Exhibit 4.1
Execution Copy
El Paso Production Holding Company
Issuer
7-3/4% Senior Notes due 2013
INDENTURE
Dated as of May 23, 2003
Wilmington Trust Company
Trustee
CROSS-REFERENCE TABLE*\
TIA Indenture
Section Section**\
310(a)(1) ............................................................ 7.10
(a)(2) ............................................................ 7.10
(a)(3) ............................................................ N.A.
(a)(4) ............................................................ N.A.
(b) ............................................................ 7.08; 7.10
(c) ............................................................ N.A.
311(a) ............................................................ 7.11
(b) ............................................................ 7.11
(c) ............................................................ N.A.
312(a) ............................................................ 2.05
(b) ............................................................ 11.03
(c) ............................................................ 11.03
313(a) ............................................................ 7.06
(b)(1) ............................................................ N.A.
(b)(2) ............................................................ 7.06
(c) ............................................................ 11.02
(d) ............................................................ 7.06
314(a) ............................................................ 4.02;
............................................................ 4.10; 11.02
(b) ............................................................ N.A.
(c)(1) ............................................................ 11.04
(c)(2) ............................................................ 11.04
(c)(3) ............................................................ N.A.
(d) ............................................................ N.A.
(e) ............................................................ 11.05
(f) ............................................................ 4.10
315(a) ............................................................ 7.01
(b) ............................................................ 7.05; 11.02
(c) ............................................................ 7.01
(d) ............................................................ 7.01
(e) ............................................................ 6.11
316(a)(last ............................................................ 11.06
sentence)
(a)(1)(A) ............................................................ 6.05
(a)(1)(B) ............................................................ 6.04
(a)(2) ............................................................ N.A.
(b) ............................................................ 6.07
317(a)(1) ............................................................ 6.08
(a)(2) ............................................................ 6.09
(b) ............................................................ 2.04
318(a) ............................................................ 11.01
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.............................................................................. 1
SECTION 1.02 Other Definitions........................................................................ 29
SECTION 1.03 Incorporation by Reference of Trust Indenture Act........................................ 29
SECTION 1.04 Rules of Construction.................................................................... 29
ARTICLE 2
THE SECURITIES
SECTION 2.01 Form and Dating.......................................................................... 30
SECTION 2.02 Execution and Authentication............................................................. 30
SECTION 2.03 Registrar and Paying Agent............................................................... 31
SECTION 2.04 Paying Agent To Hold Money in Trust...................................................... 31
SECTION 2.05 Securityholder Lists..................................................................... 32
SECTION 2.06 Transfer and Exchange.................................................................... 32
SECTION 2.07 Replacement Securities................................................................... 32
SECTION 2.08 Outstanding Securities................................................................... 32
SECTION 2.09 Temporary Securities..................................................................... 32
SECTION 2.10 Cancellation............................................................................. 33
SECTION 2.11 Defaulted Interest....................................................................... 33
SECTION 2.12 CUSIP Numbers............................................................................ 33
SECTION 2.13 Issuance of Additional Securities........................................................ 33
ARTICLE 3
REDEMPTION
SECTION 3.01 Notices to Trustee....................................................................... 34
SECTION 3.02 Selection of Securities To Be Redeemed................................................... 34
SECTION 3.03 Notice of Redemption..................................................................... 34
SECTION 3.04 Effect of Notice of Redemption........................................................... 35
SECTION 3.05 Deposit of Redemption Price.............................................................. 35
SECTION 3.06 Securities Redeemed in Part.............................................................. 35
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Securities.................................................................... 35
SECTION 4.02 SEC Reports.............................................................................. 36
SECTION 4.03 Limitation on Indebtedness............................................................... 36
SECTION 4.04 Limitation on Restricted Payments........................................................ 39
SECTION 4.05 Limitation on Restrictions on Distributions from Restricted Subsidiaries................. 42
SECTION 4.06 Limitation on Sales of Assets and Subsidiary Stock....................................... 44
SECTION 4.07 Limitation on Affiliate Transactions..................................................... 47
SECTION 4.08 Limitation on Line of Business........................................................... 48
SECTION 4.09 Change of Control........................................................................ 48
SECTION 4.10 Limitation on Liens...................................................................... 49
SECTION 4.11 Limitation on Sale/Leaseback Transactions................................................ 49
SECTION 4.12 Limitation on Advances under Parent's Cash Management Program............................ 50
SECTION 4.13 Future Guarantors........................................................................ 50
SECTION 4.14 Compliance Certificate................................................................... 51
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SECTION 4.15 Further Instruments and Acts............................................................. 51
SECTION 4.16 Covenant Termination..................................................................... 51
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01 When Company May Merge or Transfer Assets................................................ 51
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default........................................................................ 52
SECTION 6.02 Acceleration............................................................................. 54
SECTION 6.03 Other Remedies........................................................................... 55
SECTION 6.04 Waiver of Past Defaults.................................................................. 55
SECTION 6.05 Control by Majority...................................................................... 55
SECTION 6.06 Limitation on Suits...................................................................... 55
SECTION 6.07 Rights of Holders to Receive Payment..................................................... 56
SECTION 6.08 Collection Suit by Trustee............................................................... 56
SECTION 6.09 Trustee May File Proofs of Claim......................................................... 56
SECTION 6.10 Priorities............................................................................... 56
SECTION 6.11 Undertaking for Costs.................................................................... 57
SECTION 6.12 Waiver of Stay or Extension Laws......................................................... 57
ARTICLE 7
TRUSTEE
SECTION 7.01 Duties of Trustee........................................................................ 57
SECTION 7.02 Rights of Trustee........................................................................ 58
SECTION 7.03 Individual Rights of Trustee............................................................. 58
SECTION 7.04 Trustee's Disclaimer..................................................................... 59
SECTION 7.05 Notice of Defaults....................................................................... 59
SECTION 7.06 Reports by Trustee to Holders............................................................ 59
SECTION 7.07 Compensation and Indemnity............................................................... 59
SECTION 7.08 Replacement of Trustee................................................................... 60
SECTION 7.09 Successor Trustee by Merger.............................................................. 60
SECTION 7.10 Eligibility; Disqualification............................................................ 61
SECTION 7.11 Preferential Collection of Claims Against Company........................................ 61
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 Discharge of Liability on Securities; Defeasance......................................... 61
SECTION 8.02 Conditions to Defeasance................................................................. 62
SECTION 8.03 Application of Trust Money............................................................... 63
SECTION 8.04 Repayment to Company..................................................................... 63
SECTION 8.05 Indemnity for Government Obligations..................................................... 63
SECTION 8.06 Reinstatement............................................................................ 63
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders............................................................... 64
SECTION 9.02 With Consent of Holders.................................................................. 64
SECTION 9.03 Compliance with Trust Indenture Act...................................................... 65
SECTION 9.04 Revocation and Effect of Consents and Waivers............................................ 65
SECTION 9.05 Notation on or Exchange of Securities.................................................... 66
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SECTION 9.06 Trustee To Sign Amendments............................................................... 66
SECTION 9.07 Payment for Consent...................................................................... 66
ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.01 Guarantees............................................................................. 66
SECTION 10.02 Limitation on Liability................................................................ 68
SECTION 10.03 Successors and Assigns................................................................. 68
SECTION 10.04 No Waiver.............................................................................. 68
SECTION 10.05 Modification........................................................................... 68
SECTION 10.06 Release of Subsidiary Guarantor........................................................ 68
SECTION 10.07 Execution and Delivery of Guarantees................................................... 69
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls........................................................... 69
SECTION 11.02 Notices................................................................................ 69
SECTION 11.03 Communication by Holders with Other Holders............................................ 70
SECTION 11.04 Certificate and Opinion as to Conditions Precedent..................................... 70
SECTION 11.05 Statements Required in Certificate or Opinion.......................................... 70
SECTION 11.06 When Securities Disregarded............................................................ 71
SECTION 11.07 Rules by Trustee, Paying Agent and Registrar........................................... 71
SECTION 11.08 Legal Holidays......................................................................... 71
SECTION 11.09 Governing Law.......................................................................... 71
SECTION 11.10 No Recourse Against Others............................................................. 71
SECTION 11.11 Successors............................................................................. 71
SECTION 11.12 Multiple Originals..................................................................... 71
SECTION 11.13 Table of Contents; Headings............................................................ 72
Rule 144A/Regulation S Appendix
Exhibit 1 - Form of Initial Security
Exhibit A - Form of Exchange Security or Private Exchange Security
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INDENTURE dated as of May 23, 2003, among EL PASO PRODUCTION HOLDING
COMPANY, a Delaware corporation (the "Company"), the Subsidiary Guarantors from
time to time party hereto and WILMINGTON TRUST COMPANY, a Delaware banking
corporation (the "Trustee").
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's Initial
Securities, Exchange Securities and Private Exchange Securities (collectively,
the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Additional Assets" means: (1) any asset used in a Related Business,
including capital expenditures; (2) the Capital Stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such Capital Stock by
the Company or another Restricted Subsidiary; (3) Capital Stock constituting a
minority interest in any Person that at such time is a Restricted Subsidiary; or
(4) any Permitted Business Investment; provided, however, that any such
Restricted Subsidiary described in clause (2) or (3) above is primarily engaged
in a Related Business.
"Additional Securities" means Securities issued under this Indenture after
the Issue Date and in compliance with Sections 2.13 and 4.03, it being
understood that any Securities issued in exchange for or replacement of any
Initial Security issued on the Issue Date shall not be an Additional Security,
including any such Securities issued pursuant to the Registration Rights
Agreement.
"Adjusted Consolidated Net Tangible Assets" or "ACNTA" of a Person means
(without duplication), as of the date of termination:
(a) the sum of:
(1) discounted future net revenue from proved crude oil and natural
gas reserves of such Person and its Restricted Subsidiaries calculated in
accordance with SEC guidelines before any state or federal income taxes,
as estimated in a reserve report prepared as of the end of the fiscal year
ending at least 45 days prior to the date of determination, which reserve
report is prepared or audited or reviewed by independent petroleum
engineers, as increased by, as of the date of determination, the
discounted future net revenue of:
(A) estimated proved crude oil and natural gas reserves of
such Person and its Restricted Subsidiaries attributable to
acquisitions consummated, or constituting reserves contributed to
such Person or any of its Restricted Subsidiaries since the date of
such reserve report, and
(B) estimated crude oil and natural gas reserves of such
Person and its Restricted Subsidiaries attributable to extensions,
discoveries and other additions and upward determinations of
estimates of proved crude oil and natural gas reserves (including
previously estimated development costs Incurred during the period
and the accretion of discount since the prior period end) due to
exploration, development or exploitation, production or other
activities which reserves were not reflected in such reserve report
which would, in accordance with standard industry practice, result
in such determinations, in each case calculated in accordance with
SEC guidelines (utilizing the prices utilized in such year-end
reserve report),
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and decreased by, as of the date of determination, the discounted
future net revenue attributable to:
(C) estimated proved crude oil and natural gas reserves of
such Person and its Restricted Subsidiaries reflected in such
reserve report produced or disposed of since the date of such
reserve report, and
(D) reductions in the estimated oil and natural gas reserves
of such Person and its Restricted Subsidiaries reflected in such
reserve report since the date of such reserve report attributable to
downward determinations of estimates of proved crude oil and natural
gas reserves due to exploration, development or exploitation,
production or other activities conducted or otherwise occurring
since the date of such reserve report which would, in accordance
with standard industry practice, result in such determinations, in
each case calculated in accordance with SEC guidelines (utilizing
the prices utilized in such reserve report);
provided, however, that, in the case of each of the determinations
made pursuant to clauses (A) through (D), such increases and
decreases shall be estimated by the Company's engineers, except that
if as a result of such acquisitions, dispositions, discoveries,
extensions or revisions, there is a Material Change, then such
increases and decreases in the discounted future net revenue shall
be reviewed and confirmed in writing by an independent petroleum
engineer;
(2) the capitalized costs that are attributable to crude oil and
natural gas properties of such Person and its Restricted Subsidiaries to
which no proved crude oil and natural gas reserves are attributed, based
on such Person's books and records as of a date no earlier than the most
recent fiscal quarter for which financial information is publicly
available;
(3) the Net Working Capital of such Person as of the end of the most
recent fiscal quarter for which financial information is publicly
available; and
(4) the greater of (i) the net book value as of the date no earlier
than the most recent fiscal quarter for which financial information is
publicly available and (ii) the appraised value, as estimated by
independent appraisers, of other tangible assets of such Person and its
Restricted Subsidiaries as of a date no earlier than the most recent
fiscal year for which financial information is publicly available
(provided that such Person shall not be required to obtain such an
appraisal of such assets if no such appraisal has been performed); minus
(b) to the extent not otherwise taken into account in the
immediately preceding clause (a), the sum of:
(1) minority interests;
(2) any net natural gas balancing liabilities of such Person and its
Restricted Subsidiaries reflected in such Person's latest audited
financial statements;
(3) the discounted future net revenue, calculated in accordance with
SEC guidelines (utilizing the same prices utilized in such Person's
year-end reserve report), attributable to reserves subject to
participation interests, overriding royalty interests or other interests
of third parties, pursuant to participation, partnership, vendor financing
or other agreements then in effect, or which otherwise are required to be
delivered to third parties;
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(4) the discounted future net revenue calculated in accordance with
SEC guidelines (utilizing the same prices utilized in such Person's
year-end reserve report), attributable to reserves that are required to be
delivered to third parties to fully satisfy the obligations of such Person
and its Restricted Subsidiaries with respect to Volumetric Production
Payments on the schedules specified with respect thereto; and
(5) the discounted future net revenue, calculated in accordance with
SEC guidelines, attributable to reserves subject to Dollar-Denominated
Production Payments that, based on the estimates of production included in
determining the discounted future net revenue specified in the immediately
preceding clause (a)(1) (utilizing the same prices utilized in such
Person's year-end reserve report), would be necessary to satisfy fully the
obligations of such Person and its Restricted Subsidiaries with respect to
Dollar-Denominated Production Payments on the schedules specified with
respect thereto.
If the Company changes its method of accounting from the full costs method
to the successful efforts method or a similar method of accounting, "ACNTA" will
continue to be calculated as if the Company were still using the full costs
method of accounting.
"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 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. For
purposes of Sections 4.04, 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 10% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other disposition
(or series of related sales, leases, transfers or dispositions) by the Company
or any Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the purposes of this
definition as a "disposition"), of
(1) any shares of Capital Stock of a Restricted Subsidiary (other
than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Subsidiary),
(2) all or substantially all the assets of any division or line of
business of the Company or any Restricted Subsidiary or
(3) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such
Restricted Subsidiary
Notwithstanding the foregoing "Asset Disposition" shall not include any
transaction (or any component of any transaction) described below:
(A) a disposition by a Restricted Subsidiary to the Company or by
the Company or a Restricted Subsidiary to a Wholly Owned Subsidiary;
(B) for purposes of the covenant described in Section 4.06 only, (x)
a disposition that constitutes a Restricted Payment (or would constitute a
Restricted Payment but for the exclusions from the definition thereof) and
that is not prohibited
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by Section 4.04 or constitutes a Permitted Investment and (y) a
disposition of all or substantially all the assets of the Company in
accordance with Article 5 of this Indenture;
(C) the trade or exchange by the Company or any Restricted
Subsidiary of any oil or natural gas property or interest therein of the
Company or such Restricted Subsidiary for any oil or natural gas property
or interest therein of another Person, including any cash or cash
equivalents necessary in order to achieve an exchange of equivalent value;
provided, however, that the value of the oil or natural gas property or
interest therein received by the Company or any Restricted Subsidiary in
such trade or exchange (including any cash or cash equivalents) is at
least equal to the fair market value (as determined in good faith by the
Board of Directors, an Officer or an officer of such Restricted Subsidiary
with responsibility for such transaction, which determination shall be
conclusive evidence of compliance with this provision) of the oil or
natural gas property or interest therein (including any cash or cash
equivalents) so traded or exchanged;
(D) the consummation of any Permitted Business Investment;
(E) the creation of any Permitted Lien;
(F) a disposition of oil and natural gas properties in connection
with tax credit transactions complying with Section 29 or any successor or
analogous provisions of the Code;
(G) surrender or waiver of contract rights, oil and gas leases, or
the settlement, release or surrender of contract, tort or other claims of
any kind;
(H) any disposition of defaulted receivables that arose in the
ordinary course of business for collection;
(I) the grant to a vendor or its assignee of an overriding royalty
interest, net profits interest or similar interest in production in
connection with the Vendor Program;
(J) any sale, assignment, lease, license, transfer, abandonment or
other disposition of (i) damaged, worn-out, unserviceable or other
obsolete property or (ii) other property no longer necessary for the
proper conduct of the business of the Company or any of its Subsidiaries;
(K) any sale, assignment, transfer or other disposition of oil and
gas for properties having an SEC PV-10 Value as of the end of the calendar
year preceding the date of such sale, assignment, transfer or other
disposition of up to, together with the SEC PV-10 Value of all other oil
and gas properties of the Company and its Restricted Subsidiaries sold,
assigned, transferred or otherwise disposed of since the Issue Date in
reliance on this clause (K), $200,000,000, which sale, assignment,
transfer or other disposition is made (i) upon or pursuant to foreclosure
of the Lien permitted by clause (24) of the definition of Permitted Lien
(or in lieu of such a foreclosure) or (ii) by a dividend, distribution or
other transfer of such properties by the Company and its Restricted
Subsidiaries to Parent; and
(L) a disposition of assets with a fair market value of less than
$10,000,000).
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"Attributable Debt" in respect of a Sale/Leaseback Transaction means, as
at the time of determination, (1) if such Sale/Leaseback Transaction does not
result in a Capital Lease Obligation, the amount of Indebtedness represented
thereby shall be the present value (discounted at the interest rate borne by the
Securities, compounded annually) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such lease has been
extended) and (2) if such Sale/Leaseback Transaction results in a Capital Lease
Obligation, the amount of Indebtedness represented thereby will be determined in
accordance with the definition of "Capital Lease Obligation."
"Average Life" means, as of the date of determination, with respect to any
Indebtedness, the quotient obtained by dividing (1) the sum of the products of
the numbers of years from the date of determination to the dates of each
successive scheduled principal payment or redemption or similar payment with
respect to such Indebtedness multiplied by the amount of such payment by (2) the
sum of all such payments.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty. For purposes of Section 4.10, a Capital Lease Obligation will be deemed
to be secured by a Lien on the property being leased.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Cash Management Program" means the Parent's cash management program
applicable to the Parent and its subsidiaries, as in effect from time to time;
provided, however, that any advances or loans made by the Company or any
Restricted Subsidiary to any Affiliate of the Company (other than any Restricted
Subsidiary of the Company) are recorded as receivables on the consolidated
balance sheet of the Company in accordance with GAAP.
"Change of Control" means the occurrence of any of the following events:
(1) prior to the first public offering of common stock of the
Company, the Permitted Holders cease to be the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of a majority in the aggregate of the total voting power of
the Voting Stock of the Company, whether as a result of issuance of
securities of the Company, any merger, consolidation, liquidation or
dissolution of the Company, or any direct or indirect transfer of
securities (for purposes of this clause (1) and clause (2) below, the
Permitted Holders shall be deemed to beneficially own any Voting Stock of
a Person (the "specified person") held by any other Person (the "parent
entity") so long as the Permitted Holders beneficially own (as so
defined), directly or indirectly, in the aggregate a majority of the
voting power of the Voting Stock of the parent entity);
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(2) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than one or more Permitted Holders, is or
becomes the beneficial owner (as defined in clause (1) above, except that
for purposes of this clause (2) such person shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 40% of the total
voting power of the Voting Stock of the Company; provided, however, that
the Permitted Holders beneficially own (as defined in clause (1) above),
directly or indirectly, in the aggregate a lesser percentage of the total
voting power of the Voting Stock of the Company than such other person and
do not have the right or ability by voting power, contract or otherwise to
elect or designate for election a majority of the Board of Directors (for
the purposes of this clause (2), such other person shall be deemed to
beneficially own any Voting Stock of a specified Person held by a parent
entity, if such other person is the beneficial owner (as defined in this
clause (2)), directly or indirectly, of more than 40% of the voting power
of the Voting Stock of such parent entity and the Permitted Holders
beneficially own (as defined in clause (1) above), directly or indirectly,
in the aggregate a lesser percentage of the voting power of the Voting
Stock of such parent entity and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a majority
of the board of directors of such parent entity);
(3) the adoption of a plan relating to the liquidation or
dissolution of the Company; or
(4) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company (determined on
a consolidated basis) to another Person other than (i) a transaction in
which the survivor or transferee is a Person that is controlled by the
Permitted Holders or (ii) a transaction following which (A) in the case of
a merger or consolidation transaction, holders of securities that
represented 100% of the Voting Stock of the Company immediately prior to
such transaction (or other securities into which such securities are
converted as part of such merger or consolidation transaction) own
directly or indirectly at least a majority of the voting power of the
Voting Stock of the surviving Person in such merger or consolidation
transaction immediately after such transaction and in substantially the
same proportion as before the transaction and (B) in the case of a sale of
assets transaction, each transferee becomes an obligor in respect of the
Securities and a Subsidiary of the transferor of such assets;
provided, however, that none of the events set forth above under paragraphs (1)
through (4) shall constitute a Change of Control if, within 30 days of such an
event, a Ratings Event shall not have occurred.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
this Indenture securities.
"Consolidated Coverage Ratio" as of any date of determination means the
ratio of:
(x) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters ending prior to the date of such
determination and for which financial information is then publicly
available to
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(y) Consolidated Interest Expense for such four fiscal quarters;
provided, however, that
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding
on the date of determination or if the transaction giving rise to the need
to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, or both, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving effect on a pro forma basis to
such Indebtedness and the use of proceeds thereof as if such Indebtedness
had been Incurred on the first day of such period and such proceeds had
been applied as of such date;
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for
such period shall be calculated on a pro forma basis as if such discharge
had occurred on the first day of such period and as if the Company or such
Restricted Subsidiary had not earned the interest income actually earned
during such period in respect of cash or Temporary Cash Investments used
to repay, repurchase, defease or otherwise discharge such Indebtedness;
(3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition, EBITDA for
such period shall be reduced by an amount equal to EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Disposition for such period, or increased by an amount equal to EBITDA (if
negative) directly attributable thereto for such period and Consolidated
Interest Expense for such period shall be reduced by an amount equal to
the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the Company
and its continuing Restricted Subsidiaries in connection with or with the
proceeds from such Asset Disposition for such period (or, if the Capital
Stock of any Restricted Subsidiary is sold, the Consolidated Interest
Expense for such period directly attributable to the Indebtedness of such
Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after
such sale);
(4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition (or shall have received a
contribution) of assets, including any acquisition or contribution of
assets occurring in connection with a transaction requiring a calculation
to be made hereunder, which constitutes all or substantially all of an
operating unit of a business, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if such Investment or
acquisition or contribution occurred on the first day of such period; and
(5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition, any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (3) or
(4)
-7-
above if made by the Company or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition occurred on the first day of such
period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting Officer of the Company.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Agreement applicable to
such Indebtedness, but if the remaining term of such Interest Rate Agreement is
less than 12 months, then such Interest Rate Agreement shall only be taken into
account for that portion of the period equal to the remaining term thereof).
The Consolidated Interest Expense for a period attributable to interest on
any Indebtedness Incurred during such period under a Revolving Credit Facility,
the outstanding principal balance of which is required to be computed on a pro
forma basis in accordance with the foregoing, shall be computed, to the extent
the chief financial officer determines in good faith that the principal amount
(or applicable portion thereof) of such Indebtedness was Incurred for working
capital purposes in the ordinary course of business, based upon the average
daily balance of such Indebtedness during the applicable period, provided that
such average daily balance shall take into account the amount of any repayment
of Indebtedness under such Revolving Credit Facility during the applicable
period, to the extent such repayment permanently reduced the commitments or
amounts available to be borrowed under such facility.
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Company and its consolidated Restricted Subsidiaries, plus, to
the extent not included in such total interest expense, and to the extent
Incurred by the Company or its Restricted Subsidiaries, without duplication:
(1) interest expense attributable to Capital Lease Obligations and
the interest expense attributable to leases constituting part of a
Sale/Leaseback Transaction;
(2) amortization of debt discount and debt issuance cost;
(3) capitalized interest;
(4) non-cash interest expense;
(5) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing;
(6) net payments pursuant to Hedging Obligations (other than any Oil
and Natural Gas Hedging Contract);
(7) dividends accrued in respect of all Preferred Stock held by
Persons other than the Company or a Wholly Owned Subsidiary (other than
dividends payable solely in Capital Stock (other than Disqualified Stock)
of the Company);
(8) interest incurred in connection with Investments in discontinued
operations;
-8-
(9) interest accruing on any Indebtedness of any other Person to the
extent such Indebtedness is Guaranteed by (or secured by the assets of)
the Company or any Restricted Subsidiary; and
(10) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust
minus, to the extent included above, write-off of deferred financing costs and
interest attributable to Dollar-Denominated Production Payments.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Subsidiaries; provided, however, that there shall
not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that:
(A) subject to the exclusion contained in clause (4) below,
the Company's equity in the net income of any such Person for such
period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person during
such period to the Company or a Restricted Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other
distribution paid to a Restricted Subsidiary, to the limitations
contained in clause (3) below); and
(B) the Company's equity in a net loss of any such Person for
such period shall not be included in determining such Consolidated
Net Income, except to the extent of the aggregate cash actually
contributed to such Person by the Company or a Restricted Subsidiary
during such period;
(2) any net income (or loss) of any Person acquired by the Company
or a Subsidiary in a pooling of interests transaction for any period prior
to the date of such acquisition;
(3) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that
(A) subject to the exclusion contained in clause (4) below,
the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash that could have been
distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend, interest payment
or other distribution paid to another Restricted Subsidiary, to the
limitation contained in this clause); and
(B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(4) any gain (or loss) realized upon the sale or other disposition
of any assets of the Company, its consolidated Subsidiaries or any other
Person (including pursuant to any
-9-
sale-and-leaseback arrangement) which are not sold or otherwise disposed
of in the ordinary course of business and any gain (or loss) realized upon
the sale or other disposition of any Capital Stock of any Person;
(5) extraordinary gains or losses; and
(6) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of Section 4.04 only, there
shall be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of Investments or
return of capital to the Company or a Restricted Subsidiary to the extent such
repurchases, repayments, redemptions, proceeds or returns increase the amount of
Restricted Payments permitted under such Section pursuant to Section
4.04(a)(3)(D).
"Credit Facility" means one or more debt facilities (including a Revolving
Credit Facility) or commercial paper facilities with banks or other lenders,
including Affiliates, providing revolving credit loans, term loans, production
payments, receivables financing (including through the sale of receivables) or
letters of credit, in each case, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement with respect to currency values.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Disqualified Stock" means, with respect to any Person, any Capital Stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable at the option of the holder) or upon the
happening of any event:
(1) matures or is mandatorily redeemable (other than redeemable only
for Capital Stock of such Person which is not itself Disqualified Stock)
pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable at the option of the holder for
Indebtedness or Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon the
occurrence of certain events or otherwise, in whole or in part;
in each case on or prior to the first anniversary of the Stated Maturity of the
Securities; provided, however, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to purchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
first anniversary of the Stated Maturity of the Securities shall not constitute
Disqualified Stock if (1) the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more favorable to the holders of such
Capital Stock than the terms applicable to the Securities in Sections 4.06 and
4.09 of this Indenture and (2) any such requirement only becomes operative after
compliance with such terms applicable to the Securities, including the purchase
of any Securities tendered pursuant thereto (or concurrently therewith, provided
that all of the Securities validly tendered for purchase and not withdrawn
pursuant to the requirements of Section 4.06 and 4.09 are so purchased).
-10-
The amount of any Disqualified Stock that does not have a fixed redemption,
repayment or repurchase price will be calculated in accordance with the terms of
such Disqualified Stock as if such Disqualified Stock were redeemed, repaid or
repurchased on any date on which the amount of such Disqualified Stock is to be
determined pursuant to this Indenture; provided, however, that if such
Disqualified Stock could not be required to be redeemed, repaid or repurchased
at the time of such determination, the redemption, repayment or repurchase price
will be the book value of such Disqualified Stock as reflected in the most
recent financial statements of such Person.
"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary
incorporated or organized under the laws of the United States of America, any
State thereof or the District of Columbia.
"EBITDA" for any period means the sum of Consolidated Net Income, plus the
following to the extent deducted in calculating such Consolidated Net Income,
without duplication:
(1) all income tax expense of the Company and its consolidated
Restricted Subsidiaries;
(2) Consolidated Interest Expense;
(3) any depreciation, depletion, exploration and amortization
expense of the Company and its consolidated Restricted Subsidiaries
(excluding amortization expense attributable to a prepaid operating
activity item that was paid in cash in a prior period);
(4) all other non-cash charges of the Company and its consolidated
Restricted Subsidiaries (excluding any such non-cash charge to the extent
that it represents an accrual of or reserve for cash expenditures in any
future period); and
(5) any unrealized noncash gains or losses or charges in respect of
Hedging Obligations (including those resulting from the application of FAS
133);
in each case for such period, and less, to the extent included in calculating
such Consolidated Net Income and in excess of any costs or expenses attributable
thereto and deducted in calculating such Consolidated Net Income, the sum of:
(A) the amount of deferred revenues that are amortized during
such period and are attributable to reserves that are subject to
Volumetric Production Payments; and
(B) amounts recorded in accordance with GAAP as repayments of
principal and interest pursuant to Dollar-Denominated Production
Payments.
Notwithstanding the foregoing, the provision for taxes based on the income
or profits of, and the depreciation and amortization and non-cash charges of, a
Restricted Subsidiary shall be added to Consolidated Net Income to compute
EBITDA only to the extent (and in the same proportion, including by reason of
minority interests) that the net income or loss of such Restricted Subsidiary
was included in calculating Consolidated Net Income and only if a corresponding
amount would be permitted at the date of determination to be dividended to the
Company by such Restricted Subsidiary without prior approval (that has not been
obtained), pursuant to the terms of its charter
-11-
and all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Restricted Subsidiary or its
stockholders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Farm-In Agreement" means an agreement whereby a Person agrees to pay all
or a share of the drilling, completion or other expenses of an exploratory or
development well (which agreement may be subject to a maximum payment
obligation, after which expenses are shared in accordance with the working or
participation interest therein or in accordance with the agreement of the
parties) or perform the drilling, completion or other operation on such well in
exchange for an ownership interest in an oil or gas property.
"Farm-Out Agreement" means a Farm-In Agreement, viewed from the standpoint
of the party that transfers an ownership interest to another.
"Foreign Restricted Subsidiary" means a Restricted Subsidiary that is not
a Domestic Restricted Subsidiary.
"Free Cash Flow" for any period means EBITDA for such period minus the sum
of the following: (1) all income tax expense of the Company and its consolidated
Restricted Subsidiaries for such period, but only to the extent actually paid in
cash during such period, (2) Consolidated Interest Expense for such period, but
only to the extent actually paid in cash during such period and (3) (i) for any
period through March 31, 2005, 125% of, and (ii) for any period thereafter, 105%
of, in each case, any depreciation, depletion, exploration and amortization
expense of the Company and its consolidated Restricted Subsidiaries for such
period, regardless of whether actually paid in cash during such period.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, including those set forth in
(1) the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants;
(2) statements and pronouncements of the Financial Accounting
Standards Board;
(3) such other statements by such other entity as approved by a
significant segment of the accounting profession; and
(4) the rules and regulations of the SEC governing the inclusion of
financial statements (including pro forma financial statements) in
periodic reports required to be filed pursuant to Section 13 of the
Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
SEC.
All ratios and computations based on GAAP contained in this Indenture
shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (1) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise); or (2) entered into for the
-12-
purpose of assuring in any other manner the obligee of such Indebtedness of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning. The
term "Guarantor" shall mean any Person Guaranteeing any obligation.
"Guarantee Agreement" means a supplemental indenture, in a form
satisfactory to the Trustee, pursuant to which a Subsidiary Guarantor guarantees
the Company's obligations with respect to the Securities on the terms provided
for in this Indenture.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement, Oil and Natural Gas Hedging Contract or
Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a Security is
registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become liable
for; provided, however, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Restricted Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred
by such Person at the time it becomes a Restricted Subsidiary. The term
"Incurrence" when used as a noun shall have a correlative meaning.
Notwithstanding the foregoing, solely for purposes of determining compliance
with Section 4.03, the following will not be deemed to be the Incurrence of
Indebtedness:
(1) amortization of debt discount or the accretion of principal with
respect to a non-interest bearing or other discount security;
(2) the payment of regularly scheduled interest in the form of
additional Indebtedness of the same instrument or the payment of regularly
scheduled dividends on Capital Stock in the form of additional Capital
Stock of the same class and with the same terms;
(3) the obligation to pay a premium in respect of Indebtedness
arising in connection with the issuance of a notice of redemption or
making of a mandatory offer to purchase such Indebtedness; and
(4) unrealized losses or charges in respect of Hedging Obligations
(including those resulting from the application of FAS 133).
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal in respect of (A) indebtedness of such Person for
money borrowed and (B) indebtedness evidenced by notes, debentures, bonds
or other similar instruments for the payment of which such Person is
responsible or liable, including, in each case, any premium on such
indebtedness to the extent such premium has become due and payable;
(2) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered into
by such Person to the extent such Capital Lease Obligations would appear
as liabilities on the consolidated balance sheet of such Person in
accordance with GAAP;
-13-
(3) all obligations of such Person representing the balance deferred
and unpaid of the purchase price of property, all conditional sale
obligations of such Person and all obligations of such Person under any
title retention agreement to the extent such obligations would appear as
liabilities upon the consolidated balance sheet of such Person in
accordance with GAAP;
(4) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, bankers' acceptance or similar credit
transaction (other than obligations with respect to letters of credit
securing obligations (other than obligations described in clauses (1)
through (3) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and
to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following payment on the letter of credit);
(5) (i) the amount of all mandatory payment obligations of such
Person with respect to the redemption, repayment or other repurchase of
any Disqualified Stock of such Person or (ii) the amount of all
obligations of any Subsidiary of such Person with respect to the
redemption, repayment or other repurchase of any Capital Stock of such
Subsidiary or that are determined by the value of such Capital Stock, in
each case the principal amount of such obligations for purposes of this
clause (5) to be determined in accordance with this Indenture (but
excluding, in each case, any accrued dividends) (and the term "Incur
Indebtedness" and similar terms include issuances of such Disqualified
Stock and Preferred Stock and the term "Indebtedness" includes such
Disqualified Stock and Preferred Stock);
(6) all obligations of the type referred to in clauses (1) through
(5) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(7) all obligations of the type referred to in clauses (1) through
(6) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the fair market
value of such property (as determined in good faith by the Board of
Directors of such Person) or assets and the amount of the obligation so
secured;
(8) to the extent not otherwise included in this definition, net
Hedging Obligations of such Person; and
(9) any Guarantee by such Person of production or payment with
respect to a Production Payment;
provided, however, that any Indebtedness which has been defeased in accordance
with GAAP or defeased pursuant to the deposit of cash or Temporary Cash
Investments (in an amount sufficient to satisfy all such Indebtedness
obligations at maturity or redemption, as applicable, and all payments of
interest and premium, if any) in a trust or account created or pledged for the
sole benefit of the holders of such Indebtedness, and subject to no other Liens,
and the other applicable terms of the instrument governing such indebtedness,
shall not constitute "Indebtedness."
Notwithstanding the foregoing, (i) accrued expenses and trade accounts
payable arising in the ordinary course of business shall not constitute
"Indebtedness" and (ii) except as expressly provided in clause (9) above,
Production Payments and Reserve Sales shall not constitute "Indebtedness."
-14-
Any obligation of a Person in respect of a Farm-In Agreement or similar
arrangement shall not constitute Indebtedness.
Notwithstanding the foregoing, in connection with the purchase by the
Company or any Restricted Subsidiary of any business, the term "Indebtedness"
will exclude post-closing payment adjustments to which the seller may become
entitled to the extent such payment is determined by a final closing balance
sheet or such payment depends on the performance of such business after the
closing; provided, however, that, at the time of closing, the amount of any such
payment is not determinable and, to the extent such payment thereafter becomes
fixed and determined, the amount is paid within 30 days thereafter.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date; provided,
however, that in the case of Indebtedness sold at a discount, the amount of such
Indebtedness at any time will be the accreted value thereof at such time.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Independent Qualified Party" means an investment banking firm, accounting
firm or appraisal firm of national standing; provided, however, that such firm
is not an Affiliate of the Company.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement or other financial agreement or arrangement with respect to
exposure to interest rates.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. Except as otherwise provided for
herein, the amount of an Investment shall be its fair value at the time the
Investment is made and without giving effect to subsequent changes in value. For
purposes of the definition of "Unrestricted Subsidiary", the definition of
"Restricted Payment" and Section 4.04,
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall be deemed to continue to have an "Investment" in an
Unrestricted Subsidiary equal to the amount (if positive) of (x) the
Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of
such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its fair market value at the time of such transfer, in
each case as determined in good faith by the Board of Directors.
-15-
"Investment Grade Rating" means both a Moody's rating of Baa3 or higher
and an S&P rating of BBB- or higher.
"Issue Date" means the date of first issuance of any Securities under this
Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York.
"Liquidated Damages" at any time means any liquidated damages then owed
pursuant to the Registration Rights Agreement.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Material Change" means an increase or decrease (excluding changes that
result solely from changes in prices and changes resulting from the incurrence
of previously estimated development costs) of more than 50% during a fiscal
quarter in the discounted future net revenues from proved oil and natural gas
reserves of the Company and its Restricted Subsidiaries, calculated in
accordance with clause (a)(1) of the definition of ACNTA; provided, however,
that the following will be excluded from the calculation of Material Change:
(1) any acquisitions or contribution to capital during such fiscal
quarter of oil and natural gas reserves that have been estimated by
independent petroleum engineers and with respect to which a report or
reports of such engineers exist; and
(2) any disposition of properties existing at the beginning of such
fiscal quarter that have been disposed of in compliance with the covenant
described in Section 4.06.
"Moody's" means Moody's Investors Service, Inc.
"Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other disposition of any securities received as
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to such properties or assets or
received in any other non cash form), in each case net of
(1) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred, and all Federal, state, provincial,
foreign and local taxes required to be accrued as a liability under GAAP,
as a consequence of such Asset Disposition;
(2) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Disposition, in accordance with the terms of
any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of
the proceeds from such Asset Disposition;
(3) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries as a result of such
Asset Disposition; and
(4) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with
the property or other assets
-16-
disposed in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital Stock
or Incurrence of Indebtedness, means the cash proceeds of such issuance, sale or
Incurrence net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result thereof.
"Net Present Value" means, with respect to any proved oil and natural gas
reserves, the discounted future net cash flows associated with such reserves,
determined in accordance with the rules and regulations (including
interpretations thereof) of the SEC in effect on the Issue Date.
"Net Working Capital" means
(1) all current assets of the Company and its Restricted
Subsidiaries, except (i) current assets from commodity price risk
management activities arising in the ordinary course of business and (ii)
receivables from affiliates; minus
(2) all current liabilities of the Company and its Restricted
Subsidiaries, except current liabilities included in Indebtedness and
current liabilities from commodity price risk management activities
arising in the ordinary course of business, determined in accordance with
GAAP.
"Obligations" means, with respect to any Indebtedness, all obligations for
principal, premium, interest, penalties, fees, indemnifications, reimbursements,
and other amounts payable pursuant to the documentation governing such
Indebtedness.
"Offering Memorandum" means the Offering Memorandum of the Company dated
May 20, 2003, relating to the Initial Securities.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Oil and Gas Business" means:
(1) the acquisition, exploration, exploitation, development,
operation and disposition of interests in oil, gas and other hydrocarbon
properties;
(2) the gathering, marketing, distribution, treating, processing,
storage, refining, selling and transporting of any production from such
interests or properties and the marketing of oil and gas obtained from
unrelated Persons;
(3) any business relating to or arising from exploration for or
exploitation, development, production, treatment, processing, storage,
refining, transportation, gathering or marketing of oil, gas and other
hydrocarbons, minerals and products produced in association therewith;
(4) any other related energy business, including power generation
and electrical transmission business, directly or indirectly, from
hydrocarbons produced substantially from
-17-
properties in which the Company or its Restricted Subsidiaries, directly
or indirectly, participates;
(5) any business relating to oil field sales and service; and
(6) any activity necessary, appropriate or incidental to the
activities described in the preceding clauses (1) through (5) of this
definition.
"Oil and Natural Gas Hedging Contract" means any oil and natural gas
hedging agreement, and other agreement or arrangement designed to protect the
Company or any Restricted Subsidiary against fluctuations in oil and natural gas
prices.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Parent" means El Paso Corporation, a Delaware corporation, and its
successors.
"Permitted Business Investments" means Investments and expenditures made
in the ordinary course of, and of a nature that is or shall have become
customary in, the Oil and Gas Business as a means of actively exploiting,
exploring for, acquiring, developing, processing, gathering, marketing or
transporting oil, natural gas, other hydrocarbons and minerals through
agreements, transactions, interests or arrangements that permit one to share
risks or costs, comply with regulatory requirements regarding local ownership or
satisfy other objectives customarily achieved through the conduct of the Oil and
Gas Business jointly with third parties, including:
(1) ownership interests in oil, natural gas, other hydrocarbons and
minerals properties or gathering, transportation, processing, storage or
related systems; and
(2) entry into, and Investments and expenditures in the form of or
pursuant to, operating agreements, working interests, royalty interests,
mineral leases, processing agreements, Farm-In Agreements, Farm-Out
Agreements, contracts for the sale, transportation or exchange of oil,
natural gas, other hydrocarbons and minerals production sharing
agreements, development agreements, area of mutual interest agreements,
unitization agreements, pooling arrangements, joint bidding agreements,
service contracts, joint venture agreements, partnership agreements
(whether general or limited), limited liability company agreements,
subscription agreements, stock purchase agreements, stockholder agreements
and other similar agreements with third parties (including Unrestricted
Subsidiaries).
"Permitted Holders" means the Parent and its Wholly Owned Subsidiaries.
Except for a Permitted Holder specifically identified by name, in determining
whether Voting Stock is owned by a Permitted Holder, only Voting Stock acquired
by a Permitted Holder in its described capacity will be treated as "beneficially
owned" by such Permitted Holder.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary or a Person that will, upon
the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a
Related Business;
(2) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the
-18-
Company or a Restricted Subsidiary; provided, however, that such Person's
primary business is a Related Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted Subsidiary if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances;
(5) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of
business;
(6) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such Restricted
Subsidiary;
(7) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction of judgments;
(8) any Person to the extent such Investment represents the non-cash
portion of the consideration received for an Asset Disposition as
permitted pursuant to Section 4.06;
(9) any Person where such Investment was acquired by the Company or
any of its Restricted Subsidiaries (a) in exchange for any other
Investment or accounts receivable held by the Company or any such
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable or (b) as a result of a foreclosure by
the Company or any of its Restricted Subsidiaries with respect to any
secured Investment or other transfer of title with respect to any secured
Investment in default;
(10) any Person to the extent such Investments consist of prepaid
expenses, negotiable instruments held for collection and lease, utility
and workers' compensation, performance and other similar deposits made in
the ordinary course of business by the Company or any Restricted
Subsidiary;
(11) any Person to the extent such Investments consist of Hedging
Obligations otherwise permitted by Section 4.03;
(12) Persons to the extent such Investments are in existence on the
Issue Date;
(13) Permitted Business Investments;
(14) Guarantees of performance or other obligations (other than
Indebtedness) arising in the ordinary course in the Oil and Gas Business,
including obligations under oil and natural gas exploration, development,
joint operating, and related agreements and licenses or concessions
related to the Oil and Gas Business;
(15) Persons to the extent such Investments, when taken together
with all other Investments made pursuant to this clause (15) outstanding
on the date such Investment is made, do not exceed $50,000,000.
-19-
"Permitted Liens" means, with respect to any Person:
(1) pledges or deposits by such Person under worker's compensation
laws, unemployment insurance laws, social security or old age pension laws
or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than contracts for the payment of Indebtedness)
or leases to which such Person is a party, or deposits (which may be
secured by a Lien) to secure public or statutory obligations of such
Person including letters of credit and bank guarantees required or
requested by the United States, any State thereof or any foreign
government or any subdivision, department, agency, organization or
instrumentality of any of the foregoing in connection with any contract or
statute (including lessee or operator obligations under statutes,
governmental regulations, contracts or instruments related to the
ownership, exploration and production of oil, natural gas, other
hydrocarbons and minerals on State, Federal or foreign lands or waters);
or deposits of cash or United States government bonds to secure surety,
stay appeal, indemnity performance or other similar bonds to which such
Person is a party, or deposits as security for contested taxes or import
duties or for the payment of rent, in each case Incurred in the ordinary
course of business;
(2) statutory and contractual Liens of landlords and Liens imposed
by law, such as carriers', warehousemen's, royalty Liens and mechanics'
Liens, in each case for sums not yet due or being contested in good faith
by appropriate proceedings or other Liens arising out of judgments,
decrees, orders or awards against such Person with respect to which such
Person shall then be proceeding with an appeal or other proceedings for
review and Liens arising solely by virtue of any statutory or common law
provision relating to banker's Liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided, however, that (A) such deposit
account is not a dedicated cash collateral account and is not subject to
restrictions against access by the Company in excess of those set forth by
regulations promulgated by the Federal Reserve Board and (B) such deposit
account is not intended by the Company or any Restricted Subsidiary to
provide collateral to the depository institution;
(3) Liens for taxes, assessments and governmental charges or claims
not yet subject to penalties for non-payment or which are being contested
in good faith by appropriate proceedings;
(4) Liens in favor of issuers of surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in
the ordinary course of its business; provided, however, that such letters
of credit do not constitute Indebtedness;
(5) survey exceptions, encumbrances, easements or reservations of,
or rights of others for, licenses, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of real property, minor defects in title
or Liens incidental to the conduct of the business of such Person or to
the ownership of its properties which were not incurred or created to
secure the payment of borrowed money which do not in the aggregate
materially adversely affect the value of said properties or materially
impair their use in the operation of the business of such Person;
(6) Liens securing Indebtedness Incurred to finance the
construction, purchase or lease of, or repairs, improvements or additions
to, property, plant or equipment of such Person; provided, however, that
the Liens may not extend to any other property owned by such Person or any
of its Restricted Subsidiaries at the time the Lien is Incurred (other
than assets and property affixed or appurtenant thereto), and the
Indebtedness (other than any
-20-
interest thereon) secured by the Lien may not be Incurred more than 180
days after the later of the acquisition, completion of construction,
repair, improvement, addition or commencement of full operation of the
property subject to the Lien;
(7) (i) Liens to secure Indebtedness permitted under Section
4.03(b)(1); provided, however, that the holder of such Indebtedness is not
an Affiliate of the Company, and (ii) Liens to secure obligations
permitted pursuant to Section 4.03(b)(9);
(8) Liens existing on the Issue Date;
(9) Liens on property or shares of Capital Stock of another Person
at the time such other Person becomes a Subsidiary of such Person;
provided, however, that the Liens may not extend to any other property
owned by such Person or any of its Restricted Subsidiaries (other than
assets and property affixed or appurtenant thereto);
(10) Liens on property at the time such Person or any of its
Subsidiaries acquires the property, including any acquisition by means of
a merger or consolidation with or into such Person or a Subsidiary of such
Person; provided, however, that the Liens may not extend to any other
property owned by such Person or any of its Restricted Subsidiaries (other
than assets and property affixed or appurtenant thereto);
(11) Liens securing Indebtedness or other obligations of a
Subsidiary of such Person owing to such Person or a Wholly Owned
Subsidiary of such Person;
(12) Liens securing Hedging Obligations so long as such Hedging
Obligations relate to Indebtedness that is, and is permitted to be under
this Indenture, secured by a Lien on the same property securing such
Hedging Obligations;
(13) Liens on, or related to, assets to secure all or part of the
costs incurred in the ordinary course of the Oil and Gas Business for the
exploration, drilling, development, production, processing,
transportation, marketing, storage or operation thereof to the extent such
Liens (i) do not secure Indebtedness and (ii) are customary in the Oil and
Gas Business, are granted to the Person performing the service to which
such costs relate and are discharged in the ordinary course of business;
(14) Liens on pipeline or pipeline facilities that arise under
operation of law;
(15) Liens arising under operating agreements, joint venture
agreements, partnership agreements, oil, gas, other hydrocarbons and
minerals leases, the Vendor Program, Farm-Out Agreements or Farm-In
Agreements, assignments, purchase and sale agreements, division orders,
contracts for the sale, purchase, transportation, processing (but not
refining) or exchange of oil, gas or other hydrocarbons, unitization and
pooling declarations and agreements, development agreements, area of
mutual interest agreements and other agreements that are customary in the
Oil and Gas Business;
(16) Liens reserved in oil, gas or other hydrocarbons minerals
leases for bonus, royalty or rental payments and for compliance with the
terms of such leases;
(17) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
-21-
(18) Liens in favor of the Company or a Subsidiary Guarantor;
(19) leases, pooling agreements, unitization agreements, subleases,
licenses or sublicenses, royalties, joint interest billing arrangements,
net profits interests, participation agreements, and arrangements similar
to any of the foregoing, entered into in the ordinary course of business;
(20) Liens arising under this Indenture in favor of the Trustee for
its own benefit and similar Liens in favor of other trustees, agents and
representatives arising under instruments governing Indebtedness permitted
to be incurred under this Indenture; provided, however, that such Liens
are solely for the benefit of the trustees, agents or representatives in
their capacities as such and not for the benefit of the holders of such
Indebtedness;
(21) Liens arising from the deposit of funds or securities in trust
for the purpose of decreasing or defeasing Indebtedness so long as such
deposit of funds or securities and such decreasing or defeasing of
Indebtedness are permitted under the covenant described under Section
4.04;
(22) Liens to secure Production Payments, to the extent such Liens
are limited to the assets that are the subject of such Production
Payments;
(23) Liens in favor of collecting or payer banks having a right of
setoff, revocation, refused or charge back with respect to money or
instruments of the Company or any Subsidiary of the Company on deposit
with or in possession of such bank;
(24) Liens on oil and gas properties of the Company or any of its
Restricted Subsidiaries, securing any Indebtedness or other obligation of
the Parent or any of its Subsidiaries; provided, however, that at the date
of grant of such Liens the SEC PV-10 Value of the oil and gas properties
to be so subject to such Lien, together with the SEC PV-10 Value of all
other oil and gas properties of the Company and its Restricted
Subsidiaries subject to Liens described in this clause (24) and then
outstanding, does not exceed $200,000,000 (based on the SEC PV-10 Value of
all such oil and gas properties as of the end of the calendar year
preceding the date of the grant in respect of which such determination is
being made);
(25) Liens to secure any Refinancing (or successive Refinancings) as
a whole, or in part, of any Indebtedness secured by any Lien referred to
in the foregoing clauses (6),(8), (9) or (10); provided, however, that (A)
such new Lien shall be limited to all or part of the same property and
assets that secured or, under the written agreements pursuant to which the
original Lien arose, could secure the original Lien (plus improvements and
accessions to such property or proceeds or distributions thereof) and (B)
the Indebtedness secured by such Lien at such time is not increased to any
amount greater than the sum of (x) the outstanding principal amount or, if
greater, committed amount of the Indebtedness described under clauses (6),
(8), (9) or (10) at the time the original Lien became a Permitted Lien and
(y) an amount necessary to pay any fees and expenses, including premiums,
related to such refinancing, refunding, extension, renewal or replacement;
and
(26) Liens to secure Indebtedness having an aggregate principal
amount which, when added together with all other Indebtedness secured by
Liens Incurred pursuant to this clause (26) and then outstanding, does not
exceed $100,000,000.
-22-
In each case set forth above, notwithstanding any stated limitation on the
assets that may be subject to such Lien, a Permitted Lien on a specified asset
or group or type of assets may include Liens on all improvements, additions and
accessions thereto and all products and proceeds thereof (including dividends,
distributions and increases in respect thereof).
Notwithstanding the foregoing, "Permitted Liens" will not include any Lien
described in clauses (6), (9) or (10) above to the extent such Lien applies to
any Additional Assets acquired directly or indirectly from Net Available Cash
pursuant to Section 4.06. For purposes of this definition, the term
"Indebtedness" shall be deemed to include interest on such Indebtedness.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.
"Production Payments" means, collectively, Dollar-Denominated Production
Payments and Volumetric Production Payments.
"Production Payments and Reserve Sales" means the grant or transfer to any
Person of a Dollar-Denominated Production Payment, Volumetric Production
Payment, royalty, overriding royalty, net profits interest, master limited
partnership interest or other interest in oil and natural gas properties,
reserves or the right to receive all or a portion of the production or the
proceeds from the sale of production attributable to such properties.
"Ratings Event" means any downgrade in the ratings of the Securities by
either S&P or Moody's, following any of the events described in the definition
of Change of Control.
"Refinance" means, in respect of any Indebtedness, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue other
Indebtedness in exchange or replacement for, such indebtedness. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that:
(1) such Refinancing Indebtedness has a Stated Maturity no earlier
than the Stated Maturity of the Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than
the Average Life of the Indebtedness being Refinanced;
(3) such Refinancing Indebtedness has an aggregate principal amount
(or if Incurred with original issue discount, an aggregate issue price)
that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate
-23-
accreted value) then outstanding or committed (plus fees and expenses,
including any premium and defeasance costs) under the Indebtedness being
Refinanced; and
(4) if the Indebtedness being Refinanced is subordinated in right of
payment to the Securities, such Refinancing Indebtedness is subordinated
in right of payment to the Securities at least to the same extent as the
Indebtedness being Refinanced; and
provided further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary (other than a Subsidiary Guarantor) that Refinances
Indebtedness of the Company or (B) Indebtedness of the Company or a Restricted
Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of May 20, 2003 among the Company, the Subsidiary Guarantors, Credit
Suisse First Boston LLC, Citigroup Global Markets Inc. and the other initial
purchasers of the Initial Securities.
"Related Business" means the Oil and Gas Business and any business in
which the Company was engaged on the Issue Date and any business related,
ancillary or complementary to any business of the Company in which the Company
was engaged on the Issue Date.
"Restricted Payment" with respect to any Person means
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving such
Person) or similar payment to the direct or indirect holders of its
Capital Stock (other than dividends or distributions payable solely in its
Capital Stock (other than Disqualified Stock) and dividends or
distributions payable solely to the Company or a Restricted Subsidiary,
and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders
(or owners of an equivalent interest in the case of a Subsidiary that is
an entity other than a corporation));
(2) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock of the Company held by any Person or of any
Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than a Restricted Subsidiary), including in connection with
any merger or consolidation and including the exercise of any option to
exchange any Capital Stock (other than into Capital Stock of the Company
that is not Disqualified Stock);
(3) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any Subordinated
Obligations of such Person (other than the purchase, repurchase, or other
acquisition of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of such purchase,
repurchase or other acquisition); or
(4) the making of any Investment (other than a Permitted Investment)
in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that is not an
Unrestricted Subsidiary.
"Revolving Credit Facility" means any revolving credit facility (or
facilities) pursuant to written agreements from time to time in effect.
-24-
"S&P" means Standard and Poor's Ratings Group.
"Sale/Leaseback Transaction" means an arrangement relating to property
owned by the Company or a Restricted Subsidiary on the Issue Date or thereafter
acquired by the Company or a Restricted Subsidiary whereby the Company or a
Restricted Subsidiary transfers such property to a Person and the Company or a
Restricted Subsidiary leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"SEC PV-10 Value" means the estimated future gross revenue to be generated
from the production of proved reserves, net of estimated production and future
development costs, using prices and costs in effect at the determination date,
before income taxes, and without giving effect to non-property-related expenses,
discounted to a present value using an annual discount rate of 10% in accordance
with the guidelines of the SEC.
"Securities" means the securities issued under this Indenture.
"Senior Indebtedness" means, with respect to any Person:
(1) Indebtedness of such Person, whether outstanding on the Issue
Date or thereafter Incurred; and
(2) all other Obligations of such Person (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to such Person whether or not post-filing interest
is allowed in such proceeding) in respect of Indebtedness described in
clause (1) above
unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that such Indebtedness or other Obligations are subordinate in
right of payment to the Securities or the Subsidiary Guarantee of such
Person, as the case may be; provided, however, that Senior Indebtedness
shall not include:
(1) any obligation of such Person to the Company or any Subsidiary;
(2) any liability for Federal, state, local or other taxes owed or
owing by such Person;
(3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including guarantees thereof
or instruments evidencing such liabilities);
(4) any Indebtedness or other Obligation of such Person which is
subordinate or junior in any respect to any other Indebtedness or other
Obligation of such Person; or
(5) that portion of any Indebtedness which at the time of Incurrence
is Incurred in violation of this Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
-25-
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the final payment of principal of
such security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).
"Subordinated Obligation" means, with respect to a Person, any
Indebtedness of such Person (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Securities
or a Subsidiary Guarantee of such Person, as the case may be, pursuant to a
written agreement to that effect.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Voting Stock is at the time owned or controlled,
directly or indirectly, by (1) such Person, (2) such Person and one or more
Subsidiaries of such Person or (3) one or more Subsidiaries of such Person.
"Subsidiary Guarantee" means each of a Guarantee by a Subsidiary Guarantor
of the Company's obligations with respect to the Securities.
"Subsidiary Guarantor" means El Paso Production GOM, Inc., El Paso Energy
Raton, L.L.C., El Paso Production Company and Vermejo Minerals Corporation and
each other Subsidiary of the Company that executes this Indenture as a guarantor
on the Issue Date and each other Subsidiary of the Company that thereafter
guarantees the Securities pursuant to the terms of this Indenture.
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United States of
America or any agency thereof or obligations guaranteed by the United
States of America or any agency thereof;
(2) investments in demand and time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any state thereof or any
foreign country recognized by the United States of America, and which bank
or trust company has capital, surplus and undivided profits aggregating in
excess of $50,000,000 (or the foreign currency equivalent thereof) and has
outstanding debt that is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor;
(3) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (1) above entered
into with a bank meeting the qualifications described in clause (2) above;
(4) investments in deposits available for withdrawal on demand with
any commercial bank that is organized under the laws of any country in
which the Company or any Restricted Subsidiary maintains an office or is
engaged in the Oil and Gas Business;
(5) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any
-26-
investment therein is made of "P-1" (or higher) according to Moody's
Investors Service, Inc. or "A-1" (or higher) according to Standard and
Poor's Ratings Group; and
(6) investments in securities with maturities of six months or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by Standard & Poor's Ratings Group or "A" by Moody's Investors Service,
Inc.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the Issue Date.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial Code as in
effect from time to time.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors
in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary of the Company) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns
any Capital Stock or Indebtedness of, or holds any Lien on any property of, the
Company or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; provided, however, that either (A) the
Subsidiary to be so designated has total assets of $1,000 or less or (B) if such
Subsidiary has assets greater than $1,000, such designation would be permitted
under Section 4.04. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that immediately
after giving effect to such designation (A) the Company could Incur $1.00 of
additional Indebtedness under Section 4.03(a) and (B) no Default shall have
occurred and be continuing. Any such designation by the Board of Directors shall
be evidenced to the Trustee by promptly filing with the Trustee a copy of the
resolution of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
-27-
"Volumetric Production Payments" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital
Stock of which (other than directors' qualifying shares) is owned directly or
indirectly by the Company.
-28-
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction" 4.08
"Bankruptcy Law" 6.01
"Change of Control" 4.09(b)
"covenant defeasance option" 8.01(b)
"Custodian" 6.01
"Event of Default" 6.01
"legal defeasance option" 8.01(b)
"Legal Holiday" 10.08
"Offer" 4.06(b)
"Offer Amount" 4.06(c)(2)
"Offer Period" 4.06(c)(2)
"Paying Agent" 2.03
"Purchase Date" 4.06(c)(1)
"Registrar" 2.03
"Successor Company" 5.01
"Vendor Program" 4.03
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on this Indenture securities means the Company and any other
obligor on this indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
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(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared
in accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater;
(9) all references to the date the Securities were originally issued
shall refer to the Issue Date;
(10) all references in this Indenture, in any context, to any
interest or other amount payable on or with respect to the Securities
shall be deemed to include Liquidated Damages, if any, but only if owed
pursuant to the Registration Rights Agreement; and
(11) Notwithstanding any other provision of this Indenture to the
contrary, the use of proceeds of the issuance of the Securities on the
Issue Date, as described in this Offering Memorandum, and the transactions
reasonably necessary to or related to such use of proceeds, shall not be
prohibited by any provision of this Indenture.
ARTICLE 2
THE SECURITIES
SECTION 2.01. Form and Dating.
Provisions relating to the Initial Securities, and the Exchange Securities
are set forth in the Rule 144A/Regulation S Appendix attached hereto (the
"Appendix") which is hereby incorporated in and expressly made part of this
Indenture. The Initial Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to the Appendix
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). Each Security
shall be dated the date of its authentication. The terms of the Securities set
forth in the Appendix and Exhibit A are part of the terms of this Indenture.
SECTION 2.02. Execution and Authentication.
An Officer shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be impressed, affixed, imprinted
or reproduced on the Securities and may be in facsimile form.
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If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate the Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.03. Registrar and Paying Agent.
As long as any Securities are outstanding, the Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for payment
(the "Paying Agent"). The Company initially appoints the Trustee as Registrar
and Paying Agent in connection with the Securities, and accordingly, all of such
offices or agencies shall initially be the corporate trust office of the Trustee
in the Borough of Manhattan, The City of New York, which on the date of this
Indenture, is located at 520 Madison Avenue, 33rd Floor, New York, NY 10022. The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-registrars and one or more
additional paying agents; provided, however, that the Company shall in no event
be relieved of its obligation hereunder to maintain an office or agency in the
Borough of Manhattan, The City of New York, where Securities may be presented
for payment. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any Wholly Owned Subsidiary incorporated or organized within The
United States of America may act as Paying Agent, Registrar, co-registrar or
transfer agent.
SECTION 2.04. Paying Agent To Hold Money in Trust.
Prior to each due date of the principal and interest on any Security, the
Company shall deposit with the Paying Agent a sum sufficient to pay such
principal and interest when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Securityholders or the Trustee all money
held by the Paying Agent for the payment of principal of or interest on the
Securities and shall notify the Trustee of any default by the Company in making
any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust
fund. The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee and to account for any funds disbursed by the Paying Agent.
Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
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SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee, in writing at least five Business Days before each interest
payment date and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange.
The Securities shall be issued in registered form and shall be
transferable only upon the surrender of a Security for registration of transfer.
When a Security is presented to the Registrar or a co-registrar with a request
to register a transfer, the Registrar shall register the transfer as requested
if the requirements of this Indenture and Section 8-401(1) of the Uniform
Commercial Code are met. When Securities are presented to the Registrar or a
co-registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Registrar or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial Code are
met and the Holder satisfies any other reasonable requirements of the Trustee.
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss which any of them may suffer if a Security is
replaced. The Company and the Trustee may charge the Holder for their expenses
in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section as not outstanding. A Security does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to pay all
principal and interest payable on that date with respect to the Securities (or
portions thereof) to be redeemed or maturing, as the case may be, then on and
after that date such Securities (or portions thereof) cease to be outstanding
and interest on them ceases to accrue.
SECTION 2.09. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of
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definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.10. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel and destroy (subject to the
record retention requirements of the Exchange Act) all Securities surrendered
for registration of transfer, exchange, payment or cancellation and deliver a
certificate of such destruction to the Company unless the Company directs the
Trustee to deliver canceled Securities to the Company. The Company may not issue
new Securities to replace Securities it has redeemed, paid or delivered to the
Trustee for cancellation.
SECTION 2.11. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities, the
Company shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful) in any lawful manner. The Company may pay the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix or cause to be fixed any such special record date
and payment date to the reasonable satisfaction of the Trustee and shall
promptly mail to each Securityholder a notice that states the special record
date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use) and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided, however, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
SECTION 2.13. Issuance of Additional Securities.
After the Issue Date, the Company shall be entitled, subject to its
compliance with Section 4.03, to issue Additional Securities under this
Indenture, which Securities shall have identical terms as the Initial Securities
issued on the Issue Date, other than with respect to the date of issuance and
issue price. All the Securities issued under this Indenture shall be treated as
a single class for all purposes of this Indenture.
With respect to any Additional Securities, the Company shall set forth in
a resolution of the Board of Directors and an Officers' Certificate, a copy of
each which shall be delivered to the Trustee, the following information:
(1) the aggregate principal amount of such Additional Securities to
be authenticated and delivered pursuant to this Indenture and the
provision of Section 4.03 that the Company is relying on to issue such
Additional Securities;
(2) the issue price, the issue date and the CUSIP number of such
Additional Securities; provided, however, that no Additional Securities
may be issued unless such
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Additional Securities are fungible in all respects for U.S. Federal income
tax purposes with the Securities then outstanding as set forth in an
Opinion of Counsel addressed to and delivered to the Trustee;
(3) whether such Additional Securities shall be Transfer Restricted
Securities and issued in the form of Initial Securities as set forth in
the Appendix to this Indenture or shall be issued in the form of Exchange
Securities as set forth in Exhibit A; and
(4) that the Company has complied with this Section 2.13
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to paragraph 5 of the
Securities, it shall notify the Trustee in writing of the redemption date, the
principal amount of Securities to be redeemed and the paragraph of the
Securities pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If fewer than all the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed pro rata or by lot or by a method that
complies with applicable legal and securities exchange requirements, if any, and
that the Trustee in its sole discretion shall deem to be fair and appropriate
and in accordance with methods generally used at the time of selection by
fiduciaries in similar circumstances. The Trustee shall make the selection from
outstanding Securities not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities that have
denominations larger than $1,000. Securities and portions of them the Trustee
selects shall be in principal amounts of $1,000 or a whole multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a date for redemption of
Securities, the Company shall mail a notice of redemption by first-class mail to
each Holder of Securities to be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
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(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to
be redeemed;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portion thereof) called for redemption
ceases to accrue on and after the redemption date; and
(7) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense. In such event, the Company
shall provide the Trustee with the information required by this Section.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price stated
in the notice. Upon surrender to the Paying Agent, such Securities shall be paid
at the redemption price stated in the notice, plus accrued and unpaid interest,
and Liquidated Damages, if any, to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
related interest payment date). Failure to give notice or any defect in the
notice to any Holder shall not affect the validity of the notice to any other
Holder.
SECTION 3.05. Deposit of Redemption Price.
Prior to the redemption date, the Company shall deposit with the Paying
Agent (or, if the Company or a Subsidiary is the Paying Agent, shall segregate
and hold in trust) money sufficient to pay the redemption price of and accrued
and unpaid interest on all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which have been
delivered by the Company to the Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company shall
execute and the Trustee shall authenticate for the Holder (at the Company's
expense) a new Security equal in principal amount to the unredeemed portion of
the Security surrendered.
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall promptly pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities and in this
Indenture. Principal and interest shall be considered paid on the date due if on
such date the Trustee or the Paying Agent holds in accordance with this
Indenture money sufficient to pay all principal and interest then due.
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The Company shall pay interest on overdue principal at the rate specified
therefor in the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports.
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company will file
with the SEC (to the extent the SEC has adopted rules expressly providing that
it will accept such filings) and in any event will provide the Trustee and
Securityholders with such annual reports and such information, documents and
other reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, such information,
documents and other reports to be so filed and provided at the times specified
for the filings of such information, documents and reports under such Sections.
At any time that any of the Company's Subsidiaries are Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph will include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
In addition, the Company will furnish to the Holders of the Securities and
to prospective investors, upon the requests of such Holders, any information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so
long as the Securities are not freely transferable under the Securities Act.
SECTION 4.03 Limitation on Indebtedness.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, Incur, directly or indirectly, any Indebtedness; provided, however, that the
Company and the Subsidiary Guarantors shall be entitled to Incur Indebtedness
if, on the date of such Incurrence and after giving effect thereto (and the
application of the proceeds thereof) on a pro forma basis, no Default has
occurred and is continuing and the Consolidated Coverage Ratio exceeds 2.0 to 1.
(b) Notwithstanding the foregoing paragraph (a), the Company and the
Restricted Subsidiaries shall be entitled to Incur any or all of the following
Indebtedness:
(1) Indebtedness Incurred by the Company and its Restricted
Subsidiaries pursuant to any Credit Facility; provided, however, that,
immediately after giving effect to any such Incurrence, the aggregate
principal amount of all Indebtedness Incurred under this clause (1) and
then outstanding does not exceed the lesser of (x) $200,000,000 plus 20%
of ACNTA of the Company as of the date of such Incurrence and (y) prior to
May 15, 2005, $400,000,000 and, thereafter, $500,000,000;
(2) Indebtedness owed to and held by the Company of a Restricted
Subsidiary; provided, however, that any subsequent issuance or transfer of
any Capital Stock which results in any such Restricted Subsidiary ceasing
to be a Restricted Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Company or a Subsidiary) shall be deemed,
in each case, to constitute the Incurrence of such Indebtedness by the
obligor thereon;
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(3) the Securities (other than any Additional Securities) and all
Subsidiary Guarantees;
(4) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2) or (3) of this Section 4.03(b));
(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding
on or prior to the date on which such Subsidiary became a Restricted
Subsidiary or was acquired by the Company (other than Indebtedness
Incurred in connection with, or to provide all or any portion of the funds
or credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Subsidiary became a Subsidiary
or was acquired by the Company); provided, however, that on the date of
such acquisition and after giving pro forma effect thereto, the Company
would have been able to Incur at least $1.00 of additional Indebtedness
pursuant to Section 4.03(a);
(6) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to Section 4.03(a) or pursuant to clause (3), (4) or (5) of this
Section 4.03(b) or this clause (6); provided, however, that to the extent
such Refinancing Indebtedness directly or indirectly Refinances
Indebtedness of a Subsidiary Incurred pursuant to clause (5), such
Refinancing Indebtedness shall be Incurred only by such Subsidiary;
(7) Hedging Obligations consisting of Interest Rate Agreements
directly related to Indebtedness permitted to be Incurred by the Company
and the Restricted Subsidiaries pursuant to this Indenture;
(8) Hedging Obligations consisting of Oil and Natural Gas Hedging
Contracts and Currency Agreements entered into in the ordinary course of
business for the purpose of limiting risks that arise in the ordinary
course of business of the Company and its Subsidiaries;
(9) obligations in respect of completion bonds, performance bonds,
bid bonds, appeal bonds, surety bonds, insurance obligations or bonds and
other similar bonds and obligations incurred by the Company or any
Restricted Subsidiary in the ordinary course of business and any
guarantees or letters of credit functioning as or supporting any of the
foregoing bonds or obligations;
(10) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business; provided,
however, that such Indebtedness is extinguished within five Business Days
of its Incurrence;
(11) Indebtedness consisting of the Subsidiary Guarantee of a
Subsidiary Guarantor and any Guarantee by a Subsidiary Guarantor of
Indebtedness Incurred pursuant to Section 4.03(a) or pursuant to clause
(1), (2), (3) or (4) or pursuant to clause (6) of this Section 4.03(b) to
the extent the Refinancing Indebtedness Incurred thereunder directly or
indirectly Refinances Indebtedness Incurred pursuant to Section 4.03(a) or
pursuant to clause (3) or (4);
(12) Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case, Incurred for the
purpose of financing all or any part of the purchase price, cost of
construction or improvement or carrying cost of assets used in the
business of the Company and its Restricted Subsidiaries and related
financing costs,
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and Refinancing Indebtedness Incurred to Refinance any Indebtedness
Incurred pursuant to this clause (12), in an aggregate principal amount at
any one time outstanding not to exceed $50,000,000;
(13) Indebtedness arising from any agreement providing for
indemnities, Guarantees, purchase price adjustments, holdbacks,
contingency payment obligations based on the performance of the acquired
or disposed assets or similar obligations (other than Guarantees of
Indebtedness) Incurred by any Person in connection with the acquisition or
disposition of assets;
(14) in-kind obligations relating to net oil or natural gas
balancing positions arising in the ordinary course of business;
(15) any obligation of the Company or any of its Restricted
Subsidiaries to reimburse any of its vendors (or any assignee of a vendor)
for services, materials, equipment or other items furnished by such vendor
in the ordinary course of business to the extent such obligation (a)
involves an obligation to reimburse such vendor for the cost of such
services, materials, equipment or other items so furnished plus a
specified return thereon and (b) such obligation is to be satisfied from
the production of oil, gas and other hydrocarbons attributable to an
overriding royalty interest, net profits interest, Production Payment or
other similar interest that is granted by the Company or a Restricted
Subsidiary in consideration for such vendor(s) agreement not to seek a
cash payment from the Company or its Restricted Subsidiaries therefor (the
"Vendor Program");
(16) Capital Stock (other than Disqualified Stock) of the Company or
of any of the Subsidiary Guarantors;
(17) Indebtedness, including Refinancing Indebtedness, Incurred by a
Foreign Restricted Subsidiary in an aggregate amount not to exceed 20% of
such Foreign Restricted Subsidiary's ACNTA at any time outstanding;
(18) all contracts, Indebtedness and other obligations, agreements,
instruments or arrangements described in clauses (13), (15), (16), (19) or
(24) of the definition of "Permitted Liens" to the extent any of the
contracts, obligations, agreements, instruments, liens or arrangements
referred to in such clauses may constitute Indebtedness; and
(19) Indebtedness of the Company or of any of the Subsidiary
Guarantors in an aggregate principal amount which, when taken together
with all other Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the date of such Incurrence (other than Indebtedness
permitted by clauses (1) through (18) above or Section 4.03(a)) does not
exceed $50,000,000.
(c) Notwithstanding the foregoing, neither the Company nor any Subsidiary
Guarantor shall Incur any Indebtedness pursuant to Section 4.03(b) if the
proceeds thereof are used, directly or indirectly, to Refinance any Subordinated
Obligations of the Company or a Subsidiary Guarantor unless such Indebtedness
shall be subordinated to the Securities or to the Subsidiary Guarantee of such
Subsidiary Guarantor to at least the same extent as such Subordinated
Obligations.
(d) For purposes of determining compliance with this Section 4.03, (1) in
the event that an item of Indebtedness (or any portion thereof) meets the
criteria of more than one of the types of Indebtedness described above in this
Section 4.03, the Company, in its sole discretion, shall classify such item of
Indebtedness (or any portion thereof) at the time of Incurrence and only be
required to
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include the amount and type of such Indebtedness in one of the above clauses;
(2) the Company shall be entitled to divide and classify an item of Indebtedness
in more than one of the types of Indebtedness described above in this Section
4.03; and (3) the dollar-equivalent principal amount of any Indebtedness
denominated in a foreign currency and incurred pursuant to any
dollar-denominated restriction on the incurrence of Indebtedness shall be
calculated based on the relevant currency.
SECTION 4.04. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Restricted Subsidiary,
directly or indirectly, to make a Restricted Payment if at the time the Company
or such Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
(2) the Company is not entitled to Incur an additional $1.00 of
Indebtedness under Section 4.03; or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of (without
duplication):
(A) 100% of Free Cash Flow accrued during the period (treated
as one accounting period) from the beginning of the fiscal quarter
immediately following the fiscal quarter during which the Issue Date
occurs to the most recent date for which financial information is
publicly available (or, in case such Free Cash Flow shall be a
deficit, minus 100% of such deficit); plus
(B) 100% of the aggregate Net Cash Proceeds, and the fair
market value (as determined by the Company's board of directors in
good faith) of property or securities other than cash (including
Capital Stock of Persons engaged in the Oil and Gas Business or
assets used in the Oil and Gas Business), in each case received by
the Company from the issuance or sale of its Capital Stock (other
than Disqualified Stock) subsequent to the Issue Date (other than an
issuance or sale to a Subsidiary of the Company and other than an
issuance or sale to an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the
benefit of their employees) and 100% of any cash and 100% of the
fair market value (as determined by the Company's board of directors
in good faith) of property or securities other than cash (including
Capital Stock of Persons engaged in the Oil and Gas Business or
assets used in the Oil and Gas Business), in each case received by
the Company as a capital contribution from its shareholder(s)
subsequent to the Issue Date; plus
(C) the amount by which Indebtedness of the Company is reduced
on the Company's balance sheet upon the conversion or exchange
subsequent to the Issue Date of any Indebtedness of the Company
convertible or exchangeable for Capital Stock (other than
Disqualified Stock) of the Company (less the amount of any cash, or
the fair value of any other property, distributed by the Company
upon such conversion or exchange); provided, however, that the
foregoing amount shall not exceed the Net Cash Proceeds received by
the Company or any Restricted Subsidiary from the sale of such
Indebtedness (excluding Net Cash Proceeds from sales to a Subsidiary
of the Company or to an employee stock ownership plan or to a trust
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established by the Company or any of its Subsidiaries for the
benefit of their employees); plus
(D) an amount equal to the sum of (x) the net reduction in the
Investments (other than Permitted Investments) made after the Issue
Date by the Company or any Restricted Subsidiary in any Person
resulting from repurchases, repayments or redemptions of such
Investments by such Person, proceeds realized on the sale of such
Investment and proceeds representing the return of capital
(excluding dividends and distributions), in each case received by
the Company or any Restricted Subsidiary, and (y) to the extent such
Person is an Unrestricted Subsidiary, the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair market
value of the net assets of such Unrestricted Subsidiary at the time
such Unrestricted Subsidiary is designated a Restricted Subsidiary.
(b) The provisions of Section 4.04(a) shall not prohibit:
(1) any Restricted Payment made out of the Net Cash Proceeds of the
substantially concurrent sale of, or made by exchange for, Capital Stock
of the Company (other than (x) Disqualified Stock (unless the proposed
Restricted Payment is the purchase, redemption or other acquisition or
retirement of Disqualified Stock) and (y) Capital Stock issued or sold to
a Subsidiary of the Company or an employee stock ownership plan or to a
trust established by the Company or any of its Subsidiaries for the
benefit of their employees) or a substantially concurrent cash capital
contribution received by the Company from its shareholders; provided,
however, that (A) such Restricted Payment shall be excluded in the
calculation of the amount of Restricted Payments and (B) the Net Cash
Proceeds from such sale or such cash capital contribution (to the extent
so used for such Restricted Payment) shall be excluded from the
calculation of amounts under Section 4.04(a)(3)(B);
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of the
Company or any Subsidiary Guarantor made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Subordinated Obligations
of such Person which is permitted to be Incurred pursuant to Section 4.03;
provided, however, that such purchase, repurchase, redemption, defeasance
or other acquisition or retirement for value shall be excluded in the
calculation of the amount of Restricted Payments;
(3) the payment of any dividend or making of any distribution paid
within 60 days after the date of declaration thereof if at such date of
declaration such dividend would have complied with this Section 4.04;
provided, however, that such dividend shall be included in the calculation
of the amount of Restricted Payments;
(4) so long as no Default has occurred and is continuing, the
repurchase or other acquisition of Capital Stock of Parent, the Company or
any of its Subsidiaries from employees, former employees, directors or
former directors of the Company or any of its Subsidiaries (or permitted
transferees or heirs or estates of such employees, former employees,
directors or former directors), pursuant to the terms of the agreements
(including employment agreements) or plans (or amendments thereto)
approved by the Board of Directors under which such individuals purchase
or sell or are granted the option to purchase or sell, such Capital Stock;
provided, however, that the aggregate amount of such repurchases and other
acquisitions made during any fiscal year shall not exceed the greater of
(a) $5,000,000 and (b) the difference between (1) the product of (x)
$5,000,000 times (y) the number (which may be a fraction) of fiscal years
elapsed after the Issue Date and (2) the
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aggregate amount of such repurchases and other acquisitions made since the
Issue Date; provided further, however, that such repurchases and other
acquisitions shall be excluded in the calculation of the amount of
Restricted Payments;
(5) repurchases, redemptions or other acquisitions or retirements
for value of Capital Stock of Parent or the Company deemed to occur upon
exercise or exchange of warrants, options or rights to acquire Capital
Stock if such Capital Stock represents a portion of the exercise or
exchange price of such warrants, options or rights, and any repurchases,
redemptions or other acquisitions or retirements for value of Capital
Stock made in lieu of withholding taxes in connection with any exercise or
exchange of warrants, options or rights to acquire Capital Stock;
provided, however, that any payment pursuant to this clause (5) shall be
excluded in the calculation of the amount of Restricted Payments;
(6) payments or distributions, directly or indirectly through any
Parent, to dissenting stockholders pursuant to applicable law or in
connection with the settlement or other satisfaction of legal claims made
pursuant to or in connection with a consolidation, merger or transfer of
assets; provided, however, that any payment pursuant to this clause (6)
shall be excluded in the calculation of the amount of Restricted Payments;
(7) cash payments in lieu of the issuance of fractional shares;
provided, however, that any payment pursuant to this clause (7) shall be
excluded in the calculation of the amount of Restricted Payments;
(8) payments of dividends, distributions or other amounts by us to
fund the payment by Parent or its Affiliates of administrative, legal,
financial, accounting or other similar expenses relating to Parent's
direct or indirect ownership of us and to pay other corporate overhead
expenses relating to such ownership interest, including directors' fees,
indemnifications and similar arrangements, so long as such payments are
fair and reasonable and are paid as and when needed by Parent; provided,
however, that any payment pursuant to this clause (8) shall be excluded in
the calculation of the amount of Restricted Payments;
(9) any transfers, advances, loans or other payments by the Company
or any of its Restricted Subsidiaries pursuant to the Cash Management
Program of the Parent and its Subsidiaries, consistent with past
practices; provided, however, (a) no Default or Event of Default shall
have occurred and be continuing at the time of or immediately after giving
effect to any such transfers, advances, loans or other payments and (b)
that any such transfer, advance, loan or other payment pursuant to this
clause (9) shall be excluded in the calculation of the amount of
Restricted Payments;
(10) payments to Parent to enable Parent to pay foreign, federal,
state or local tax liabilities ("Tax Payment"), not to exceed the amount
of any tax liabilities that would be otherwise payable by the Company and
its Subsidiaries to the appropriate taxing authorities if each of the
Company and such Subsidiaries filed a separate tax return, to the extent
that Parent has an obligation to pay such tax liabilities relating to the
operations, assets or capital of the Company or its Subsidiaries,
provided, however, that any payment pursuant to this clause (10) shall be
excluded in the calculation of the amount of Restricted Payments;
(11) the grant from time to time by the Company or any Restricted
Subsidiary of any Lien described in clause (24) of the definition of
"Permitted Liens," and any sale, transfer or other disposition of
properties mentioned in such clause (24) made (i) upon or pursuant to
foreclosure of any such Lien (or in lieu of such a foreclosure) or (ii) by
a dividend, distribution or other transfer of such properties by the
Company or any of its
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Restricted Subsidiaries to Parent; provided, however, that any such grant,
sale, transfer, disposition, dividend or distribution shall be excluded in
the calculation of the amount of Restricted Payments; and
(12) other Restricted Payments not in excess of $50,000,000 in the
aggregate since the Issue Date, provided, however, that (a) no Default or
Event of Default shall have occurred and be continuing at the time of or
immediately after giving effect to any such Restricted Payment and (b) any
Restricted Payment made pursuant to this clause (12) shall be included in
the calculation of Restricted Payments.
SECTION 4.05 Limitation on Restrictions on Distributions from Restricted
Subsidiaries.
The Company shall not, and shall not permit any Restricted Subsidiary to,
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary to (a)
pay dividends or make any other distributions on its Capital Stock to the
Company or a Restricted Subsidiary or pay any Indebtedness owed to the Company,
(b) make any loans or advances to the Company or (c) transfer any of its
property or assets to the Company, except:
(1) with respect to clauses (a), (b) and (c)
(A) any encumbrance or restriction pursuant to or by reason of
an agreement in effect at or entered into on the Issue Date;
(B) customary encumbrances and restrictions contained in
agreements of the types described in the definition of "Permitted
Business Investments";
(C) encumbrances and restrictions contained in contracts
entered into in the ordinary course of business, not relating to any
Indebtedness, and that do not, individually or in the aggregate,
detract from the value of, or from the ability of the Company and
the Restricted Subsidiaries to realize the value of, property or
assets of the Company or any Restricted Subsidiary in any manner
material to the Company or any Restricted Subsidiary;
(D) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to or by reason of an agreement
relating to any Indebtedness Incurred by such Restricted Subsidiary
on or prior to the date on which such Restricted Subsidiary was
acquired by the Company (other than Indebtedness Incurred as
consideration in, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by the Company) and
outstanding on such date;
(E) with respect to any Subsidiary Guarantor, any encumbrance
or restriction contained in the terms of any Indebtedness or any
agreement or instrument pursuant to which such Indebtedness was
Incurred if:
(i) the encumbrance or restriction applies only in the
event of a payment default or a default with respect to a
financial covenant contained in such Indebtedness or
agreement;
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(ii) the encumbrance or restriction is not materially
more disadvantageous to the Holders of the Securities than is
customary in comparable financings (as determined by the
Company); and
(iii) the Company determines that any such encumbrance
or restriction will not materially affect the Company's
ability to make principal or interest payments on the
Securities, as determined in good faith by the Board of
Directors of the Company, whose determination shall be
conclusive;
(F) with respect to any Foreign Subsidiary, any encumbrance or
restriction contained in the terms of any Indebtedness or any
agreement pursuant to which such Indebtedness was Incurred if:
(i) either (x) the encumbrance or restriction applies
only in the event of a payment default or a default with
respect to a financial covenant in such Indebtedness or
agreement or (y) the Company determines that any such
encumbrance or restriction will not materially affect the
Company's ability to make principal or interest payments on
the Securities, as determined in good faith by the Board of
Directors of the Company, whose determination shall be
conclusive; and
(ii) the encumbrance or restriction is not materially
more disadvantageous to the Holders of the Securities than is
customary in comparable financing (as determined by the
Company);
(G) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an
agreement referred to in clauses (A) through (F) of clause (1) of
this Section 4.05 or this clause (G) or contained in any amendment
to an agreement referred to in clauses (A) through (F) of clause (1)
of this Section 4.05 or this clause (G); provided, however, that the
encumbrances and restrictions with respect to such Restricted
Subsidiary contained in any such refinancing agreement or amendment
taken as a whole are no less favorable to the Securityholders than
encumbrances and restrictions with respect to such Restricted
Subsidiary contained in such predecessor agreements;
(H) any encumbrance or restriction with respect to a
Restricted Subsidiary imposed pursuant to an agreement entered into
for the sale or disposition of all or substantially all the Capital
Stock or assets of such Restricted Subsidiary pending the closing of
such sale or disposition; and
(2) with respect to clause (c) only,
(A) any encumbrance or restriction consisting of customary
nonassignment provisions (including provisions forbidding
subletting) in leases governing leasehold interests or Farm-In
Agreements or Farm-Out Agreements relating to leasehold interests in
oil and gas properties to the extent such provisions restrict the
transfer of the lease, the property leased thereunder or the other
interests therein;
(B) any encumbrance or restriction contained in security
agreements, mortgages, purchase money agreements or similar
instruments securing Indebtedness of a Restricted Subsidiary to the
extent such encumbrance or restriction restricts the
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transfer of the property subject to such security agreements,
mortgages, purchase money agreements or similar instruments;
(C) any encumbrance or restriction contained in (i) any
instrument giving rise to any Lien described in clause (24) of the
definition of "Permitted Liens" or (ii) any instrument giving rise
to an obligation secured by any such Lien, in each case to the
extent such encumbrance or restriction restricts the transfer of the
property subject to such Lien;
(D) restrictions on cash or other deposits imposed by
customers under contracts entered into in the ordinary course of
business; and
(E) provisions with respect to the disposition or distribution
of assets or property in operating agreements, joint venture
agreements, development agreements, area of mutual interest
agreements and other agreements that are customary in the Oil and
Gas Business and entered into in the ordinary course of business.
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate any Asset Disposition unless: (1) the
Company or such Restricted Subsidiary receives consideration at the time of such
Asset Disposition at least equal to the fair market value (including as to the
value of all non-cash consideration), as determined in good faith by the Board
of Directors, of the shares and assets subject to such Asset Disposition; (2) at
least 85% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash or cash equivalents; and (3) an
amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by the Company (or such Restricted Subsidiary, as the case may be) (A)
first, to the extent the Company elects (or is required by the terms of any
Indebtedness), to prepay, repay, redeem or purchase Senior Indebtedness of the
Company or of a Subsidiary Guarantor or Indebtedness (other than any
Disqualified Stock) of any Wholly Owned Subsidiary that is not a Subsidiary
Guarantor (in each case other than Indebtedness owed to the Company or an
Affiliate of the Company) within one year from the later of the date of such
Asset Disposition and the receipt of such Net Available Cash; (B) second, to the
extent of the balance of such Net Available Cash after application in accordance
with clause (A), to the extent the Company elects, to acquire or pay for
Additional Assets within one year from the later of the date of such Asset
Disposition and the receipt of such Net Available Cash; and (C) third, to the
extent of the balance of such Net Available Cash after application in accordance
with clauses (A) and (B), to make an offer to the holders of the Securities (and
to holders of other Senior Indebtedness of the Company or of a Subsidiary
Guarantor designated by the Company) to purchase Securities (and such other
Senior Indebtedness of the Company or of a Subsidiary Guarantor) pursuant to and
subject to the conditions of Section 4.06(b); provided, however, that in
connection with any prepayment, repayment or purchase of Indebtedness pursuant
to clause (A) or (C) above, the Company or such Restricted Subsidiary shall
permanently retire such Indebtedness and shall cause the related loan commitment
(if any) to be permanently reduced in an amount equal to the principal amount so
prepaid, repaid or purchased. Notwithstanding the foregoing provisions of this
Section 4.06(a), the Company and the Restricted Subsidiaries shall not be
required to apply any Net Available Cash in accordance with this Section 4.06(a)
except to the extent that the aggregate Net Available Cash from all Asset
Dispositions which is not applied in accordance with this Section 4.06(a)
exceeds $25,000,000. Pending application of Net Available Cash pursuant to this
Section 4.06(a), such Net Available Cash shall be invested in Temporary Cash
Investments or applied to temporarily reduce revolving credit indebtedness.
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For the purposes of this Section 4.06(a), the following are deemed to be
cash or cash equivalents:
(1) the assumption of Indebtedness of the Company (other than
obligations in respect of Disqualified Stock of the Company) or any
Restricted Subsidiary (other than obligations in respect of Disqualified
Stock or Preferred Stock of a Subsidiary Guarantor) and the release of the
Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition (or in lieu of such
a release, the agreement of the acquirer or its parent company to
indemnify and hold the Company or such Restricted Subsidiary harmless from
and against any loss, liability or cost in respect of such assumed
Indebtedness; provided, however, that such indemnifying party (or its long
term debt securities) shall have an Investment Grade Rating (with no
indication of a negative outlook or credit watch with negative
implications, in any case, that contemplates such indemnifying party (or
its long term debt securities) failing to have an Investment Grade Rating)
at the time the indemnity is entered into); and
(2) securities received by the Company or any Restricted Subsidiary
from the transferee that are promptly converted by the Company or such
Restricted Subsidiary into cash, to the extent of cash received in that
conversion.
Notwithstanding the foregoing, the 85% limitation referred to in Section
4.06(a)(2) shall be deemed satisfied with respect to any Asset Disposition in
which the cash or cash equivalents portion of the consideration received
therefrom, determined in accordance with the foregoing provision on an after-tax
basis, is equal to or greater than what the after-tax proceeds would have been
had such Asset Disposition complied with the aforementioned 85% limitation.
The requirement of Section 4.06(a)(3)(B) shall be deemed to be satisfied
if an agreement (including a lease, whether a capital lease or an operating
lease) committing to make the acquisitions or expenditures referred to therein
is entered into by the Company or its Restricted Subsidiary within the time
period specified in such clause and such Net Available Cash is subsequently
applied in accordance with such agreement within six months following such
agreement.
(b) In the event of an Asset Disposition that requires the purchase of
Securities (and other Senior Indebtedness of the Company or of a Subsidiary
Guarantor) pursuant to Section 4.06(a)(3)(C), the Company shall purchase
Securities tendered pursuant to an offer by the Company for the Securities (and
such other Senior Indebtedness) (the "Offer") at a purchase price of 100% of
their principal amount (or, in the event such other Senior Indebtedness was
issued with significant original issue discount, 100% of the accreted value
thereof), without premium, plus accrued but unpaid interest and Liquidated
Damages, if any, (or, in respect of such other Senior Indebtedness of the
Company or of a Subsidiary Guarantor, such lesser price, if any, as may be
provided for by the terms of such Senior Indebtedness) in accordance with the
procedures (including prorating in the event of oversubscription) set forth in
Section 4.06(c). If the aggregate purchase price of Securities (and any other
Senior Indebtedness) tendered pursuant to the Offer exceeds the Net Available
Cash allotted to their purchase, the Company shall select the Securities and
other Senior Indebtedness to be purchased on a pro rata basis but in round
denominations, which in the case of the Securities will be denominations of
$1,000 principal amount or multiples thereof. The Company shall not be required
to make an Offer to purchase Securities (and other Senior Indebtedness) pursuant
to this Section 4.06 if the Net Available Cash available therefor is less than
$100,000,000 (which lesser amount shall be carried forward for purposes of
determining whether such an Offer is required with respect to the Net Available
Cash from any subsequent Asset Disposition). Upon completion of such an Offer,
Net Available Cash shall be deemed to be reduced by the aggregate amount of such
offer.
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(c) (1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall deliver to the
Trustee and send, by first-class mail to each Holder, a written notice
stating that the Holder may elect to have his Securities purchased by the
Company either in whole or in part (subject to prorating as described in
Section 4.06(b) in the event the Offer is oversubscribed) in integral
multiples of $1,000 of principal amount, at the applicable purchase price.
The notice shall specify a purchase date not less than 30 days nor more
than 60 days after the date of such notice (the "Purchase Date") and shall
contain such information concerning the business of the Company which the
Company in good faith believes will enable such Holders to make an
informed decision (which at a minimum will include (A) the most recently
filed Annual Report on Form 10-K (including audited consolidated financial
statements) of the Company, the most recent subsequently filed Quarterly
Report on Form 10-Q and any Current Report on Form 8-K of the Company
filed subsequent to such Quarterly Report, other than Current Reports
describing Asset Dispositions otherwise described in the offering
materials (or corresponding successor reports), (B) a description of
material developments in the Company's business subsequent to the date of
the latest of such Reports, and (C) if material, appropriate pro forma
financial information) and all instructions and materials necessary to
tender Securities pursuant to the Offer, together with the information
contained in clause (3) of this Section 4.06(c).
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided above, the Company shall deliver to
the Trustee an Officers' Certificate as to (A) the amount of the Offer
(the "Offer Amount"), including information as to any other Senior
Indebtedness included in the Offer, (B) the allocation of the Net
Available Cash from the Asset Dispositions pursuant to which such Offer is
being made and (C) the compliance of such allocation with the provisions
of Sections 4.06(a) and (b). On such date, the Company shall also
irrevocably 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) in
Temporary Cash Investments, maturing on the last day prior to the Purchase
Date or on the Purchase Date if funds are immediately available by open of
business, an amount equal to the Offer Amount to be held for payment in
accordance with the provisions of this Section 4.06. If the Offer includes
other Senior Indebtedness, the deposit described in the preceding sentence
may be made with any other paying agent pursuant to arrangements
satisfactory to the Trustee. Upon the expiration of the period for which
the Offer remains open (the "Offer Period"), the Company shall deliver to
the Trustee for cancellation the Securities or portions thereof which have
been properly tendered to and are to be accepted by the Company. The
Trustee shall, on the Purchase Date, mail or deliver payment (or cause the
delivery of payment) to each tendering Holder in the amount of the
purchase price. In the event that the aggregate purchase price of the
Securities delivered by the Company to the Trustee is less than the Offer
Amount applicable to the Securities, the Trustee shall deliver the excess
to the Company immediately after the expiration of the Offer Period for
application in accordance with this Section 4.06.
(3) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business
Days prior to the Purchase Date. Holders shall be entitled to withdraw
their election if the Trustee or the Company receives not later than one
Business Day prior to the Purchase Date, a telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
the Security which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such
Security purchased. Holders whose Securities are purchased only in part
shall be issued
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new Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by
the Company pursuant to and in accordance with the terms of this Section
4.06. A Security shall be deemed to have been accepted for purchase at the
time the Trustee, directly or through an agent, mails or delivers payment
therefor to the surrendering Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.06. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this Section 4.06 by virtue of its
compliance with such securities laws or regulations.
SECTION 4.07. Limitation on Affiliate Transactions.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property, employee compensation arrangements or the
rendering of any service) with, or for the benefit of, any Affiliate of the
Company (an "Affiliate Transaction") unless: (1) the terms of the Affiliate
Transaction are no less favorable to the Company or such Restricted Subsidiary
than those that could be obtained at the time of the Affiliate Transaction in
arm's-length dealings with a Person who is not an Affiliate; (2) if such
Affiliate Transaction involves payments or value in excess of $25,000,000, the
Board of Directors approves such Affiliate Transaction and determines, in the
good faith judgment of the Board of Directors, that such Affiliate Transaction
complies with clause (1) of this Section 4.07(a); and (3) if such Affiliate
Transaction involves an amount in excess of $100,000,000, the Board of Directors
shall also have received a written opinion from an Independent Qualified Party
to the effect that such Affiliate Transaction is fair, from a financial
standpoint, to the Company and its Restricted Subsidiaries or is not less
favorable to the Company and its Restricted Subsidiaries than could reasonably
be expected to be obtained at the time in an arm's length transaction with a
Person who was not an Affiliate.
(b) The provisions of Section 4.07(a) shall not prohibit:
(1) any Investment (other than a Permitted Investment) or other
Restricted Payment, in each case permitted to be made pursuant to Section
4.04;
(2) any issuance of securities, or other payments, awards or grants
in cash, securities or otherwise pursuant to, or the funding of,
employment or severance arrangements, stock options and stock ownership
phantom stock or other incentive compensation plans approved by the Board
of Directors;
(3) loans or advances to employees in the ordinary course of
business in accordance with the past practices of the Company or its
Restricted Subsidiaries, but in any event not to exceed $5,000,000 in the
aggregate outstanding at any one time;
(4) the payment of reasonable fees to directors of the Company and
its Restricted Subsidiaries;
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(5) any transaction with a Restricted Subsidiary or joint venture or
similar entity which would constitute an Affiliate Transaction solely
because the Company or a Restricted Subsidiary owns, directly or
indirectly, an equity interest in or otherwise controls such Restricted
Subsidiary, joint venture or similar entity;
(6) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company or receipt by the Company of any
capital contribution from its shareholders;
(7) indemnities of officers, directors and employees of the Company
or any of its Restricted Subsidiaries permitted by bylaw or statutory
provisions and any employment agreement or other employee compensation
plan or arrangement entered into in the ordinary course of business by the
Company or any of its Restricted Subsidiaries;
(8) the grant from time to time by the Company or any Restricted
Subsidiary of any Lien described in clause (24) of the definition of
"Permitted Liens," and any sale, transfer or other disposition of
properties mentioned in such clause (24) made (i) upon or pursuant to
foreclosure of any such Lien (or in lieu of such a foreclosure) or (ii) by
a dividend or distribution of such properties by the Company or any of its
Restricted Subsidiaries to Parent; and
(9) transactions and arrangements in effect on the Issue Date,
including any modifications, extensions or renewals thereof or payments or
repayments pursuant thereto that do not adversely affect the Company and
its Restricted Subsidiaries, considered as a single enterprise.
SECTION 4.08. Limitation on Line of Business.
The Company will not, and will not permit any Restricted Subsidiary to
engage in any business other than a Related Business.
SECTION 4.09. Change of Control.
(a) Upon the occurrence of a Ratings Event occurring within 30 days after
a Change of Control, each Holder shall have the right to require that the
Company repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Securities at a purchase price in cash equal to 101%
of the principal amount thereof on the date of purchase plus accrued and unpaid
interest, if any, and Liquidated Damages, if any, to the date of purchase
(subject to the right of holders of record on the relevant record date to
receive interest on the relevant interest payment date), in accordance with the
terms contemplated in Section 4.09(b).
(b) Within 30 days following a Ratings Event following any Change of
Control, the Company shall mail a notice to each Holder with a copy to the
Trustee (the "Change of Control Offer") stating:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof on
the date of purchase plus accrued and unpaid interest, if any, and
Liquidated Damages, if any, to the date of purchase (subject to the right
of Holders of record on the relevant record date to receive interest on
the relevant interest payment date);
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(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical
income, cash flow and capitalization, each after giving effect to such
Change of Control);
(3) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with this
Section, that a Holder must follow in order to have its Securities
purchased.
(c) Holders electing to have a Security purchased will be required to
surrender the Security, with an appropriate form duly completed, to the Company
at the address specified in the notice at least three Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security which was delivered
for purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the Company under
this Section shall be delivered by the Company to the Trustee for cancellation,
and the Company shall pay the purchase price plus accrued and unpaid interest,
if any, and Liquidated Damages, if any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section, the Company
shall not be required to make a Change of Control Offer upon a Change of Control
if a third party makes the Change of Control Offer in the manner, at the times
and otherwise in compliance with the requirements set forth in this Section 4.09
and purchases all Securities validly tendered and not withdrawn under such
Change of Control Offer.
(f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue of its compliance with
such securities laws or regulations.
SECTION 4.10. Limitation on Liens.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, Incur or permit to exist any Lien (the "Initial Lien")
of any nature whatsoever on any of its properties (including Capital Stock of a
Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired,
securing any Indebtedness, other than Permitted Liens, without effectively
providing that the Securities shall be secured equally and ratably with (or
prior to) the obligations so secured for so long as such obligations are so
secured. Any Lien created for the benefit of the Holders of the Securities
pursuant to the preceding sentence shall provide by its terms that such Lien
shall be automatically and unconditionally released and discharged upon the
release and discharge of the Initial Lien.
SECTION 4.11. Limitation on Sale/Leaseback Transactions.
The Company shall not, and shall not permit any Restricted Subsidiary to,
enter into any Sale/Leaseback Transaction with respect to any property unless
(1) the Company or such Restricted Subsidiary would be entitled to (A) Incur
Indebtedness in an amount equal to the Attributable Debt
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with respect to such Sale/Leaseback Transaction pursuant to Section 4.03 and (B)
create a Lien on such property securing such Attributable Debt without equally
and ratably securing the Securities pursuant to Section 4.10, (2) the net
proceeds received by the Company or any Restricted Subsidiary in connection with
such Sale/Leaseback Transaction are at least equal to the fair value (as
determined by the Board of Directors) of such property and (3) the Company
applies the proceeds of such transaction in compliance with Section 4.06.
SECTION 4.12. Limitation on Advances under Parent's Cash Management Program.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, advance any funds to the Parent or any of its Subsidiaries (other than to
the Company and any of its Subsidiaries) pursuant to Parent's Cash Management
Program if any default occurs or exists under any bond, debenture, note or other
evidence of debt for money borrowed or under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any debt for money borrowed, in each case, by Parent or any of its
Subsidiaries (or the payment of which is Guaranteed by Parent or any of its
Subsidiaries) whether such debt or Guarantee now exists, or is created after the
Issue Date, if such default:
(1) is caused by a failure to pay principal of, or interest or
premium, if any, on such debt of Parent or such Subsidiary prior to the
expiration of the grace period provided in such debt of Parent or such
Subsidiary on the date of such default (a "Payment Default"); or
(2) results in the acceleration (without cure or revocation within
five business days) of debt of Parent or such Subsidiary prior to its
express maturity,
and, in each case, the principal amount of any such debt of Parent or such
Subsidiary, together with the principal amount of any other such debt of Parent
or such Subsidiary under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $50,000,000 or more, until such
acceleration has been cured or revoked or such payment of such debt of Parent or
such Subsidiary has been made in full.
(b) The Company shall not, and shall not permit any Restricted Subsidiary
to, advance any funds at any time after the Issue Date, to the Parent or any of
its Subsidiaries (other than the Company and any of its Restricted Subsidiaries)
pursuant to Parent's Cash Management Program if, after giving pro forma effect
to any proposed advance, the aggregate amount of all funds so advanced and not
repaid would exceed the sum of (a) $125,000,000 plus (b) an amount equal to 5%
of the ACNTA of the Company attributable to (i) oil and natural gas reserves or
properties contributed to or acquired by the Company or any of its Restricted
Subsidiaries after the Issue Date, to the extent such reserves or properties
were contributed by or acquired from Parent or its Subsidiaries, or (ii) any
Person that became a Restricted Subsidiary of the Company after the Issue Date,
to the extent such Person was contributed by or acquired from Parent or its
Subsidiaries.
(c) Notwithstanding Section 4.12(a) and (b), neither the Company nor any
of its Subsidiaries shall be precluded by this Section from paying or repaying
any Indebtedness or other obligation owed to any Person.
SECTION 4.13. Future Guarantors.
The Company shall cause each Domestic Restricted Subsidiary that Incurs
any Indebtedness to, at the same time, execute and deliver to the Trustee a
Guarantee Agreement pursuant to which such Restricted Subsidiary will Guarantee
payment of the Securities on the same terms and conditions as those set forth in
Article 10 of this Indenture.
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SECTION 4.14. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the end of
each fiscal year of the Company an Officers' Certificate stating that in the
course of the performance by the signers of their duties as Officers of the
Company they would normally have knowledge of any Default and whether or not the
signers know of any Default that occurred during such period. If they do, the
certificate shall describe the Default, its status and what action the Company
is taking or proposes to take with respect thereto. The Company also shall
comply with TIA Section 314(a)(4).
SECTION 4.15. Further Instruments and Acts.
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
SECTION 4.16. Covenant Termination.
Notwithstanding any provision hereof or of the Securities to the contrary,
from and after any time that the Securities have an Investment Grade Rating and
no Default has occurred and is then continuing, the Company and the Restricted
Subsidiaries will cease to be subject to Sections 4.03, 4.04, 4.05, 4.06, 4.07,
4.08, 4.09, 4.13 and 5.01(a)(3) and no Default or Event of Default shall result
from any failure to comply with any of the provisions of such Sections.
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. When Company May Merge or Transfer Assets.
The Company shall not consolidate with or merge with or into, or convey,
transfer or lease, in one transaction or a series of transactions, directly or
indirectly, all or substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the "Successor
Company") shall be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia
and the Successor Company (if not the Company) shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, all the obligations of the Company
under the Securities and this Indenture;
(2) immediately after giving pro forma effect to such transaction
(and treating any Indebtedness which becomes an obligation of the
Successor Company or any Subsidiary as a result of such transaction as
having been Incurred by the Successor Company or such Subsidiary at the
time of such transaction), no Default shall have occurred and be
continuing;
(3) immediately after giving pro forma effect to such transaction,
the Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a); provided, however, that this
clause (3) will not be applicable to (A) a Restricted Subsidiary
consolidating with, merging into or transferring all or part of its
properties and assets to the Company or (B) the Company merging with an
Affiliate of the Company solely for the purpose and with the sole effect
of reincorporating the Company in another jurisdiction;
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(4) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture; and
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders will not recognize income, gain or
loss for Federal income tax purposes as a result of such transaction and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
transaction had not occurred.
For purposes of this Section 5.01(a), the sale, lease, conveyance,
assignment, transfer or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
The Successor Company shall be the successor to the Company and shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture, and the predecessor Company, except in the
case of a lease, shall be released from the obligation to pay the principal of
and interest on the Securities.
(b) The Company shall not permit any Subsidiary Guarantor to consolidate
with or merge with or into, or convey, transfer or lease, in one transaction or
a series of transactions, all or substantially all of its assets to any Person
unless: (1) (except in the case of a Subsidiary Guarantor that has been disposed
of in its entirety to another Person (other than to the Company or an Affiliate
of the Company), whether through a merger, consolidation or sale of Capital
Stock or assets, if in connection therewith the Company provides an Officers'
Certificate to the Trustee to the effect that the Company will comply with its
obligations under Section 4.06 in respect of such disposition), the resulting,
surviving or transferee Person (if not such Subsidiary) shall be a Person
organized and existing under the laws of the jurisdiction under which such
Subsidiary was organized or under the laws of the United States of America, or
any State thereof or the District of Columbia, and such Person shall expressly
assume, by a Guarantee Agreement, in a form satisfactory to the Trustee, all the
obligations of such Subsidiary, if any, under its Subsidiary Guarantee; (2)
immediately after giving effect to such transaction or transactions on a pro
forma basis (and treating any Indebtedness which becomes an obligation of the
resulting, surviving or transferee Person as a result of such transaction as
having been issued by such Person at the time of such transaction), no Default
shall have occurred and be continuing; and (3) the Company delivers to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such Guarantee Agreement, if any,
complies with this Indenture.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest, or Liquidated
Damages, if any, on any Security when the same becomes due and payable,
and such default continues for a period of 30 days;
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(2) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity,
upon optional redemption, upon declaration of acceleration or otherwise;
(3) the Company (i) fails to purchase Securities when required
pursuant to Section 4.06 or 4.09 of this Indenture or (ii) fails to comply
with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 or 4.13 (other than a failure to
purchase Securities when required under Section 4.06 or 4.09) and such
failure continues for 30 days after the notice specified below;
(5) the Company or any Subsidiary Guarantor fails to comply with any
of its agreements in this Indenture (other than those referred to in
clause (1), (2), (3) or (4) above) and such failure continues for 60 days
after the notice specified below;
(6) (i) Indebtedness of the Company, any Subsidiary Guarantor or any
Significant Subsidiary (a) is not paid within any applicable grace period
after final maturity, and such defaulted payment shall not have been made,
waived or extended within 10 days of such payment default or (b) is
accelerated by the holders thereof because of a default, and such
Indebtedness has not been discharged in full or such acceleration has not
been rescinded or annulled within 10 days of such acceleration and (ii)
the total amount of such Indebtedness unpaid or accelerated exceeds
$25,000,000 (the "cross acceleration provision");
(7) the Company, any Subsidiary Guarantor or any Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property;
(D) makes a general assignment for the benefit of its
creditors; or
(E) takes any comparable action under any foreign laws
relating to insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company, any Subsidiary
Guarantor or any Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company, any Subsidiary
Guarantor or any Significant Subsidiary or for any substantial part
of its property; or
(C) orders the winding up or liquidation of the Company, any
Subsidiary Guarantor or any Significant Subsidiary;
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or any similar relief is granted under any foreign laws and the
order or decree remains unstayed and in effect for 60 days;
(9) any final judgment or decree (to the extent not covered by
insurance) for the payment of money in excess of $100,000,000 is entered
against the Company, a Subsidiary Guarantor or any Significant Subsidiary,
and shall not be paid or discharged, and there shall be any period of 60
consecutive days following entry of such final judgment or decree during
which a stay of enforcement of such final judgment or decree, by reason of
pending appeal or otherwise, shall not be in effect (the "judgment default
provision"); provided, however, that if any such final judgment or decree
described above requires the payment by the Company, a Subsidiary
Guarantor or a Significant Subsidiary of money in excess of $100,000,000,
which payment(s) are to be made over a stipulated future period after the
date of such final judgment or decree or upon or following the future
occurrence of specified events, an Event of Default shall not occur under
this clause (9), unless (i) any such payment is not made within 60 days of
its due date and (ii) such amount that is not paid within 60 days of its
due date, together with any other amounts in respect of such judgment or
decree that have become due and payable, including as a result of such
nonpayment discussed in clause (i), and have not been paid, exceeds
$100,000,000; or
(10) a Subsidiary Guarantee ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guarantee as
set forth in this Indenture) or a Subsidiary Guarantor denies or
disaffirms its obligations under its Subsidiary Guarantee.
The foregoing will constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clauses (4) or (5) of this Section 6.01 shall not
constitute an Event of Default until the Trustee or the holders of at least 25%
in principal amount of the outstanding Securities notify the Company in writing
of the Default and the Company does not cure such Default within the time
specified after receipt of such notice. Such notice must specify the Default,
demand that it be remedied and state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6), (9) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
Section 6.01(7) or (8) with respect to the Company) occurs and is continuing,
the Trustee by notice to the Company, or the Holders of at least 25% in
principal amount of the outstanding Securities by notice to the Company and the
Trustee, may declare the principal of and accrued but unpaid interest and
Liquidated Damages, if any, on all the Securities to be due and payable. Upon
such a declaration, such principal and interest and Liquidated Damages, if any,
shall be due and payable immediately. If an Event of
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Default specified in Section 6.01(7) or (8) with respect to the Company occurs,
the principal of and interest and Liquidated Damages, if any, on all the
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Securityholders.
The Holders of a majority in principal amount of the Securities by notice to the
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except nonpayment of principal, interest or Liquidated
Damages that has become due solely because of acceleration. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal of or interest on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults.
The Holders of a majority in principal amount of the Securities by notice
to the Trustee may waive an existing Default and its consequences except (i) a
Default in the payment of the principal of or interest on a Security, (ii) a
Default arising from the failure to redeem or purchase any Security when
required pursuant to this Indenture, or (iii) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of each
Securityholder affected. When a Default is waived, it is deemed cured, but no
such waiver shall extend to any subsequent or other Default or impair any
consequent right.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of the outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or of exercising any trust or power
conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section 7.01,
that the Trustee determines is unduly prejudicial to the rights of other
Securityholders or would involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction. Prior to taking any action
hereunder, the Trustee shall be entitled to reasonable security or
indemnification satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits.
Except to enforce the right to receive payment of principal, premium (if
any) or interest when due, no Securityholder may pursue any remedy with respect
to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
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(2) the Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the outstanding
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Securities held by
such Holder, on or after the respective due dates expressed in the Securities,
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount then due and owing
(together with interest on any unpaid interest to the extent lawful) and the
amounts provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
Securityholders allowed in any judicial proceedings relative to the Company, its
creditors or its property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this Article 6,
it shall pay out the money or property in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest and Liquidated Damages, if any,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal and interest,
respectively; and
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THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 or a suit by Holders of more than 10% in principal
amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws.
The Company (to the extent it may lawfully do so) shall not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and shall not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
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(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(h) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would
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have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company or any Subsidiary
Guarantor in this Indenture or in any document issued in connection with the
sale of the Securities or in the Securities other than the Trustee's certificate
of authentication.
SECTION 7.05. Notice of Defaults.
If a Default occurs and is continuing and if it is known to the Trustee,
the Trustee shall mail to each Securityholder notice of the Default within 90
days after it occurs. Except in the case of a Default in payment of principal of
or interest or Liquidated Damages, if any, on any Security (including payments
pursuant to the mandatory redemption provisions of such Security, if any), the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders.
As promptly as practicable after each May 15 beginning with the May 15
following the date of this Indenture, and in any event prior to July 15 in each
year, the Trustee shall mail to each Securityholder a brief report dated as of
May 15 that complies with TIA Section 313(a). The Trustee also shall comply with
TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be filed with the SEC and each stock exchange (if any) on which the Securities
are listed. The Company agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. The Company shall indemnify the Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee may have separate
counsel and the Company shall pay the fees and expenses of such counsel. The
Company need not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee through the Trustee's own willful misconduct,
negligence or bad faith.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
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The Company's payment obligations pursuant to this Section shall survive
the discharge of this Indenture. When the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(7) or (8) with respect to the
Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company. The
Holders of a majority in principal amount of the Securities may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee. The
Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section,
the Company's obligations under Section 7.07 shall continue for the benefit of
the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the
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successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA Section
310(a). The Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b); provided, however,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or certificates of interest
or participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Securities; Defeasance.
(a) The Indenture will be discharged and will cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
Notes) as to all outstanding Notes when either:
(1) all such Securities theretofore authorized and delivered (except
lost, stolen or destroyed Securities which have been replaced or paid and
Securities 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) have been delivered to the
Trustee for cancellation; or
(2) (i) the Company shall have given irrevocable and unconditional
notice of redemption for all of the outstanding Securities within 60 days
of such Securities pursuant to the redemption provisions of the Indenture
or all Securities not theretofore delivered to the Trustee for
cancellation otherwise have become due and payable, and the Company has
irrevocably deposited or caused to be deposited with the Trustee as trust
funds in the trust for such purpose an amount of money sufficient to pay
and discharge the entire indebtedness on the Securities not theretofore
delivered to the Trustee for cancellation, for principal, premium, if any,
and accrued and unpaid interest, and Liquidated Damages, if any, (ii) the
Company has paid all sums payable by it under the Indenture, (iii) the
Company has delivered irrevocable instructions to the Trustee to apply the
deposited money toward the payment of the Securities at maturity or the
redemption date, as the case may be, and (iv) the holders of the
Securities have a valid, perfected, exclusive security interest in such
trust.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel stating that all conditions precedent to satisfaction and discharge have
been complied with.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (1) all its obligations under the Securities and this Indenture
("legal defeasance option") or (2) its obligations under Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 4.13 and
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the operation of Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but,
in the case of Sections 6.01(7) and (8), with respect only to Subsidiary
Guarantors and Significant Subsidiaries) and the limitations contained in
Section 5.01(a)(3) ("covenant defeasance option"). The Company may exercise its
legal defeasance option notwithstanding its prior exercise of its covenant
defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified in
Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of
Sections 6.01(7) and (8), with respect only to Subsidiary Guarantors and
Significant Subsidiaries) or because of the failure of the Company to comply
with Section 5.01(a)(3). If the Company exercises its legal defeasance option or
its covenant defeasance option, each Subsidiary Guarantor, if any, shall be
released from all its obligations with respect to its Subsidiary Guarantee.
Upon satisfaction of the conditions set forth herein and upon request of
the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's obligations
in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in this
Article 8 shall survive until the Securities have been paid in full. Thereafter,
the Company's obligations in Sections 7.07, 8.04 and 8.05 shall survive.
SECTION 8.02. Conditions to Defeasance.
The Company may exercise its legal defeasance option or its covenant
defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal of and
interest on the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Sections 6.01(7) or (8) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940;
(6) in the case of the legal defeasance option, 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
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this Indenture there has been a change in the applicable Federal income
tax law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for Federal income tax purposes as a result of such
defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for Federal income
tax purposes as a result of such covenant defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article
8 have been complied with.
Before or after a deposit, the Company may make arrangements satisfactory
to the Trustee for the redemption of Securities at a future date in accordance
with Article 3.
SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article 8. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of and interest on
the Securities.
SECTION 8.04. Repayment to Company.
The Trustee and the Paying Agent shall promptly turn over to the Company
upon request any excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Securityholders entitled to the money must look to the Company for
payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations.
The Company shall pay and shall indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
SECTION 8.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Article 8 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to this Article 8
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with this Article 8;
provided, however, that, if the Company has made any payment of interest on or
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principal of any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without Consent of Holders.
The Company, the Subsidiary Guarantors and the Trustee may amend this
Indenture or the Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Securities, including any
Subsidiary Guarantees, or to secure the Securities or any Guarantees;
(5) to effect the release of a Subsidiary Guarantor from its
Subsidiary Guarantee and the termination of such Subsidiary Guarantee, all
in accordance with the provision of this Indenture governing such release
and termination;
(6) to add to the covenants of the Company or a Subsidiary Guarantor
for the benefit of the Holders or to surrender any right or power herein
conferred upon the Company or a Subsidiary Guarantor;
(7) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA; or
(8) to make any change that does not adversely affect the rights of
any Securityholder.
After an amendment under this Section becomes effective, the Company shall
mail to Securityholders a notice briefly describing such amendment. The failure
to give such notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders.
The Company, the Subsidiary Guarantors and the Trustee may amend this
Indenture or the Securities without notice to any Securityholder but with the
written consent of the Holders of at least a majority in principal amount of the
Securities then outstanding (including consents obtained in connection with a
tender offer or exchange for the Securities). However, without the consent of
each Securityholder affected thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
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(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal amount of or change the Stated Maturity of
any Security;
(4) reduce the amount payable upon the redemption of any Security or
change the time at which any Security may be redeemed in accordance with
Article 3; provided, however, that for the avoidance of doubt, redemption
shall not be deemed to include any purchase or repurchase of Securities;
(5) make any Security payable in money other than that stated in the
Security;
(6) make any changes in the ranking or priority of any Security that
would adversely affect the Securityholders;
(7) make any change in Section 6.04 or 6.07 or the second sentence
of this Section; or
(8) make any change in, or release other than in accordance with the
Indenture, any Subsidiary Guarantee that would adversely affect the
Securityholders.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company shall
mail to Securityholders a notice briefly describing such amendment. The failure
to give such notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities shall comply with the
TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers.
A consent to an amendment or a waiver by a Holder of a Security shall bind
the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same debt as the consenting Holder's Security, even
if notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
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SECTION 9.05. Notation on or Exchange of Securities.
If an amendment changes the terms of a Security, the Trustee may require
the Holder of the Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Security regarding the changed terms and return
it to the Holder. Alternatively, if the Company or the Trustee so determines,
the Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make the
appropriate notation or to issue a new Security shall not affect the validity of
such amendment.
SECTION 9.06. Trustee To Sign Amendments.
The Trustee shall sign any amendment authorized pursuant to this Article 9
if the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may but need not sign it. In
signing such amendment the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive, and (subject to Section 7.01)
shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture.
SECTION 9.07. Payment for Consent.
Neither the Company nor any Affiliate of the Company shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Securities unless such consideration is offered to be paid to all Holders
that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.01. Guarantees.
Each Subsidiary Guarantor hereby unconditionally and irrevocably
guarantees, jointly and severally, to each Holder and to the Trustee and its
successors and assigns (a) the full and punctual payment of principal of and
interest on the Securities when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company under
this Indenture and the Securities and (b) the full and punctual performance
within applicable grace periods of all other obligations of the Company under
this Indenture and the Securities (all the foregoing being hereinafter
collectively called the "Obligations"). Each Subsidiary Guarantor further agrees
that the Obligations may be extended or renewed, in whole or in part, without
notice or further assent from such Subsidiary Guarantor and that such Subsidiary
Guarantor will remain bound under this Article 10 notwithstanding any extension
or renewal of any Obligation.
To the fullest extent allowed by applicable law, each Subsidiary Guarantor
waives presentation to, demand of, payment from and protest to the Company of
any of the Obligations and also waives notice of protest for nonpayment. To the
fullest extent allowed by applicable law, each Subsidiary Guarantor waives
notice of any default under the Securities or the Obligations. The obligations
of each Subsidiary Guarantor hereunder shall not be affected by (a) the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
right or remedy against the Company or any other Person under this Indenture,
the Securities or any other agreement or otherwise; (b) any extension or renewal
of any thereof; (c) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Indenture, the Securities or any other
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agreement; (d) the release of any security held by any Holder or the Trustee for
the Obligations or any of them; (e) the failure of any Holder or the Trustee to
exercise any right or remedy against any other guarantor of the Obligations; or
(f) except as set forth in Section 10.06, any change in the ownership of such
Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Guarantee herein
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and, to the fullest extent allowed by applicable law,
waives any right to require that any resort be had by any Holder or the Trustee
to any security held for payment of the Obligations.
To the fullest extent allowed by applicable law, except as expressly set
forth in Sections 8.01(b), 10.02 and 10.06, the obligations of each Subsidiary
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, to the fullest
extent allowed by applicable law, the obligations of each Subsidiary Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the obligations, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.
Each Subsidiary Guarantor further agrees that its Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other right
which any Holder or the Trustee has at law or in equity against any Subsidiary
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of or interest on any Obligation when and as the same shall become due, whether
at maturity, by acceleration, by redemption or otherwise, or to perform or
comply with any other Obligation, each Subsidiary Guarantor hereby promises to
and shall, upon receipt of written demand by the Trustee, forthwith pay, or
cause to be paid, in cash, to the Holders or the Trustee an amount equal to the
sum of (1) the unpaid amount of such Obligations, (2) accrued and unpaid
interest on such Obligations (but only to the extent not prohibited by law) and
(3) all other monetary Obligations of the Company to the Holders and the
Trustee.
Each Subsidiary Guarantor agrees that it shall not be entitled to any
right of subrogation in respect of any Obligations guaranteed hereby until
payment in full of all Obligations. Each Subsidiary Guarantor agrees that, as
between it, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the Obligations Guaranteed hereby may be accelerated as
provided in Article 6 for the purposes of such Subsidiary Guarantor's Subsidiary
Guarantee herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby,
and (y) in the event of any declaration of acceleration of such Obligations as
provided in Article 6, such Obligations (whether or not due and payable) shall
forthwith become due and payable by such Subsidiary Guarantor for the purposes
of this Section.
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Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
SECTION 10.02. Limitation on Liability.
Any term or provision of this Indenture to the contrary notwithstanding,
the maximum aggregate amount of the Obligations guaranteed hereunder by any
Subsidiary Guarantor shall not exceed the maximum amount that can be hereby
guaranteed without rendering this Indenture, as it relates to such Subsidiary
Guarantor, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors generally.
SECTION 10.03. Successors and Assigns.
This Article 10 shall be binding upon each Subsidiary Guarantor and its
successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Securities shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.
SECTION 10.04. No Waiver.
Neither a failure nor a delay on the part of either the Trustee or the
Holders in exercising any right, power or privilege under this Article 10 shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any right, power or privilege. The
rights, remedies and benefits of the Trustee and the Holders herein expressly
specified are cumulative and not exclusive of any other rights, remedies or
benefits which either may have under this Article 10 at law, in equity, by
statute or otherwise.
SECTION 10.05. Modification.
No modification, amendment or waiver of any provision of this Article 10,
nor the consent to any departure by any Subsidiary Guarantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Trustee, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on any
Subsidiary Guarantor in any case shall entitle such Subsidiary Guarantor to any
other or further notice or demand in the same, similar or other circumstances.
SECTION 10.06. Release of Subsidiary Guarantor.
A Subsidiary Guarantor shall be deemed released from all Guarantied
Obligations under this Article 10 without any further action required on the
part of the Trustee or any Holder:
(1) upon the sale or other disposition (including by way of
consolidation or merger) of any Subsidiary Guarantor;
(2) upon the sale or disposition of all or substantially all the
assets of such Subsidiary Guarantor; or
(3) upon the designation of such Subsidiary Guarantor as an
Unrestricted Subsidiary,
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in the case of clauses (1) and (2) above (a) other than to the Company or an
Affiliate of the Company and as permitted by the Indenture and (b), if in
connection therewith the Company provides an Officers' Certificate to the
Trustee to the effect that the Company will comply with its obligations under
the covenant described under Section 4.06 in respect of such disposition.
SECTION 10.07. Execution and Delivery of Guarantees.
To evidence the Subsidiary Guarantees set forth in this Article 10, each
Subsidiary Guarantor hereby agrees that a notation of the Subsidiary Guarantees
substantially in the form of included in Exhibit 1 and in Exhibit A shall be
endorsed by the Chairman of the Board, the President, any Vice President, the
Treasurer or the Secretary of such Subsidiary Guarantor on each Security
authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of such Subsidiary Guarantor by its President or one of its
Vice Presidents.
Each Subsidiary Guarantor hereby agrees that the Subsidiary Guarantees set
forth in this Article 10 shall remain in full force and effect notwithstanding
any failure to endorse on each Security a notation of the Subsidiary Guarantees.
If an officer that held an office of the Company or of any Subsidiary
Guarantor whose signature is on this Indenture or on the Guarantees no longer
holds that office at the time the Trustee authenticates the Security on which
the notation of the Subsidiary Guarantees are endorsed, the Subsidiary
Guarantees shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantees
set forth in this Indenture on behalf of the Subsidiary Guarantors.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
SECTION 11.02. Notices.
Any notice or communication shall be in writing and delivered in person or
mailed by first-class mail addressed as follows:
if to the Company or any Subsidiary Guarantor:
El Paso Production Holding Company
1001 Louisiana Street
Houston, Texas 77002
Attention:
Chief Financial Officer
if to the Trustee:
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Wilmington Trust Company
1100 North Market Street
Wilmington, DE 19890
Attention:
Corporate Trust Department
The Company, any Subsidiary Guarantor or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall be mailed to
the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 11.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, any Subsidiary Guarantor the Trustee, the Registrar and
anyone else shall have the protection of TIA Section 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or
refrain from taking any action under this Indenture, the Company shall furnish
to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(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;
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(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 11.06. When Securities Disregarded.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned shall be so disregarded. Also, subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 11.08. Legal Holidays.
If a payment date is a Legal Holiday, payment shall be made on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period. If a regular record date is a Legal Holiday, the record date
shall not be affected.
SECTION 11.09. Governing Law.
This Indenture and the Securities shall be governed by, and construed in
accordance with, the laws of the State of New York.
SECTION 11.10. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company or
any Subsidiary Guarantor shall not have any liability for any obligations of the
Company under the Securities or this Indenture or of such Subsidiary Guarantor
under its Subsidiary Guarantee or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder shall waive and release all such liability. The
waiver and release shall be part of the consideration for the issue of the
Securities.
SECTION 11.11. Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 11.12. Multiple Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
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SECTION 11.13. Table of Contents; Headings.
The table of contents, cross-reference sheet and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not intended to be considered a part hereof and shall not modify or
restrict any of the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
EL PASO PRODUCTION HOLDING COMPANY
By: /s/ Gene T. Waguespack
---------------------------------
Name: Gene T. Waguespack
Title: Senior Vice President and
Chief Financial Officer
EL PASO PRODUCTION GOM, INC.
By: /s/ Gene T. Waguespack
---------------------------------
Name: Gene T. Waguespack
Title: Senior Vice President and
Chief Financial Officer
EL PASO ENERGY RATON, L.L.C.
By: /s/ Gene T. Waguespack
---------------------------------
Name: Gene T. Waguespack
Title: Senior Vice President and
Chief Financial Officer
EL PASO PRODUCTION COMPANY
By: /s/ Gene T. Waguespack
---------------------------------
Name: Gene T. Waguespack
Title: Senior Vice President and
Chief Financial Officer
VERMEJO MINERALS CORPORATION
By: /s/ Gene T. Waguespack
---------------------------------
Name: Gene T. Waguespack
Title: Senior Vice President and
Chief Financial Officer
WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ James D. Nesci
---------------------------------------
Name: James D. Nesci
Title: Authorized Signer
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RULE 144A/REGULATION S APPENDIX
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions.
1.1 Definitions
Capitalized terms used but not otherwise defined in this Appendix shall
have the meanings assigned in the Indenture. For the purposes of this Appendix
the following terms shall have the meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Temporary Regulation S Global Security or beneficial interest
therein, the rules and procedures of the Depository, Euroclear and Clearstream,
for such a Temporary Regulation S Global Security, in each case to the extent
applicable to such transaction and as in effect from time to time.
"Clearstream" means Clearstream Banking, societe anonyme, or any successor
securities clearing agency.
"Definitive Security" means a certificated Initial Security or Exchange
Security or Private Exchange Security bearing, if required, the restricted
securities legend set forth in Section 2.3(e).
"Depository" means The Depository Trust Company, its nominees and their
respective successors.
"Distribution Compliance Period", with respect to any Securities, means
the period of 40 consecutive days beginning on and including the later of (i)
the day on which such Securities are first offered to Persons other than
distributors (as defined in Regulation S under the Securities Act) in reliance
on Regulation S and (ii) the Issue Date with respect to such Securities.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear System, or any successor securities clearing agency.
"Exchange Securities" means (1) the 7-3/4% Senior Notes due 2013 issued
pursuant to the Indenture in connection with a Registered Exchange Offer
pursuant to the Registration Rights Agreement and (2) Additional Securities, if
any, issued pursuant to a registration statement filed with the SEC under the
Securities Act.
"Initial Purchasers" means (1) with respect to the Initial Securities
issued on the Issue Date, Credit Suisse First Boston LLC, Citigroup Global
Markets LLC, Bank of America Securities LLC, Deutsche Bank Securities Inc.,
Lehman Brothers, Inc., Scotia Capital (USA) Inc. and (2) with respect to each
issuance of Additional Securities, the Persons purchasing such Additional
Securities under the related Purchase Agreement.
"Initial Securities" means (1) $1.2 billion aggregate principal amount of
7-3/4% Senior Notes due 2013 issued on the Issue Date and (2) Additional
Securities, if any, issued in a transaction exempt from the registration
requirements of the Securities Act.
"Private Exchange" means the offer by the Company and the Subsidiary
Guarantors pursuant to Registration Rights Agreement, to the Initial Purchasers
to a issue and deliver to each Initial
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Purchaser, in exchange for the Initial Securities held by the Initial Purchaser
as part of its initial distribution, a like aggregate principal amount of
Private Exchange Securities.
"Private Exchange Securities" means any 7-3/4% Senior Notes due 2013
issued in connection with a Private Exchange.
"Purchase Agreement" means (1) with respect to the Initial Securities
issued on the Issue Date, the Purchase Agreement dated May 20, 2003, among the
Company and the Initial Purchasers, and (2) with respect to each issuance of
Additional Securities, the purchase agreement or underwriting agreement among
the Company, the Subsidiary Guarantors and the Persons purchasing such
Additional Securities.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company and the
Subsidiary Guarantors, pursuant to a Registration Rights Agreement, to certain
Holders of Initial Securities, to issue and deliver to such Holders, in exchange
for the Initial Securities, a like aggregate principal amount of Exchange
Securities registered under the Securities Act.
"Registration Rights Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Registration Rights Agreement dated May
20, 2003, among the Company, the Subsidiary Guarantors and the Initial
Purchasers, and (2) with respect to each issuance of Additional Securities
issued in a transaction exempt from the registration requirements of the
Securities Act, the registration rights agreement, if any, among the Company and
the Persons purchasing such Additional Securities under the related Purchase
Agreement.
"Rule 144A Securities" means all Initial Securities offered and sold to
QIBs in reliance on Rule 144A.
"Securities" means the Initial Securities, the Exchange Securities and the
Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor Person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement issued by
the Company in connection with the offer and sale of Initial Securities or
Private Exchange Securities pursuant to a Registration Rights Agreement.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend relating to restrictions on transfer relating to the
Securities Act set forth in Section 2.3(e) hereto.
1.2 Other Definitions
Defined in
Term Section:
- ---- --------
"Agent Members" 2.1(b)
"Global Security" 2.1(a)
"Permanent Regulation S Global Security" 2.1(a)
"Regulation S" 2.1(a)
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"Rule 144A" 2.1(a)
"Rule 144A Global Security" 2.1(a)
"Temporary Regulation S Global Security" 2.1(a)
2. The Securities.
2.1 (a) Form and Dating. The Initial Securities will be offered and sold
by the Company pursuant to a Purchase Agreement. The Initial Securities will be
resold initially only to (i) QIBs in reliance on Rule 144A under the Securities
Act ("Rule 144A") and (ii) Persons other than U.S. Persons (as defined in
Regulation S) in reliance on Regulation S under the Securities Act ("Regulation
S"). Initial Securities may thereafter be transferred to, among others, QIBs and
purchasers in reliance on Regulation S, subject to the restrictions on transfer
set forth herein. Initial Securities initially resold pursuant to Rule 144A
shall be issued initially in the form of one or more permanent global Securities
in definitive, fully registered form (collectively, the "Rule 144A Global
Security") and Initial Securities initially resold pursuant to Regulation S
shall be issued initially in the form of one or more temporary global securities
in definitive, fully registered form (collectively, the "Temporary Regulation S
Global Security"), in each case without interest coupons and with the global
securities legend and restricted securities legend set forth in Exhibit 1
hereto, which shall be deposited on behalf of the purchasers of the Initial
Securities represented thereby with the Securities Custodian, and registered in
the name of the Depository or a nominee of the Depository, duly executed by the
Companies and authenticated by the Trustee as provided in the Indenture.
Beneficial ownership interests in the Temporary Regulation S Global Security
will not be exchangeable for interests in the Rule 144A Global Security, a
permanent global security (the "Permanent Regulation S Global Security"), or any
other Security without a legend containing restrictions on transfer of such
Security prior to the expiration of the Distribution Compliance Period and then
only upon certification in form reasonably satisfactory to the Trustee that
beneficial ownership interests in such Temporary Regulation S Global Security
are owned either by non-U.S. persons or U.S. persons who purchased such
interests in a transaction that did not require registration under the
Securities Act. The Rule 144A Global Security, the Temporary Regulation S Global
Security and the Permanent Regulation S Global Security are collectively
referred to herein as "Global Securities". The aggregate principal amount of the
Global Securities may from time to time be increased or decreased by adjustments
made on the records of the Trustee and the Depository or its nominee as
hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for
such Global Security or Global Securities or the nominee of such
Depository and (b) shall be delivered by the Trustee to such Depository or
pursuant to such Depository's instructions or held by the Trustee as
custodian for the Depository.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under the Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as the
custodian of the Depository or under such Global Security, and the
Company, the Trustee and any agent of the Company or the Trustee shall be
entitled to treat the Depository as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as
between
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the Depository and its Agent Members, the operation of customary practices
of such Depository governing the exercise of the rights of a holder of a
beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this Section 2.1
or Section 2.3 or 2.4, owners of beneficial interests in Restricted Global
Securities shall not be entitled to receive physical delivery of
Definitive Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1) on the
Issue Date, Initial Securities in an aggregate principal amount of
$1,200,000,000, (2) any Additional Securities for an original issue in an
aggregate principal amount specified in the written order of the Company
pursuant to Section 2.02 of the Indenture and (3) Exchange Securities or Private
Exchange Securities for issue only in a Registered Exchange Offer or a Private
Exchange, respectively, pursuant to a Registration Rights Agreement, for a like
principal amount of Initial Securities, in each case upon a written order of the
Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated and, in the case of any issuance of
Additional Securities pursuant to Section 2.13 of the Indenture, shall certify
that such issuance is in compliance with Section 4.03 of the Indenture.
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When Definitive
Securities are presented to the Registrar or a co-registrar with a
request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized
denominations,
the Registrar or co-registrar shall register the transfer or make the
exchange as requested if its reasonable requirements for such transaction
are met; provided, however, that the Definitive Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the
Company and the Registrar or co-registrar, duly executed by the
Holder thereof or its attorney duly authorized in writing; and
(ii) if such Definitive Securities are required to bear a
restricted securities legend, they are being transferred or
exchanged pursuant to an effective registration statement under the
Securities Act, pursuant to Section 2.3(b) or pursuant to clause
(A), (B) or (C) below, and are accompanied by the following
additional information and documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect;
or
(B) if such Definitive Securities are being transferred to the
Company, a certification to that effect; or
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(C) if such Definitive Securities are being transferred (x)
pursuant to an exemption from registration in accordance with Rule
144A, Regulation S or Rule 144 under the Securities Act,; or (y) in
reliance upon another exemption from the requirements of the
Securities Act: (i) a certification to that effect (in the form set
forth on the reverse of the Security) and (ii) if the Company so
requests, an opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the restrictions set
forth in the legend set forth in Section 2.3(e)(i).
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Rule 144A Global Security or a
Permanent Regulation S Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the
Security, that such Definitive Security is either (A) being
transferred to a QIB in accordance with Rule 144A or (B) is being
transferred after expiration of the Distribution Compliance Period
by a Person who initially purchased such Security in reliance on
Regulation S to a buyer who elects to hold its interest in such
Security in the form of a beneficial interest in the Permanent
Regulation S Global Security; and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books
and records with respect to such Rule 144A Global Security (in the
case of a transfer pursuant to clause (b)(i)(A)) or Permanent
Regulation S Global Security (in the case of a transfer pursuant to
clause (b)(i)(B)) to reflect an increase in the aggregate principal
amount of the Securities represented by the Rule 144A Global
Security or Permanent Regulation S Global Security, as applicable,
such instructions to contain information regarding the Depository
account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or
direct the Securities Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depository and the
Securities Custodian, the aggregate principal amount of Securities
represented by the Rule 144A Global Security or Permanent Regulation S
Global Security, as applicable, to be increased by the aggregate principal
amount of the Definitive Security to be exchanged and shall credit or
cause to be credited to the account of the Person specified in such
instructions a beneficial interest in the Rule 144A Global Security or
Permanent Regulation S Global Security, as applicable, equal to the
principal amount of the Definitive Security so canceled. If no Rule 144A
Global Securities or Permanent Regulation S Global Securities, as
applicable, are then outstanding, the Company shall issue and the Trustee
shall authenticate, upon written order of the Company in the form of an
Officers' Certificate of Company, a new Rule 144A Global Security or
Permanent Regulation S Global Security, as applicable, in the appropriate
principal amount.
(c) Transfer and Exchange of Global Securities. (i) The transfer and
exchange of Global Securities or beneficial interests therein shall be
effected through the Depository, in accordance with the Indenture
(including applicable restrictions on transfer set forth herein, if any)
and the procedures of the Depository therefor. A transferor of a
beneficial interest in a Global Security shall deliver to the Registrar a
written order given in accordance with the Depository's procedures
containing information regarding the participant account of the Depository
to be credited with a beneficial interest in the Global Security. The
Registrar
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shall, in accordance with such instructions, instruct the Depository to
credit to the account of the Person specified in such instructions a
beneficial interest in the Global Security and to debit the account of the
Person making the transfer the beneficial interest in the Global Security
being transferred.
(i) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another
Global Security, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the
Global Security to which such interest is being transferred in an
amount equal to the principal amount of the interest to be so
transferred, and the Registrar shall reflect on its books and
records the date and a corresponding decrease in the principal
amount of the Global Security from which such interest is being
transferred.
(ii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4), a Global
Security may not be transferred as a whole except by the Depository
to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a
nominee of such successor Depository.
(iii) In the event that a Global Security is exchanged for
Definitive Securities pursuant to Section 2.4 of this Appendix,
prior to the consummation of a Registered Exchange Offer or the
effectiveness of a Shelf Registration Statement with respect to such
Securities, such Securities may be exchanged only in accordance with
such procedures as are substantially consistent with the provisions
of this Section 2.3 (including the certification requirements set
forth on the reverse of the Initial Securities intended to ensure
that such transfers comply with Rule 144A or Regulation S, as the
case may be) and such other procedures as may from time to time be
adopted by the Company.
(d) Restrictions on Transfer of Temporary Regulation S Global
Securities. During the Distribution Compliance Period, beneficial
ownership interests in Temporary Regulation S Global Securities may only
be sold, pledged or transferred through Euroclear or Clearstream in
accordance with the Applicable Procedures and only (i) to the Company,
(ii) so long as such Security is eligible for resale pursuant to Rule
144A, to a Person whom the selling holder reasonably believes is a QIB
that purchases for its own account or for the account of a QIB to whom
notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, (iii) in an offshore transaction in accordance with
Regulation S, (iv) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 (if applicable) under the Securities
Act or (v) pursuant to an effective registration statement under the
Securities Act, in each case in accordance with any applicable securities
laws of any state of the United States.
(e) Legend.
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing the Global
Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the
following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY
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NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO THE COMPANY (II) IN THE UNITED STATES TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
(I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
Each Definitive Security will also bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION
AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by
a Global Security) pursuant to Rule 144 under the Securities Act,
the Registrar shall permit the transferee thereof to exchange such
Transfer Restricted Security for a certificated Security that does
not bear the legend set forth above and rescind any restriction on
the transfer of such Transfer Restricted Security, if the transferor
thereof certifies in writing to the Registrar that such sale or
transfer was made in reliance on Rule 144 (such certification to be
in the form set forth on the reverse of the Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities pursuant to and during the period of the
effectiveness of a Shelf Registration Statement with respect to such
Initial Securities or Private Exchange Securities, as the case may
be, all requirements pertaining to legends relating to the
restrictions on transfer relating to the Securities Act on such
Initial Security or such Private Exchange Security will cease to
apply, the requirements requiring any such Initial Security or such
Private Exchange Security issued to certain Holders be issued in
global form will cease to apply, and a certificated Initial Security
or Private Exchange Security or an Initial Security or Private
Exchange Security in global form, in each case without restrictive
transfer legends, will be available to the transferee of the Holder
of such Initial Securities or Private Exchange Securities upon
exchange of such transferring Holder's certificated Initial Security
or Private Exchange Security or appropriate directions to transfer
such Holder's interest in the Global Security, as applicable.
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(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities, all requirements pertaining to
such Initial Securities that Initial Securities issued to certain
Holders be issued in global form will still apply with respect to
Holders of such Initial Securities that do not exchange their
Initial Securities, and Exchange Securities in certificated or
global form, in each case without the restrictive securities legend
relating to the restrictions on transfer relating to the Securities
Act set forth in Exhibit 1 hereto will be available to Holders that
exchange such Initial Securities in such Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders
be issued in global form will still apply with respect to Holders of
such Initial Securities that do not exchange their Initial
Securities, and Private Exchange Securities in global form with the
global securities legend and the Restricted Securities Legend set
forth in Exhibit 1 hereto will be available to Holders that exchange
such Initial Securities in such Private Exchange.
(f) Cancellation or Adjustment of Global Security. At such time as
all beneficial interests in a Global Security have either been exchanged
for Definitive Securities, redeemed, purchased or canceled, such Global
Security shall be returned to the Depository for cancellation or retained
and canceled by the Trustee. At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for certificated
Securities, redeemed, purchased or canceled, the principal amount of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is
then the Securities Custodian for such Global Security) with respect to
such Global Security, by the Trustee or the Securities Custodian, to
reflect such reduction.
(g) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate
certificated Securities and Global Securities at the Registrar's or
co-registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge
payable upon exchange or transfer pursuant to Sections 3.06, 4.09
and 9.05 of the Indenture).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any Definitive Security
selected for redemption in whole or in part pursuant to Article 3 of
the Indenture, except the unredeemed portion of any Definitive
Security being redeemed in part, or (b) any Security for a period
beginning 15 Business Days before the mailing of a notice of an
offer to repurchase or redeem Securities or 15 Business Days before
an interest payment date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying
Agent, the Registrar or any co-registrar may deem and treat the
person in whose name a Security is registered as the absolute owner
of such Security for the purpose of receiving payment of principal
of and interest on such Security and for all other purposes
whatsoever, whether or not
-8-
such Security is overdue, and none of the Company, the Trustee, the
Paying Agent, the Registrar or any co-registrar shall be affected by
notice to the contrary.
(v) All Securities issued upon any transfer or exchange
pursuant to the terms of the Indenture shall evidence the same debt
and shall be entitled to the same benefits under the Indenture as
the Securities surrendered upon such transfer or exchange.
(h) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a
participant in the Depository or other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership
interest in the Securities or with respect to the delivery to any
participant, member, beneficial owner or other Person (other than
the Depository) of any notice (including any notice of redemption)
or the payment of any amount, under or with respect to such
Securities. All notices and communications to be given to the
Holders and all payments to be made to Holders under the Securities
shall be given or made only to or upon the order of the registered
Holders (which shall be the Depository or its nominee in the case of
a Global Security). The rights of beneficial owners in any Global
Security shall be exercised only through the Depository subject to
the applicable rules and procedures of the Depository. The Trustee
may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its members,
participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on
transfer imposed under the Indenture or under applicable law with
respect to any transfer of any interest in any Security (including
any transfers between or among Depository participants, members or
beneficial owners in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as
are expressly required by, and to do so if and when expressly
required by, the terms of the Indenture, and to examine the same to
determine substantial compliance as to form with the express
requirements hereof.
2.4 Certificated Securities.
(a) A Global Security deposited with the Depository or with the Trustee as
Securities Custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of Definitive
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 hereof and (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for such Global
Security and the Depository fails to appoint a successor depositary or if at any
time such Depository ceases to be a "clearing agency" registered under the
Exchange Act and, in either case, a successor Depository is not appointed by the
Company within 90 days of such notice, or (ii) an Event of Default has occurred
and is continuing or (iii) the Company, in their sole discretion, notify the
Trustee in writing that it elects to cause the issuance of Definitive Securities
under the Indenture.
-9-
(b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section shall be surrendered by the Depository to the
Trustee located at its principal corporate trust office in the Borough of
Manhattan, The City of New York, to be so transferred, in whole or from time to
time in part, without charge, and the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Security, an equal aggregate
principal amount of Definitive Securities of authorized denominations. Any
portion of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of US$1,000
principal amount and any integral multiple thereof and registered in such names
as the Depository shall direct. Any Definitive Security delivered in exchange
for an interest in the Transfer Restricted Security shall, except as otherwise
provided by Section 2.3(e) hereof, bear the restricted securities legend set
forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b) hereof, the registered
Holder of a Global Security shall be entitled to grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under the Indenture or the Securities.
(d) In the event of the occurrence of one of the events specified in
Section 2.4(a) hereof, the Company shall promptly make available to the Trustee
a reasonable supply of Definitive Securities in definitive, fully registered
form without interest coupons.
-10-
EXHIBIT 1 to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[[FOR REGULATION S GLOBAL SECURITY ONLY] UNTIL 40 DAYS AFTER THE
COMMENCEMENT OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED
STATES BY A DEALER (AS DEFINED IN THE U.S. SECURITIES ACT) MAY VIOLATE THE
REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT IF SUCH OFFER OR SALE IS
MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION,
AS AMENDED EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I)
THE COMPANY, (II) WITHIN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE UNITED STATES SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER
JURISDICTIONS, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
[Temporary Regulation S Global Security Legend]
EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN
THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY REPRESENTING AN
INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND
CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE "40-DAY
DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE 903(b)(2) OF
REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM
REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED
EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A
TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING
SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN
THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY ONLY BE SOLD, PLEDGED OR
TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.A., AS OPERATOR OF THE EUROCLEAR
SYSTEM OR CLEARSTREAM BANKING,
Exhibit 1 - Page 1
SOCIETE ANONYME AND ONLY (I) TO THE COMPANY, (II) WITHIN THE UNITED STATES TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN A TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, OR (IV) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES AND OTHER JURISDICTIONS. HOLDERS OF INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL SECURITY WILL NOTIFY ANY PURCHASER OF THIS
SECURITY OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.
BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY BE
EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL SECURITY ONLY IF (1) SUCH EXCHANGE
OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE WITH RULE
144A, AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL SECURITY FIRST DELIVERS
TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE)
TO THE EFFECT THAT THE REGULATION S GLOBAL SECURITY IS BEING TRANSFERRED (A) TO
A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A (B) TO A PERSON WHO IS PURCHASING FOR ITS
OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
BENEFICIAL INTERESTS IN A RULE 144A GLOBAL SECURITY MAY BE TRANSFERRED TO
A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S
GLOBAL SECURITY, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY
DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO THE
TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE
EFFECT THAT IF SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904 OF
REGULATION S OR RULE 144 (IF AVAILABLE) AND THAT, IF SUCH TRANSFER OCCURS PRIOR
TO THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, THE INTEREST
TRANSFERRED WILL BE HELD IMMEDIATELY THEREAFTER THROUGH EUROCLEAR BANK S.A./N.A.
OR CLEARSTREAM BANKING SOCIETE ANONYME.
[Definitive Securities Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.
Exhibit 1 - Page 2
CUSIP No. _________
ISIN __________
Common Code No. __________
No. $__________________
7 3/4% Senior Notes due 2013
El Paso Production Holding Company, a Delaware corporation, promises to
pay to ____________________________________, or registered assigns, the
principal sum of ________________________________________________________
Dollars on June 1, 2013.
Interest Payment Dates: June 1 and December 1.
Record Dates: May 15 and November 15.
Additional provisions of this Security are set forth on the other side of
this Security.
Dated: ______________
EL PASO PRODUCTION HOLDING COMPANY
By:_______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
WILMINGTON TRUST COMPANY
as Trustee, certifies that this is one of the Securities
referred to in the Indenture.
By:________________________________________________
Authorized Signatory
Exhibit 1 - Page 3
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
7 3/4% Senior Note due 2013
1. Interest.
El Paso Production Holding Company, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest, and
Liquidated Damages, if any, on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest semiannually on June 1 and
December 1 of each year, commencing December 1, 2003. Interest and Liquidated
Damages, if any, on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from May 23,
2003. Interest and Liquidated Damages, if any, will be computed on the basis of
a 360-day year of twelve 30-day months.
2. Method of Payment.
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the May 15 or November 15 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).
3. Paying Agent and Registrar.
Initially, Wilmington Trust Company, a T banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice. The Company
or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of May 23,
2003 ("Indenture"), among the Company, the Subsidiary Guarantors and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the
Indenture (the "Act"). Terms defined in the Indenture and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to this Indenture and the
Act for a statement of those terms.
The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor will be treated as a single class for all purposes under the
Indenture. The Indenture contains covenants that limit the ability of the
Company and its subsidiaries to incur additional indebtedness; pay dividends or
distributions on, or redeem or repurchase capital stock; make investments; issue
or sell capital stock of subsidiaries; engage in transactions with affiliates;
transfer or sell assets; guarantee indebtedness; restrict dividends or other
payments of subsidiaries; consolidate, merge or transfer all or substantially
all of its assets and the assets of its subsidiaries; and engage in
sale/leaseback transactions. These covenants are subject to important exceptions
and qualifications.
Exhibit 1 - Page 4
5. Optional Redemption.
Except as set forth below, the Company shall not be entitled to redeem the
Securities at its option prior to June 1, 2008.
On and after June 1, 2008, the Company shall be entitled at its option to
redeem all or a portion of the Securities upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed in percentages of principal
amount, on the redemption date), plus accrued and unpaid interest, and
Liquidated Damages, if any, to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the 12-month period
commencing on June 1 of the years set forth below:
Redemption
Period Price
- ------ -----
2008 103.875%
2009 102.583
2010 101.292
2011 and thereafter 100.00%
In addition, prior to June 1, 2006, the Company shall be entitled at its
option on one or more occasions to redeem Securities (which includes Additional
Securities, if any) in an aggregate principal amount not to exceed 35% of the
aggregate principal amount of the Securities (which includes Additional
Securities, if any) originally issued at a redemption price (expressed as a
percentage of principal amount) of 107.750%, plus accrued and unpaid interest,
and Liquidated Damages, if any, to the redemption date, with the net cash
proceeds of a public offering or private placement of common stock of the
Company or the net cash proceeds of a capital contribution to the Company's
common equity; provided, however, that (i) at least 65% of the aggregate
principal amount of Securities (including Additional Securities) remains
outstanding immediately after the occurrence of such redemption (excluding
Securities held by the Company and its Affiliates) and (ii) each such redemption
occurs within 90 days after the related offering or capital contribution.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed at
his registered address. Securities in denominations larger than $1,000 principal
amount may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued and unpaid interest, and
Liquidated Damages, if any, on all Securities (or portions thereof) to be
redeemed on the redemption date is deposited with the Paying Agent on or before
the redemption date and certain other conditions are satisfied, on and after
such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
7. Put Provisions.
Upon the occurrence of a Change of Control (which includes a Ratings
Event), any Holder of Securities will have the right to cause the Company to
repurchase all or any part of the Securities of such Holder at a repurchase
price equal to 101% of the principal amount of the Securities to be repurchased
plus accrued and unpaid interest, and Liquidated Damages, if any, to the date of
repurchase (subject to the right of holders of record on the relevant record
date to receive interest due on the related interest payment date) as provided
in, and subject to the terms of, the Indenture.
8. Guarantees.
The payment by the Company of the principal of, and premium and interest
on, the Securities is fully and unconditionally guaranteed on a joint and
several senior basis by each of the Subsidiary Guarantors on the terms set forth
in the Indenture.
Exhibit 1 - Page 5
9. Denominations: Transfer; Exchange.
The Securities are in registered form without coupons in denominations of
$1,000 principal amount and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of it
for all purposes.
11. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its request unless an abandoned property law designates another Person. After
any such payment, Holders entitled to the money must look only to the Company
and not to the Trustee for payment.
12. Discharge and Defeasance.
Subject to certain conditions, the Company at any time shall be entitled
to terminate some or all of its obligations under the Securities and the
Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
13. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, generally,
pursuant to the terms of the Indenture: (i) the Indenture and the Securities may
be amended with the written consent of the Holders of at least a majority in
principal amount outstanding of the Securities and (ii) any default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount outstanding of the Securities. Subject
to certain exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company, the Subsidiary Guarantors and the Trustee shall be
entitled to amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of this
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities, including Subsidiary Guarantees, or to secure the Securities, or to
add additional covenants or surrender rights and powers conferred on the Company
or the Subsidiary Guarantors, or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder.
14. Defaults and Remedies.
Under the Indenture, Events of Default generally include: (i) default for
30 days in payment of interest or Liquidated Damages, if any, on the Securities;
(ii) default in payment of principal on the Securities at maturity, upon
redemption pursuant to paragraph 5 of the Securities, upon acceleration or
otherwise, or failure by the Company to redeem or purchase Securities when
required; (iii) failure by the Company to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company, the
Subsidiary Guarantors or any Significant Subsidiaries if the amount accelerated
(or so unpaid) exceeds $25,000,000; (v) certain events of bankruptcy or
insolvency with respect to the Company, the Subsidiary Guarantors and the
Significant Subsidiaries; and (vi) certain judgments or decrees for the payment
of money in excess of $100,000,000; and (vii) certain defaults with respect to
Subsidiary Guarantees. If an Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the Securities may
declare all the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Exhibit 1 - Page 6
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security satisfactory
to it. Subject to certain limitations, Holders of a majority in principal amount
of the Securities may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is not opposed to the interest of the Holders.
15. Trustee Dealings with the Company.
Subject to certain limitations imposed by the Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company or
the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. Authentication.
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
21. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written request and
without charge to the Security holder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
El Paso Production Holdings Company
1001 Louisiana Street
Houston, Texas 77002
Attention: Chief Financial Officer
Exhibit 1 - Page 7
GUARANTEE NOTATION
Subject to the limitations set forth in the Indenture (the "Indenture")
referred to in the Security upon which this notation is endorsed, each of the
undersigned entities (hereinafter referred to as the "Subsidiary Guarantors,"
which term includes any successor or additional Subsidiary Guarantor under the
Indenture, has jointly and severally unconditionally and irrevocably guaranteed
to each Holder and to the Trustee and its successors and assigns (a) the full
and punctual payment of principal of and interest on the Securities when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under the Indenture and the Securities and
(b) the full and punctual performance within applicable grace periods of all
other obligations of the Company under the Indenture and the Securities.
This notation of the Subsidiary Guarantees is subject to the limitations
set forth in the Indenture, including Article 10 thereof.
No member, stockholder, partner, officer, employee, director or
incorporator, as such, past, present or future, of the Subsidiary Guarantors
shall have any personal liability under this Subsidiary Guarantee by reason of
his or its status as such member, manager, partner, stockholder, officer,
employee, director or incorporator.
The Subsidiary Guarantee of each Subsidiary Guarantor shall be binding
upon such Subsidiary Guarantor and its successors and assigns and shall inure to
the benefit of the successors and assigns of the Trustee and the Holders and, in
the event of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and conditions hereof.
Each Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Security upon which this notation
of Subsidiary Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
Any of the Subsidiary Guarantors may be released from its Subsidiary
Guarantee upon the terms and subject to the conditions provided in the
Indenture.
[Insert Signature Blocks for each Subsidiary Guarantor]
Exhibit 1 - Page 8
- --------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.
- --------------------------------------------------------------------------------
Date: Your Signature:
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement under the Securities
Act of 1933; or
(3) [ ] inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and in
compliance with Rule 144A under the Securities Act of 1933; or
(4) [ ] outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance with
Rule 904 under the Securities Act of 1933; or
(5) [ ] pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933.
Exhibit 1 - Page 9
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the
name of any person other than the registered holder thereof;
provided, however, that if box (4) or (5) is checked, the Trustee
shall be entitled to require, prior to registering any such transfer
of the Securities, such legal opinions, certifications and other
information as the Company has reasonably requested to confirm that
such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144
under such Act.
---------------------------------------
Signature
Signature Guarantee:
- -------------------------------------- --------------------------------------
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
- --------------------------------------------------------------------------------
Exhibit 1 - Page 10
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:_________________ ______________________________________________
Notice: To be executed by an executive officer
Exhibit 1 - Page 11
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal amount in Principal amount this Global Security authorized officer
of this Global of this Global following such of Trustee or
Security Security decrease or increase) Securities Custodian
Exhibit 1 - Page 12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.09 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.06 or 4.09 of the Indenture, state the amount in
principal amount: $____________________
Dated:_______________ Your Signature:___________________________________
(Sign exactly as your name appears on the
other side of this Security.)
Signature Guarantee:
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Exhibit 1 - Page 13
EXHIBIT A
FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY*/**/
No. $
7-3/4 % Senior Notes due 2013
El Paso Production Holding Company, a Delaware corporation, promises to
pay to ____________________________________, or registered assigns, the
principal sum of ________________________________________________________
Dollars on June 1, 2013.
Interest Payment Dates: June 1and December 1.
Record Dates: May 15 and November 15.
Additional provisions of this Security are set forth on the other side of
this Security.
Dated:
EL PASO PRODUCTION HOLDING COMPANY
By:_______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
WILIMINGTON TRUST COMPANY
as Trustee, certifies that this is one of the Securities
referred to in the Indenture.
By:_______________________________________________
Authorized Signatory
- --------------------
*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".
**/.If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.
Exhibit A - Page 1
FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY
7-3/4% Senior Note due 2013
1. Interest.
El Paso Production Holding Company, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest, and
Liquidated Damages, if any, on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest semiannually on June 1 and
December 1 of each year, commencing December 1, 2003. Interest and Liquidated
Damages, if any, on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from May 23,
2003. Interest and Liquidated Damages, if any, will be computed on the basis of
a 360-day year of twelve 30-day months.
2. Method of Payment.
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the May 15 or November 15 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).
3. Paying Agent and Registrar.
Initially, Wilmington Trust Company, a T banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice. The Company
or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of May 23,
2003 ("Indenture"), among the Company, the Subsidiary Guarantors and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the
Indenture (the "Act"). Terms defined in the Indenture and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the Act
for a statement of those terms.
The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor will be treated as a single class for all purposes under the
Indenture. The Indenture contains covenants that limit the ability of the
Company and its subsidiaries to incur additional indebtedness; pay dividends or
distributions on, or redeem or repurchase capital stock; make investments; issue
or sell capital stock of subsidiaries; engage in transactions with affiliates;
transfer or sell assets; guarantee indebtedness; restrict dividends or other
payments of subsidiaries; consolidate, merge or transfer all or substantially
all of its assets and the assets of its subsidiaries; and engage in
sale/leaseback transactions. These covenants are subject to important exceptions
and qualifications.
Exhibit A - Page 2
5. Optional Redemption.
Except as set forth below, the Company shall not be entitled to redeem the
Securities at its option prior to June 1, 2008.
On and after June 1, 2008, the Company shall be entitled at its option to
redeem all or a portion of the Securities upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed in percentages of principal
amount, on the redemption date), plus accrued and unpaid interest, and
Liquidated Damages, if any, to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the 12-month period
commencing on June 1 of the years set forth below:
Redemption
Period Price
------ -----
2008 103.875%
2009 102.583
2010 101.292
2011 and thereafter 100.00%
In addition, prior to June 1, 2006, the Company shall be entitled at its
option on one or more occasions to redeem Securities (which includes Additional
Securities, if any) in an aggregate principal amount not to exceed 35% of the
aggregate principal amount of the Securities (which includes Additional
Securities, if any) originally issued at a redemption price (expressed as a
percentage of principal amount) of 107.750%, plus accrued and unpaid interest,
and Liquidated Damages, if any, to the redemption date, with the net cash
proceeds of a public offering or private placement of common stock of the
Company or the net cash proceeds of a capital contribution to the Company's
common equity; provided, however, that (i) at least 65% of the aggregate
principal amount of Securities (including Additional Securities) remains
outstanding immediately after the occurrence of such redemption (excluding
Securities held by the Company and its Affiliates) and (ii) each such redemption
occurs within 90 days after the related offering or capital contribution.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed at
his registered address. Securities in denominations larger than $1,000 principal
amount may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued and unpaid interest, and
Liquidated Damages, if any, on all Securities (or portions thereof) to be
redeemed on the redemption date is deposited with the Paying Agent on or before
the redemption date and certain other conditions are satisfied, on and after
such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
7. Put Provisions.
Upon the occurrence of a Change of Control (which includes a Ratings
Event), any Holder of Securities will have the right to cause the Company to
repurchase all or any part of the Securities of such Holder at a repurchase
price equal to 101% of the principal amount of the Securities to be repurchased
plus accrued and unpaid interest, and Liquidated Damages, if any, to the date of
repurchase (subject to the right of holders of record on the relevant record
date to receive interest due on the related interest payment date) as provided
in, and subject to the terms of, the Indenture.
8. Guarantees.
The payment by the Company of the principal of, and premium and interest
on, the Securities is fully and unconditionally guaranteed on a joint and
several senior basis by each of the Subsidiary Guarantors on the terms set forth
in the Indenture.
Exhibit A - Page 3
9. Denominations: Transfer; Exchange.
The Securities are in registered form without coupons in denominations of
$1,000 principal amount and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of it
for all purposes.
11. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its request unless an abandoned property law designates another Person. After
any such payment, Holders entitled to the money must look only to the Company
and not to the Trustee for payment.
12. Discharge and Defeasance.
Subject to certain conditions, the Company at any time shall be entitled
to terminate some or all of its obligations under the Securities and the
Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
13. Amendment, Waiver.
Subject to certain exceptions set forth in the Indenture, generally,
pursuant to the terms of the Indenture: (i) the Indenture and the Securities may
be amended with the written consent of the Holders of at least a majority in
principal amount outstanding of the Securities and (ii) any default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount outstanding of the Securities. Subject
to certain exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company, the Subsidiary Guarantors and the Trustee shall be
entitled to amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of this
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities, including Subsidiary Guarantees, or to secure the Securities, or to
add additional covenants or surrender rights and powers conferred on the Company
or the Subsidiary Guarantors, or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder.
14. Defaults and Remedies.
Under the Indenture, Events of Default generally include: (i) default for
30 days in payment of interest or Liquidated Damages, if any, on the Securities;
(ii) default in payment of principal on the Securities at maturity, upon
redemption pursuant to paragraph 5 of the Securities, upon acceleration or
otherwise, or failure by the Company to redeem or purchase Securities when
required; (iii) failure by the Company to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company, the
Subsidiary Guarantors or any Significant Subsidiaries if the amount accelerated
(or so unpaid) exceeds $25,000,000; (v) certain events of bankruptcy or
insolvency with respect to the Company, Subsidiary Guarantors and the
Significant Subsidiaries; and (vi) certain judgments or decrees for the payment
of money in excess of $100,000,000; and (vii) certain defaults with respect to
Subsidiary Guarantees. If an Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the Securities may
declare all the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Exhibit A - Page 4
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security satisfactory
to it. Subject to certain limitations, Holders of a majority in principal amount
of the Securities may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is not opposed to the interest of the Holders.
15. Trustee Dealings with the Company.
Subject to certain limitations imposed by the Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company or
the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. Authentication.
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
[20. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.]1
20. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written request and
without charge to the Security holder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
El Paso Production Holdings Company
1001 Louisiana Street
- --------
1 Delete if this Security is not being issued in exchange for an Initial
Security.
Exhibit A - Page 5
Houston, Texas 77002
Attention: Chief Financial Officer
Exhibit A - Page 6
GUARANTEE NOTATION
Subject to the limitations set forth in the Indenture (the "Indenture")
referred to in the Security upon which this notation is endorsed, each of the
undersigned entities (hereinafter referred to as the "Subsidiary Guarantors,"
which term includes any successor or additional Subsidiary Guarantor under the
Indenture, has jointly and severally unconditionally and irrevocably guaranteed
to each Holder and to the Trustee and its successors and assigns (a) the full
and punctual payment of principal of and interest on the Securities when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under the Indenture and the Securities and
(b) the full and punctual performance within applicable grace periods of all
other obligations of the Company under the Indenture and the Securities.
This notation of the Subsidiary Guarantees is subject to the limitations
set forth in the Indenture, including Article 10 thereof.
No member, stockholder, partner, officer, employee, director or
incorporator, as such, past, present or future, of the Subsidiary Guarantors
shall have any personal liability under this Subsidiary Guarantee by reason of
his or its status as such member, manager, partner, stockholder, officer,
employee, director or incorporator.
The Subsidiary Guarantee of each Subsidiary Guarantor shall be binding
upon such Subsidiary Guarantor and its successors and assigns and shall inure to
the benefit of the successors and assigns of the Trustee and the Holders and, in
the event of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and conditions hereof.
Each Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Security upon which this notation
of Subsidiary Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
Any of the Subsidiary Guarantors may be released from its Subsidiary
Guarantee upon the terms and subject to the conditions provided in the
Indenture.
[Insert Signature Blocks for each Subsidiary Guarantor]
Exhibit A - Page 7
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.
- --------------------------------------------------------------------------------
Date: Your Signature:
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.09 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.06 or 4.09 of the Indenture, state the amount in
principal amount: $_________________
Dated:___________________ Your Signature:___________________________________
(Sign exactly as your name appears on the
other side of this Security.)
Signature Guarantee:
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Exhibit A - Page 8