,
14
(1) the title of the Securities of the series (which shall distinguish the Securities of the
series from Securities of any other series);
(2) if the Securities of the series will not have the benefit of the Subsidiary Guarantees of
the Subsidiary Guarantors;
(3) any limit upon the aggregate principal amount of the Securities of the series which may be
authenticated and delivered under this Indenture (except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series
pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to
Section 303, are deemed never to have been authenticated and delivered hereunder);
(4) the Person to whom any interest on a Security of the series shall be payable, if other
than the Person in whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest;
(5) the date or dates on which the principal of any Securities of the series is payable;
(6) the rate or rates at which any Securities of the series shall bear interest, if any, the
date or dates from which any such interest shall accrue, the Interest Payment Dates on which any
such interest shall be payable and the Regular Record Date for any such interest payable on any
Interest Payment Date;
(7) the place or places where the principal of and any premium and interest on any Securities
of the series shall be payable;
(8) the period or periods within which, the price or prices at which and the terms and
conditions upon which any Securities of the series may be redeemed, in whole or in part, at the
option of the Company and, if other than by a Board Resolution, the manner in which any election by
the Company to redeem the Securities shall be evidenced;
(9) the obligation, if any, of the Company to redeem or purchase any Securities of the series
pursuant to any sinking fund or analogous provisions or at the option of the Holder thereof and the
period or periods within which, the price or prices at which and the terms and conditions upon
which any Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;
(10) if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which any Securities of the series shall be issuable;
(11) if the amount of principal of or any premium or interest on any Securities of the series
may be determined with reference to an index or pursuant to a formula, the manner in which such
amounts shall be determined;
(12) if other than the currency of the United States of America, the currency, currencies or
currency units in which the principal of or any premium or interest on any Securities of the series
shall be payable and the manner of determining the equivalent thereof in the currency of the United
States of America for any purpose, including for purposes of the definition of Outstanding in
Section 101;
(13) if the principal of or any premium or interest on any Securities of the series is to be
payable, at the election of the Company or the Holder thereof, in one or more currencies or
currency units other than that or those in which such Securities are stated to be payable, the
currency, currencies or currency units in which the principal of or any premium or interest on such
Securities as to which such election is made shall be payable, the periods within which and the
terms and conditions upon which such election is to be made and the amount so payable (or the
manner in which such amount shall be determined);
(14) if other than the entire principal amount thereof, the portion of the principal amount of
any Securities of the series which shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 502;
(15) if the principal amount payable at the Stated Maturity of any Securities of the
series will not be determinable as of any one or more dates prior to the Stated Maturity, the
amount which shall be deemed to be the principal amount of such Securities as of any such date for
any purpose thereunder or hereunder, including the principal amount thereof which shall be due and
payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding
as of any date prior to the Stated Maturity (or, in any such case, the manner in which such amount
deemed to be the principal amount shall be determined);
15
(16) if applicable, that the Securities of the series, in whole or any specified part,
shall be defeasible pursuant to Section 1502 or Section 1503 or both such Sections and, if other
than by a Board Resolution, the manner in which any election by the Company to defease such
Securities shall be evidenced;
(17) if applicable, that any Securities of the series shall be issuable in whole or in part in
the form of one or more Global Securities and, in such case, the respective Depositories for such
Global Securities, the form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Section 205 and any circumstances in
addition to or in lieu of those set forth in clause (2) of the last paragraph of Section 305 in
which any such Global Security may be exchanged in whole or in part for Securities registered, and
any transfer of such Global Security in whole or in part may be registered, in the name or names of
Persons other than the Depositary for such Global Security or a nominee thereof;
(18) any addition to or change in the Events of Default which applies to any Securities of the
series and any change in the right of the Trustee or the requisite Holders of such Securities to
declare the principal amount thereof due and payable pursuant to Section 502;
(19) any addition to or change in the covenants set forth in Article Ten which applies to
Securities of the series;
(20) whether the Securities of the series will be convertible into Common Stock (or cash in
lieu thereof) and, if so, the terms and conditions upon which such conversion will be effected; and
(21) any other terms of the series (which terms shall not be inconsistent with the provisions
of this Indenture, except as permitted by Section 901(5)).
All Securities of any one series shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to the Board Resolution referred to above
and (subject to Section 303) set forth, or determined in the manner provided, in the Officers
Certificate referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or
an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of
the Officers Certificate setting forth the terms of the series.
The Securities of each series shall have the benefit of the Subsidiary Guarantees unless the
Company elects otherwise upon the establishment of a series pursuant to this Section 301.
SECTION 302.
Denominations
.
The Securities of each series shall be issuable only in registered form without coupons and
only in such denominations as shall be specified as contemplated by Section 301. In the absence of
any such specified denomination with respect to the Securities of any series, the Securities of
such series shall be issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 303.
Execution, Authentication, Delivery and Dating
.
The Securities shall be executed on behalf of the Company by its Chairman of the Board of
Directors, its Vice Chairman of the Board of Directors, its President or one of its Vice
Presidents. If its corporate seal is reproduced thereon, then it shall be attested by its Secretary
or one of its Assistant Secretaries. The signature of any of these officers on the Securities may
be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any series executed by the Company and, if applicable, having
endorsed thereon the notations of Subsidiary Guarantees executed as provided in Section 1303 by the
Subsidiary Guarantors to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established by or pursuant to one or more Board
Resolutions as permitted by
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Sections 201 and 301, in authenticating such Securities, and accepting
the additional responsibilities under this Indenture in relation to such Securities, the Trustee
shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant to Board Resolution as
permitted by Section 201, that such form has been established in conformity with the provisions of
this Indenture;
(2) if the terms of such Securities have been established by or pursuant to Board Resolution
as permitted by Section 301, that such terms have been established in conformity with the
provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company, and, if applicable, the notations
of Subsidiary Guarantees endorsed thereon will constitute valid and legally binding obligations of
the Subsidiary Guarantors, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be required to
authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect
the Trustees own rights, duties or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all
Securities of a series are not to be originally issued at one time, it shall not be necessary to
deliver the Officers Certificate otherwise required pursuant to Section 301 or the Company Order
and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered at or prior to the
authentication upon original issuance of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security or Subsidiary Guarantee shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a certificate of
authentication substantially in the form provided for herein executed by the Trustee by manual
signature, and such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding
the foregoing, if any Security shall have been authenticated and delivered hereunder but never
issued and sold by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309, for all purposes of this Indenture such Security shall be
deemed never to have been authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304.
Temporary Securities
.
Pending the preparation of definitive Securities of any series, the Company may execute, and
upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities and, if applicable, having
endorsed thereon the notations of Subsidiary Guarantees in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as the officers
executing such Securities and, if applicable, notations of Subsidiary Guarantees may determine, as
evidenced by their execution of such Securities and notations of Subsidiary Guarantees.
If temporary Securities of any series are issued, the Company will cause definitive Securities
of that series to be prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities of such series at
the office or agency of the Company in a Place of Payment for that series, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the
Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or
more definitive Securities of the same series, of any authorized denominations and of like tenor
and aggregate principal amount and, if applicable, having endorsed thereon notations of Subsidiary
Guarantees executed by the Subsidiary Guarantors. Until so exchanged, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series and tenor.
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SECTION 305.
Registration, Registration of Transfer and Exchange
.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register
(the register maintained in such office and in any other office or agency of the Company in a Place
of Payment being herein sometimes collectively referred to as the
Security Register
) in which,
subject to such reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby appointed
Security Registrar
for the purpose of registering Securities and transfers of Securities as
herein provided.
Upon surrender for registration of transfer of any Security of a series at the office or
agency of the Company in a Place of Payment for that series, the Company shall execute, if
applicable the Subsidiary Guarantors shall execute the notations of Subsidiary Guarantees endorsed
thereon and the Trustee shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged for other Securities of
the same series, of any authorized denominations and of like tenor and aggregate principal amount,
upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, if applicable the Subsidiary Guarantors
shall execute the notations of Subsidiary Guarantees endorsed thereon and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or exchange of Securities shall be the
valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for exchange shall (if
so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security Registrar duly
executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of Securities,
but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906, 1107 or otherwise not involving any
transfer.
If the Securities of any series (or of any series and specified tenor) are to be redeemed in
part, the Company shall not be required (A) to issue, register the transfer of or exchange any
Securities of that series (or of that series and specified tenor, as the case may be) during a
period beginning at the opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing, or (B) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part.
The provisions of clauses (1), (2), (3) and (4) below shall apply only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be registered in the name of
the Depositary designated for such Global Security or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global Security may be exchanged
in whole or in part for Securities registered, and no transfer of a Global Security in whole or in
part may be registered, in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (A) such Depositary (i) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a
clearing agency registered under the Exchange Act, and in either case the Company fails to appoint
a successor Depositary within 90 days, (B) there shall have occurred and be continuing an Event of
Default with respect to such Global Security and the Depositary shall have notified the Trustee of
its decision to exchange such Global Security for Securities in certificated form, (C) subject to
the rules of the Depositary, the Company shall have elected to terminate the book-entry system
through the Depositary or (D) there
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shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have
been specified for this purpose as contemplated by Section 301.
(3) Subject to clause (2) above, any exchange of a Global Security for other Securities may be
made in whole or in part, and all Securities issued in exchange for a Global Security or any
portion thereof shall be registered in such names as the Depositary for such Global Security shall
direct.
(4) Every Security authenticated and delivered upon registration of transfer of, or in
exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this
Section, Section 304, 306, 906 or 1107 or otherwise, shall be authenticated and delivered in the
form of, and shall be, a Global Security, unless such Security is registered in the name of a
Person other than the Depositary for such Global Security or a nominee thereof.
SECTION 306.
Mutilated, Destroyed, Lost and Stolen Securities
.
If any mutilated Security is surrendered to the Trustee, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and
of like tenor and principal amount and bearing a number not contemporaneously outstanding, and, if
applicable, the Subsidiary Guarantors shall execute the notation of Subsidiary Guarantee endorsed
thereon.
If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction
of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless from any loss that
any of them may suffer if a Security is replaced, then, in the absence of notice to the Company or
the Trustee that such Security has been acquired by a protected purchaser, the Company shall
execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding, and, if applicable, the Subsidiary Guarantors
shall execute the notation of Subsidiary Guarantee endorsed thereon. In case any such mutilated,
destroyed, lost or stolen Security has become or is about to become due and payable or is to be
converted, the Company in its discretion may, instead of issuing a new Security, pay or authorize
the conversion of such Security (without surrender thereof save in the case of a mutilated
Security).
Upon the issuance of any new Security under this Section, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series issued pursuant to this Section in lieu of any destroyed,
lost or stolen Security shall constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement, payment or conversion of mutilated,
destroyed, lost or stolen Securities.
SECTION 307.
Payment of Interest; Interest Rights Preserved
.
Except as otherwise provided as contemplated by Section 301 with respect to any series of
Securities, interest on any Security which is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the Regular Record Date for
such interest.
Any interest on any Security of any series which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called
Defaulted Interest
) shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose
names the Securities of such series (or their respective Predecessor Securities) are registered at
the close of business on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security of such series and the date of
the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such Defaulted
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Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be given to each Holder of Securities of such series in the manner set
forth in Section 106, not less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such
series (or their respective Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on the Securities of any series in
any other lawful manner not inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.
SECTION 308.
Persons Deemed Owners
.
Prior to due presentment of a Security for registration of transfer, the Company, the
Subsidiary Guarantors, the Trustee and any agent of the Company, the Subsidiary Guarantors, or the
Trustee may treat the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium and (subject to
Section 307) any interest on such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, any Subsidiary Guarantor, the Trustee nor any
agent of the Company, any Subsidiary Guarantor, or the Trustee shall be affected by notice to the
contrary.
SECTION 309.
Cancellation
.
All Securities surrendered for payment, redemption, purchase, registration of transfer or
exchange or for credit against any sinking fund payment shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver
to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of in
accordance with its standard procedures, unless as directed by a Company Order.
SECTION 310.
Computation of Interest
.
Except as otherwise specified as contemplated by Section 301 for Securities of any series,
interest on the Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401.
Satisfaction and Discharge of Indenture
.
This Indenture shall upon Company Request cease to be of further effect with respect to the
Securities of any series, and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities of such series theretofore authenticated and delivered
(other than (i) Securities of such series which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and (ii) Securities
of such series for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been delivered to the
Trustee for cancellation; or
(B) all such Securities of such series not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company,
and the Company or, if applicable, a Subsidiary Guarantor, in the case of
(i), (ii) or (iii) above, has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose money in
an amount sufficient, without consideration of any reinvestment of interest,
to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal and any
premium and interest to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Company or a Subsidiary Guarantor has paid or caused to be paid all other sums
payable hereunder by the Company and the Subsidiary Guarantors with respect to the
Securities of such series; and
(3) the Company has delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture with respect to the Securities of such series
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 607, the obligations of the Company with respect to the
Securities of such series under Sections 304, 305, 306, 1002 and 1003, any surviving rights of
conversion, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if
money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this
Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003
shall survive.
SECTION 402.
Application of Trust Money
.
Subject to the provisions of the last paragraph of Section 1003, all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine,
to the Persons entitled thereto, of the principal and any premium and interest for whose payment
such money has been deposited with the Trustee.
21
ARTICLE FIVE
REMEDIES
SECTION 501.
Events of Default
.
Event of Default
, wherever used herein with respect to Securities of any series, means any
one of the following events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or
order of any court or any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that series when it becomes
due and payable, and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of or any premium on any Security of that series
at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due by the terms of a
Security of that series; or
(4) default in the performance, or breach, of any covenant of the Company or, if the
Subsidiary Guarantors have issued Subsidiary Guarantees with respect to the Securities of such
series, any Subsidiary Guarantor in Article Eight of this Indenture; or
(5) default in the performance, or breach, of any covenant or warranty of the Company or, if
the Subsidiary Guarantors have issued Subsidiary Guarantees with respect to the Securities of such
series, any Subsidiary Guarantor in this Indenture (other than a covenant or warranty a default in
whose performance or whose breach is elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of series of Securities other than
that series), and continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of
that series a written notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a
Notice of Default
hereunder; or
(6) any Debt of the Company, any Significant Subsidiary or, if the Subsidiary Guarantors have
issued Subsidiary Guarantees with respect to the Securities of such series, any Subsidiary
Guarantor is not paid within any applicable grace period after final maturity or is accelerated by
the holders thereof because of a default and the total amount of such Debt unpaid or accelerated
exceeds $20.0 million, or its foreign currency equivalent at the time; or
(7) any judgment or decree for the payment of money in excess of $20.0 million or its foreign
currency equivalent at the time it is entered against the Company, any Significant Subsidiary or,
if the Subsidiary Guarantors have issued Subsidiary Guarantees with respect to the Securities of
such series, any Subsidiary Guarantor, remains outstanding for a period of 60 consecutive days
following the entry of such judgment or decree and is not discharged, waived or the execution
thereof stayed; or
(8) the entry by a court having jurisdiction in the premises of (A) a decree or order for
relief in respect of the Company, any Significant Subsidiary or, if the Subsidiary Guarantors have
issued Subsidiary Guarantees with respect to the Securities of such series, any Subsidiary
Guarantor in an involuntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company, any
Significant Subsidiary or any such Subsidiary Guarantor a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company, any Significant Subsidiary or any such Subsidiary Guarantor under any
applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company, any Significant Subsidiary or any
such Subsidiary Guarantor or of any substantial part of its or their property, or ordering the
winding up or liquidation of its or their affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive
days; or
(9) the commencement by the Company, any Significant Subsidiary or, if the Subsidiary
Guarantors have issued Subsidiary Guarantees with respect to the Securities of such series, any
Subsidiary Guarantor of a voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it or them to the entry of a decree or
order for relief in respect of the Company, any Significant Subsidiary or any such Subsidiary
Guarantor in an involuntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it or them, or the filing by it or them of a petition or
answer or consent seeking reorganization or relief under any applicable Federal or State law, or
the consent by it or them to the filing of such petition or to the appointment
22
of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company, any Significant Subsidiary or any such Subsidiary
Guarantor or of any substantial part of its or their property, or the making by it or them of an
assignment for the benefit of creditors, or the admission by it or them in writing of its or their
inability to pay its or their debts generally as they become due, or the taking of corporate action
by the Company, any Significant Subsidiary or any such Subsidiary Guarantor in furtherance of any
such action; or
(10) in the event the Subsidiary Guarantors have issued Subsidiary Guarantees with respect to
the Securities of such series, the Subsidiary Guarantee of any Subsidiary Guarantor is held by a
final non-appealable order or judgment of a court of competent jurisdiction to be unenforceable or
invalid or ceases for any reason to be in full force and effect (other than in accordance with the
terms of this Indenture) or any Subsidiary Guarantor or any Person acting on behalf of any
Subsidiary Guarantor denies or disaffirms such Subsidiary Guarantors obligations under its
Subsidiary Guarantee (other than by reason of a release of such Subsidiary Guarantor from its
Subsidiary Guarantee in accordance with the terms of this Indenture); or
(11) any other Event of Default provided with respect to Securities of that series.
SECTION 502.
Acceleration of Maturity; Rescission and Annulment
.
If an Event of Default (other than an Event of Default with respect to the Company specified
in Section 501(8) or 501(9)) with respect to Securities of any series at the time Outstanding
occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25%
in principal amount of the Outstanding Securities of that series may declare the principal amount
of all the Securities of that series (or, if any Securities of that series are Original Issue
Discount Securities, such portion of the principal amount of such Securities as may be specified by
the terms thereof) to be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such principal amount (or specified
amount), together with any accrued and unpaid interest thereon, shall become immediately due and
payable. If an Event of Default with respect to the Company specified in Section 501(8) or 501 (9)
with respect to Securities of any series at the time Outstanding occurs, the principal amount of
all the Securities of that series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be specified by the
terms thereof), together with any accrued and unpaid interest thereon, shall automatically, and
without any declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable.
At any time after such a declaration of acceleration with respect to Securities of any series
has been made and before a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of
the Outstanding Securities of that series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if
(1) the Company or, if applicable, any Subsidiary Guarantor has paid or deposited with the
Trustee a sum sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that series which have
become due otherwise than by such declaration of acceleration and any interest thereon at
the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue interest at
the rate or rates prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series which has become due solely by such
declaration of acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right consequent thereon.
23
SECTION 503.
Collection of Indebtedness and Suits for Enforcement by Trustee
.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when such interest becomes
due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if any, on) any Security
at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for principal and any premium
and interest and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
SECTION 504.
Trustee May File Proofs of Claim
.
In case of any judicial proceeding relative to the Company, any Subsidiary Guarantor or any
other obligor upon the Securities, or the property or creditors of the Company, any Subsidiary
Guarantor or any other obligor upon the Securities, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions authorized under the
Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the same; and 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, in the event that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or any Subsidiary Guarantee 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; provided, however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a creditors or other
similar committee.
SECTION 505.
Trustee May Enforce Claims Without Possession of Securities
.
All rights of action and claims under this Indenture or the Securities or any Subsidiary
Guarantee may be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has been recovered.
SECTION 506.
Application of Money Collected
.
Any money collected by the Trustee pursuant to this Article shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on
account of principal or any premium or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607;
SECOND: To the payment of the amounts then due and unpaid for principal of and any premium and
interest on the Securities in respect of which or for the benefit of which such money has been
collected, ratably,
24
without preference or priority of any kind, according to the amounts due and payable on such
Securities for principal and any premium and interest, respectively; and
THIRD: The balance, if any, to the Company or to such other Person as a court of competent
jurisdiction shall direct.
SECTION 507.
Limitation on Suits
.
No Holder of any Security of any series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a continuing Event of
Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that
series shall have made written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities 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) no direction inconsistent with such written request has been given to the Trustee during
such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities
of that series;
it being understood and intended that no one or more of such Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such Holders.
SECTION 508.
Unconditional Right of Holders to Receive Principal, Premium and
Interest
.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the principal of and any
premium and (subject to Section 307) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption or offer by the Company to purchase the
Securities pursuant to the terms of this Indenture, on the Redemption Date or purchase date, as
applicable) and, if applicable, to convert such Security in accordance with its terms, and to
institute suit for the enforcement of any such right, and such rights shall not be impaired without
the consent of such Holder.
SECTION 509.
Restoration of Rights and Remedies
.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every such case, subject to
any determination in such proceeding, the Company, the Subsidiary Guarantors, the Trustee and the
Holders shall be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510.
Rights and Remedies Cumulative
.
Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy
25
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511.
Delay or Omission Not Waiver
.
No delay or omission of the Trustee or of any Holder of any Securities to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512.
Control by Holders
.
The Holders of a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 513.
Waiver of Past Defaults
.
The Holders of not less than a majority in principal amount of the Outstanding Securities of
any series may on behalf of the Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on any Security of such
series (including any Security which is required to have been purchased by the Company pursuant to
an offer to purchase by the Company made pursuant to the terms of this Indenture), or
(2) in respect of a covenant or provision hereof which under Article Nine cannot be modified
or amended without the consent of the Holder of each Outstanding Security of such series.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any right consequent thereon.
SECTION 514.
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, suffered or omitted by it as Trustee, a court may require
any party litigant in such suit to file an undertaking to pay the costs of such suit, and may
assess costs against any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, however, that neither this Section nor the Trust Indenture Act shall be
deemed to authorize any court to require such an undertaking or to make such an assessment in any
suit instituted by the Company or any Subsidiary Guarantor.
SECTION 515.
Waiver of Usury, Stay or Extension Laws
.
Each of the Company and the Subsidiary Guarantors 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 usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the performance of this
Indenture; and each of the Company and the Subsidiary Guarantors (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that
it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law had been enacted.
26
ARTICLE SIX
THE TRUSTEE
SECTION 601.
Certain Duties and Responsibilities
.
The duties and responsibilities of the Trustee shall be as expressly set forth in this
Indenture and as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether
or not therein expressly so provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.
SECTION 602.
Notice of Defaults
.
If a default occurs hereunder with respect to Securities of any series, the Trustee shall give
the Holders of Securities of such series notice of such default as and to the extent provided by
the Trust Indenture Act; provided, however, that in the case of any default of the character
specified in Section 501(5) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term default means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.
SECTION 603.
Certain Rights of Trustee
.
Subject to the provisions of Section 601:
(1) the Trustee may rely and shall 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 party or parties;
(2) any request or direction of the Company mentioned herein shall be sufficiently evidenced
by a Company Request or Company Order, and any resolution of the Board of Directors shall be
sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall deem it desirable that
a matter be proved or established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers Certificate;
(4) the Trustee may consult with counsel and the written advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with such request or
direction;
(6) the Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder.
SECTION 604.
Not Responsible for Recitals or Issuance of Securities
.
The recitals contained herein and in the Securities and the notations of Subsidiary
Guarantees, except the Trustees certificates of authentication, shall be taken as the statements
of the Company or the Subsidiary
27
Guarantors, as the case may be, and neither the Trustee nor any Authenticating Agent assumes
any responsibility for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities or the Subsidiary Guarantees. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company
of Securities or the proceeds thereof.
SECTION 605.
May Hold Securities
.
The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other
agent of the Company or any Subsidiary Guarantor, in its individual or any other capacity, may
become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal
with the Company and any Subsidiary Guarantor with the same rights it would have if it were not
Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606.
Money Held in Trust
.
Money held by the Trustee in trust hereunder need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company or any Subsidiary Guarantor,
as the case may be.
SECTION 607.
Compensation and Reimbursement
.
The Company and each Subsidiary Guarantor jointly and severally agree
(1) to pay to the Trustee from time to time reasonable compensation for all services rendered
by it hereunder (which compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder, including the costs and expenses
of defending itself against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
SECTION 608.
Conflicting Interests
.
If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the
manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.
To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest
by virtue of being a trustee under this Indenture with respect to Securities of more than one
series.
SECTION 609.
Corporate Trustee Required; Eligibility
.
There shall at all times be one (and only one) Trustee hereunder with respect to the
Securities of each series, which may be Trustee hereunder for Securities of one or more other
series. Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act
as such, and has a combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee with respect to the Securities of any series shall cease
to be eligible in accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
28
SECTION 610.
Resignation and Removal; Appointment of Successor
.
No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to
this Article shall become effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.
The Trustee may resign at any time with respect to the Securities of one or more series by
giving written notice thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Securities of such
series.
The Trustee may be removed at any time with respect to the Securities of any series by Act of
the Holders of a majority in principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Company.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after
written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Trustee or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (A) the Company by a Board Resolution may
remove the Trustee with respect to all Securities, or (B) subject to Section 514, any Holder who
has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall
occur in the office of Trustee for any cause, with respect to the Securities of one or more series,
the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of such series and
that at any time there shall be only one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of Section 611. If, within one year after
such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 611, become the successor
Trustee with respect to the Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
The Company shall give notice of each resignation and each removal of the Trustee with respect
to the Securities of any series and each appointment of a successor Trustee with respect to the
Securities of any series to all Holders of Securities of such series in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 611.
Acceptance of Appointment by Successor
.
In case of the appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company,
the Subsidiary Guarantors and to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of
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the retiring Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by such retiring Trustee
hereunder.
In case of the appointment hereunder of a successor Trustee with respect to the Securities of
one or more (but not all) series, the Company, the Subsidiary Guarantors, the retiring Trustee and
each successor Trustee with respect to the Securities of one or more series shall execute and
deliver an indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable
to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each
such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which the appointment of
such successor Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Company and the Subsidiary Guarantors shall
execute any and all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts referred to in the first or second preceding
paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible under this Article.
SECTION 612.
Merger, Conversion, Consolidation or Succession to Business
.
Any Person into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder, provided such Person
shall be otherwise qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. As soon as practicable, the
successor Trustee shall mail a notice of its succession to the Company and the Holders of the
Securities then Outstanding. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself authenticated such
Securities.
SECTION 613.
Preferential Collection of Claims Against Company and Subsidiary
Guarantors
.
If and when the Trustee shall be or become a creditor of the Company, any Subsidiary Guarantor
or any other obligor upon the Securities, the Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Company, such Subsidiary
Guarantor or any such other obligor.
SECTION 614.
Appointment of Authenticating Agent
.
The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities
of such series issued
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upon original issue and upon exchange, registration of transfer, conversion or partial
redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustees certificate of
authentication, such reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a Person organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia, authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000
and subject to supervision or examination by Federal or State authority. If such Authenticating
Agent publishes reports of condition at least annually, pursuant to law or to the requirements of
said supervising or examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any Person into which an Authenticating Agent may be merged or converted or with which it may
be consolidated, or any Person resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any Person succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent,
provided such Person shall be otherwise eligible under this Section, without the execution or
filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee
and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment in the manner provided in Section 106 to all Holders of Securities of
the series with respect to which such Authenticating Agent will serve. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under
the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section, and the Trustee shall be entitled to be
reimbursed for such payments, subject to the provisions of Section 607.
If an appointment with respect to one or more series is made pursuant to this Section, the
Securities of such series may have endorsed thereon, in addition to the Trustees certificate of
authentication, an alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.
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[TRUSTEES NAME],
As Trustee
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By:
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As Authenticating Agent
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By:
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Authorized Officer
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ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701.
Company to Furnish Trustee Names and Addresses of Holders
.
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The Company will furnish or cause to be furnished to the Trustee with respect to the
Securities of each series:
(1) not more than 10 days after each record date with respect to the payment of interest, if
any, a list, in such form as the Trustee may reasonably require, of the names and addresses of the
Holders of Securities of such series as of such record date, and
(2) at such other times as the Trustee may request in writing, within 30 days after the
receipt by the Company of any such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its capacity as
Security Registrar.
SECTION 702.
Preservation of Information; Communications to Holders
.
The Trustee shall preserve, in as current a form as is reasonably practicable, the names and
addresses of Holders contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701
upon receipt of a new list so furnished. The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with the Company and the
Trustee that neither the Company, the Subsidiary Guarantors nor the Trustee nor any agent of any of
them shall be held accountable by reason of any disclosure of information as to names and addresses
of Holders made pursuant to the Trust Indenture Act.
SECTION 703.
Reports by Trustee
.
The Trustee shall transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto.
A copy of each such report shall, at the time of such transmission to Holders, be filed by the
Trustee with each stock exchange upon which any Securities are listed, with the Commission and with
the Company. The Company will notify the Trustee when any Securities are listed on any stock
exchange.
SECTION 704.
Reports by Company and Subsidiary Guarantors
.
The Company and each of the Subsidiary Guarantors shall file with the Trustee and the
Commission, and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant to such Act; provided that any such information, documents or reports
required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall
be filed with the Trustee within 15 days after the same is filed with the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801.
Company May Consolidate, Etc., Only on Certain Terms
.
The Company shall not, in a single transaction or a series of related transactions,
consolidate with or merge into any other Person or permit any other Person to consolidate with or
merge into the Company or, directly or indirectly, transfer, convey, sell, lease or otherwise
dispose of all or substantially all of its assets, unless:
(1) in a transaction in which the Company does not survive or in which the Company transfers,
conveys, sells, leases or otherwise disposes of all or substantially all of its assets, the
successor entity (for purposes of this Article Eight, a
Successor Company
) shall be a
corporation, partnership, trust or other entity organized and validly existing under the laws of
the United States of America, any State thereof or the District of Columbia, and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and
interest on all the
32
Securities and the performance or observance of every covenant of this Indenture on the part
of the Company to be performed or observed;
(2) immediately before and after giving pro forma effect to such transaction and treating any
indebtedness which becomes an obligation of the Company or any Subsidiary as a result of such
transaction as having been incurred by the Company or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such transfer, conveyance, sale,
lease or other disposition, properties or assets of the Company would become subject to a mortgage,
pledge, lien, security interest or other encumbrance which would not be permitted by this
Indenture, the Company or the Successor Company, as the case may be, shall take such steps as shall
be necessary effectively to secure the Securities equally and ratably with (or prior to) all
indebtedness secured thereby;
(4) any other conditions provided pursuant to Section 301 with respect to the Securities of a
series are satisfied; and
(5) the Company has delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, transfer, conveyance, sale, lease or other
disposition and, if a supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.
SECTION 802.
Subsidiary Guarantors May Consolidate, Etc., Only on Certain Terms
.
Except in a transaction resulting in the release of a Subsidiary Guarantor in accordance with
the terms of this Indenture, each Subsidiary Guarantor shall not, and the Company shall not permit
any Subsidiary Guarantor to, in a single or a series of related transactions, consolidate or merge
with or into any Person (other than the Company or another Subsidiary Guarantor) or permit any
Person (other than another Subsidiary Guarantor) to consolidate or merge with or into such
Subsidiary Guarantor or, directly or indirectly, transfer, convey, sell, lease or otherwise dispose
of all or substantially all of its assets unless, in each case:
(1) in a transaction in which such Subsidiary Guarantor does not survive or in which all or
substantially all of the assets of such Subsidiary Guarantor are transferred, conveyed, sold,
leased or otherwise disposed of, the successor entity (the
Successor Subsidiary Guarantor
) shall
be a corporation, partnership, trust or other entity organized and validly existing under the laws
of the United States of America, any State thereof or the District of Columbia, and shall expressly
assume by an indenture supplemental hereto executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of all obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee and this Indenture and the performance of every covenant
of this Indenture on the part of such Subsidiary Guarantor to be performed or observed; and
(2) the Company has delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, transfer, conveyance, sale, lease or other
disposition and, if a supplemental indenture is required in connection with such transaction, such
supplemental indenture, comply with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.
SECTION 803.
Successor Substituted
.
(a) Upon any consolidation of the Company with, or merger of the Company into, any other
Person or any transfer, conveyance, sale, lease or other disposition of all or substantially all of
the assets of the Company in accordance with Section 801, the Successor Company shall succeed to,
and be substituted for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
(b) Upon any consolidation of a Subsidiary Guarantor with, or merger of such Subsidiary
Guarantor into, any other Person or any transfer, conveyance, sale, lease or other disposition of
all or substantially all of the assets of such Subsidiary Guarantor in accordance with Section 802,
the Successor Subsidiary Guarantor shall succeed to, and be substituted for, and may exercise every
right and power of, such Subsidiary Guarantor under this Indenture with the same effect as if such
successor Person had been named as a Subsidiary Guarantor herein, and thereafter, except
33
in the case of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and its Subsidiary Guarantee.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901.
Supplemental Indentures Without Consent of Holders
.
Without the consent of any Holders, the Company, when authorized by a Board Resolution, the
Subsidiary Guarantors, when authorized by their respective Board Resolutions, and the Trustee, at
any time and from time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company or any Subsidiary Guarantor
and the assumption by any such successor of the covenants of the Company or any Subsidiary
Guarantor herein and in the Securities or Subsidiary Guarantees, as the case may be; or
(2) to add to the covenants of the Company or the Subsidiary Guarantors for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for the benefit of less
than all series of Securities, stating that such covenants are expressly being included solely for
the benefit of such series) or to surrender any right or power herein conferred upon the Company or
the Subsidiary Guarantors; or
(3) to add any additional Events of Default for the benefit of the Holders of all or any
series of Securities (and if such additional Events of Default are to be for the benefit of less
than all series of Securities, stating that such additional Events of Default are expressly being
included solely for the benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to such extent as shall be
necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this Indenture in respect of one
or more series of Securities, provided that any such addition, change or elimination (A) shall
neither (i) apply to any Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of
any such Security with respect to such provision or (B) shall become effective only when there is
no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as permitted by Sections 201
and 301; or
(8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee
with respect to the Securities of one or more series and to add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611; or
(9) to cure any ambiguity, to correct or supplement any provision herein which may be
defective or inconsistent with any other provision herein; or
(10) to make any other provisions with respect to matters or questions arising under this
Indenture, provided that such action pursuant to this clause (10) shall not adversely affect the
interests of the Holders of Securities of any series in any material respect; or
(11) to add new Subsidiary Guarantors.
SECTION 902.
Supplemental Indentures With Consent of Holders
.
With the consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series affected by such supplemental indenture, by Act of said
Holders delivered to the Company, the Subsidiary Guarantors and the Trustee, the Company, when
authorized by a Board Resolution, the Subsidiary
34
Guarantors, when authorized by their respective Board Resolutions and the Trustee may enter
into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or of modifying in
any manner the rights of the Holders of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of, or any installment of principal of or
interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon
or any premium payable upon the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security or any other Security which would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of
Payment where, or the coin or currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of (a) any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date
or in the case of an offer to purchase Securities which has been made pursuant to a covenant
contained in this Indenture, on or after the applicable purchase date) or (b) any conversion right
with respect to any Security, or modify the provisions of this Indenture with respect to the
conversion of the Securities, in a manner adverse to the Holders, or release any Subsidiary
Guarantee other than as provided in this Indenture; or
(2) reduce the percentage in principal amount of the Outstanding Securities of any series, the
consent of whose Holders is required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this Indenture; or
(3) modify any of the provisions of this Section, Section 513 or Section 1009, except to
increase any such percentage or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to the Trustee and concomitant changes in this
Section and Section 1009, or the deletion of this proviso, in accordance with the requirements of
Sections 611 and 901(8); or
(4) following the making of an offer to purchase Securities from any Holder which has been
made pursuant to a covenant contained in this Indenture, modify the provisions of this Indenture
with respect to such offer to purchase in a manner adverse to such Holder.
A supplemental indenture which changes or eliminates any covenant or other provision of this
Indenture which has expressly been included solely for the benefit of one or more particular series
of Securities, or which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof.
After a supplemental indenture under this Section 902 requiring the consent of the Holders of
any series of Debt Securities is approved, the Company shall mail to Holders of that series of Debt
Securities a notice briefly describing any amendment or supplement hereto effected by such
supplemental indenture. The failure to give such notice to any such Holders, or any defect therein,
shall not impair or affect the validity of any amendment or supplement hereto effected by such
supplemental indenture with respect to other Holders.
SECTION 903.
Execution of Supplemental Indentures
.
In executing, or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture which affects the Trustees own rights, duties or immunities
under this Indenture or otherwise.
35
SECTION 904.
Effect of Supplemental Indentures
.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.
SECTION 905.
Conformity with Trust Indenture Act
.
Every supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act.
SECTION 906.
Reference in Securities to Supplemental Indentures
.
Securities of any series authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of any series so modified as to conform, in the opinion
of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by
the Company, if applicable the notations of Subsidiary Guarantees may be endorsed thereon and such
new Securities may be authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001.
Payment of Principal, Premium and Interest
.
The Company covenants and agrees for the benefit of each series of Securities that it will
duly and punctually pay the principal of and any premium and interest on the Securities of that
series in accordance with the terms of the Securities and this Indenture. Principal, premium, if
any, and interest shall be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary thereof, holds as of 11:00 A.M., New York City time, on the due date money
deposited with it in immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due.
SECTION 1002.
Maintenance of Office or Agency
.
The Company will maintain in each Place of Payment for any series of Securities an office or
agency where Securities of that series may be presented or surrendered for payment or, if
applicable, for conversion, where Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company or any Subsidiary
Guarantor in respect of the Securities of that series or any Subsidiary Guarantee and this
Indenture may be served. 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
shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee, and each of the Company and the Subsidiary Guarantors
hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices or agencies where
the Securities of one or more series may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain an office or
agency in each Place of Payment for Securities of any series for such purposes. 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 1003.
Money for Securities Payments to Be Held in Trust
.
If the Company or any Subsidiary Guarantor shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the principal of or any
premium or interest on any of the Securities of that series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient
36
to pay the principal and any premium and interest so becoming due until such sums shall be
paid to such Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of Securities, it
will, prior to 11:00 A.M., New York City time, on each due date of the principal of or any premium
or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay
such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to
act.
The Company will cause each Paying Agent for any series of Securities other than the Trustee
to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such Paying Agent will (1) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company, the Subsidiary Guarantors, if applicable, or any other
obligor upon the Securities of that series in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith pay to the Trustee
all sums held in trust by such Paying Agent for payment in respect of the Securities of that
series.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay,
to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of or any premium or interest on any Security of any series
and remaining unclaimed for two years after such principal, premium or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of the Company cause to be published
once, in a newspaper published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining will be repaid to the
Company.
SECTION 1004.
Statement by Officers as to Default
.
(a) The Company and the Subsidiary Guarantors will deliver to the Trustee, within 90 days
after the end of each fiscal year of the Company ending after the date hereof, an Officers
Certificate, stating whether or not to the best knowledge of the signers thereof the Company or any
Subsidiary Guarantor, as the case may be, is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company or any Subsidiary Guarantor shall be
in default, specifying all such defaults and the nature and status thereof of which they may have
knowledge.
(b) The Company shall, so long as any series of Securities is Outstanding, deliver to the
Trustee, as soon as possible and in any event within five days after the Company becomes aware of
the occurrence of an Event of Default or an event which, with notice or the lapse of time or both,
would constitute an Event of Default, an Officers Certificate setting forth the details of such
Event of Default or default, and the action which the Company proposes to take with respect
thereto.
SECTION 1005.
Existence
.
Subject to Article Eight, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect the existence, rights (charter and statutory) and
franchises of the Company; provided, however, that the Company shall not be required to preserve
any such right or franchise if it shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
37
SECTION 1006.
Maintenance of Properties
.
The Company will cause all properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair and working order
(reasonable wear and tear excepted) and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the operation or maintenance
of any of such properties if such discontinuance is, in the judgment of the Company, desirable in
the conduct of its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1007.
Payment of Taxes and Other Claims
.
The Company will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all taxes, assessments and governmental charges levied or imposed upon the
Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary,
and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a
lien upon the property of the Company or any Subsidiary; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 1008.
Maintenance of Insurance
.
The Company shall, and shall cause its Subsidiaries to, keep at all times all of their
properties which are of an insurable nature insured against loss or damage with insurers believed
by the Company to be responsible to the extent that property of similar character is usually so
insured by corporations similarly situated and owning like properties in accordance with good
business practice.
SECTION 1009.
Waiver of Certain Covenants
.
Except as otherwise specified as contemplated by Section 301 for Securities of such series,
the Company and the Subsidiary Guarantors may, with respect to the Securities of any series, omit
in any particular instance to comply with any term, provision or condition set forth in any of
Sections 1005 through 1008 or in any covenant provided pursuant to Section 301(21), 901(2) or
901(7) for the benefit of the Holders of such series if before the time for such compliance the
Holders of at least a majority in principal amount of the Outstanding Securities of such series
shall, by Act of such Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of the Company and the duties of the Trustee in respect of
any such term, provision or condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101.
Applicability of Article
.
Securities of any series which are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified as contemplated by Section 301
for such Securities) in accordance with this Article.
SECTION 1102.
Election to Redeem; Notice to Trustee
.
The election of the Company to redeem any Securities shall be evidenced by a Board Resolution
or in another manner specified as contemplated by Section 301 for such Securities. In case of any
redemption at the election of the Company of less than all the Securities of any series (including
any such redemption affecting only a
38
single Security), the Company shall, at least five Business Days prior to giving notice of
such redemption (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee
of such Redemption Date, of the principal amount of Securities of such series to be redeemed and,
if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers Certificate evidencing compliance with such restriction.
SECTION 1103.
Selection by Trustee of Securities to Be Redeemed
.
If less than all the Securities of any series are to be redeemed (unless all the Securities of
such series and of a specified tenor are to be redeemed or unless such redemption affects only a
single Security), the particular Securities to be redeemed shall be selected by the Trustee, from
the Outstanding Securities of such series not previously called for redemption, (i) in compliance
with the requirements of the principal national securities exchange on which such Securities are
listed, if such Securities are listed on any national securities exchange, and (ii) if such
Securities are not so listed, on a pro rata basis, by lot or by such other method as the Trustee
shall deem fair and appropriate and which may provide for the selection for redemption of a portion
of the principal amount of any Security of such series, provided that the unredeemed portion of the
principal amount of any Security shall be in an authorized denomination (which shall not be less
than the minimum authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption affects only a
single Security), the particular Securities to be redeemed shall be selected by the Trustee, from
the Outstanding Securities of such series and specified tenor not previously called for redemption
in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the Securities selected for
redemption as aforesaid and, in case of any Securities selected for partial redemption as
aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with respect to any redemption
affecting only a single Security, whether such Security is to be redeemed in whole or in part. In
the case of any such redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to
be redeemed only in part, to the portion of the principal amount of such Securities which has been
or is to be redeemed. If any Security selected for partial redemption is surrendered for conversion
after such selection, the converted portion of such Security shall be deemed (so far as may be) to
be the portion selected for redemption. Upon any redemption of less than all the Securities of a
series, for purposes of selection for redemption the Company and the Trustee may treat as
Outstanding Securities surrendered for conversion during the period of 15 days next preceding the
mailing of a notice of redemption, and need not treat as Outstanding any Security authenticated and
delivered during such period in exchange for the unconverted portion of any Security converted in
part during such period.
SECTION 1104.
Notice of Redemption
.
Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than
30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed,
at his address appearing in the Security Register; provided, however, notice of redemption may be
given more than 60 days prior to the Redemption Date if the notice is issued in connection with a
satisfaction and discharge pursuant to Article Four.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, if then determinable and otherwise the method of its determination,
(3) if less than all the Outstanding Securities of any series consisting of more than a single
Security are to be redeemed, the identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be redeemed and, if less than
all the Outstanding Securities of any series consisting of a single Security are to be redeemed,
the principal amount of the particular Security to be redeemed,
39
(4) that on the Redemption Date the Redemption Price will become due and payable upon each
such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and
after said date,
(5) the place or places where each such Security is to be surrendered for payment of the
Redemption Price,
(6) that the redemption is for a sinking fund, if such is the case; and
(7) if applicable, the conversion price then in effect and the date on which the right to
convert such Securities will expire.
Notice of redemption of Securities to be redeemed at the election of the Company shall be
given by the Company or, at the Companys request, by the Trustee in the name and at the expense of
the Company and shall be irrevocable. If any Security called for redemption is converted pursuant
hereto, any money deposited with the Trustee or any Paying Agent or so segregated and held in trust
for the redemption of such Security shall be paid to the Company upon delivery of a Company Request
to the Trustee or such Paying Agent, or, if then held by the Company, shall be discharged from such
trust.
SECTION 1105.
Deposit of Redemption Price
.
Prior to 11:00 A.M., New York City time, on any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.
SECTION 1106.
Securities Payable on Redemption Date
.
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall,
on the Redemption Date, become due and payable at the Redemption Price therein specified, and from
and after such date (unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date; provided, however, that,
unless otherwise specified as contemplated by Section 301, installments of interest whose Stated
Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of business on the relevant
Record Dates according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date
at the rate prescribed therefor in the Security.
SECTION 1107.
Securities Redeemed in Part
.
Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment
therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Company shall execute, if
applicable, the Subsidiary Guarantors shall execute the notations of Subsidiary Guarantees endorsed
thereon, and the Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series and of like tenor, of any
authorized denomination as requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
[INTENTIONALLY OMITTED]
40
ARTICLE THIRTEEN
SUBSIDIARY GUARANTEES
SECTION 1301.
Applicability of Article
.
Unless the Company elects to issue any series of Securities without the benefit of the
Subsidiary Guarantees, which election shall be evidenced in or pursuant to the Board Resolution or
supplemental indenture establishing such series of Securities pursuant to Section 301, the
provisions of this Article shall be applicable to each series of Securities except as otherwise
specified in or pursuant to the Board Resolution or supplemental indenture establishing such series
pursuant to Section 301.
SECTION 1302.
Subsidiary Guarantees
.
Subject to Section 1301, each Subsidiary Guarantor hereby, jointly and severally, fully and
unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee,
the due and punctual payment of the principal of (and premium, if any) and interest on such
Security when and as the same shall become due and payable, whether at the Stated Maturity, by
acceleration, call for redemption, offer to purchase or otherwise, in accordance with the terms of
such Security and of this Indenture, and each Subsidiary Guarantor similarly guarantees to the
Trustee the payment of all amounts owing to the Trustee in accordance with the terms of this
Indenture. In case of the failure of the Company punctually to make any such payment, each
Subsidiary Guarantor hereby, jointly and severally, agrees to cause such payment to be made
punctually when and as the same shall become due and payable, whether at the Stated Maturity or by
acceleration, call for redemption, offer to purchase or otherwise, and as if such payment were made
by the Company.
Each of the Subsidiary Guarantors hereby jointly and severally agrees that its obligations
hereunder shall be absolute, unconditional, irrespective of, and shall be unaffected by, the
validity, regularity or enforceability of such Security or this Indenture, the absence of any
action to enforce the same or any release, amendment, waiver or indulgence granted to the Company
or any other guarantor or any consent to departure from any requirement of any other guarantee of
all or any of the Securities of such series or any other circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor; provided, however,
that, notwithstanding the foregoing, no such release, amendment, waiver or indulgence shall,
without the consent of such Subsidiary Guarantor, increase the principal amount of such Security,
or increase the interest rate thereon, or alter the Stated Maturity thereof. Each of the Subsidiary
Guarantors hereby waives the benefits of diligence, presentment, demand for payment, any
requirement that the Trustee or any of the Holders protect, secure, perfect or insure any security
interest in or other lien on any property subject thereto or exhaust any right or take any action
against the Company or any other Person or any collateral, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a proceeding first against
the Company, protest or notice with respect to such Security or the indebtedness evidenced thereby
and all demands whatsoever, and covenants that this Subsidiary Guarantee will not be discharged in
respect of such Security except by complete performance of the obligations contained in such
Security and in such Subsidiary Guarantee. Each Subsidiary Guarantor agrees that if, after the
occurrence and during the continuance of an Event of Default, the Trustee or any of the Holders are
prevented by applicable law from exercising their respective rights to accelerate the maturity of
the Securities of a series, to collect interest on the Securities of a series, or to enforce or
exercise any other right or remedy with respect to the Securities of a series, such Subsidiary
Guarantor agrees to pay to the Trustee for the account of the Holders, upon demand therefor, the
amount that would otherwise have been due and payable had such rights and remedies been permitted
to be exercised by the Trustee or any of the Holders.
Each Subsidiary Guarantor shall be subrogated to all rights of the Holders of the Securities
upon which its Subsidiary Guarantee is endorsed against the Company in respect of any amounts paid
by such Subsidiary Guarantor on account of such Security pursuant to the provisions of its
Subsidiary Guarantee or this Indenture; provided, however, that no Subsidiary Guarantor shall be
entitled to enforce or to receive any payments arising out of, or based upon, such right of
subrogation until the principal of (and premium, if any) and interest on all Securities of the
relevant series issued hereunder shall have been paid in full.
Each Subsidiary Guarantor that makes or is required to make any payment in respect of its
Subsidiary Guarantee shall be entitled to seek contribution from the other Subsidiary Guarantors to
the extent permitted by applicable law; provided, however, that no Subsidiary Guarantor shall be
entitled to enforce or receive any payments arising out of, or based upon, such right of
contribution until the principal of (and premium, if any) and interest on all Securities of the
relevant series issued hereunder shall have been paid in full.
Each Subsidiary Guarantee shall remain in full force and effect and continue to be effective
should any petition be filed by or against the Company for liquidation or reorganization, should
the Company become insolvent
41
or make an assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any part of the Companys assets, and shall, to the fullest extent permitted
by law, continue to be effective or be reinstated, as the case may be, if at any time payment and
performance of the Securities of a series, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any Holder of the Securities, whether as a
voidable preference, fraudulent transfer, or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Securities shall, to the fullest extent permitted by law, be
reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or
returned.
SECTION 1303.
Execution and Delivery of Notations of Subsidiary Guarantees
.
To further evidence the Subsidiary Guarantee set forth in Section 1302, each of the Subsidiary
Guarantors hereby agrees that a notation relating to such Subsidiary Guarantee, substantially in
the form set forth in Section 204, shall be endorsed on each Security entitled to the benefits of
the Subsidiary Guarantee authenticated and delivered by the Trustee and executed by either manual
or facsimile signature of an officer of such Subsidiary Guarantor, or in the case of a Subsidiary
Guarantor that is a limited partnership, an officer of the general partner of each Subsidiary
Guarantor. Each of the Subsidiary Guarantors hereby agrees that the Subsidiary Guarantee set forth
in Section 1302 shall remain in full force and effect notwithstanding any failure to endorse on
each Security a notation relating to the Subsidiary Guarantee. If any officer of the Subsidiary
Guarantor, or in the case of a Subsidiary Guarantor that is a limited partnership, any officer of
the general partner of the Subsidiary Guarantor, whose signature is on this Indenture or a Security
no longer holds that office at the time the Trustee authenticates such Security or at any time
thereafter, the Subsidiary Guarantee of such Security shall be valid nevertheless. The delivery of
any Security by the Trustee, after the authentication thereof hereunder, shall constitute due
delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of the Subsidiary
Guarantors.
SECTION 1304.
Release of Subsidiary Guarantors
.
Unless otherwise specified pursuant to Section 301 with respect to a series of Securities,
each Subsidiary Guarantee will remain in effect with respect to the respective Subsidiary Guarantor
until the entire principal of, premium, if any, and interest on the Securities to which such
Subsidiary Guarantee relates shall have been paid in full or otherwise satisfied and discharged in
accordance with the provisions of such Securities and this Indenture and all amounts owing to the
Trustee hereunder have been paid; provided, however, that if (i) such Subsidiary Guarantor ceases
to be a Subsidiary in compliance with the applicable provisions of this Indenture, (ii) either
Defeasance or Covenant Defeasance occurs with respect to such Securities pursuant to Article
Fifteen or (iii) all or substantially all of the assets of such Subsidiary Guarantor or all of the
Capital Stock of such Subsidiary Guarantor is sold (including by sale, merger, consolidation or
otherwise) by the Company or any Subsidiary in a transaction complying with the requirements of
this Indenture, then, in each case of (i), (ii) or (iii), upon delivery by the Company of an
Officers Certificate and an Opinion of Counsel stating that all conditions precedent herein
provided for relating to the release of such Subsidiary Guarantor from its obligations under its
Subsidiary Guarantee and this Article Thirteen have been complied with, such Subsidiary Guarantor
shall be released and discharged of its obligations under its Subsidiary Guarantee and under this
Article Thirteen without any action on the part of the Trustee or any Holder, and the Trustee shall
execute any documents reasonably required in order to acknowledge the release of such Subsidiary
Guarantor from its obligations under its Subsidiary Guarantee endorsed on the Securities of such
series and under this Article Thirteen.
SECTION 1305.
Additional Subsidiary Guarantors
.
Unless otherwise specified pursuant to Section 301 with respect to a series of Securities, the
Company will cause any domestic Wholly Owned Subsidiary of the Company that becomes a Subsidiary
after the date the Securities of a series are first issued hereunder to become a Subsidiary
Guarantor as soon as practicable after such Subsidiary becomes a Subsidiary. The Company shall
cause any such Wholly Owned Subsidiary to become a Subsidiary Guarantor with respect to the
Securities by executing and delivering to the Trustee (a) a supplemental indenture, in form and
substance satisfactory to the Trustee, which subjects such Person to the provisions (including the
representations and warranties) of this Indenture as a Subsidiary Guarantor and (b) an Opinion of
Counsel to the effect that such supplemental indenture has been duly authorized and executed by
such Person and such supplemental indenture and such Persons obligations under its Subsidiary
Guarantee and this Indenture constitute
42
the legal, valid, binding and enforceable obligations of such Person (subject to such
customary exceptions concerning creditors rights and equitable principles as may be acceptable to
the Trustee in its discretion).
SECTION 1306.
Limitation on Liability
.
Any term or provision of this Indenture to the contrary notwithstanding, the maximum amount of
the Subsidiary Guarantee of any Subsidiary Guarantor shall not exceed the maximum amount that can
be hereby guaranteed by such Subsidiary Guarantor without rendering such Subsidiary Guarantee
voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar
laws affecting the rights of creditors generally.
ARTICLE FOURTEEN
[INTENTIONALLY OMITTED]
ARTICLE FIFTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1501.
Companys Option to Effect Defeasance or Covenant Defeasance
.
The Company may elect, at its option at any time, to have Section 1502 or Section 1503 applied
to any Securities or any series of Securities, as the case may be, designated pursuant to Section
301 as being defeasible pursuant to such Section 1502 or 1503, in accordance with any applicable
requirements provided pursuant to Section 301 and upon compliance with the conditions set forth
below in this Article. Any such election shall be evidenced in or pursuant to a Board Resolution or
in another manner specified as contemplated by Section 301 for such Securities.
SECTION 1502.
Defeasance and Discharge
.
Upon the Companys exercise of its option (if any) to have this Section applied to any
Securities or any series of Securities, as the case may be, the Company shall be deemed to have
been discharged from its obligations, and each Subsidiary Guarantor shall be deemed to have been
discharged from its obligations with respect to its Subsidiary Guarantee of such Securities, as
provided in this Section on and after the date the conditions set forth in Section 1504 are
satisfied (herein called
Defeasance
). For this purpose, such Defeasance means that the Company
shall be deemed to have paid and discharged the entire indebtedness represented by such Securities
and to have satisfied all its other obligations under such Securities and this Indenture insofar as
such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), subject to the following which shall survive until otherwise
terminated or discharged hereunder: (1) the rights of Holders of such Securities to receive, solely
from the trust fund described in Section 1504 and as more fully set forth in such Section, payments
in respect of the principal of and any premium and interest on such Securities when payments are
due, or, if applicable, to convert such Securities in accordance with their terms, (2) the
Companys and each Subsidiary Guarantors obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003, and, if applicable, their obligations with respect to the
conversion of such Securities, (3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (4) this Article. Subject to compliance with this Article, the Company may exercise
its option (if any) to have this Section applied to any Securities notwithstanding the prior
exercise of its option (if any) to have Section 1503 applied to such Securities.
SECTION 1503.
Covenant Defeasance
.
Upon the Companys exercise of its option (if any) to have this Section applied to any
Securities or any series of Securities, as the case may be, (1) the Company shall be released from
its obligations under Section 801(3), Sections 1005 through 1008, inclusive, and any covenants
provided pursuant to Section 301(21), 901(2) or 901(7) for the benefit of the Holders of such
Securities, and (2) the occurrence of any event specified in Sections 501(5) (with respect to any
of Section 801(3), Sections 1006 through 1008, inclusive, and any such covenants provided pursuant
to Section 301(21), 901(2) or 901(7)), 501(6), 501(7)), 501(10) and 501(11) shall be deemed not to
be or result in an Event of Default and (3) the provisions of Article Thirteen shall cease to be
effective, in each case with respect to such Securities and Subsidiary Guarantees as provided in
this Section on and after the date the conditions set forth in Section 1504 are satisfied (herein
called
Covenant Defeasance
). For this purpose, such Covenant
43
Defeasance means that, with respect to such Securities, the Company and the Subsidiary
Guarantors, as applicable, may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such specified Section (to the extent so specified
in the case of Section 501(5)) or Article Thirteen, whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or Article or by reason of any reference in any such
Section or Article to any other provision herein or in any other document, but the remainder of
this Indenture and such Securities shall be unaffected thereby.
SECTION 1504.
Conditions to Defeasance or Covenant Defeasance
.
The following shall be the conditions to the application of Section 1502 or Section 1503 to
any Securities or any series of Securities, as the case may be:
(1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or
another trustee which satisfies the requirements contemplated by Section 609 and agrees to comply
with the provisions of this Article applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and dedicated solely to, the
benefits of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the due date of any
payment, money in an amount, or (C) a combination thereof, in each case sufficient, in the opinion
of a nationally recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of and any
premium and interest on such Securities on the respective Stated Maturities, in accordance with the
terms of this Indenture and such Securities. As used herein,
U.S. Government Obligation
means (x)
any security which is (i) a direct obligation of the United States of America for the payment of
which the full faith and credit of the United States of America is pledged or (ii) an obligation of
a Person controlled or supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government
Obligation which is specified in clause (x) above and held by such bank for the account of the
holder of such depositary receipt, or with respect to any specific payment of principal of or
interest on any U.S. Government Obligation which is so specified and held, provided that (except as
required by law) such custodian is not authorized to make any deduction from the amount payable to
the holder of such depositary receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of principal or interest evidenced by such
depositary receipt.
(2) In the event of an election to have Section 1502 apply to any Securities or any series of
Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of
Counsel stating that (A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this instrument, there has been a change
in the applicable Federal income tax law, in either case (A) or (B) to the effect that, and based
thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or
loss for Federal income tax purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to such Securities and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if such deposit and
Defeasance were not to occur.
(3) In the event of an election to have Section 1503 apply to any Securities or any series of
Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with
respect to such Securities and will be subject to Federal income tax on the same amount, in the
same manner and at the same times as would be the case if such deposit and Covenant Defeasance were
not to occur.
(4) The Company shall have delivered to the Trustee an Officers Certificate to the effect
that neither such Securities nor any other Securities of the same series, if then listed on any
securities exchange, will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would become, an Event of
Default with respect to such Securities shall have occurred and be continuing at the time of such
deposit or, with regard to any such event specified in Sections 501(7) and (8), at any time on or
prior to the 121st day after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until after such 121st day).
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(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting
interest within the meaning of the Trust Indenture Act (assuming all Securities are in default
within the meaning of such Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or
constitute a default under, any other agreement or instrument to which the Company or any
Subsidiary is a party or by which it is bound.
(8) The Company shall have delivered to the Trustee an Opinion of Counsel to the effect that
such deposit shall not cause either the Trustee or the trust so created to be subject to the
Investment Company Act of 1940.
(9) The Company shall have delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
SECTION 1505.
Deposited Money and U.S. Government Obligations to Be Held in Trust;
Miscellaneous Provisions
.
Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee
(solely for purposes of this Section and Section 1506, the Trustee and any such other trustee are
referred to collectively as the
Trustee
) pursuant to Section 1504 in respect of any Securities
shall be held in trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders
of such Securities, of all sums due and to become due thereon in respect of principal and any
premium and interest, but money so held in trust need not be segregated from other funds except to
the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to Section 1504 or the
principal and interest received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to
the Company from time to time upon Company Request any money or U.S. Government Obligations held by
it as provided in Section 1504 with respect to any Securities which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.
SECTION 1506.
Reinstatement
.
If the Trustee or the Paying Agent is unable to apply any money in accordance with this
Article with respect to any Securities by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such application, then the
obligations under this Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1502 or 1503 shall be revived and reinstated as though no deposit had
occurred pursuant to this Article with respect to such Securities, until such time as the Trustee
or Paying Agent is permitted to apply all money held in trust pursuant to Section 1505 with respect
to such Securities in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security following such
reinstatement of its obligations, the Company shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in trust.
ARTICLE SIXTEEN
SINKING FUNDS
SECTION 1601.
Applicability of Article
.
The provisions of this Article shall be applicable to any sinking fund for the retirement of
Securities of any series except as otherwise specified as contemplated by Section 301 for such
Securities.
45
The minimum amount of any sinking fund payment provided for by the terms of any Securities is
herein referred to as a mandatory sinking fund payment, and any payment in excess of such minimum
amount provided for by the terms of such Securities is herein referred to as an optional sinking
fund payment. If provided for by the terms of any Securities, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 1602. Each sinking fund payment shall be
applied to the redemption of Securities as provided for by the terms of such Securities.
SECTION 1602.
Satisfaction of Sinking Fund Payments with Securities
.
The Company (1) may deliver Outstanding Securities of a series (other than any previously
called for redemption) and (2) may apply as a credit Securities of a series which have been (x)
converted or (y) redeemed either at the election of the Company pursuant to the terms of such
Securities or through the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to any Securities of such series required to be made pursuant to the terms of
such Securities as and to the extent provided for by the terms of such Securities; provided,
however, that the Securities to be so credited have not been previously so credited. The Securities
to be so credited shall be received and credited for such purpose by the Trustee at the Redemption
Price, as specified in the Securities so to be redeemed, for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 1603.
Redemption of Securities for Sinking Fund
.
Not less than 35 days prior to each sinking fund payment date for any Securities, the Company
will deliver to the Trustee an Officers Certificate specifying the amount of the next ensuing
sinking fund payment for such Securities pursuant to the terms of such Securities, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which
is to be satisfied by delivering and crediting Securities pursuant to Section 1602 and will also
deliver to the Trustee any Securities to be so delivered. Not less than 32 days prior to each such
sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107. This instrument may be executed
in any number of counterparts, each of which so executed shall be deemed to be an original, but all
such counterparts shall together constitute but one and the same instrument.
46
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as
of the day and year first above written.
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ISSUER:
APPROACH RESOURCES INC.
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By:
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Name:
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Title:
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SUBSIDIARY GUARANTORS:
[INSERT SUBSIDIARY GUARANTORS]
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By:
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Name:
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Title:
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TRUSTEE:
[TRUSTEES NAME]
,
as Trustee
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By:
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Name:
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Title:
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SCHEDULE I
SUBSIDIARY GUARANTORS
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SUBSIDIARY
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STATE OF ORGANIZATION
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[
Insert Subsidiary Guarantors
]
Schedule I-1
Exhibit 4.3
APPROACH RESOURCES INC.,
AS ISSUER
AND
ANY SUBSIDIARY GUARANTORS PARTIES HERETO,
AS SUBSIDIARY GUARANTORS
TO
[TRUSTEES NAME],
AS TRUSTEE
SUBORDINATED INDENTURE
DATED AS OF
, 20
TABLE OF CONTENTS
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Page
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ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
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1
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SECTION 101. Definitions
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1
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SECTION 102. Compliance Certificates and Opinions
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5
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SECTION 103. Form of Documents Delivered to Trustee
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5
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SECTION 104. Acts of Holders; Record Dates
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5
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SECTION 105. Notices, Etc., to Trustee and Company
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7
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SECTION 106. Notice to Holders; Waiver
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7
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SECTION 107. Conflict with Trust Indenture Act
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7
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SECTION 108. Effect of Headings and Table of Contents
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8
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SECTION 109. Successors and Assigns
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8
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SECTION 110. Separability Clause
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8
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SECTION 111. Benefits of Indenture
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8
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SECTION 112. Governing Law
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8
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SECTION 113. Legal Holidays
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8
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SECTION 114. No Recourse Against Others
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8
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ARTICLE TWO SECURITY FORMS
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8
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SECTION 201. Forms Generally
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8
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SECTION 202. Form of Face of Security
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9
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SECTION 203. Form of Reverse of Security
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10
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SECTION 204. Form of Notation of Subsidiary Guarantee
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12
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SECTION 205. Form of Legend for Global Securities
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13
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SECTION 206. Form of Trustees Certificate of Authentication
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13
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SECTION 207. Form of Conversion Notice
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13
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ARTICLE THREE THE SECURITIES
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14
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SECTION 301. Amount Unlimited; Issuable in Series
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14
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SECTION 302. Denominations
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16
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SECTION 303. Execution, Authentication, Delivery and Dating
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16
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SECTION 304. Temporary Securities
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17
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SECTION 305. Registration, Registration of Transfer and Exchange
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17
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SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities
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18
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SECTION 307. Payment of Interest; Interest Rights Preserved
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19
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SECTION 308. Persons Deemed Owners
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19
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SECTION 309. Cancellation
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20
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SECTION 310. Computation of Interest
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20
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ARTICLE FOUR SATISFACTION AND DISCHARGE
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20
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SECTION 401. Satisfaction and Discharge of Indenture
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20
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SECTION 402. Application of Trust Money
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21
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i
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Page
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ARTICLE FIVE REMEDIES
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21
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SECTION 501. Events of Default
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21
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SECTION 502. Acceleration of Maturity; Rescission and Annulment
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22
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SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee
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23
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SECTION 504. Trustee May File Proofs of Claim
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23
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SECTION 505. Trustee May Enforce Claims Without Possession of Securities
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23
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SECTION 506. Application of Money Collected
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23
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SECTION 507. Limitation on Suits
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24
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SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest
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24
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SECTION 509. Restoration of Rights and Remedies
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24
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SECTION 510. Rights and Remedies Cumulative
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24
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SECTION 511. Delay or Omission Not Waiver
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24
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SECTION 512. Control by Holders
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25
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SECTION 513. Waiver of Past Defaults
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25
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SECTION 514. Undertaking for Costs
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25
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SECTION 515. Waiver of Usury, Stay or Extension Laws
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25
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ARTICLE SIX THE TRUSTEE
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25
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SECTION 601. Certain Duties and Responsibilities
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25
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SECTION 602. Notice of Defaults
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26
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SECTION 603. Certain Rights of Trustee
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26
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SECTION 604. Not Responsible for Recitals or Issuance of Securities
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26
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SECTION 605. May Hold Securities
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26
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SECTION 606. Money Held in Trust
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26
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SECTION 607. Compensation and Reimbursement
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26
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SECTION 608. Conflicting Interests
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27
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SECTION 609. Corporate Trustee Required; Eligibility
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27
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SECTION 610. Resignation and Removal; Appointment of Successor
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27
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SECTION 611. Acceptance of Appointment by Successor
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28
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SECTION 612. Merger, Conversion, Consolidation or Succession to Business
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29
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SECTION 613. Preferential Collection of Claims Against Company and Subsidiary Guarantors
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29
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SECTION 614. Appointment of Authenticating Agent
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29
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ARTICLE SEVEN HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
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30
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SECTION 701. Company to Furnish Trustee Names and Addresses of Holders
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30
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SECTION 702. Preservation of Information; Communications to Holders
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30
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SECTION 703. Reports by Trustee
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30
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SECTION 704. Reports by Company and Subsidiary Guarantors
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31
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ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
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31
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SECTION 801. Company May Consolidate, Etc., Only on Certain Terms
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31
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SECTION 802. Subsidiary Guarantors May Consolidate, Etc., Only on Certain Terms
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31
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SECTION 803. Successor Substituted
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32
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ii
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Page
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ARTICLE NINE SUPPLEMENTAL INDENTURES
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32
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SECTION 901. Supplemental Indentures Without Consent of Holders
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32
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SECTION 902. Supplemental Indentures With Consent of Holders
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33
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SECTION 903. Execution of Supplemental Indentures
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34
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SECTION 904. Effect of Supplemental Indentures
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34
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SECTION 905. Conformity with Trust Indenture Act
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34
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SECTION 906. Reference in Securities to Supplemental Indentures
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34
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ARTICLE TEN COVENANTS
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34
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SECTION 1001. Payment of Principal, Premium and Interest
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34
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SECTION 1002. Maintenance of Office or Agency
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34
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SECTION 1003. Money for Securities Payments to Be Held in Trust
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35
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SECTION 1004. Statement by Officers as to Default
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35
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SECTION 1005. Existence
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36
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SECTION 1006. Maintenance of Properties
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36
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SECTION 1007. Payment of Taxes and Other Claims
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36
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SECTION 1008. Maintenance of Insurance
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36
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SECTION 1009. Waiver of Certain Covenants
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36
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ARTICLE ELEVEN REDEMPTION OF SECURITIES
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36
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SECTION 1101. Applicability of Article
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36
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SECTION 1102. Election to Redeem; Notice to Trustee
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36
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SECTION 1103. Selection by Trustee of Securities to Be Redeemed
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37
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SECTION 1104. Notice of Redemption
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37
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SECTION 1105. Deposit of Redemption Price
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38
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SECTION 1106. Securities Payable on Redemption Date
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38
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SECTION 1107. Securities Redeemed in Part
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38
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ARTICLE TWELVE SUBORDINATION OF SECURITIES
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38
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SECTION 1201. Applicability of Article
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38
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SECTION 1202. Securities Subordinate to Senior Debt
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38
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SECTION 1203. Payment Over of Proceeds Upon Dissolution, Etc
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38
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SECTION 1204. No Payment When Senior Debt of the Company in Default
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39
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SECTION 1205. Payment Permitted If No Default
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40
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SECTION 1206. Subrogation to Rights of Holders of Senior Debt of the Company
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40
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SECTION 1207. Provisions Solely to Define Relative Rights
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40
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SECTION 1208. Trustee to Effectuate Subordination
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41
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SECTION 1209. No Waiver of Subordination Provisions
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41
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SECTION 1210. Notice to Trustee
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41
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SECTION 1211. Reliance on Judicial Order or Certificate of Liquidating Agent
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42
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SECTION 1212. Trustee Not Fiduciary for Holders of Senior Debt of the Company
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42
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SECTION 1213. Rights of Trustee as Holder of Senior Debt of the Company; Preservation of Trustees Rights
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42
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SECTION 1214. Article Applicable to Paying Agents
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42
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iii
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Page
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SECTION 1215. Defeasance of this Article Twelve
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42
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ARTICLE THIRTEEN SUBSIDIARY GUARANTEES
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42
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SECTION 1301. Applicability of Article
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42
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SECTION 1302. Subsidiary Guarantees
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42
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SECTION 1303. Execution and Delivery of Notations of Subsidiary Guarantees
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44
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SECTION 1304. Release of Subsidiary Guarantors
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44
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SECTION 1305. Additional Subsidiary Guarantors
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44
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SECTION 1306. Limitation on Liability
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44
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ARTICLE FOURTEEN SUBORDINATION OF SUBSIDIARY GUARANTEES
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45
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SECTION 1401. Applicability of Article
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45
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SECTION 1402. Subsidiary Guarantees Subordinate to Senior Debt of Subsidiary Guarantors
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45
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SECTION 1403. Payment Over of Proceeds Upon Dissolution, Etc
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45
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SECTION 1404. No Payment When Senior Debt of such Subsidiary Guarantor in Default
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46
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SECTION 1405. Payment Permitted If No Default
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46
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SECTION 1406. Subrogation to Rights of Holders of Senior Debt of such Subsidiary Guarantor
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46
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SECTION 1407. Provisions Solely to Define Relative Rights
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47
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SECTION 1408. Trustee to Effectuate Subordination
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47
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SECTION 1409. No Waiver of Subordination Provisions
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47
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SECTION 1410. Notice to Trustee
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47
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SECTION 1411. Reliance on Judicial Order or Certificate of Liquidating Agent
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48
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SECTION 1412. Trustee Not Fiduciary for Holders of Senior Debt of such Subsidiary Guarantor
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48
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SECTION 1413. Rights of Trustee as Holder of Senior Debt of such Subsidiary Guarantor; Preservation of Trustees Rights
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48
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SECTION 1414. Article Applicable to Paying Agents
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48
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SECTION 1415. Defeasance of this Article Fourteen
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48
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ARTICLE FIFTEEN DEFEASANCE AND COVENANT DEFEASANCE
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49
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SECTION 1501. Companys Option to Effect Defeasance or Covenant Defeasance
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49
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SECTION 1502. Defeasance and Discharge
|
|
|
49
|
|
SECTION 1503. Covenant Defeasance
|
|
|
49
|
|
SECTION 1504. Conditions to Defeasance or Covenant Defeasance
|
|
|
49
|
|
SECTION 1505. Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions
|
|
|
51
|
|
SECTION 1506. Reinstatement
|
|
|
51
|
|
|
|
|
|
|
ARTICLE SIXTEEN SINKING FUNDS
|
|
|
51
|
|
|
|
|
|
|
SECTION 1601. Applicability of Article
|
|
|
51
|
|
SECTION 1602. Satisfaction of Sinking Fund Payments with Securities
|
|
|
52
|
|
SECTION 1603. Redemption of Securities for Sinking Fund
|
|
|
52
|
|
[SCHEDULE I SUBSIDIARY GUARANTORS]
iv
APPROACH RESOURCES INC.
RECONCILIATION AND TIE OF CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310 THROUGH 318,
INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
|
|
|
|
|
INDENTURE
|
TRUST INDENTURE ACT SECTION
|
|
SECTION
|
Section 310(a)(1)
|
|
609
|
(a)(2)
|
|
609
|
(a)(3)
|
|
Not Applicable
|
(a)(4)
|
|
Not Applicable
|
(b)
|
|
608
|
|
|
610
|
|
|
|
Section 311(a)
|
|
613
|
(b)
|
|
613
|
|
|
|
Section 312(a)
|
|
701
|
|
|
702
|
(b)
|
|
702
|
(c)
|
|
702
|
|
|
|
Section 313(a)
|
|
703
|
(b)
|
|
703
|
(c)
|
|
703
|
(d)
|
|
703
|
|
|
|
Section 314(a)
|
|
704
|
(a)(4)
|
|
101
|
|
|
1004
|
(b)
|
|
Not Applicable
|
(c)(1)
|
|
102
|
(c)(2)
|
|
102
|
(c)(3)
|
|
Not Applicable
|
(d)
|
|
Not Applicable
|
(e)
|
|
102
|
|
|
|
Section 315(a)
|
|
601
|
(b)
|
|
602
|
(c)
|
|
601
|
(d)
|
|
601
|
(e)
|
|
514
|
|
|
|
Section 316(a)
|
|
101
|
(a)(1)(A)
|
|
502
|
|
|
512
|
v
|
|
|
|
|
INDENTURE
|
TRUST INDENTURE ACT SECTION
|
|
SECTION
|
(a)(1)(B)
|
|
513
|
(a)(2)
|
|
Not Applicable
|
(b)
|
|
508
|
(c)
|
|
104
|
|
|
|
Section 317(a)(1)
|
|
503
|
(a)(2)
|
|
504
|
(b)
|
|
1003
|
|
|
|
Section 318(a)
|
|
107
|
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the
Indenture.
vi
INDENTURE
, dated as of __________, 20___, among Approach Resources
Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein
called the
Company
), having its principal office at One Ridgmar Centre, 6500 West Freeway, Suite
800, Fort Worth, Texas 76116, each of the Subsidiary Guarantors (as hereinafter defined) parties
hereto and
[
TRUSTEES NAME
]
, a [__________] duly organized and existing under the
laws of
[
__________
]
, as Trustee (herein called the
Trustee
).
RECITALS OF THE COMPANY AND THE SUBSIDIARY GUARANTORS
The Company has duly authorized the execution and delivery of this Indenture to provide for
the issuance from time to time of its unsecured debentures, notes or other evidences of
indebtedness (herein called the
Securities
), to be issued in one or more series as in this
Indenture provided.
The Company and the Subsidiary Guarantors are members of the same consolidated group of
companies. The Subsidiary Guarantors will derive direct and indirect economic benefit from the
issuance of the Securities. Accordingly, each Subsidiary Guarantor has duly authorized the
execution and delivery of this Indenture to provide for its full, unconditional and joint and
several guarantee of the Securities to the extent provided in or pursuant this Indenture.
All things necessary to make this Indenture a valid agreement of the Company, in accordance
with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders
thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the
Securities or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101.
Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or unless the
context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture Act, either directly
or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles, and, except as otherwise herein expressly
provided, the term generally accepted accounting principles with respect to any computation
required or permitted hereunder shall mean such accounting principles as are generally accepted at
the date of this instrument;
(4) unless the context otherwise requires, any reference to an Article or a Section refers
to an Article or a Section, as the case may be, of this Indenture;
(5) the words herein, hereof, hereunder and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other subdivision; and
(6) unsecured Debt shall not be deemed to be subordinate or junior to secured Debt merely by
virtue of its nature as unsecured Debt.
Act
, when used with respect to any Holder, has the meaning specified in Section 104.
Affiliate
of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For the
purposes of this definition, control when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms controlling and
controlled have meanings correlative to the foregoing; provided that direct or indirect
beneficial ownership of 10% or more of the Voting Stock of a Person shall be deemed to be control.
1
Authenticating Agent
means any Person authorized by the Trustee pursuant to Section 614 to
act on behalf of the Trustee to authenticate Securities of one or more series.
Board of Directors
means, with respect to the Company, either the board of directors of the
Company or any committee of that board duly authorized to act for it in respect hereof, and with
respect to any Subsidiary Guarantor, either the board of directors of such Subsidiary Guarantor or
any committee of that board duly authorized to act for it in respect hereof.
Board Resolution
means, with respect to the Company or a Subsidiary Guarantor, a copy of a
resolution certified by the Secretary or an Assistant Secretary of the Company or such Subsidiary
Guarantor, as the case may be, to have been duly adopted by its Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the Trustee.
Business Day
, when used with respect to any Place of Payment, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of
Payment are authorized or obligated by law or executive order to close.
Capital Stock
of any Person means any and all shares, interests, participations or other
equivalents (however designated) of corporate stock or other equity participations, including
partnership interests, whether general or limited, of such Person.
Commission
means the Securities and Exchange Commission, from time to time constituted,
created under the Exchange Act, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
Common Stock
means the common stock, $0.01 par value per share, of the Company as the same exists at the
date of execution and delivery of this Indenture or other Capital Stock of the Company into which
such common stock is converted, reclassified or changed from time to time.
Company
means the Person named as the Company in the first paragraph of this instrument
until a successor Person shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter Company shall mean such successor Person.
Company Request
or
Company Order
means a written request or order signed in the name of
the Company by its Chairman of the Board of Directors, its Vice Chairman of the Board of Directors,
its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
Conversion Agent
means any Person authorized by the Company to convert any Securities on
behalf of the Company.
Corporate Trust Office
means the principal office of the Trustee in [__________, __________] at which at any particular time its corporate trust business
shall be administered, such office being located on the date hereof at
[
TRUSTEES ADDRESS
]
.
Corporation
means a corporation, association, limited liability company, joint-stock company
or business trust.
Covenant Defeasance
has the meaning specified in Section 1503.
Debt
of any Person at any date means any obligation created, assumed or guaranteed by such
Person for the repayment of borrowed money.
Defaulted Interest
has the meaning specified in Section 307.
Defeasance
has the meaning specified in Section 1502.
Depositary
means, with respect to Securities of any series issuable in whole or in part in
the form of one or more Global Securities, a clearing agency registered under the Exchange Act that
is designated to act as Depositary for such Securities as contemplated by Section 301.
Event of Default
has the meaning specified in Section 501.
Exchange Act
means the Securities Exchange Act of 1934 and any statute successor thereto, in
each case as amended from time to time.
Expiration Date
has the meaning specified in Section 104.
Global Security
means a Security that evidences all or part of the Securities of any series
and bears the legend set forth in Section 205 (or such legend as may be specified as contemplated
by Section 301 for such Securities).
Holder
means a Person in whose name a Security is registered in the Security Register.
Indenture
means this instrument as originally executed and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including, for all purposes of this instrument and any such
supplemental
2
indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and
govern this instrument and any such supplemental indenture, respectively. The term Indenture
shall also include the terms of particular series of Securities established as contemplated by
Section 301.
interest
, when used with respect to an Original Issue Discount Security which by its terms
bears interest only after Maturity, means interest payable after Maturity.
Interest Payment Date
, when used with respect to any Security, means the Stated Maturity of
an installment of interest on such Security.
Investment Company Act
means the Investment Company Act of 1940 and any statute successor
thereto, in each case as amended from time to time.
Maturity
, when used with respect to any Security, means the date on which the principal of
such Security or an installment of principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
Notice of Default
means a written notice of the kind specified in Section 501(5).
Officers Certificate
means a certificate signed by the Chairman of the Board of Directors,
a Vice Chairman of the Board of Directors, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company or a Subsidiary
Guarantor, as the case may be, and delivered to the Trustee. One of the officers signing an
Officers Certificate given pursuant to Section 1004 shall be the principal executive, financial or
accounting officer of the Company.
Opinion of Counsel
means, as to the Company or a Subsidiary Guarantor, a written opinion of
counsel, who may be counsel for the Company or such Subsidiary Guarantor, as the case may be, and
who shall be acceptable to the Trustee.
Original Issue Discount Security
means any Security which provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502.
Outstanding
, when used with respect to Securities, means, as of the date of determination,
all Securities theretofore authenticated and delivered under this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;
(2) Securities for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory
to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to Section 1502; and
(4) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of
which other Securities have been authenticated and delivered pursuant to this Indenture, other than
any such Securities in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite principal amount of the
Outstanding Securities have given, made or taken any request, demand, authorization, direction,
notice, consent, waiver or other action hereunder as of any date, (A) the principal amount of an
Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the
principal thereof which would be due and payable as of such date upon acceleration of the Maturity
thereof to such date pursuant to Section 502, (B) if, as of such date, the principal amount payable
at the Stated Maturity of a Security is not determinable, the principal amount of such Security
which shall be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated in one or more
foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S.
dollar equivalent, determined as of such date in the manner provided as contemplated by Section
301, of the principal amount of such Security (or, in the case of a Security described in clause
(A) or (B) above, of the amount determined as provided in such clause), and (D) Securities owned by
the Company, any Subsidiary Guarantor or any other obligor upon the Securities or any Affiliate of
the Company, any Subsidiary Guarantor or of such other obligor shall be disregarded and deemed not
to be Outstanding, except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent, waiver or other action,
only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to
the
3
satisfaction of the Trustee the pledgees right so to act with respect to such Securities and that
the pledgee is not the Company, a Subsidiary Guarantor or any other obligor upon the Securities or
any Affiliate of the Company, a Subsidiary Guarantor or of such other obligor.
Paying Agent
means any Person authorized by the Company to pay the principal of or any
premium or interest on any Securities on behalf of the Company.
Person
means any individual, corporation, partnership, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Place of Payment
, when used with respect to the Securities of any series, means the place or
places where the principal of and any premium and interest on the Securities of that series are
payable as specified as contemplated by Section 301.
Predecessor Security
of any particular Security means every previous Security evidencing all
or a portion of the same debt as that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered under Section 306 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Security.
Redemption Date
, when used with respect to any Security to be redeemed, means the date fixed
for such redemption by or pursuant to this Indenture.
Redemption Price
, when used with respect to any Security to be redeemed, means the price at
which it is to be redeemed pursuant to this Indenture.
Regular Record Date
for the interest payable on any Interest Payment Date on the Securities
of any series means the date specified for that purpose as contemplated by Section 301.
Securities
has the meaning stated in the first recital of this Indenture and more
particularly means any Securities authenticated and delivered under this Indenture.
Securities Act
means the Securities Act of 1933 and any statute successor thereto, in each
case as amended from time to time.
Security Register
and
Security Registrar
have the respective meanings specified in Section
305.
Senior Debt
with respect to any series of Securities shall have the meaning specified as
contemplated by Section 301.
Significant Subsidiary
means, at any date of determination, any Subsidiary that represents
10% or more of the Companys consolidated total assets at the end of the most recent fiscal quarter
for which financial information is available or 10% or more of the Companys consolidated net
revenues or consolidated operating income for the most recent four quarters for which financial
information is available.
Special Record Date
for the payment of any Defaulted Interest means a date fixed by the
Trustee pursuant to Section 307.
Stated Maturity
, when used with respect to any Security or any installment of principal
thereof or interest thereon, means the date specified in such Security as the fixed date on which
the principal of such Security or such installment of principal or interest is due and payable.
Subsidiary
of any Person means (1) a corporation more than 50% of the combined voting power
of the outstanding Voting Stock of which is owned, directly or indirectly, by such Person or by one
or more other Subsidiaries of such Person or by such Person and one or more Subsidiaries thereof or
(2) any other Person (other than a corporation) in which such Person, or one or more other
Subsidiaries of such Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies, management and
affairs thereof.
Subsidiary Guarantees
means the guarantees of each Subsidiary Guarantor as provided in
Article Thirteen.
Subsidiary Guarantors
means (i) the subsidiaries listed in Schedule I hereto; (ii) each
other Subsidiary of the Company that becomes a Subsidiary Guarantor in accordance with Section 1305
hereof; and (iii) any successor of the foregoing, in each case (i), (ii) and (iii) until such
Subsidiary Guarantor ceases to be such in accordance with Section 1304 hereof.
Trust Indenture Act
means the Trust Indenture Act of 1939 as in force at the date as of
which this instrument was executed; provided, however, that in the event the Trust Indenture Act of
1939 is amended after such date, Trust Indenture Act means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
4
Trustee
means the Person named as the Trustee in the first paragraph of this instrument
until a successor Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter Trustee shall mean or include each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, Trustee as used with respect to
the Securities of any series shall mean the Trustee with respect to Securities of that series.
U.S. Government Obligation
has the meaning specified in Section 1504.
Vice President
, when used with respect to the Company or the Trustee, means any vice
president, whether or not designated by a number or a word or words added before or after the title
vice president.
Voting Stock
of any Person means Capital Stock of such Person which ordinarily has voting
power for the election of directors (or persons performing similar functions) of such Person,
whether at all times or only so long as no senior class of securities has such voting power by
reason of any contingency.
Wholly Owned Subsidiary
of any Person means a Subsidiary of such Person all of the
outstanding Capital Stock of which (other than directors qualifying shares) shall at the time be
owned by such Person or by one or more Wholly Owned Subsidiaries of such Person or by such Person
and one or more Wholly Owned Subsidiaries of such Person.
SECTION 102.
Compliance Certificates and Opinions.
Upon any application or request by the Company or any Subsidiary Guarantor to the Trustee to
take any action under any provision of this Indenture, the Company and/or such Subsidiary
Guarantor, as appropriate, shall furnish to the Trustee such certificates and opinions as may be
required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form
of an Officers Certificate, if to be given by an officer of the Company or a Subsidiary Guarantor,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the
Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture shall include:
(1) a statement that each individual signing such certificate or opinion has read such
covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such condition or
covenant has been complied with.
SECTION 103.
Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the Company or a Subsidiary Guarantor may be
based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or representations by, an officer
or officers of the Company or such Subsidiary Guarantor stating that the information with respect
to such factual matters is in the possession of the Company or such Subsidiary Guarantor, unless
such counsel knows, or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.
SECTION 104.
Acts of Holders; Record Dates.
Whenever in this Indenture it is provided that the Holders of a specified percentage in
aggregate principal amount of the Securities of any or all series may take action (including the
making of any demand
5
or request, the giving of any direction, notice, consent or waiver or the taking of any other
action) the fact that at the time of taking any such action the Holders of such specified
percentage have joined therein may be evidenced (a) by any instrument or any number of instruments
of similar tenor executed by Holders in person or by agent or proxy appointed in writing, (b) by
the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in
accordance with procedures approved by the Trustee, (c) by a combination of such instrument or
instruments and any such record of such a meeting of Holders or (d) in the case of Securities
evidenced by a Global Security, by any electronic transmission or other message, whether or not in
written format, that complies with the Depositarys applicable procedures. Such evidence (and the
action embodied therein and evidenced thereby) are herein sometimes referred to as the
Act
of the
relevant Holders. Proof of execution of any such instrument or of a writing appointing any such
agent or proxy shall be sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Where such execution
is by a signer acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner that the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
Holder of any Security shall bind every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company
in reliance thereon, whether or not notation of such action is made upon such Security.
The Company may set any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give, make or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided or permitted by this
Indenture to be given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or direction referred to in
the next paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities of the relevant series on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities
of such series on such record date. Nothing in this paragraph shall be construed to prevent the
Company from setting a new record date for any action for which a record date has previously been
set pursuant to this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be
construed to render ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice
of such record date, the proposed action by Holders and the applicable Expiration Date to be given
to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set
forth in Section 106.
The Trustee may set any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of
Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to
institute proceedings referred to in Section 507(2) or (iv) any direction referred to in Section
512, in each case with respect to Securities of such series. If any record date is set pursuant to
this paragraph, the Holders of Outstanding Securities of such series on such record date, and no
other Holders, shall be entitled to join in such notice, declaration, request or direction, whether
or not such Holders remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the
requisite principal amount of Outstanding Securities of such series on such record date. Nothing in
this paragraph shall be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person be
6
cancelled and of
no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant series on the date such
action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at
the Companys expense, shall cause notice of such record date, the proposed action by Holders and
the applicable Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party hereto which sets such
record dates may designate any day as the Expiration Date and from time to time may change the
Expiration Date to any earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in writing, and to
each Holder of Securities of the relevant series in the manner set forth in Section 106, on or
prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the party hereto which set such record date shall be
deemed to have initially designated the 180th day after such record date as the Expiration Date
with respect thereto, subject to its right to change the Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day
after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with
regard to any particular Security may do so with regard to all or any part of the principal amount
of such Security or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
SECTION 105.
Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or furnished to, or
filed with:
(1) the Trustee by any Holder or by the Company or any Subsidiary Guarantor shall be
sufficient for every purpose hereunder if made, given, furnished or filed in writing in the English
language to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Department; or
(2) the Company or any Subsidiary Guarantor by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing
in the English language and mailed, first-class postage prepaid, in the case of the Company
addressed to it at the address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the Trustee by the Company
and, in the case of any Subsidiary Guarantor, to it at the address of the Companys principal
office specified in the first paragraph of this instrument, Attention: Chief Financial Officer, or
at any other address previously furnished in writing to the Trustee by such Subsidiary Guarantor.
SECTION 106.
Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing in the English
language and mailed, first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date (if any), and not
earlier than the earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect
in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either before or after the
event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall
be filed with the Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of any other cause it
shall be impracticable to give such notice by mail, then such notification as shall be made with
the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
SECTION 107.
Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture
Act which is required under such Act to be a part of and govern this Indenture, the latter
provision shall control. If any provision of this Indenture modifies or excludes any provision of
the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed
to apply to this Indenture as so modified or to be excluded, as the case may be.
7
SECTION 108.
Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 109.
Successors and Assigns.
All covenants and agreements in this Indenture by the Company and any Subsidiary Guarantor
shall bind their respective successors and assigns, whether so expressed or not.
SECTION 110.
Separability Clause.
In case any provision in this Indenture, the Securities or the Subsidiary Guarantees shall be
invalid, illegal or unenforceable, the validity, legality and enforce ability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 111.
Benefits of Indenture.
Nothing in this Indenture, the Securities or the Subsidiary Guarantees, express or implied,
shall give to any Person, other than the parties hereto and their successors hereunder, the holders
of Senior Debt and the Holders, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 112.
Governing Law.
This Indenture, the Securities and the Subsidiary Guarantees shall be governed by and
construed in accordance with the law of the State of New York.
SECTION 113.
Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, purchase date or Stated Maturity
of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or of the Securities (other than a provision of any Security
which specifically states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date, Redemption Date or purchase date, or at the
Stated Maturity.
SECTION 114.
No Recourse Against Others.
No director, officer, employee, incorporator, stockholder, member, partner or trustee of the
Company or any Subsidiary Guarantor, as such, shall have any liability for any obligations of the
Company or any Subsidiary Guarantor under the Securities, this Indenture or any Subsidiary
Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their
creation. By accepting a Security, each Holder shall be deemed to have waived and released all such
liability. The waiver and release shall be a party of the consideration for the issue of the
Securities.
ARTICLE TWO
SECURITY FORMS
SECTION 201.
Forms Generally.
The Securities of each series and, if applicable, the notations of Subsidiary Guarantees to be
endorsed thereon shall be in substantially the form set forth in this Article, or in such other
form as shall be established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon as may be required
to comply with the rules of any securities exchange or Depositary therefor or as may, consistently
herewith, be determined by the officers executing such Securities or notations of Subsidiary
Guarantees, as the case may be, as evidenced by their execution thereof. If the form of Securities
of any series is established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on steel engraved borders
or may be produced in any other manner, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
8
SECTION 202.
Form of Face of Security.
[
Insert any legend required by the Internal Revenue Code and the regulations thereunder.
]
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Approach Resources Inc.
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No._________________________
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$_______________________
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Approach Resources Inc., a corporation duly organized and existing under the laws of Delaware
(herein called the
Company
, 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 ___________________________
[
if the Security is to bear interest prior to Maturity, insert , and to pay interest
thereon from _______________ or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually on _______________ and _______________ in each year,
commencing _______________, at the rate of __________% per annum, until the principal hereof is paid or made available for payment, provided that
any principal and premium, and any such installment of interest, which is overdue shall bear
interest at the rate of ___% per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or made available for
payment, and such interest shall be payable on demand. 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 __________ or __________(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 Trustee, 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
]
.
[
If the Security is not to bear interest prior to Maturity, insert The principal of this
Security shall not bear interest except in the case of a default in payment of principal upon
acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any
overdue premium shall bear interest at the rate of ___% per annum (to the extent that the payment
of such interest shall be legally enforceable), from the dates such amounts are due until they are
paid or made available for payment. Interest on any overdue principal or premium shall be payable
on demand. Any such interest on overdue principal or premium which is not paid on demand shall bear
interest at the rate of __________% per annum (to the extent that the payment of
such interest on interest shall be legally enforceable), from the date of such demand until the
amount so demanded is paid or made available for payment. Interest on any overdue interest shall be
payable on demand.
]
Payment of the principal of (and premium, if any) and
[
if applicable, insert any such
]
interest on this Security will be made at the office or agency of the Company maintained for that
purpose in __________, 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; provided,
however, that at the option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the Security Register.
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.
9
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
[
under its
corporate seal
]
.
Dated:
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APPROACH RESOURCES INC.
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By:
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[
Attest:
_______________________________
]
SECTION 203.
Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the Company (herein called
the
Securities
), issued and to be issued in one or more series under an Indenture, dated as of
_______________, 20___(herein called the
Indenture
, which term
shall have the meaning assigned to it in such instrument), among the Company, the Subsidiary
Guarantors named therein and
[
TRUSTEES NAME
]
, as Trustee (herein called the
Trustee
, which term
includes any successor trustee under the Indenture), and
reference is hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the Subsidiary Guarantors,
the Trustee, the holders of Senior Debt 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
[
if applicable, insert , limited in aggregate principal
amount to $ __________
]
.
[
If applicable, insert The Securities of this series are subject to redemption upon not
less than 30 nor more than 60 days notice by mail,
[
if applicable, insert (1) on _______________ in any year commencing with the year __________
and ending with the year __________ through operation of the sinking fund for
this series at a Redemption Price equal to 100% of the principal amount, and (2)
]
at any time
[
if
applicable, insert on or after _______________, 20___
]
, as a
whole or in part, at the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed
[
if applicable, insert on or before ________________%, and if redeemed
]
during the 12-month period beginning _______________ of the years indicated,
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Redemption
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Redemption
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Year
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Price
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Year
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Price
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and thereafter at a Redemption Price equal to __________% of the principal
amount, together in the case of any such redemption
[
if applicable, insert (whether through
operation of the sinking fund or otherwise)
]
with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable
to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.
]
[
If applicable, insert The Securities of this series are subject to redemption upon not
less than 30 nor more than 60 days notice by mail, (1) on _______________ in any year commencing with the year ___ and ending with the year ___ through operation of
the sinking fund for this series at the Redemption Prices for redemption through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in the table below, and
(2) at any time
[
if applicable, insert on or after _______________
]
, as a whole or in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below: If redeemed during the 12-month period beginning
___ of the years indicated,
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Redemption Price For Redemption
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Redemption Price For Redemption
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Through Operation of the Sinking
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Otherwise Than Through Operation
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Year
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Fund
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of the Sinking Fund
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10
and thereafter at a Redemption Price equal to __________% of the principal
amount, together in the case of any such redemption (whether through operation of the sinking fund
or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the relevant Record
Dates referred to on the face hereof, all as provided in the Indenture.
]
[
If applicable, insert Notwithstanding the foregoing, the Company may not, prior to _______________, redeem any Securities of this series as contemplated by
[
if applicable, insert clause (2) of
]
the preceding paragraph as a part of, or in anticipation
of, any refunding operation by the application, directly or indirectly, of moneys borrowed having
an interest cost to the Company (calculated in accordance with generally accepted financial
practice) of less than __________% per annum.
]
[
If applicable, insert The sinking fund for this series provides for the redemption on _______________ in each year beginning with the year __________ and ending with the year __________ of
[
if applicable, insert not
less than $__________ (
mandatory sinking fund
) and not more than
]
$__________ aggregate principal amount of Securities
of this series. Securities of this series acquired or redeemed by the Company otherwise than
through
[
if applicable, insert mandatory
]
sinking fund payments may be credited against
subsequent
[
if applicable, insert mandatory
]
sinking fund payments otherwise required to be made
[
if applicable, insert , in the inverse order in which they become due
]
.
]
[
If the Security is subject to redemption of any kind, insert In the event of redemption of
this Security in part only, a new Security or Securities of this series and of like tenor for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.
]
[
If the Security is subject to conversion, insert Subject to the provisions of the
Indenture, the Holder has the right to convert the principal amount of this Security into fully
paid and nonassessable
shares of Common Stock of the Company at the initial conversion price per share of Common
Stock of $__________ (or $__________ in principal amount of Securities for each such share of Common Stock), or at the
adjusted conversion price then in effect, if adjustment has been made as provided in the Indenture,
upon surrender of the Security to the Conversion Agent, together with a fully executed notice in
substantially the form attached hereto and, if required by the Indenture, an amount equal to
accrued interest payable on this Security.
]
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 Debt of the
Company, 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 behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee
his attorney-in-fact for any and all such purposes.
[
If applicable, insert As provided in the Indenture and subject to certain limitations
therein set forth, the obligations of the Company under this Security are guaranteed on a senior
subordinated basis pursuant to the Indenture as indicated in the notation of Subsidiary Guarantee
endorsed hereon. The Indenture provides that a Subsidiary Guarantor shall be released from its
Subsidiary Guarantee upon compliance with certain conditions.
]
[
If applicable, insert The Indenture contains provisions for Defeasance at any time of
[
the
entire indebtedness of this Security
] [
or
] [
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 the Security is not an Original Issue Discount Security, insert 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.
]
[
If the Security is an Original Issue Discount Security, insert If an Event of Default with
respect to Securities of this series shall occur and be continuing, an amount of principal of the
Securities of this series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal to insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable and (ii) of
interest on any overdue principal, premium and interest (in each case to the extent that the
payment of such interest shall be legally enforceable), all of the
11
Companys obligations in respect
of the payment of the principal of and premium and interest, if any, on the Securities of this
series shall terminate.
]
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of a majority 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 Company 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 as Trustee and offered the Trustee
reasonable security or indemnity, 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 [if
applicable, insert or the right to convert this Security in accordance with its terms].
No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, 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 [if applicable, insert and to convert this Security in
accordance with its terms].
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 Company in any place where the
principal of and any premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company 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 $ __________ and any integral multiple 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
Company 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 Company, the
Trustee and any agent of the Company 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 Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
SECTION 204.
Form of Notation of Subsidiary Guarantee.
NOTATION OF SUBSIDIARY GUARANTEE
Each of the Subsidiary Guarantors (which term includes any successor Person under the
Indenture) has fully, unconditionally and absolutely guaranteed, to the extent set forth in the
Indenture and
12
subject to the provisions in the Indenture, the due and punctual payment of the
principal of, and premium, if any, and interest on the Securities and all other amounts due and
payable under the Indenture and the Securities by the Company.
The obligations of the Subsidiary Guarantors to the Holders of Securities and to the Trustee
pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth in Article Thirteen
of the Indenture and reference is hereby made to the Indenture for the precise terms of the
Subsidiary Guarantee.
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[
Insert Names of Subsidiary Guarantors
]
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By:
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Title:
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SECTION 205.
Form of Legend for Global Securities.
Unless otherwise specified as contemplated by Section 301 for the Securities evidenced
thereby, every Global Security authenticated and delivered hereunder shall bear a legend in
substantially the following form:
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.
SECTION 206.
Form of Trustees Certificate of Authentication.
The Trustees certificates of authentication shall be in substantially the following form:
This is one of the Securities of the series designated therein referred to in the within-mentioned
Indenture.
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[
TRUSTEES NAME
]
,
As Trustee
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By:
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Authorized Officer
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SECTION 207.
Form of Conversion Notice.
Each convertible Security shall have attached thereto, or set forth on the reverse of the
Security, a notice of conversion in substantially the following form:
Conversion Notice
To: Approach Resources Inc.
The undersigned owner of this Security hereby: (i) irrevocably exercises the option to convert
this Security, or the portion hereof below designated, for shares of Common Stock of Approach
Resources Inc. in accordance with the terms of the Indenture referred to in this Security and (ii)
directs that such shares of Common Stock deliverable upon the conversion, together with any check
in payment for fractional shares and any Security(ies) representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a different name has
been indicated below. If shares are to be delivered registered in the name of a Person other than
the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Any
amount required to be paid by the undersigned on account of interest accompanies this Security.
13
Fill in for registration of shares if to be delivered, and of Securities if to be issued,
otherwise than to and in the name of the registered holder.
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Social Security or other
Taxpayer Identification Number
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(Please print name and address)
Principal amount to be converted: (if less than all)
$ __________________________________
Signature Guarantee*
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*
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Participant in a recognized Signature Guarantee Medallion Program (or other signature acceptable
to the Trustee).
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ARTICLE THREE
THE SECURITIES
SECTION 301.
Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be established in or pursuant
to a Board Resolution and, subject to Section 303, set forth, or determined in the manner provided,
in an Officers Certificate, or established in one or more indentures supplemental hereto, prior to
the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish the Securities of the
series from Securities of any other series);
(2) if the Securities of the series will not have the benefit of the Subsidiary Guarantees of
the Subsidiary Guarantors;
(3) any change to the subordination provisions which applies to the Securities of the series
from those contained in Article Twelve with respect to the Securities and/or, if applicable, those
contained in Article Fourteen with respect to the Subsidiary Guarantees, and the definitions of
Senior Debt and Designated Senior Debt which shall apply to the Securities of the series, and, if
applicable, the Subsidiary Guarantees;
(4) any limit upon the aggregate principal amount of the Securities of the series which may be
authenticated and delivered under this Indenture (except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series
pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to
Section 303, are deemed never to have been authenticated and delivered hereunder);
(5) the Person to whom any interest on a Security of the series shall be payable, if other
than the Person in whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest;
(6) the date or dates on which the principal of any Securities of the series is payable;
(7) the rate or rates at which any Securities of the series shall bear interest, if any, the
date or dates from which any such interest shall accrue, the Interest Payment Dates on which any
such interest shall be payable and the Regular Record Date for any such interest payable on any
Interest Payment Date;
(8) the place or places where the principal of and any premium and interest on any
Securities of the series shall be payable;
14
(9) the period or periods within which, the price or prices at which and the terms and
conditions upon which any Securities of the series may be redeemed, in whole or in part, at the
option of the Company and, if other than by a Board Resolution, the manner in which any election by
the Company to redeem the Securities shall be evidenced;
(10) the obligation, if any, of the Company to redeem or purchase any Securities of the series
pursuant to any sinking fund or analogous provisions or at the option of the Holder thereof and the
period or periods within which, the price or prices at which and the terms and conditions upon
which any Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;
(11) if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which any Securities of the series shall be issuable;
(12) if the amount of principal of or any premium or interest on any Securities of the series
may be determined with reference to an index or pursuant to a formula, the manner in which such
amounts shall be determined;
(13) if other than the currency of the United States of America, the currency, currencies or
currency units in which the principal of or any premium or interest on any Securities of the series
shall be payable and the manner of determining the equivalent thereof in the currency of the United
States of America for any purpose, including for purposes of the definition of Outstanding in
Section 101;
(14) if the principal of or any premium or interest on any Securities of the series is to be
payable, at the election of the Company or the Holder thereof, in one or more currencies or
currency units other than that or those in which such Securities are stated to be payable, the
currency, currencies or currency units in which the principal of or any premium or interest on such
Securities as to which such election is made shall be payable, the periods within which and the
terms and conditions upon which such election is to be made and the amount so payable (or the
manner in which such amount shall be determined);
(15) if other than the entire principal amount thereof, the portion of the principal amount of
any Securities of the series which shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 502;
(16) if the principal amount payable at the Stated Maturity of any Securities of the series
will not be determinable as of any one or more dates prior to the Stated Maturity, the amount which
shall be deemed to be the principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall be due and payable upon
any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any
date prior to the Stated Maturity (or, in any such case, the manner in which such amount deemed to
be the principal amount shall be determined);
(17) if applicable, that the Securities of the series, in whole or any specified part, shall
be defeasible pursuant to Section 1502 or Section 1503 or both such Sections and, if other than by
a Board Resolution, the manner in which any election by the Company to defease such Securities
shall be evidenced;
(18) if applicable, that any Securities of the series shall be issuable in whole or in part in
the form of one or more Global Securities and, in such case, the respective Depositories for such
Global Securities, the form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Section 205 and any circumstances in
addition to or in lieu of those set forth in clause (2) of the last paragraph of Section 305 in
which any such Global Security may be exchanged in whole or in part for Securities registered, and
any transfer of such Global Security in whole or in part may be registered, in the name or names of
Persons other than the Depositary for such Global Security or a nominee thereof;
(19) any addition to or change in the Events of Default which applies to any Securities of the
series and any change in the right of the Trustee or the requisite Holders of such Securities to
declare the principal amount thereof due and payable pursuant to Section 502;
(20) any addition to or change in the covenants set forth in Article Ten which applies to
Securities of the series;
(21) whether the Securities of the series will be convertible into Common Stock (or cash in
lieu thereof) and, if so, the terms and conditions upon which such conversion will be effected; and
(22) any other terms of the series (which terms shall not be inconsistent with the provisions
of this Indenture, except as permitted by Section 901(5)).
All Securities of any one series shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to the Board Resolution referred to above
and (subject
15
to Section 303) set forth, or determined in the manner provided, in the Officers Certificate
referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or
an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of
the Officers Certificate setting forth the terms of the series.
The Securities of each series shall have the benefit of the Subsidiary Guarantees unless the
Company elects otherwise upon the establishment of a series pursuant to this Section 301.
SECTION 302.
Denominations.
The Securities of each series shall be issuable only in registered form without coupons and
only in such denominations as shall be specified as contemplated by Section 301. In the absence of
any such specified denomination with respect to the Securities of any series, the Securities of
such series shall be issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 303.
Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman of the Board of
Directors, its Vice Chairman of the Board of Directors, its President or one of its Vice
Presidents. If its corporate seal is reproduced thereon, then it shall be attested by its Secretary
or one of its Assistant Secretaries. The signature of any of these officers on the Securities may
be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any series executed by the Company and, if applicable, having
endorsed thereon the notations of Subsidiary Guarantees executed as provided in Section 1303 by the
Subsidiary Guarantors to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the
series have been established by or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(1) if the form of such Securities has been established by or pursuant to Board Resolution as
permitted by Section 201, that such form has been established in conformity with the provisions of
this Indenture;
(2) if the terms of such Securities have been established by or pursuant to Board Resolution
as permitted by Section 301, that such terms have been established in conformity with the
provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company, and, if applicable, the notations
of Subsidiary Guarantees endorsed thereon will constitute valid and legally binding obligations of
the Subsidiary Guarantors, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be required to
authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect
the Trustees own rights, duties or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all
Securities of a series are not to be originally issued at one time, it shall not be necessary to
deliver the Officers Certificate otherwise required pursuant to Section 301 or the Company Order
and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security
16
of such series if such documents are delivered at or prior to the authentication upon original
issuance of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security or Subsidiary Guarantee shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a certificate of
authentication substantially in the form provided for herein executed by the Trustee by manual
signature, and such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding
the foregoing, if any Security shall have been authenticated and delivered hereunder but never
issued and sold by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309, for all purposes of this Indenture such Security shall be
deemed never to have been authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304.
Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may execute, and
upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities and, if applicable, having
endorsed thereon the notations of Subsidiary Guarantees in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as the officers
executing such Securities and, if applicable, notations of Subsidiary Guarantees may determine, as
evidenced by their execution of such Securities and notations of Subsidiary Guarantees.
If temporary Securities of any series are issued, the Company will cause definitive Securities
of that series to be prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities of such series at
the office or agency of the Company in a Place of Payment for that series, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the
Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or
more definitive Securities of the same series, of any authorized denominations and of like tenor
and aggregate principal amount and, if applicable, having endorsed thereon the notations of
Subsidiary Guarantees executed by the Subsidiary Guarantors. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.
SECTION 305.
Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register
(the register maintained in such office and in any other office or agency of the Company in a Place
of Payment being herein sometimes collectively referred to as the
Security Register
) in which,
subject to such reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby appointed
Security Registrar
for the purpose of registering Securities and transfers of Securities as
herein provided.
Upon surrender for registration of transfer of any Security of a series at the office or
agency of the Company in a Place of Payment for that series, the Company shall execute, if
applicable the Subsidiary Guarantors shall execute the notation of Subsidiary Guarantee endorsed
thereon and the Trustee shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged for other Securities of
the same series, of any authorized denominations and of like tenor and aggregate principal amount,
upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, if applicable the Subsidiary Guarantors
shall execute the notation of Subsidiary Guarantees endorsed thereon and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or exchange of Securities shall be the
valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for exchange shall (if
so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written
instrument of
17
transfer in form satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of Securities,
but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906, 1107 or otherwise not involving any
transfer.
If the Securities of any series (or of any series and specified tenor) are to be redeemed in
part, the Company shall not be required (A) to issue, register the transfer of or exchange any
Securities of that series (or of that series and specified tenor, as the case may be) during a
period beginning at the opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing, or (B) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part.
The provisions of clauses (1), (2), (3) and (4) below shall apply only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be registered in the name of
the Depositary designated for such Global Security or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global Security may be exchanged
in whole or in part for Securities registered, and no transfer of a Global Security in whole or in
part may be registered, in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (A) such Depositary (i) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a
clearing agency registered under the Exchange Act, and in either case the Company fails to appoint
a successor Depositary within 90 days, (B) there shall have occurred and be continuing an Event of
Default with respect to such Global Security and the Depositary shall have notified the Trustee of
its decision to exchange such Global Security for Securities in certificated form, (C) subject to
the rules of the Depositary, the Company shall have elected to terminate the book-entry system
through the Depositary or (D) there shall exist such circumstances, if any, in addition to or in
lieu of the foregoing as have been specified for this purpose as contemplated by Section 301.
(3) Subject to clause (2) above, any exchange of a Global Security for other Securities may be
made in whole or in part, and all Securities issued in exchange for a Global Security or any
portion thereof shall be registered in such names as the Depositary for such Global Security shall
direct.
(4) Every Security authenticated and delivered upon registration of transfer of, or in
exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this
Section, Section 304, 306, 906 or 1107 or otherwise, shall be authenticated and delivered in the
form of, and shall be, a Global Security, unless such Security is registered in the name of a
Person other than the Depositary for such Global Security or a nominee thereof.
SECTION 306.
Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and
of like tenor and principal amount and bearing a number not contemporaneously outstanding and, if
applicable, the Subsidiary Guarantors shall execute the notation of Subsidiary Guarantee endorsed
thereon.
If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction
of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless from any loss that
any of them may suffer if a Security is replaced, then, in the absence of notice to the Company or
the Trustee that such Security has been acquired by a protected purchaser, the Company shall
execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding and, if applicable, the Subsidiary Guarantors
shall execute the notation of Subsidiary Guarantee endorsed thereon.
In case any such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable or is to be converted, the Company in its discretion may, instead of issuing
a new Security, pay or authorize the conversion of such Security (without surrender thereof save in
the case of a mutilated Security).
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Upon the issuance of any new Security under this Section, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series issued pursuant to this Section in lieu of any destroyed,
lost or stolen Security shall constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement, payment or conversion of mutilated,
destroyed, lost or stolen Securities.
SECTION 307.
Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect to any series of
Securities, interest on any Security which is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the Regular Record Date for
such interest.
Any interest on any Security of any series which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called
Defaulted Interest
) shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose
names the Securities of such series (or their respective Predecessor Securities) are registered at
the close of business on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security of such series and the date of
the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be given to each Holder of Securities of such series in the manner set forth in Section
106, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on the Securities of any series in
any other lawful manner not inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.
SECTION 308.
Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the Company, the
Subsidiary Guarantors, the Trustee and any agent of the Company, the Subsidiary Guarantors, or the
Trustee may treat the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium and (subject to
Section 307) any interest on such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the
19
Company, any Subsidiary Guarantor, the Trustee nor any agent of the Company, any Subsidiary
Guarantor, or the Trustee shall be affected by notice to the contrary.
SECTION 309.
Cancellation.
All Securities surrendered for payment, redemption, purchase, registration of transfer or
exchange or for credit against any sinking fund payment shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver
to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of in
accordance with its standard procedures, unless as directed by a Company Order.
SECTION 310.
Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities of any series,
interest on the Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401.
Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect with respect to the
Securities of any series, and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities of such series theretofore authenticated and delivered (other than
(i) Securities of such series which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii) Securities of such series for whose
payment money has theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from such trust, as provided
in Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities of such series not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the Trustee
in the name, and at the expense, of the Company,
and the Company or, if applicable, a Subsidiary Guarantor, in the case of (i), (ii) or
(iii) above, has irrevocably deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose money in an amount sufficient, without consideration of any
reinvestment of interest, to pay and discharge the entire indebtedness on such Securities
not theretofore delivered to the Trustee for cancellation, for principal and any premium
and interest to the date of such deposit (in the case of Securities which have become due
and payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company or a Subsidiary Guarantor has paid or caused to be paid all other sums payable
hereunder by the Company and the Subsidiary Guarantors with respect to the Securities of such
series; and
(3) the Company has delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture with respect to the Securities of such series have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 607, the obligations of the Company with respect to the
Securities of such series under Sections 304, 305, 306, 1002 and 1003, any surviving rights of
conversion, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if
money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this
Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003
shall survive.
20
SECTION 402.
Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine,
to the Persons entitled thereto, of the principal and any premium and interest for whose payment
such money has been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501.
Events of Default.
Event of Default
, wherever used herein with respect to Securities of any series, means any
one of the following events (whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article Twelve or be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that series when it becomes
due and payable, and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of or any premium on any Security of that series
at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due by the terms of a
Security of that series; or
(4) default in the performance, or breach, of any covenant of the Company or, if the
Subsidiary Guarantors have issued Subsidiary Guarantees with respect to the Securities of such
series, any Subsidiary Guarantor in Article Eight of this Indenture; or
(5) default in the performance, or breach, of any covenant or warranty of the Company or, if
the Subsidiary Guarantors have issued Subsidiary Guarantees with respect to the Securities of such
series, any Subsidiary Guarantor in this Indenture (other than a covenant or warranty a default in
whose performance or whose breach is elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of series of Securities other than
that series), and continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of
that series a written notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a
Notice of Default
hereunder; or
(6) any Debt of the Company, any Significant Subsidiary or, if the Subsidiary Guarantors have
issued Subsidiary Guarantees with respect to the Securities of such series, any Subsidiary
Guarantor is not paid within any applicable grace period after final maturity or is accelerated by
the holders thereof because of a default and the total amount of such Debt unpaid or accelerated
exceeds $20.0 million, or its foreign currency equivalent at the time; or
(7) any judgment or decree for the payment of money in excess of $20.0 million or its foreign
currency equivalent at the time it is entered against the Company, any Significant Subsidiary or,
if the Subsidiary Guarantors have issued Subsidiary Guarantees with respect to the Securities of
such series, any Subsidiary Guarantor, remains outstanding for a period of 60 consecutive days
following the entry of such judgment or decree and is not discharged, waived or the execution
thereof stayed; or
(8) the entry by a court having jurisdiction in the premises of (A) a decree or order for
relief in respect of the Company, any Significant Subsidiary or, if the Subsidiary Guarantors have
issued Subsidiary Guarantees with respect to the Securities of such series, any Subsidiary
Guarantor in an involuntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company, any
Significant Subsidiary or any such Subsidiary Guarantor a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company, any Significant Subsidiary or any such Subsidiary Guarantor under any
applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company, any Significant Subsidiary or any
such Subsidiary Guarantor or of any substantial part of its or their property, or ordering the
winding up or liquidation of its or their affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive
days; or
(9) the commencement by the Company, any Significant Subsidiary or, if the Subsidiary
Guarantors have issued Subsidiary Guarantees with respect to the Securities of such series, any
Subsidiary
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Guarantor of a voluntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it or them to the entry of a decree or order
for relief in respect of the Company, any Significant Subsidiary or any such Subsidiary Guarantor
in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it or them, or the filing by it or them of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State law, or the consent by it or
them to the filing of such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company, any
Significant Subsidiary or any such Subsidiary Guarantor or of any substantial part of its or their
property, or the making by it or them of an assignment for the benefit of creditors, or the
admission by it or them in writing of its or their inability to pay its or their debts generally as
they become due, or the taking of corporate action by the Company, any Significant Subsidiary or
any such Subsidiary Guarantor in furtherance of any such action; or
(10) in the event the Subsidiary Guarantors have issued Subsidiary Guarantees with respect to
the Securities of such series, the Subsidiary Guarantee of any Subsidiary Guarantor is held by a
final non-appealable order or judgment of a court of competent jurisdiction to be unenforceable or
invalid or ceases for any reason to be in full force and effect (other than in accordance with the
terms of this Indenture) or any Subsidiary Guarantor or any Person acting on behalf of any
Subsidiary Guarantor denies or disaffirms such Subsidiary Guarantors obligations under its
Subsidiary Guarantee (other than by reason of a release of such Subsidiary Guarantor from its
Subsidiary Guarantee in accordance with the terms of this Indenture); or
(11) any other Event of Default provided with respect to Securities of that series.
SECTION 502.
Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default with respect to the Company specified
in Section 501(8) or 501(9)) with respect to Securities of any series at the time Outstanding
occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25%
in principal amount of the Outstanding Securities of that series may declare the principal amount
of all the Securities of that series (or, if any Securities of that series are Original Issue
Discount Securities, such portion of the principal amount of such Securities as may be specified by
the terms thereof) to be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such principal amount (or specified
amount), together with any accrued and unpaid interest thereon, shall become immediately due and
payable. If an Event of Default with respect to the Company specified in Section 501(8) or 501 (9)
with respect to Securities of any series at the time Outstanding occurs, the principal amount of
all the Securities of that series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be specified by the
terms thereof), together with any accrued and unpaid interest thereon, shall automatically, and
without any declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable.
At any time after such a declaration of acceleration with respect to Securities of any series
has been made and before a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of
the Outstanding Securities of that series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if
(1) the Company or, if applicable, any Subsidiary Guarantor has paid or deposited with the
Trustee a sum sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that series which
have become due otherwise than by such declaration of acceleration and any interest thereon
at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue
interest at the rate or rates prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel;
and
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(2) all Events of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series which has become due solely by such
declaration of acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right consequent thereon.
SECTION 503.
Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when such interest becomes
due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if any, on) any Security
at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for principal and any premium
and interest and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
SECTION 504.
Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company, any Subsidiary Guarantor or any
other obligor upon the Securities, or the property or creditors of the Company, any Subsidiary
Guarantor or any other obligor upon the Securities, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions authorized under the
Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the same; and 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, in the event that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or any Subsidiary Guarantee 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; provided, however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a creditors or other
similar committee.
SECTION 505.
Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities or any Subsidiary
Guarantee may be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has been recovered.
SECTION 506.
Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on
account of principal or any premium or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607;
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SECOND: Subject to Article Twelve and Article Fourteen, to the payment of the amounts then due
and unpaid for principal of and any premium and interest on the Securities in respect of which or
for the benefit of which such money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such Securities for principal and any premium
and interest, respectively; and
THIRD: The balance, if any, to the Company or to such other Person as a court of competent
jurisdiction shall direct.
SECTION 507.
Limitation on Suits.
No Holder of any Security of any series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a continuing Event of
Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that
series shall have made written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities 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) no direction inconsistent with such written request has been given to the Trustee during
such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities
of that series;
it being understood and intended that no one or more of such Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such Holders.
SECTION 508.
Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the principal of and any
premium and (subject to Section 307) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption or offer by the Company to purchase the
Securities pursuant to the terms of this Indenture, on the Redemption Date or purchase date, as
applicable) and, if applicable, to convert such Security in accordance with its terms, and to
institute suit for the enforcement of any such right, and such rights shall not be impaired without
the consent of such Holder.
SECTION 509.
Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every such case, subject to
any determination in such proceeding, the Company, the Subsidiary Guarantors, the Trustee and the
Holders shall be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510.
Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511.
Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a
waiver of
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any such Event of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512.
Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 513.
Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the Outstanding Securities of
any series may on behalf of the Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on any Security of such
series (including any Security which is required to have been purchased by the Company pursuant to
an offer to purchase by the Company made pursuant to the terms of this Indenture), or
(2) in respect of a covenant or provision hereof which under Article Nine cannot be modified
or amended without the consent of the Holder of each Outstanding Security of such series.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any right consequent thereon.
SECTION 514.
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, suffered or omitted by it as Trustee, a court may require
any party litigant in such suit to file an undertaking to pay the costs of such suit, and may
assess costs against any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, however, that neither this Section nor the Trust Indenture Act shall be
deemed to authorize any court to require such an undertaking or to make such an assessment in any
suit instituted by the Company or any Subsidiary Guarantor.
SECTION 515.
Waiver of Usury, Stay or Extension Laws.
Each of the Company and the Subsidiary Guarantors 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 usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the performance of this
Indenture; and each of the Company and the Subsidiary Guarantors (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that
it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601.
Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as expressly set forth in this
Indenture and as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether
or not therein expressly so provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.
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SECTION 602.
Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series, the Trustee shall give
the Holders of Securities of such series notice of such default as and to the extent provided by
the Trust Indenture Act; provided, however, that in the case of any default of the character
specified in Section 501(5) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term default means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.
SECTION 603.
Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may rely and shall 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 party or parties;
(2) any request or direction of the Company mentioned herein shall be sufficiently evidenced
by a Company Request or Company Order, and any resolution of the Board of Directors shall be
sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall deem it desirable that
a matter be proved or established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers Certificate;
(4) the Trustee may consult with counsel and the written advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with such request or
direction;
(6) the Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder.
SECTION 604.
Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities and the notations of Subsidiary
Guarantees, except the Trustees certificates of authentication, shall be taken as the statements
of the Company or the Subsidiary Guarantors, as the case may be, and neither the Trustee nor any
Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the Securities or the
Subsidiary Guarantees. Neither the Trustee nor any Authenticating Agent shall be accountable for
the use or application by the Company of Securities or the proceeds thereof.
SECTION 605.
May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other
agent of the Company or any Subsidiary Guarantor, in its individual or any other capacity, may
become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal
with the Company and any Subsidiary Guarantor with the same rights it would have if it were not
Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606.
Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company or any Subsidiary Guarantor,
as the case may be.
SECTION 607.
Compensation and Reimbursement.
The Company and each Subsidiary Guarantor jointly and severally agree:
26
(1) to pay to the Trustee from time to time reasonable compensation for all services rendered
by it hereunder (which compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder, including the costs and expenses
of defending itself against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
SECTION 608.
Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the
manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.
To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to Securities of more than
one series.
SECTION 609.
Corporate Trustee Required; Eligibility.
There shall at all times be one (and only one) Trustee hereunder with respect to the
Securities of each series, which may be Trustee hereunder for Securities of one or more other
series. Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act
as such, and has a combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee with respect to the Securities of any series shall cease
to be eligible in accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 610.
Resignation and Removal; Appointment of Successor.
No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to
this Article shall become effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.
The Trustee may resign at any time with respect to the Securities of one or more series by
giving written notice thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Securities of such
series.
The Trustee may be removed at any time with respect to the Securities of any series by Act of
the Holders of a majority in principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Company.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after
written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Trustee or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the Trustee with respect
to all Securities, or (B) subject to Section 514, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
27
If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall
occur in the office of Trustee for any cause, with respect to the Securities of one or more series,
the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of such series and
that at any time there shall be only one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of Section 611. If, within one year after
such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 611, become the successor
Trustee with respect to the Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
The Company shall give notice of each resignation and each removal of the Trustee with respect
to the Securities of any series and each appointment of a successor Trustee with respect to the
Securities of any series to all Holders of Securities of such series in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 611.
Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company,
the Subsidiary Guarantors and to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or
the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of
the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee with respect to the Securities of
one or more (but not all) series, the Company, the Subsidiary Guarantors, the retiring Trustee and
each successor Trustee with respect to the Securities of one or more series shall execute and
deliver an indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable
to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each
such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which the appointment of
such successor Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
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Upon request of any such successor Trustee, the Company and the Subsidiary Guarantors shall
execute any and all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts referred to in the first or second preceding
paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible under this Article.
SECTION 612.
Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder, provided such Person
shall be otherwise qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. As soon as practicable, the
successor Trustee shall mail a notice of its succession to the Company and the Holders of the
Securities then Outstanding. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself authenticated such
Securities.
SECTION 613.
Preferential Collection of Claims Against Company and Subsidiary
Guarantors.
If and when the Trustee shall be or become a creditor of the Company, any Subsidiary Guarantor
or any other obligor upon the Securities, the Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Company, such Subsidiary
Guarantor or any such other obligor.
SECTION 614.
Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities
of such series issued upon original issue and upon exchange, registration of transfer, conversion
or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustees certificate of
authentication, such reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a Person organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia, authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000
and subject to supervision or examination by Federal or State authority. If such Authenticating
Agent publishes reports of condition at least annually, pursuant to law or to the requirements of
said supervising or examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any Person into which an Authenticating Agent may be merged or converted or with which it may
be consolidated, or any Person resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any Person succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent,
provided such Person shall be otherwise eligible under this Section, without the execution or
filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee
and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment in the manner provided in Section 106 to all Holders of Securities of
the series with respect to which such
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Authenticating Agent will serve. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section, and the Trustee shall be entitled to be
reimbursed for such payments, subject to the provisions of Section 607.
If an appointment with respect to one or more series is made pursuant to this Section, the
Securities of such series may have endorsed thereon, in addition to the Trustees certificate of
authentication, an alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to in the within-mentioned
Indenture.
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[
TRUSTEES NAME
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As Trustee
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By:
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As Authenticating Agent
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By:
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Authorized Officer
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ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701.
Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee with respect to the
Securities of each series:
(1) not more than 10 days after each record date with respect to the payment of interest, if
any, a list, in such form as the Trustee may reasonably require, of the names and addresses of the
Holders of Securities of such series as of such record date, and
(2) at such other times as the Trustee may request in writing, within 30 days after the
receipt by the Company of any such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its capacity as
Security Registrar.
SECTION 702.
Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably practicable, the names and
addresses of Holders contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701
upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to their rights under
this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee,
shall be as provided by the Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with the Company and the
Trustee that neither the Company, the Subsidiary Guarantors nor the Trustee nor any agent of any of
them shall be held accountable by reason of any disclosure of information as to names and addresses
of Holders made pursuant to the Trust Indenture Act.
SECTION 703.
Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto.
A copy of each such report shall, at the time of such transmission to Holders, be filed by the
Trustee with each stock exchange upon which any Securities are listed, with the Commission and with
the Company. The Company will notify the Trustee when any Securities are listed on any stock
exchange.
30
SECTION 704.
Reports by Company and Subsidiary Guarantors.
The Company and each of the Subsidiary Guarantors shall file with the Trustee and the
Commission, and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant to such Act; provided that any such information, documents or reports
required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall
be filed with the Trustee within 15 days after the same is filed with the Commission.
ARTICLE
EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801.
Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not, in a single transaction or a series of related transactions,
consolidate with or merge into any other Person or permit any other Person to consolidate with or
merge into the Company or, directly or indirectly, transfer, convey, sell, lease or otherwise
dispose of all or substantially all of its assets, unless:
(1) in a transaction in which the Company does not survive or in which the Company transfers,
conveys, sells, leases or otherwise disposes of all or substantially all of its assets, the
successor entity (for purposes of this Article Eight, a
Successor Company
) shall be a
corporation, partnership, trust or other entity organized and validly existing under the laws of
the United States of America, any State thereof or the District of Columbia, and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and
interest on all the Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(2) immediately before and after giving pro forma effect to such transaction and treating any
indebtedness which becomes an obligation of the Company or any Subsidiary as a result of such
transaction as having been incurred by the Company or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such transfer, conveyance, sale,
lease or other disposition, properties or assets of the Company would become subject to a mortgage,
pledge, lien, security interest or other encumbrance which would not be permitted by this
Indenture, the Company or the Successor Company, as the case may be, shall take such steps as shall
be necessary effectively to secure the Securities equally and ratably with (or prior to) all
indebtedness secured thereby;
(4) any other conditions provided pursuant to Section 301 with respect to the Securities of a
series are satisfied; and
(5) the Company has delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, transfer, conveyance, sale, lease or other
disposition and, if a supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.
SECTION 802.
Subsidiary Guarantors May Consolidate, Etc., Only on Certain Terms.
Except in a transaction resulting in the release of a Subsidiary Guarantor in accordance with
the terms of this Indenture, each Subsidiary Guarantor shall not, and the Company shall not permit
any Subsidiary Guarantor to, in a single or a series of related transactions, consolidate or merge
with or into any Person (other than the Company or another Subsidiary Guarantor) or permit any
Person (other than another Subsidiary Guarantor) to consolidate or merge with or into such
Subsidiary Guarantor or, directly or indirectly, transfer, convey, sell, lease or otherwise dispose
of all or substantially all of its assets unless, in each case:
(1) in a transaction in which such Subsidiary Guarantor does not survive or in which all or
substantially all of the assets of such Subsidiary Guarantor are transferred, conveyed, sold,
leased or otherwise disposed of, the successor entity (the
Successor Subsidiary Guarantor
) shall
be a corporation, partnership, trust or other entity organized and validly existing under the laws
of the United States of America, any State thereof or the District of Columbia, and shall expressly
assume by an indenture supplemental hereto executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of all obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee and this Indenture and the performance of every covenant
of this Indenture on the part of such Subsidiary Guarantor to be performed or observed; and
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(2) the Company has delivered to the Trustee an Officers Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, transfer, conveyance, sale, lease or other
disposition and, if a supplemental indenture is required in connection with such transaction, such
supplemental indenture, comply with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.
SECTION 803.
Successor Substituted.
(a) Upon any consolidation of the Company with, or merger of the Company into, any other
Person or any transfer, conveyance, sale, lease or other disposition of all or substantially all of
the assets of the Company in accordance with Section 801, the Successor Company shall succeed to,
and be substituted for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
(b) Upon any consolidation of a Subsidiary Guarantor with, or merger of such Subsidiary
Guarantor into, any other Person or any transfer, conveyance, sale, lease or other disposition of
all or substantially all of the assets of such Subsidiary Guarantor in accordance with Section 802,
the Successor Subsidiary Guarantor shall succeed to, and be substituted for, and may exercise every
right and power of, such Subsidiary Guarantor under this Indenture with the same effect as if such
successor Person had been named as a Subsidiary Guarantor herein, and thereafter, except in the
case of a lease, the predecessor Person shall be relieved of all obligations and covenants under
this Indenture and its Subsidiary Guarantee.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901.
Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board Resolution, the
Subsidiary Guarantors, when authorized by their respective Board Resolutions, and the Trustee, at
any time and from time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company or any Subsidiary Guarantor
and the assumption by any such successor of the covenants of the Company or any Subsidiary
Guarantor herein and in the Securities or Subsidiary Guarantees, as the case may be; or
(2) to add to the covenants of the Company or the Subsidiary Guarantors for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for the benefit of less
than all series of Securities, stating that such covenants are expressly being included solely for
the benefit of such series) or to surrender any right or power herein conferred upon the Company or
the Subsidiary Guarantors; or
(3) to add any additional Events of Default for the benefit of the Holders of all or any
series of Securities (and if such additional Events of Default are to be for the benefit of less
than all series of Securities, stating that such additional Events of Default are expressly being
included solely for the benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to such extent as shall be
necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this Indenture in respect of one
or more series of Securities, provided that any such addition, change or elimination (A) shall
neither (i) apply to any Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of
any such Security with respect to such provision or (B) shall become effective only when there is
no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as permitted by Sections 201
and 301; or
(8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee
with respect to the Securities of one or more series and to add to or change any of the provisions
of this
Indenture as shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section 611; or
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(9) to cure any ambiguity, to correct or supplement any provision herein which may be
defective or inconsistent with any other provision herein; or
(10) to make any other provisions with respect to matters or questions arising under this
Indenture, provided that such action pursuant to this clause (10) shall not adversely affect the
interests of the Holders of Securities of any series in any material respect; or
(11) to add new Subsidiary Guarantors; or
(12) to make any change to the provisions of Article Twelve or Fourteen that limits or
terminates the benefits applicable to any holder of Senior Debt.
SECTION 902.
Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series affected by such supplemental indenture, by Act of said
Holders delivered to the Company, the Subsidiary Guarantors and the Trustee, the Company, when
authorized by a Board Resolution, the Subsidiary Guarantors, when authorized by their respective
Board Resolutions and the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities
of such series under this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of, or any installment of principal of or
interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon
or any premium payable upon the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security or any other Security which would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of
Payment where, or the coin or currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of (a) any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date
or in the case of an offer to purchase Securities which has been made pursuant to a covenant
contained in this Indenture, on or after the applicable purchase date), or (b) any conversion right
with respect to any Security, or modify the provisions of this Indenture with respect to the
conversion or subordination of the Securities or the Subsidiary Guarantees, in a manner adverse to
the Holders, or release any Subsidiary Guarantee other than as provided in this Indenture; or
(2) reduce the percentage in principal amount of the Outstanding Securities of any series, the
consent of whose Holders is required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this Indenture; or
(3) modify any of the provisions of this Section, Section 513 or Section 1009, except to
increase any such percentage or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to the Trustee and concomitant changes in this
Section and Section 1009, or the deletion of this proviso, in accordance with the requirements of
Sections 611 and 901(8); or
(4) following the making of an offer to purchase Securities from any Holder which has been
made pursuant to a covenant contained in this Indenture, modify the provisions of this Indenture
with respect to such offer to purchase in a manner adverse to such Holder.
A supplemental indenture which changes or eliminates any covenant or other provision of this
Indenture which has expressly been included solely for the benefit of one or more particular series
of Securities, or which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof.
After a supplemental indenture under this Section 902 requiring the consent of the Holders of
any series of Debt Securities is approved, the Company shall mail to Holders of that series of Debt
Securities a notice briefly describing any amendment or supplement hereto effected by such
supplemental indenture.
The failure to give such notice to any such Holders, or any defect therein, shall not impair
or affect the
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validity of any amendment or supplement hereto effected by such supplemental
indenture with respect to other Holders.
SECTION 903.
Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture which affects the Trustees own rights, duties or immunities
under this Indenture or otherwise.
SECTION 904.
Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.
SECTION 905.
Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act.
SECTION 906.
Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of any series so modified as to conform, in the opinion
of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by
the Company, if applicable the notations of Subsidiary Guarantees may be endorsed thereon and such
new Securities may be authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001.
Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Securities that it will
duly and punctually pay the principal of and any premium and interest on the Securities of that
series in accordance with the terms of the Securities and this Indenture. Principal, premium, if
any, and interest shall be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary thereof, holds as of 11:00 A.M., New York City time, on the due date money
deposited with it in immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due, and such Paying Agent is not prohibited from
paying such money to the Holders entitled thereto on such date pursuant to the terms of Article
Twelve or Fourteen of this Indenture.
SECTION 1002.
Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of Securities an office or
agency where Securities of that series may be presented or surrendered for payment or, if
applicable, for conversion, where Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company or any Subsidiary
Guarantor in respect of the Securities of that series or any Subsidiary Guarantee and this
Indenture may be served. 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
shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee, and each of the Company and the Subsidiary Guarantors
hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices or agencies where
the Securities of one or more series may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain an office or
agency in each Place of Payment for Securities of any series for such purposes. 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.
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SECTION 1003.
Money for Securities Payments to Be Held in Trust.
If the Company or any Subsidiary Guarantor shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the principal of or any
premium or interest on any of the Securities of that series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and
interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of Securities, it
will, prior to 11:00 A.M., New York City time, on each due date of the principal of or any premium
or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay
such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to
act.
The Company will cause each Paying Agent for any series of Securities other than the Trustee
to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such Paying Agent will (1) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company, the Subsidiary Guarantors, if applicable, or any other
obligor upon the Securities of that series in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith pay to the Trustee
all sums held in trust by such Paying Agent for payment in respect of the Securities of that
series.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay,
to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of or any premium or interest on any Security of any series
and remaining unclaimed for two years after such principal, premium or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of the Company cause to be published
once, in a newspaper published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining will be repaid to the
Company.
SECTION 1004.
Statement by Officers as to Default.
(a) The Company and the Subsidiary Guarantors will deliver to the Trustee, within 90 days
after the end of each fiscal year of the Company ending after the date hereof, an Officers
Certificate, stating whether or not to the best knowledge of the signers thereof (i) the Company or
any Subsidiary Guarantor, as the case may be, is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company or any Subsidiary Guarantor
shall be in default, specifying all such defaults and the nature and status thereof of which they
may have knowledge and (ii) any event has occurred and remains in existence prohibiting any
payments on any series of Securities then Outstanding and, if any such event exists, a description
of such event and what action the Company is taking or proposes to take with respect thereto.
(b) The Company shall, so long as any series of Securities is Outstanding, deliver to the
Trustee, as soon as possible and in any event within five days after the Company becomes aware of
the occurrence of an Event of Default or an event which, with notice or the lapse of time or both,
would constitute an Event of Default, an Officers Certificate setting forth the details of such
Event of Default or default, and the action which the Company proposes to take with respect
thereto.
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SECTION 1005.
Existence.
Subject to Article Eight, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect the existence, rights (charter and statutory) and
franchises of the Company; provided, however, that the Company shall not be required to preserve
any such right or franchise if it shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 1006.
Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair and working order
(reasonable wear and tear excepted) and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the operation or maintenance
of any of such properties if such discontinuance is, in the judgment of the Company, desirable in
the conduct of its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1007.
Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all taxes, assessments and governmental charges levied or imposed upon the
Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary,
and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a
lien upon the property of the Company or any Subsidiary; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 1008.
Maintenance of Insurance.
The Company shall, and shall cause its Subsidiaries to, keep at all times all of their
properties which are of an insurable nature insured against loss or damage with insurers believed
by the Company to be responsible to the extent that property of similar character is usually so
insured by corporations similarly situated and owning like properties in accordance with good
business practice.
SECTION 1009.
Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for Securities of such series,
the Company and the Subsidiary Guarantors may, with respect to the Securities of any series, omit
in any particular instance to comply with any term, provision or condition set forth in any of
Sections 1005 through 1008 or in any covenant provided pursuant to Section 301(22), 901(2) or
901(7) for the benefit of the Holders of such series if before the time for such compliance the
Holders of at least a majority in principal amount of the Outstanding Securities of such series
shall, by Act of such Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of the Company and the duties of the Trustee in respect of
any such term, provision or condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101.
Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified as contemplated by Section 301
for such Securities) in accordance with this Article.
SECTION 1102.
Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by a Board Resolution
or in another manner specified as contemplated by Section 301 for such Securities. In case of any
redemption at the election of the Company of less than all the Securities of any series (including
any such redemption affecting only a single Security), the Company shall, at least five Business
Days prior to giving notice of such redemption (unless a shorter notice shall be satisfactory to
the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of
such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In
the case of any redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere
36
in this Indenture, the Company shall furnish the Trustee with an Officers Certificate
evidencing compliance with such restriction.
SECTION 1103.
Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless all the Securities of
such series and of a specified tenor are to be redeemed or unless such redemption affects only a
single Security), the particular Securities to be redeemed shall be selected by the Trustee, from
the Outstanding Securities of such series not previously called for redemption, (i) in compliance
with the requirements of the principal national securities exchange on which such Securities are
listed, if such Securities are listed on any national securities exchange, and (ii) if such
Securities are not so listed, on a pro rata basis, by lot or by such other method as the Trustee
shall deem fair and appropriate and which may provide for the selection for redemption of a portion
of the principal amount of any Security of such series, provided that the unredeemed portion of the
principal amount of any Security shall be in an authorized denomination (which shall not be less
than the minimum authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption affects only a
single Security), the particular Securities to be redeemed shall be selected by the Trustee, from
the Outstanding Securities of such series and specified tenor not previously called for redemption
in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the Securities selected for
redemption as aforesaid and, in case of any Securities selected for partial redemption as
aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with respect to any redemption
affecting only a single Security, whether such Security is to be redeemed in whole or in part. In
the case of any such redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to
be redeemed only in part, to the portion of the principal amount of such Securities which has been
or is to be redeemed. If any Security selected for partial redemption is surrendered for conversion
after such selection, the converted portion of such Security shall be deemed (so far as may be) to
be the portion selected for redemption. Upon any redemption of less than all the Securities of a
series, for purposes of selection for redemption the Company and the Trustee may treat as
Outstanding Securities surrendered for conversion during the period of 15 days next preceding the
mailing of a notice of redemption, and need not treat as Outstanding any Security authenticated and
delivered during such period in exchange for the unconverted portion of any Security converted in
part during such period.
SECTION 1104.
Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than
30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed,
at his address appearing in the Security Register; provided, however, notice of redemption may be
given more than 60 days prior to the Redemption Date if the notice is issued in connection with a
satisfaction and discharge pursuant to Article Four. All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, if then determinable and otherwise the method of its determination,
(3) if less than all the Outstanding Securities of any series consisting of more than a single
Security are to be redeemed, the identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be redeemed and, if less than
all the Outstanding Securities of any series consisting of a single Security are to be redeemed,
the principal amount of the particular Security to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due and payable upon each
such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and
after said date,
(5) the place or places where each such Security is to be surrendered for payment of the
Redemption Price,
(6) that the redemption is for a sinking fund, if such is the case, and
(7) if applicable, the conversion price then in effect and the date on which the right to
convert such Securities will expire.
37
Notice of redemption of Securities to be redeemed at the election of the Company shall be
given by the Company or, at the Companys request, by the Trustee in the name and at the expense of
the Company and shall be irrevocable. If any Security called for redemption is converted pursuant
hereto, any money deposited with the Trustee or any Paying Agent or so segregated and held in trust
for the redemption of such Security shall be paid to the Company upon delivery of a Company Request
to the Trustee or such Paying Agent, or, if then held by the Company, shall be discharged from such
trust.
SECTION 1105.
Deposit of Redemption Price.
Prior to 11:00 A.M., New York City time, on any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.
SECTION 1106.
Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall,
on the Redemption Date, become due and payable at the Redemption Price therein specified, and from
and after such date (unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date; provided, however, that,
unless otherwise specified as contemplated by Section 301, installments of interest whose Stated
Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of business on the relevant
Record Dates according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date
at the rate prescribed therefor in the Security.
SECTION 1107.
Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment
therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Company shall execute, if
applicable, the Subsidiary Guarantors shall execute the notations of Subsidiary Guarantees endorsed
thereon, and the Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series and of like tenor, of any
authorized denomination as requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
SECTION 1201.
Applicability of Article.
Unless otherwise provided with respect to the Securities of any series in or pursuant to the
Board Resolution or supplemental indenture establishing such series of Securities pursuant to
Section 301, the provisions of this Article shall be applicable to each series of Securities.
SECTION 1202.
Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by his acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this
Article (subject to the provisions of Article Four and Article Fifteen), the payment of the
principal of (and premium, if any) and interest on each and all of the Securities of such series is
hereby expressly made subordinate and subject in right of payment to the prior payment in full of
all Senior Debt of the Company.
No provisions of this Article Twelve shall prevent the occurrence of any Event of Default.
SECTION 1203.
Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection therewith, relative
to the Company or to its creditors, as such, or to its assets, or (b) any liquidation, dissolution
or other winding up of the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy,
38
or (c) any assignment for the benefit of creditors or any other marshalling of assets and
liabilities of the Company, then and in any such event specified in (a), (b) or (c) above (each
such event, if any, herein sometimes referred to as a
Proceeding
) the holders of Senior Debt of
the Company shall be entitled to receive payment in full of all amounts due or to become due on or
in respect of all Senior Debt of the Company, or provision shall be made for such payment in cash
or cash equivalents or otherwise in a manner satisfactory to the holders of Senior Debt of the
Company, before the Holders of the Securities are entitled to receive any payment or distribution
of any kind or character, whether in cash, property or securities (including any payment or
distribution which may be payable or deliverable by reason of the payment of any other indebtedness
of the Company subordinated to the payment of the Securities, such payment or distribution being
hereinafter referred to as a
Junior Subordinated Payment
), on account of principal of (or
premium, if any) or interest on the Securities or on account of any purchase or other acquisition
of Securities by the Company or any Subsidiary of the Company (all such payments, distributions,
purchases and acquisitions, other than the payment or distribution of stock or securities of the
Company referred to in the second succeeding paragraph, herein referred to, individually and
collectively, as a
Securities Payment
), and to that end the holders of Senior Debt of the Company
shall be entitled to receive, for application to the payment thereof, any Securities Payment which
may be payable or deliverable in respect of the Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this Section, the Trustee or
the Holder of any Security shall have received any Securities Payment before all Senior Debt of the
Company is paid in full or payment thereof provided for in cash or cash equivalents or otherwise in
a manner satisfactory to the holders of Senior Debt of the Company, and if such fact shall, at or
prior to the time of such Securities Payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such Securities Payment shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent
or other Person making payment or distribution of assets of the Company for application to the
payment of all Senior Debt of the Company remaining unpaid, to the extent necessary to pay all
Senior Debt of the Company in full, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Debt of the Company.
For purposes of this Article only, the words any payment or distribution of any kind or
character, whether in cash, property or securities shall not be deemed to include a payment or
distribution of stock or securities of the Company provided for by a plan of reorganization or
readjustment authorized by an order or decree of a court of competent jurisdiction in a
reorganization proceeding under any applicable bankruptcy law or of any other corporation provided
for by such plan of reorganization or readjustment which stock or securities are subordinated in
right of payment to all then outstanding Senior Debt of the Company to substantially the same
extent as the Securities are so subordinated as provided in this Article. The consolidation of the
Company with, or the merger of the Company into, another Person or the liquidation or dissolution
of the Company following the conveyance or other disposition of all or substantially all of its
assets to another Person upon the terms and conditions set forth in Article Eight shall not be
deemed a Proceeding for the purposes of this Section if the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance or other disposition
such assets, as the case may be, shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions set forth in Article Eight.
SECTION 1204.
No Payment When Senior Debt of the Company in Default.
In the event that any Senior Payment Default (as defined below) shall have occurred and be
continuing, then no Securities Payment shall be made unless and until such Senior Payment Default
shall have been cured or waived or shall have ceased to exist or all amounts then due and payable
in respect of Senior Debt of the Company shall have been paid in full, or provision shall have been
made for such payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt of the Company; provided, however, that nothing in this Section shall
prevent the satisfaction of any sinking fund payment in accordance with Article Sixteen by
delivering and crediting pursuant to Section 1602 Securities which have been acquired (upon
redemption or otherwise) prior to such Senior Payment Default.
Senior Payment Default
means any default in the payment of principal of (or premium, if any)
or interest on any Senior Debt of the Company when due, whether at the Stated Maturity of any such
payment or by declaration of acceleration, call for redemption or otherwise.
In the event that any Senior Nonmonetary Default (as defined below) shall have occurred and be
continuing, then, upon the receipt by the Company, the Subsidiary Guarantors and the Trustee of
written notice of such Senior Nonmonetary Default from the agent for the Designated Senior Debt
which is the
39
subject of such Senior Nonmonetary Default, no Securities Payment shall be made during the
period (the
Payment Blockage Period
) commencing on the date of such receipt of such written
notice and ending on the earlier of (i) the date on which such Senior Nonmonetary Default shall
have been cured or waived or shall have ceased to exist or all Designated Senior Debt the subject
of such Senior Nonmonetary Default shall have been discharged; (ii) the 179th day after the date of
such receipt of such written notice; or (iii) the date on which the Payment Blockage Period shall
have been terminated by written notice to the Company, any Subsidiary Guarantor or the Trustee from
the agent for the Designated Senior Debt initiating the Payment Blockage Period; provided, however,
that nothing in this Section shall prevent the satisfaction of any sinking fund payment in
accordance with Article Sixteen by delivering and crediting pursuant to Section 1602 Securities
which have been acquired (upon redemption or otherwise) prior to the date of such receipt of such
written notice. No more than one Payment Blockage Period may be commenced with respect to the
Securities of a particular series during any 360-day period and there shall be a period of at least
181 consecutive days in each 360-day period when no Payment Blockage Period is in effect. For all
purposes of this paragraph, no Senior Nonmonetary Default that existed or was continuing on the
date of commencement of any Payment Blockage Period shall be, or be made, the basis for the
commencement of a subsequent Payment Blockage Period, whether or not within a period of 360
consecutive days, unless such Senior Nonmonetary Default shall have been cured for a period of not
less than 90 consecutive days.
Senior Nonmonetary Default
means the occurrence or existence and continuance of any event of
default with respect to any Designated Senior Debt, other than a Senior Payment Default, permitting
the holders of such Designated Senior Debt (or a trustee or agent on behalf of the holders thereof)
to declare such Designated Senior Debt due and payable prior to the date on which it would
otherwise become due and payable.
In the event that, notwithstanding the foregoing, the Company shall make any Securities
Payment to the Trustee or any Holder prohibited by the foregoing provisions of this Section, and if
such fact shall, at or prior to the time of such Securities Payment, have been made known to the
Trustee or, as the case may be, such Holder, then and in such event such Securities Payment shall
be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any Securities Payment with respect to which
Section 1203 would be applicable.
SECTION 1205.
Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or in any of the Securities
shall prevent (a) the Company, at any time except during the pendency of any Proceeding referred to
in Section 1203 or under the conditions described in Section 1204, from making Securities Payments,
or (b) the application by the Trustee of any money deposited with it hereunder to Securities
Payments or the retention of such Securities Payment by the Holders, if, at the time of such
application by the Trustee, it did not have knowledge that such Securities Payment would have been
prohibited by the provisions of this Article.
SECTION 1206.
Subrogation to Rights of Holders of Senior Debt of the Company.
Subject to the payment in full of all amounts due or to become due on or in respect of Senior
Debt of the Company, or the provision for such payment in cash or cash equivalents or otherwise in
a manner satisfactory to the holders of Senior Debt of the Company, the Holders of the Securities
shall be subrogated to the rights of the holders of such Senior Debt of the Company to receive
payments and distributions of cash, property and securities applicable to the Senior Debt of the
Company until the principal of (and premium, if any) and interest on the Securities shall be paid
in full. For purposes of such subrogation, no payments or distributions to the holders of the
Senior Debt of the Company of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of Senior Debt of the
Company by Holders of the Securities or the Trustee, shall, as among the Company, its creditors
other than holders of Senior Debt of the Company and the Holders of the Securities, be deemed to be
a payment or distribution by the Company to or on account of the Senior Debt of the Company.
SECTION 1207.
Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the purpose of defining the
relative rights of the Holders on the one hand and the holders of Senior Debt of the Company on the
other hand. Nothing contained in this Article or elsewhere in this Indenture or in the Securities
is intended to or shall (a) impair, as among the Company, its creditors other than holders of
Senior Debt of the Company and the Holders of the Securities, the obligation of the Company, which
is absolute and unconditional (and which,
40
subject to the rights under this Article of the holders
of Senior Debt of the Company, is intended to rank
equally with all other general obligations of the Company), to pay to the Holders of the
Securities the principal of (and premium, if any) and interest on the Securities as and when the
same shall become due and payable in accordance with their terms; or (b) affect the relative rights
against the Company of the Holders of the Securities and creditors of the Company other than the
holders of Senior Debt of the Company; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of Senior Debt of the
Company to receive cash, property and securities otherwise payable or deliverable to the Trustee or
such Holder.
SECTION 1208.
Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the subordination
provided in this Article and appoints the Trustee his attorney-in-fact for any and all such
purposes.
SECTION 1209.
No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt of the Company to enforce
subordination as herein provided shall at any time in any way be prejudiced or impaired by any act
or failure to act on the part of the Company or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
Without in any way limiting the generality of the foregoing paragraph, the holders of Senior
Debt of the Company may, at any time and from time to time, without the consent of or notice to the
Trustee or the Holders of the Securities, without incurring responsibility to the Holders of the
Securities and without impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of Senior Debt of the
Company, do any one or more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Debt of the Company, or otherwise amend or
supplement in any manner Senior Debt of the Company or any instrument evidencing the same or any
agreement under which Senior Debt of the Company is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior Debt of the
Company; (iii) release any Person liable in any manner for the collection of Senior Debt of the
Company; and (iv) exercise or refrain from exercising any rights against the Company and any other
Person.
SECTION 1210.
Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact known to the Company
which would prohibit the making of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless and until the
Trustee shall have received written notice thereof from the Company or a holder of Senior Debt of
the Company or from any trustee therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 601, shall be entitled in all respects to assume that
no such facts exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least three Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without limitation, the payment of
the principal of (and premium, if any) or interest on any Security), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was received and shall
not be affected by any notice to the contrary which may be received by it within three Business
Days prior to such date.
Subject to the provisions of Section 601, the Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself to be a holder of Senior Debt
of the Company (or a trustee therefor) to establish that such notice has been given by a holder of
Senior Debt of the Company (or a trustee therefor). In the event that the Trustee determines in
good faith that further evidence is required with respect to the right of any Person as a holder of
Senior Debt of the Company to participate in any payment or distribution pursuant to this Article,
the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Debt of the Company held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence is not furnished,
the Trustee
41
may defer any payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
SECTION 1211.
Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in this Article, the
Trustee, subject to the provisions of Section 601, and the Holders of the Securities shall be
entitled to rely upon any order or decree entered by any court of competent jurisdiction in which
such Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Holders of Securities, for the purpose
of ascertaining the Persons entitled to participate in such payment or distribution, the holders of
the Senior Debt of the Company and other indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
SECTION 1212.
Trustee Not Fiduciary for Holders of Senior Debt of the Company.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt of the
Company and shall not be liable to any such holders if it shall in good faith mistakenly pay over
or distribute to Holders of Securities or to the Company, a Subsidiary Guarantor or to any other
Person cash, property or securities to which any holders of Senior Debt of the Company shall be
entitled by virtue of this Article or otherwise.
SECTION 12.13.
Rights of Trustee as Holder of Senior Debt of the Company; Preservation of
Trustees Rights.
The Trustee in its individual capacity shall be entitled to all the rights set forth in this
Article with respect to any Senior Debt of the Company which may at any time be held by it, to the
same extent as any other holder of Senior Debt of the Company, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 607.
SECTION 1214.
Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term Trustee as used in this Article shall in such case
(unless the context otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article in addition to or in place of the Trustee; provided, however, that Section 1213
shall not apply to the Company, any Subsidiary Guarantor or any Affiliate of the Company if it or
such Subsidiary Guarantor or Affiliate acts as Paying Agent.
SECTION 1215.
Defeasance of this Article Twelve.
The subordination of the Securities of a series provided by this Article Twelve is expressly
made subject to the provisions for Defeasance or Covenant Defeasance in Article Fifteen hereof and,
anything herein to the contrary notwithstanding, upon the effectiveness of any such Defeasance or
Covenant Defeasance, the Securities of such series then outstanding shall thereupon cease to be
subordinated pursuant to this Article Twelve.
ARTICLE THIRTEEN
SUBSIDIARY GUARANTEES
SECTION 1301.
Applicability of Article.
Unless the Company elects to issue any series of Securities without the benefit of the
Subsidiary Guarantees, which election shall be evidenced in or pursuant to the Board Resolution or
supplemental indenture establishing such series of Securities pursuant to Section 301, the
provisions of this Article shall be applicable to each series of Securities except as otherwise
specified in or pursuant to the Board Resolution or supplemental indenture establishing such series
pursuant to Section 301.
SECTION 1302.
Subsidiary Guarantees.
Subject to Section 1301, each Subsidiary Guarantor hereby, jointly and severally, fully and
unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee,
the due and punctual payment of the principal of (and premium, if any) and interest on such
Security when and as the same shall become due and payable, whether at the Stated Maturity, by
acceleration, call for
42
redemption, offer to purchase or otherwise, in accordance with the terms of such Security and
of this Indenture, and each Subsidiary Guarantor similarly guarantees to the Trustee the payment of
all amounts owing to the Trustee in accordance with the terms of this Indenture. In case of the
failure of the Company punctually to make any such payment, each Subsidiary Guarantor hereby,
jointly and severally, agrees to cause such payment to be made punctually when and as the same
shall become due and payable, whether at the Stated Maturity or by acceleration, call for
redemption, offer to purchase or otherwise, and as if such payment were made by the Company.
Each of the Subsidiary Guarantors hereby jointly and severally agrees that its obligations
hereunder shall be absolute, unconditional, irrespective of, and shall be unaffected by, the
validity, regularity or enforceability of such Security or this Indenture, the absence of any
action to enforce the same or any release, amendment, waiver or indulgence granted to the Company
or any other guarantor or any consent to departure from any requirement of any other guarantee of
all or any of the Securities of such series or any other circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor; provided, however,
that, notwithstanding the foregoing, no such release, amendment, waiver or indulgence shall,
without the consent of such Subsidiary Guarantor, increase the principal amount of such Security,
or increase the interest rate thereon, or alter the Stated Maturity thereof. Each of the Subsidiary
Guarantors hereby waives the benefits of diligence, presentment, demand for payment, any
requirement that the Trustee or any of the Holders protect, secure, perfect or insure any security
interest in or other lien on any property subject thereto or exhaust any right or take any action
against the Company or any other Person or any collateral, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a proceeding first against
the Company, protest or notice with respect to such Security or the indebtedness evidenced thereby
and all demands whatsoever, and covenants that this Subsidiary Guarantee will not be discharged in
respect of such Security except by complete performance of the obligations contained in such
Security and in such Subsidiary Guarantee. Each Subsidiary Guarantor agrees that if, after the
occurrence and during the continuance of an Event of Default, the Trustee or any of the Holders are
prevented by applicable law from exercising their respective rights to accelerate the maturity of
the Securities of a series, to collect interest on the Securities of a series, or to enforce or
exercise any other right or remedy with respect to the Securities of a series, such Subsidiary
Guarantor agrees to pay to the Trustee for the account of the Holders, upon demand therefor, the
amount that would otherwise have been due and payable had such rights and remedies been permitted
to be exercised by the Trustee or any of the Holders.
The indebtedness of each Subsidiary Guarantor evidenced by the Subsidiary Guarantees is, to
the extent provided in this Indenture, subordinate and subject in right of payment to the prior
payment in full of all Senior Debt of each Subsidiary Guarantor, and the Subsidiary Guarantees are
issued subject to the provisions of this Indenture with respect thereto. Each Holder of such
Security, by accepting the same, will be deemed to have (a) agreed to and be bound by such
provisions, (b) authorized and directed the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c) appointed the Trustee
his attorney-in-fact for any and all such purposes.
Each Subsidiary Guarantor shall be subrogated to all rights of the Holders of the Securities
upon which its Subsidiary Guarantee is endorsed against the Company in respect of any amounts paid
by such Subsidiary Guarantor on account of such Security pursuant to the provisions of its
Subsidiary Guarantee or this Indenture; provided, however, that no Subsidiary Guarantor shall be
entitled to enforce or to receive any payments arising out of, or based upon, such right of
subrogation until the principal of (and premium, if any) and interest on all Securities of the
relevant series issued hereunder shall have been paid in full.
Each Subsidiary Guarantor that makes or is required to make any payment in respect of its
Subsidiary Guarantee shall be entitled to seek contribution from the other Subsidiary Guarantors to
the extent permitted by applicable law; provided, however, that no Subsidiary Guarantor shall be
entitled to enforce or receive any payments arising out of, or based upon, such right of
contribution until the principal of (and premium, if any) and interest on all Securities of the
relevant series issued hereunder shall have been paid in full.
Each Subsidiary Guarantee shall remain in full force and effect and continue to be effective
should any petition be filed by or against the Company for liquidation or reorganization, should
the Company become insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any part of the Companys assets, and shall, to the
fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if
at any time payment and performance of the Securities of a series, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be
43
restored or returned by any Holder of the Securities, whether as a voidable preference,
fraudulent transfer, or otherwise, all as though such payment or performance had not been made.
In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned,
the Securities shall, to the fullest extent permitted by law, be reinstated and deemed reduced only
by such amount paid and not so rescinded, reduced, restored or returned.
SECTION 1303.
Execution and Delivery of Notations of Subsidiary Guarantees.
To further evidence the Subsidiary Guarantee set forth in Section 1302, each of the Subsidiary
Guarantors hereby agrees that a notation relating to such Subsidiary Guarantee, substantially in
the form set forth in Section 204, shall be endorsed on each Security entitled to the benefits of
the Subsidiary Guarantee authenticated and delivered by the Trustee and executed by either manual
or facsimile signature of an officer of such Subsidiary Guarantor, or in the case of a Subsidiary
Guarantor that is a limited partnership, an officer of the general partner of each Subsidiary
Guarantor. Each of the Subsidiary Guarantors hereby agrees that the Subsidiary Guarantee set forth
in Section 1302 shall remain in full force and effect notwithstanding any failure to endorse on
each Security a notation relating to the Subsidiary Guarantee. If any officer of the Subsidiary
Guarantor, or in the case of a Subsidiary Guarantor that is a limited partnership, any officer of
the general partner of the Subsidiary Guarantor, whose signature is on this Indenture or a Security
no longer holds that office at the time the Trustee authenticates such Security or at any time
thereafter, the Subsidiary Guarantee of such Security shall be valid nevertheless. The delivery of
any Security by the Trustee, after the authentication thereof hereunder, shall constitute due
delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of the Subsidiary
Guarantors.
SECTION 1304.
Release of Subsidiary Guarantors.
Unless otherwise specified pursuant to Section 301 with respect to a series of Securities,
each Subsidiary Guarantee will remain in effect with respect to the respective Subsidiary Guarantor
until the entire principal of, premium, if any, and interest on the Securities to which such
Subsidiary Guarantee relates shall have been paid in full or otherwise satisfied and discharged in
accordance with the provisions of such Securities and this Indenture and all amounts owing to the
Trustee hereunder have been paid; provided, however, that if (i) such Subsidiary Guarantor ceases
to be a Subsidiary in compliance with the applicable provisions of this Indenture, (ii) either
Defeasance or Covenant Defeasance occurs with respect to such Securities pursuant to Article
Fifteen or (iii) all or substantially all of the assets of such Subsidiary Guarantor or all of the
Capital Stock of such Subsidiary Guarantor is sold (including by sale, merger, consolidation or
otherwise) by the Company or any Subsidiary in a transaction complying with the requirements of
this Indenture, then, in each case of (i), (ii) or (iii), upon delivery by the Company of an
Officers Certificate and an Opinion of Counsel stating that all conditions precedent herein
provided for relating to the release of such Subsidiary Guarantor from its obligations under its
Subsidiary Guarantee and this Article Thirteen have been complied with, such Subsidiary Guarantor
shall be released and discharged of its obligations under its Subsidiary Guarantee and under this
Article Thirteen without any action on the part of the Trustee or any Holder, and the Trustee shall
execute any documents reasonably required in order to acknowledge the release of such Subsidiary
Guarantor from its obligations under its Subsidiary Guarantee endorsed on the Securities of such
series and under this Article Thirteen.
SECTION 1305.
Additional Subsidiary Guarantors.
Unless otherwise specified pursuant to Section 301 with respect to a series of Securities, the
Company will cause any domestic Wholly Owned Subsidiary of the Company that becomes a Subsidiary
after the date the Securities of a series are first issued hereunder to become a Subsidiary
Guarantor as soon as practicable after such Subsidiary becomes a Subsidiary. The Company shall
cause any such Wholly Owned Subsidiary to become a Subsidiary Guarantor with respect to the
Securities by executing and delivering to the Trustee (a) a supplemental indenture, in form and
substance satisfactory to the Trustee, which subjects such Person to the provisions (including the
representations and warranties) of this Indenture as a Subsidiary Guarantor and (b) an Opinion of
Counsel to the effect that such supplemental indenture has been duly authorized and executed by
such Person and such supplemental indenture and such Persons obligations under its Subsidiary
Guarantee and this Indenture constitute the legal, valid, binding and enforceable obligations of
such Person (subject to such customary exceptions concerning creditors rights and equitable
principles as may be acceptable to the Trustee in its discretion).
SECTION 1306.
Limitation on Liability.
Any term or provision of this Indenture to the contrary notwithstanding, the maximum amount of
the Subsidiary Guarantee of any Subsidiary Guarantor shall not exceed the maximum amount that can
be hereby guaranteed by such Subsidiary Guarantor without rendering such Subsidiary Guarantee
voidable
44
under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
ARTICLE FOURTEEN
SUBORDINATION OF SUBSIDIARY GUARANTEES
SECTION 1401.
Applicability of Article.
Unless otherwise provided with respect to the Securities of any series in or pursuant to the
Board Resolution or supplemental indenture establishing such series of Securities pursuant to
Section 301, the provisions of this Article shall be applicable to each series of Securities.
SECTION 1402.
Subsidiary Guarantees Subordinate to Senior Debt of Subsidiary
Guarantors.
Each Subsidiary Guarantor covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article (subject to the provisions of Article Four and Article
Fifteen), the Subsidiary Guarantee of such Subsidiary Guarantor is hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all Senior Debt of such
Subsidiary Guarantor.
No provisions of this Article Fourteen shall prevent the occurrence of any Event of Default.
SECTION 1403.
Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection therewith, relative
to any Subsidiary Guarantor or to its creditors, as such, or to its assets, or (b) any liquidation,
dissolution or other winding up of any Subsidiary Guarantor, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of any Subsidiary Guarantor, then and
in any such event specified in (a), (b) or (c) above (each such event, if any, herein sometimes
referred to as a
Guarantor Proceeding
) the holders of Senior Debt of such Subsidiary Guarantor
shall be entitled to receive payment in full of all amounts due or to become due on or in respect
of all Senior Debt of such Subsidiary Guarantor, or provision shall be made for such payment in
cash or cash equivalents or otherwise in a manner satisfactory to the holders of Senior Debt of
such Subsidiary Guarantor, before the Holders of the Securities are entitled to receive any payment
or distribution of any kind or character, whether in cash, property or securities (including any
payment or distribution which may be payable or deliverable by reason of the payment of any other
indebtedness of such Subsidiary Guarantor subordinated to the payment of the Securities, such
payment or distribution being hereinafter referred to as a
Guarantor Junior Subordinated
Payment
), on account of the Subsidiary Guarantee of such Subsidiary Guarantor (all such payments,
other than the payment or distribution of stock or securities of a Subsidiary Guarantor referred to
in the second succeeding paragraph, herein referred to, individually and collectively, as a
Guarantee Payment
), and to that end the holders of Senior Debt of such Subsidiary Guarantor shall
be entitled to receive, for application to the payment thereof, any Guarantee Payment which may be
payable or deliverable in respect of such Subsidiary Guarantors Subsidiary Guarantee in any such
Guarantor Proceeding.
In the event that, notwithstanding the foregoing provisions of this Section, the Trustee or
the Holder of any Security shall have received any Guarantee Payment before all Senior Debt of such
Subsidiary Guarantor is paid in full or payment thereof provided for in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt of such Subsidiary Guarantor, and
if such fact shall, at or prior to the time of such Guarantee Payment, have been made known to the
Trustee or, as the case may be, such Holder, then and in such event such Guarantee Payment shall be
paid over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of assets of such
Subsidiary Guarantor for application to the payment of all Senior Debt of such Subsidiary Guarantor
remaining unpaid, to the extent necessary to pay all Senior Debt of such Subsidiary Guarantor in
full, after giving effect to any concurrent payment or distribution to or for the holders of Senior
Debt of such Subsidiary Guarantor.
For purposes of this Article only, the words any payment or distribution of any kind or
character, whether in cash, property or securities shall not be deemed to include a payment or
distribution of stock or securities of a Subsidiary Guarantor provided for by a plan of
reorganization or readjustment authorized by an order or decree of a court of competent
jurisdiction in a reorganization proceeding under any applicable bankruptcy law or of any other
corporation provided for by such plan of reorganization or readjustment which stock or securities
are subordinated in right of payment to all then outstanding Senior Debt of such Subsidiary
Guarantor to substantially the same extent as the Subsidiary Guarantees are so subordinated as
45
provided in this Article. The consolidation of a Subsidiary Guarantor with, or the merger of a
Subsidiary Guarantor into, another Person or the liquidation or dissolution of such Subsidiary
Guarantor following the conveyance or other disposition of all or substantially all of its assets
to another Person upon the terms and conditions set forth in Article Eight shall not be deemed a
Guarantor Proceeding for the purposes of this Section if the Person formed by such consolidation or
into which such Subsidiary Guarantor is merged or the Person which acquires by conveyance or
transfer such assets, as the case may be, shall, as a part of such consolidation, merger,
conveyance or other disposition, comply with the conditions set forth in Article Eight.
SECTION 1404.
No Payment When Senior Debt of such Subsidiary Guarantor in Default.
In the event that any Senior Payment Default shall have occurred and be continuing, then no
Guarantee Payment shall be made unless and until such Senior Payment Default shall have been cured
or waived or shall have ceased to exist or all amounts then due and payable in respect of the
relevant Senior Debt of the Company shall have been paid in full, or provision shall have been made
for such payment in cash or cash equivalents or otherwise in a manner satisfactory to the holders
of such Senior Debt; provided, that nothing in this Section shall prevent the satisfaction of any
sinking fund payment in accordance with Article Sixteen by delivering and crediting pursuant to
Section 1602 Securities which have been acquired (upon redemption or otherwise) prior to such
Senior Payment Default.
In the event that any Senior Nonmonetary Default shall have occurred and be continuing, then,
upon the receipt by the Company, the Subsidiary Guarantors and the Trustee of written notice of
such Senior Nonmonetary Default from any holder, or agent for the holders, of any Designated Senior
Debt of the Company, no Guarantee Payment shall be made during the applicable Payment Blockage
Period; provided, however, that nothing in this Section shall prevent the satisfaction of any
sinking fund payment in accordance with Article Sixteen by delivering and crediting pursuant to
Section 1602 Securities which have been acquired (upon redemption or otherwise) prior to the date
of such receipt of such written notice. No more than one Payment Blockage Period may be commenced
with respect to the Subsidiary Guarantees during any 360-day period and there shall be a period of
at least 181 consecutive days in each 360-day period when no Payment Blockage Period is in effect.
For all purposes of this paragraph, no Senior Nonmonetary Default that existed or was continuing on
the date of commencement of any Payment Blockage Period shall be, or be made, the basis for the
commencement of a subsequent Payment Blockage Period, whether or not within a period of 360
consecutive days, unless such Senior Nonmonetary Default shall have been cured for a period of not
less than 90 consecutive days.
In the event that, notwithstanding the foregoing, a Subsidiary Guarantor shall make any
Guarantee Payment to the Trustee or any Holder prohibited by the foregoing provisions of this
Section, and if such fact shall, at or prior to the time of such Guarantee Payment, have been made
known to the Trustee or, as the case may be, such Holder, then and in such event such Guarantee
Payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any Guarantee Payment with respect to which
Section 1403 would be applicable.
SECTION 1405.
Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or in any of the Subsidiary
Guarantees shall prevent (a) a Subsidiary Guarantor, at any time except during the pendency of any
Guarantor Proceeding referred to in Section 1403 or under the conditions described in Section 1404,
from making Guarantee Payments, or (b) the application by the Trustee of any money deposited with
it hereunder to Guarantee Payments or the retention of such Guarantee Payment by the Holders, if,
at the time of such application by the Trustee, it did not have knowledge that such Guarantee
Payment would have been prohibited by the provisions of this Article.
SECTION 1406.
Subrogation to Rights of Holders of Senior Debt of such Subsidiary
Guarantor.
Subject to the payment in full of all amounts due or to become due on or in respect of Senior
Debt of a Subsidiary Guarantor, or the provision for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt of such Subsidiary Guarantor, the
Holders of the Securities shall be subrogated to the rights of the holders of such Senior Debt of
such Subsidiary Guarantor to receive payments and distributions of cash, property and securities
applicable to the Senior Debt of such Subsidiary Guarantor until the principal of (and premium, if
any) and interest on the Securities shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of the Senior Debt of
46
a Subsidiary Guarantor of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of Senior Debt of a
Subsidiary Guarantor by Holders of the Securities or the Trustee, shall, as among a Subsidiary
Guarantor, its creditors other than holders of Senior Debt of such Subsidiary Guarantor and the
Holders of the Securities, be deemed to be a payment or distribution by such Subsidiary Guarantor
to or on account of the Senior Debt of such Subsidiary Guarantor.
SECTION 1407.
Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the purpose of defining the
relative rights of the Holders on the one hand and the holders of Senior Debt of a Subsidiary
Guarantor on the other hand. Nothing contained in this Article or elsewhere in this Indenture or in
the Subsidiary Guarantees is intended to or shall (a) impair, as among a Subsidiary Guarantor, its
creditors other than holders of Senior Debt of such Subsidiary Guarantor and the Holders of the
Securities, the obligation of such Subsidiary Guarantor, which is absolute and unconditional (and
which, subject to the rights under this Article of the holders of Senior Debt of such Subsidiary
Guarantor, is intended to rank equally with all other general obligations of such Subsidiary
Guarantor), to guarantee payment to the Holders of the Securities of the principal of (and premium,
if any) and interest on the Securities as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against a Subsidiary Guarantor of
the Holders of the Securities and creditors of such Subsidiary Guarantor other than the holders of
Senior Debt of such Subsidiary Guarantor; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of Senior Debt of a
Subsidiary Guarantor to receive cash, property and securities otherwise payable or deliverable to
the Trustee or such Holder.
SECTION 1408.
Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the subordination
provided in this Article and appoints the Trustee his attorney-in-fact for any and all such
purposes.
SECTION 1409.
No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt of a Subsidiary Guarantor to
enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of such Subsidiary Guarantor or by any act or failure to act,
in good faith, by any such holder, or by any noncompliance by such Subsidiary Guarantor with the
terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the holders of Senior
Debt of a Subsidiary Guarantor may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Securities, without incurring responsibility to the
Holders of the Securities and without impairing or releasing the subordination provided in this
Article or the obligations hereunder of the Holders of the Securities to the holders of Senior Debt
of such Subsidiary Guarantor, do any one or more of the following: (i) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter, Senior Debt of such
Subsidiary Guarantor, or otherwise amend or supplement in any manner Senior Debt of such Subsidiary
Guarantor or any instrument evidencing the same or any agreement under which Senior Debt of such
Subsidiary Guarantor is outstanding; (ii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt of such Subsidiary Guarantor; (iii)
release any Person liable in any manner for the collection of Senior Debt of such Subsidiary
Guarantor; and (iv) exercise or refrain from exercising any rights against such Subsidiary
Guarantor and any other Person.
SECTION 1410.
Notice to Trustee.
Each Subsidiary Guarantor shall give prompt written notice to the Trustee of any fact known to
such Subsidiary Guarantor which would prohibit the making of any payment to or by the Trustee in
respect of its Subsidiary Guarantee. Notwithstanding the provisions of this Article or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in respect of the
Subsidiary Guarantees, unless and until the Trustee shall have received written notice thereof from
a Subsidiary Guarantor or a holder of Senior Debt of such Subsidiary Guarantor or from any trustee
therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 601, shall be entitled in all respects to
47
assume that no such facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section at least three Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (and premium, if any) or interest on any Security),
then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be received by it within
three Business Days prior to such date.
Subject to the provisions of Section 601, the Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself to be a holder of Senior Debt
of a Subsidiary Guarantor (or a trustee therefor) to establish that such notice has been given by a
holder of Senior Debt of such Subsidiary Guarantor (or a trustee therefor). In the event that the
Trustee determines in good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Debt of a Subsidiary Guarantor to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior Debt of such Subsidiary
Guarantor held by such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such Person under this
Article, and if such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such payment.
SECTION 1411.
Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of a Subsidiary Guarantor referred to in this
Article, the Trustee, subject to the provisions of Section 601, and the Holders of the Securities
shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction
in which such Guarantor Proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other
Person making such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt of such Subsidiary Guarantor and other indebtedness of
such Subsidiary Guarantor, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 1412.
Trustee Not Fiduciary for Holders of Senior Debt of such Subsidiary
Guarantor.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt of a
Subsidiary Guarantor and shall not be liable to any such holders if it shall in good faith
mistakenly pay over or distribute to Holders of Securities or to the Company, a Subsidiary
Guarantor, or to any other Person cash, property or securities to which any holders of Senior Debt
of such Subsidiary Guarantor shall be entitled by virtue of this Article or otherwise.
SECTION 1413.
Rights of Trustee as Holder of Senior Debt of such Subsidiary Guarantor;
Preservation of Trustees Rights.
The Trustee in its individual capacity shall be entitled to all the rights set forth in this
Article with respect to any Senior Debt of a Subsidiary Guarantor which may at any time be held by
it, to the same extent as any other holder of Senior Debt of such Subsidiary Guarantor, and nothing
in this Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 607.
SECTION 1414.
Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term Trustee as used in this Article shall in such case
(unless the context otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article in addition to or in place of the Trustee; provided, however, that Section 1413
shall not apply to the Company, any Subsidiary Guarantor or any Affiliate of the Company if it or
such Subsidiary Guarantor or Affiliate acts as Paying Agent.
SECTION 1415.
Defeasance of this Article Fourteen.
The subordination of the Subsidiary Guarantees provided by this Article Fourteen is expressly
made subject to the provisions for Defeasance or Covenant Defeasance of a series of Securities in
Article Fifteen hereof and, anything herein to the contrary notwithstanding, upon the effectiveness
of any
48
such Defeasance or Covenant Defeasance with respect to a series of Securities, the Subsidiary
Guarantees of the Securities of such series shall thereupon cease to be subordinated pursuant to
this Article Fourteen.
ARTICLE FIFTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1501.
Companys Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option at any time, to have Section 1502 or Section 1503 applied
to any Securities or any series of Securities, as the case may be, designated pursuant to Section
301 as being defeasible pursuant to such Section 1502 or 1503, in accordance with any applicable
requirements provided pursuant to Section 301 and upon compliance with the conditions set forth
below in this Article. Any such election shall be evidenced in or pursuant to a Board Resolution or
in another manner specified as contemplated by Section 301 for such Securities.
SECTION 1502.
Defeasance and Discharge.
Upon the Companys exercise of its option (if any) to have this Section applied to any
Securities or any series of Securities, as the case may be, the Company shall be deemed to have
been discharged from its obligations, and each Subsidiary Guarantor shall be deemed to have been
discharged from its obligations with respect to its Subsidiary Guarantee of such Securities, and
the provisions of Articles Twelve and Fourteen shall cease to be effective, with respect to such
Securities and Subsidiary Guarantees as provided in this Section on and after the date the
conditions set forth in Section 1504 are satisfied (herein called
Defeasance
). For this purpose,
such Defeasance means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and to have satisfied all its other obligations under
such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging the same), subject to
the following which shall survive until otherwise terminated or discharged hereunder: (1) the
rights of Holders of such Securities to receive, solely from the trust fund described in Section
1504 and as more fully set forth in such Section, payments in respect of the principal of and any
premium and interest on such Securities when payments are due, or, if applicable, to convert such
Securities in accordance with their terms, (2) the Companys and each Subsidiary Guarantors
obligations with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, and, if
applicable, their obligations with respect to the conversion of such Securities, (3) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (4) this Article. Subject to
compliance with this Article, the Company may exercise its option (if any) to have this Section
applied to any Securities notwithstanding the prior exercise of its option (if any) to have Section
1503 applied to such Securities.
SECTION 1503.
Covenant Defeasance.
Upon the Companys exercise of its option (if any) to have this Section applied to any
Securities or any series of Securities, as the case may be, (1) the Company shall be released from
its obligations under Section 801(3), Sections 1005 through 1008, inclusive, and any covenants
provided pursuant to Section 301(22), 901(2) or 901(7) for the benefit of the Holders of such
Securities, and (2) the occurrence of any event specified in Sections 501(5) (with respect to any
of Section 801(3), Sections 1005 through 1008, inclusive, and any such covenants provided pursuant
to Section 301(22), 901(2) or 901(7)), 501(6), 501(7)), 501(10) and 501(11) shall be deemed not to
be or result in an Event of Default and (3) the provisions of Articles Twelve, Thirteen and
Fourteen shall cease to be effective, in each case with respect to such Securities and Subsidiary
Guarantees as provided in this Section on and after the date the conditions set forth in Section
1504 are satisfied (herein called
Covenant Defeasance
). For this purpose, such Covenant
Defeasance means that, with respect to such Securities, the Company and the Subsidiary Guarantors,
as applicable, may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such specified Section (to the extent so specified in the
case of Section 501(5)) or Article Twelve, Thirteen or Article Fourteen, whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or Article or by reason
of any reference in any such Section or Article to any other provision herein or in any other
document, but the remainder of this Indenture and such Securities shall be unaffected thereby.
SECTION 1504.
Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 1502 or Section 1503 to
any Securities or any series of Securities, as the case may be:
(1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee
(or another trustee which satisfies the requirements contemplated by Section 609 and agrees to
comply with the provisions of this Article applicable to it) as trust funds in trust for the
purpose of making the following
49
payments, specifically pledged as security for, and dedicated solely to, the benefits of the
Holders of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which
through the scheduled payment of principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any payment, money in an amount,
or (C) a combination thereof, in each case sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any premium and interest on such
Securities on the respective Stated Maturities, in accordance with the terms of this Indenture and
such Securities. As used herein,
U.S. Government Obligation
means (x) any security which is (i) a
direct obligation of the United States of America for the payment of which the full faith and
credit of the United States of America is pledged or (ii) an obligation of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case (i) or (ii), is not callable or redeemable at the option
of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is
specified in clause (x) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of principal of or interest on any U.S.
Government Obligation which is so specified and held, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by such depositary receipt.
(2) In the event of an election to have Section 1502 apply to any Securities or any series of
Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of
Counsel stating that (A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this instrument, there has been a change
in the applicable Federal income tax law, in either case (A) or (B) to the effect that, and based
thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or
loss for Federal income tax purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to such Securities and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if such deposit and
Defeasance were not to occur.
(3) In the event of an election to have Section 1503 apply to any Securities or any series of
Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with
respect to such Securities and will be subject to Federal income tax on the same amount, in the
same manner and at the same times as would be the case if such deposit and Covenant Defeasance were
not to occur.
(4) The Company shall have delivered to the Trustee an Officers Certificate to the effect
that neither such Securities nor any other Securities of the same series, if then listed on any
securities exchange, will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would become, an Event of
Default with respect to such Securities shall have occurred and be continuing at the time of such
deposit or, with regard to any such event specified in Sections 501(7) and (8), at any time on or
prior to the 121st day after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until after such 121st day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting
interest within the meaning of the Trust Indenture Act (assuming all Securities are in default
within the meaning of such Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or
constitute a default under, any other agreement or instrument to which the Company or any
Subsidiary is a party or by which it is bound.
(8) At the time of such deposit, (A) no default in the payment of any principal of or premium
or interest on any Senior Debt of the Company or any Subsidiary Guarantor shall have occurred and
be continuing, (B) no event of default with respect to any Senior Debt of the Company or any
Subsidiary Guarantor shall have resulted in such Senior Debt becoming, and continuing to be, due
and payable prior to the date on which it would otherwise have become due and payable (unless
payment of such Senior Debt
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has been made or duly provided for), and (C) no other event of default with respect to any
Senior Debt of the Company or any Subsidiary Guarantor shall have occurred and be continuing
permitting (after notice or lapse of time or both) the holders of such Senior Debt (or a trustee on
behalf of such holders) to declare such Senior Debt due and payable prior to the date on which it
would otherwise have become due and payable.
(9) The Company shall have delivered to the Trustee an Opinion of Counsel to the effect that
such deposit shall not cause either the Trustee or the trust so created to be subject to the
Investment Company Act of 1940.
(10) The Company shall have delivered to the Trustee an Officers Certificate and an Opinion
of Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
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SECTION 1505.
Deposited Money and U.S. Government Obligations to Be Held in Trust;
Miscellaneous Provisions.
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Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee
(solely for purposes of this Section and Section 1506, the Trustee and any such other trustee are
referred to collectively as the
Trustee
) pursuant to Section 1504 in respect of any Securities
shall be held in trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders
of such Securities, of all sums due and to become due thereon in respect of principal and any
premium and interest, but money so held in trust need not be segregated from other funds except to
the extent required by law. Money and U.S. Government Obligations so held in trust shall not be
subject to the provisions of Article Twelve or Article Fourteen.
The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to Section 1504 or the
principal and interest received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to
the Company from time to time upon Company Request any money or U.S. Government Obligations held by
it as provided in Section 1504 with respect to any Securities which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.
SECTION 1506.
Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in accordance with this
Article with respect to any Securities by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such application, then the
obligations under this Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1502 or 1503 shall be revived and reinstated as though no deposit had
occurred pursuant to this Article with respect to such Securities, until such time as the Trustee
or Paying Agent is permitted to apply all money held in trust pursuant to Section 1505 with respect
to such Securities in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security following such
reinstatement of its obligations, the Company shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in trust.
ARTICLE SIXTEEN
SINKING FUNDS
SECTION 1601.
Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the retirement of
Securities of any series except as otherwise specified as contemplated by Section 301 for such
Securities.
The minimum amount of any sinking fund payment provided for by the terms of any Securities is
herein referred to as a mandatory sinking fund payment, and any payment in excess of such minimum
amount provided for by the terms of such Securities is herein referred to as an optional sinking
fund payment. If provided for by the terms of any Securities, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 1602. Each sinking fund payment shall be
applied to the redemption of Securities as provided for by the terms of such Securities.
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SECTION 1602.
Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other than any previously
called for redemption) and (2) may apply as a credit Securities of a series which have been (x)
converted or (y) redeemed either at the election of the Company pursuant to the terms of such
Securities or through the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to any Securities of such series required to be made pursuant to the terms of
such Securities as and to the extent provided for by the terms of such Securities; provided,
however, that the Securities to be so credited have not been previously so credited. The Securities
to be so credited shall be received and credited for such purpose by the Trustee at the Redemption
Price, as specified in the Securities so to be redeemed, for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 1603.
Redemption of Securities for Sinking Fund.
Not less than 35 days prior to each sinking fund payment date for any Securities, the Company
will deliver to the Trustee an Officers Certificate specifying the amount of the next ensuing
sinking fund payment for such Securities pursuant to the terms of such Securities, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which
is to be satisfied by delivering and crediting Securities pursuant to Section 1602 and will also
deliver to the Trustee any Securities to be so delivered. Not less than 32 days prior to each such
sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.
This instrument may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as
of the day and year first above written.
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ISSUER:
APPROACH RESOURCES INC.
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By:
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Name:
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Title:
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SUBSIDIARY GUARANTORS:
[INSERT SUBSIDIARY GUARANTORS]
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By:
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Name:
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Title:
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TRUSTEE:
[TRUSTEES NAME]
,
as Trustee
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By:
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Name:
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Title:
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SCHEDULE I
SUBSIDIARY GUARANTORS
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SUBSIDIARY
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STATE OF ORGANIZATION
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[
Insert Subsidiary Guarantors
]
Schedule I