EXHIBIT 4.A.2
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SECOND SUPPLEMENTAL INDENTURE
AMONG
EL PASO PRODUCTION HOLDING COMPANY
AS ISSUER,
EL PASO PRODUCTION COMPANY,
EL PASO PRODUCTION GOM INC.
AND
EL PASO ENERGY RATON CORPORATION,
AS SUBSIDIARY GUARANTORS,
AND
WILMINGTON TRUST COMPANY
AS TRUSTEE
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JULY 26, 2004
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7-3/4% SENIOR NOTES DUE 2013
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SECOND SUPPLEMENTAL INDENTURE
This Second Supplemental Indenture dated as of July 26, 2004 (this "Second
Supplemental Indenture") among (i) El Paso Production Holding Company, a
Delaware corporation (the "Company"), (ii) El Paso Production Company, El Paso
Production GOM Inc. and El Paso Energy Raton Corporation (collectively, the
"Subsidiary Guarantors") and (iii) Wilmington Trust Company, as trustee (the
"Trustee"). All capitalized terms used herein without definition shall have the
respective meanings ascribed to them in the Original Indenture (as defined
below).
W I T N E S S E T H:
WHEREAS, the Company, El Paso Production Company ("El Paso Production"),
El Paso Production GOM Inc. ("GOM"), Vermejo Minerals Corporation ("Vermejo")
and El Paso Energy Raton, L.L.C. ("Raton") have heretofore executed and
delivered to the Trustee an Indenture dated as of May 23, 2003 (the "Original
Indenture"), providing for the issuance $1,200,000,000 aggregate principal
amount of the Company's 7-3/4% Senior Notes due 2013;
WHEREAS, Raton and Vermejo entered into an Agreement of Merger, pursuant
to which (i) Raton was merged with and into Vermejo, (ii) Vermejo was the
surviving corporation of the merger contemplated by such agreement and (iii)
Vermejo's name was changed to "El Paso Energy Raton Corporation;"
WHEREAS, the Company, El Paso Production, GOM and Vermejo entered into
that First Supplemental Indenture dated as of January 31, 2004 (the "First
Supplemental Indenture"), pursuant to which Vermejo expressly assumed the
obligations of Raton under its Subsidiary Guarantee;
WHEREAS, Section 9.01(6) of the Original Indenture provides that, without
notice to or consent of any Holder, the Company, the Subsidiary Guarantors and
the Trustee may amend the Original Indenture to add to the covenants of the
Company for the benefit of the Holders;
WHEREAS, the Company and the Subsidiary Guarantors desire to add to the
covenants contained in the Original Indenture for the benefit of the Holders;
WHEREAS, all action on the part of the Company and the Subsidiary
Guarantors necessary to authorize its execution, delivery and performance of the
Original Indenture, as further supplemented by this Second Supplemental
Indenture, has been duly taken; and
NOW, THEREFORE, to comply with the provisions of the Original Indenture
and in consideration of the above premises, the Company, the Subsidiary
Guarantors and the Trustee mutually covenant and agree for the equal and
proportionate benefit of all Holders of the Securities as follows:
ARTICLE 1
Section 1.01 This Second Supplemental Indenture is supplemental to the
Original Indenture and does and shall be deemed to form a part of, and shall be
construed in connection with and as a part of, the Original Indenture for any
and all purposes.
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Section 1.02 This Second Supplemental Indenture shall become effective
immediately upon its execution and delivery by each of the Company, the
Subsidiary Guarantors and the Trustee.
ARTICLE 2
Section 2.01 The following definitions shall be added (each in the
appropriate alphabetical order with respect to the other definitions) to Section
1.01 of the Original Indenture, as supplemented:
"Company Proved Reserves" means, as of any date of determination,
the total "proved oil and gas reserves" of the Company and its Restricted
Subsidiaries, calculated in accordance with SEC guidelines and expressed
on a million cubic feet of natural gas equivalent basis, as reported in
the Latest Reserve Report available as of such date of determination.
"Consolidated Indebtedness" means the total Indebtedness of the
Company and its Restricted Subsidiaries determined on a consolidated basis
in accordance with GAAP.
"Debt to EBITDA Ratio" as of any date of determination means the
ratio of (x) Consolidated Indebtedness as of such date of determination to
(y) the aggregate amount of EBITDA for the Reference Period; provided,
however, that, for purposes of such computation only, in calculating
EBITDA:
(1) only for purposes of determining the Debt to EBITDA Ratio
on a pro forma basis giving effect to an Affiliate Transaction (or
series of related Affiliate Transactions), the transaction giving
rise to the need to calculate the Debt to EBITDA Ratio shall be
given pro forma effect as if such Affiliate Transaction (or series
of related Affiliate Transactions) had occurred on the first day of
the Reference Period;
(2) if since the beginning of the Reference Period the Company
or any Restricted Subsidiary shall have made any Asset Disposition,
EBITDA for such Reference Period shall be calculated after giving
pro forma effect thereto as if such Asset Disposition, and the
application of Net Available Cash therefrom, occurred on the first
day of such Reference Period;
(3) if since the beginning of the Reference Period (A) 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 or (B) 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 Reference Period) shall have made any Asset Disposition, any
Investment or acquisition (or received a contribution) of assets
that would have required an adjustment pursuant to clause (A) above
if made by the Company or a Restricted Subsidiary during such
Reference Period, then EBITDA for such Reference Period shall be
calculated after giving pro forma effect thereto
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as if such Asset Disposition, Investment, acquisition or receipt of
contribution of assets occurred on the first day of such Reference
Period.
For purposes of this definition, whenever pro forma effect is
to be given to an acquisition or receipt of a contribution of assets, the
amount of income or earnings relating thereto, the pro forma calculations
shall be determined in good faith in accordance with Article 11 of
Regulation S-X promulgated by the SEC (provided that such acquisition or
receipt of contribution of assets shall be given effect as if it had
occurred on the first day of the Reference Period), by a responsible
financial or accounting Officer of the Company.
"Debt to Company Proved Reserves Ratio" as of any date of
determination, means the ratio of (x) Consolidated Indebtedness as of such
date of determination to (y) the Company Proved Reserves as of such date
of determination; provided, however, that, for purposes of such
computation only, in calculating Company Proved Reserves:
(1) only for purposes of determining the Debt to Company
Proved Reserves Ratio on a pro forma basis giving effect to an
Affiliate Transaction (or series of related Affiliate Transactions),
Company Proved Reserves shall be increased or decreased by the
Proved Reserves attributable to any assets acquired (including any
assets received in a contribution) or disposed of (respectively) in
such Affiliate Transaction (or series of related Affiliate
Transactions);
(2) Company Proved Reserves shall be increased by the Proved
Reserves attributable to any acquisition or receipt of contribution
of assets consummated since the date of the Latest Reserve Report as
of such date of determination;
(3) Company Proved Reserves shall be decreased by the Proved
Reserves (A) disposed of since the date of the Latest Reserve Report
and (B) produced during the period commencing on the date of the
Latest Reserve Report and ending as of the most recent month's end
preceding the date of determination for which monthly operating
reports are available to the Company in respect of the properties to
which the Company Proved Reserves are attributable; and
(4) Company Proved Reserves shall be increased or decreased by
the amount of any revisions to Company Proved Reserves due to
exploration, development, exploitation, production or other
activities conducted or otherwise occurring during the period
commencing on the date of the Latest Reserve Report and ending as of
such date of determination.
For purposes of this definition of Debt to Company Proved
Reserves Ratio, all increases and decreases to Company Proved Reserves
described in items (1) through (4) above shall be set forth in an
Officer's Certificate and shall be estimated in good faith in writing in
accordance with SEC guidelines by the Company's engineers or engineers
retained by it. If any of the
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increases or decreases to Company Proved Reserves described in items (1)
through (4), individually or in the aggregate, constitutes a Material
Change in Reserves, such increases or decreases (excluding for purposes of
such determination decreases attributable to production from the
properties of the Company and its Restricted Subsidiaries since the date
of the Latest Reserve Report) shall also be confirmed in writing by an
independent petroleum engineer retained by the Company.
"Latest Reserve Report" means, as of any date of determination, the
most recent reserve report of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than fifteen (15) months prior to
such date of determination), prepared and reviewed in accordance with SEC
guidelines by an independent petroleum engineer retained by the Company.
"Material Change in Reserves" means an increase or decrease in
Company Proved Reserves (excluding for purposes of such determination
decreases attributable to production from the properties of the Company
and its Restricted Subsidiaries since the date of the Latest Reserve
Report) of more than 10% of Company Proved Reserves as of the relevant
date of determination (without giving effect to any increases and
decreases described in items (1) through (4) of the definition of "Debt to
Company Proved Reserves Ratio" occurring since the date of the Latest
Reserve Report).
"Negative Credit Event" means the occurrence of any Affiliate
Transaction (or series of related Affiliate Transactions) the effect of
which is to cause (1) (x) the Debt to Company Proved Reserves Ratio,
calculated on a pro forma basis immediately after giving effect to such
Affiliate Transaction (or series of related Affiliate Transactions) being
greater than (y) the Debt to Company Proved Reserves Ratio immediately
prior to such Affiliate Transaction (or series of related Affiliate
Transactions) or (2) (x) the Debt to EBITDA Ratio, calculated on a pro
forma basis immediately after giving effect to such Affiliate Transaction
(or series of related Affiliate Transactions) being greater than (y) the
Debt to EBITDA Ratio immediately prior to such Affiliate Transaction (or
series of related Affiliate Transactions).
"Proved Reserves" of a Person or an asset means the "proved oil and
gas reserves" owned by such Person or attributable to such asset, in each
case, calculated in accordance with SEC guidelines and expressed on a
million cubic feet of natural gas equivalent basis.
"Reference Period" means, with respect to a date of determination,
the most recent four consecutive fiscal quarters of the Company ended
prior to such date of determination, for which financial information is
then publicly available.
Section 2.02 The Company, the Subsidiary Guarantors and the Trustee hereby
acknowledge and agree that the following new Sections 4.07(c) and (d) shall be
added to the Original Indenture, as supplemented:
"(c) Notwithstanding the foregoing provisions of this Section 4.07, the
Company shall not, and shall not permit any Restricted Subsidiary to, enter
into or otherwise effect any
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Affiliate Transaction (or series of related Affiliate Transactions) if such
Affiliate Transaction (or series of related Affiliate Transactions):
(1) involves an amount in excess of $100,000,000; and
(2) would constitute or result in a Negative Credit Event.
(d) The provisions of Section 4.07(c) shall not prohibit any transaction or
arrangement by the Company or any Restricted Subsidiary:
(1) described in Section 4.07(b)(2), (3), (4), (6), (7) or (8) of
the Original Indenture;
(2) that are a transaction or transactions involving only the
Company and one or more Subsidiary Guarantors; or
(3) pursuant to any transaction or arrangement in effect on the
Issue Date and described in the Offering Memorandum under the
caption "Certain Relationships and Related Transactions,"
including any modifications, extensions or renewals of any
such transactions or arrangements or payments or repayments
pursuant to any such transactions or arrangements that do not
adversely affect the Company and its Restricted Subsidiaries,
considered as a single enterprise.
ARTICLE 3
Section 3.01 Except as specifically modified herein, the Original
Indenture and the Securities are in all respects ratified and confirmed and
shall remain in full force and effect in accordance with their terms. The
Trustee shall not be responsible in any manner whatsoever for or in respect of
the validity or sufficiency of this Second Supplemental Indenture or for or in
respect of the recitals contained herein, all of which are made solely by the
Company and the Subsidiary Guarantors.
Section 3.02 Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed, by the Trustee by reason of this Second Supplemental Indenture. This
Second Supplemental Indenture is executed and accepted by the Trustee subject to
all the terms and conditions set forth in the Original Indenture with the same
force and effect as if those terms and conditions were repeated at length herein
and made applicable to the Trustee with respect hereto. In entering into this
Second Supplemental Indenture, the Trustee shall be entitled to the benefit of
every provision of the Original Indenture relating to the conduct or affecting
the liability or affording protection to the Trustee, whether or not elsewhere
herein so provided.
Section 3.03 THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 3.04 This Second Supplemental Indenture may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument.
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Section 3.05 By not later than the close of the Business Day after
execution of this Second Supplemental Indenture, the Company shall issue a press
release describing the material terms of (a) this Second Supplemental Indenture,
(b) the consents obtained from the Holders of Securities in connection with
execution of this Second Supplemental Indenture, and (c) the waiver obtained
pursuant to Section 6.04 of the Original Indenture in connection with execution
of this Second Supplemental Indenture.
(Signature Pages Follow)
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, all as of the date first written
above.
EL PASO PRODUCTION HOLDING COMPANY
By: /s/ D. Xxxx Xxxxxx
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D. Xxxx Xxxxxx
Executive Vice President and Chief
Financial Officer
EL PASO PRODUCTION COMPANY
By: /s/ D. Xxxx Xxxxxx
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D. Xxxx Xxxxxx
Executive Vice President and Chief
Financial Officer
EL PASO PRODUCTION GOM INC.
By: /s/ D. Xxxx Xxxxxx
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D. Xxxx Xxxxxx
Executive Vice President and Chief
Financial Officer
EL PASO ENERGY RATON CORPORATION
By: /s/ D. Xxxx Xxxxxx
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D. Xxxx Xxxxxx
Executive Vice President and Chief
Financial Officer
WILMINGTON TRUST COMPANY, as Trustee
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
Title: Vice President
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