PLAINS EXPLORATION & PRODUCTION COMPANY as the Company THE GUARANTOR PARTIES NAMED HEREIN as Guarantors and WELLS FARGO BANK, N. A. as Trustee THIRD SUPPLEMENTAL INDENTURE Dated as of June 19, 2007 To INDENTURE Dated as of March 13, 2007 7¾% SENIOR...
Exhibit
4.2
EXECUTION
COPY
PLAINS
EXPLORATION & PRODUCTION COMPANY
as
the Company
THE
GUARANTOR PARTIES NAMED HEREIN
as
Guarantors
and
XXXXX
FARGO BANK, N. A.
as
Trustee
Dated
as of June 19, 2007
To
INDENTURE
Dated
as of March 13, 2007
7¾%
SENIOR NOTES DUE 2015
TABLE
OF CONTENTS
Page
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ARTICLE
1 Relation
to Indenture; Definitions
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1
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SECTION
1.01.
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Relation
to Indenture.
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1
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SECTION
1.02.
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Definitions.
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1
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SECTION
1.03.
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General
References.
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1
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ARTICLE
2 The
Series of Securities
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2
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||
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SECTION
2.01.
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The
Form and Title of the Securities.
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2
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SECTION
2.02.
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Amount.
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2
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SECTION
2.03.
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Stated
Maturity.
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2
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|
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SECTION
2.04.
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Interest
and Interest Rates.
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2
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|
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SECTION
2.05.
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Place
of Payment.
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2
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|
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SECTION
2.06.
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Optional
Redemption.
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3
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|
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SECTION
2.07.
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Defeasance
and Discharge; Covenant Defeasance.
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3
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SECTION
2.08.
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Global
Securities.
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3
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SECTION
2.09.
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Subsidiary
Guarantees.
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3
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ARTICLE
3 Amendments
to Original Indenture
|
3
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||
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SECTION
3.01.
|
Defined
Terms.
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3
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|
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SECTION
3.02.
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Defaults
and Remedies.
|
30
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|
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SECTION
3.03.
|
Notice
of Defaults.
|
33
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SECTION
3.04.
|
Compensation
and Reimbursement.
|
33
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SECTION
3.05.
|
Merger,
Consolidation or Sale of Substantially All Assets.
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33
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SECTION
3.06.
|
Selection
for and Notice of Redemption.
|
35
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SECTION
3.07.
|
Redemption
Upon Equity Offering.
|
37
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|
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SECTION
3.08.
|
Covenant
Defeasance.
|
37
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|
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SECTION
3.09.
|
Subsidiary
Guarantees.
|
37
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|
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SECTION
3.10.
|
Repurchase
Offers.
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39
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ARTICLE
4 Additional
Covenants
|
40
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||
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SECTION
4.01.
|
Reports.
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41
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SECTION
4.02.
|
Taxes.
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41
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SECTION
4.03.
|
Restricted
Payments.
|
42
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|
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SECTION
4.04.
|
Dividend
and Other Payment Restrictions Affecting Restricted
Subsidiaries.
|
46
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|
|
SECTION
4.05.
|
Incurrence
of Indebtedness and Issuance of Preferred Stock.
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48
|
|
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SECTION
4.06.
|
Asset
Sales.
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51
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|
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SECTION
4.07.
|
Transactions
with Affiliates.
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53
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SECTION
4.08.
|
Limitation
on Liens.
|
55
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|
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SECTION
4.09.
|
Offer
to Repurchase upon a Change of Control.
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55
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SECTION
4.10.
|
Designation
of Restricted and Unrestricted Subsidiaries.
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57
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SECTION
4.11.
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Future
Guarantors.
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57
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SECTION
4.12.
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Covenant
Termination.
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58
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ARTICLE
5 Miscellaneous
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58
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SECTION
5.01.
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Certain
Trustee Matters.
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58
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SECTION
5.02.
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Continued
Effect.
|
58
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SECTION
5.03.
|
Governing
Law.
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58
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SECTION
5.04.
|
Counterparts.
|
59
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EXHIBITS
|
Exhibit
A:
|
Form
of Note
|
THIRD
SUPPLEMENTAL INDENTURE, dated as of June 19, 2007 (this “Supplemental
Indenture”), by and among PLAINS EXPLORATION & PRODUCTION
COMPANY, a corporation duly organized and existing under the laws of
the State of Delaware (the “Company”), each of the Guarantor parties named on
the signature pages hereof (collectively, the “Guarantors”) and XXXXX
FARGO BANK, N. A., a nationally chartered banking association, as
trustee under the Indenture referred to below (in such capacity, the
“Trustee”).
RECITALS
OF THE COMPANY
WHEREAS,
the Company and the Trustee have heretofore entered into an Indenture, dated
as
of March 13, 2007 (the “Original Indenture”) (the Original Indenture, as
supplemented from time to time, including without limitation pursuant to this
Supplemental Indenture, being referred to herein as the “Indenture”);
and
WHEREAS,
under the Original Indenture, a new series of Securities may at any time be
established by the Board of Directors of the Company, in accordance with the
provisions of the Original Indenture, and the terms of such series may be
established by an indenture supplemental to the Original Indenture;
and
WHEREAS,
the Company proposes to create under the Indenture a new series of Securities;
and
WHEREAS,
the Company proposes that its obligations under such new series of Securities
and under the Indenture to the extent applicable to such new series of
Securities be guaranteed by each of the Guarantors in accordance with the
provisions of the Indenture (including without limitation Article Fourteen
of
the Original Indenture and the provisions of this Supplemental Indenture);
and
NOW,
THEREFORE, in consideration of the premises, agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree,
for the equal and proportionate benefit of all Holders of the Notes (as defined
below), as follows:
ARTICLE
1
Relation
to Indenture; Definitions
SECTION
1.01. Relation
to Indenture.
With
respect to the Notes, this Supplemental Indenture constitutes an integral part
of the Indenture.
SECTION
1.02. Definitions.
For
all
purposes of this Supplemental Indenture, capitalized terms used herein and
not
otherwise defined herein shall have the meanings assigned thereto in the
Original Indenture.
SECTION
1.03. General
References.
Unless
otherwise specified or unless the context otherwise requires, (i) all references
in this Supplemental Indenture to Articles and Sections refer to the
corresponding Articles and Sections of this Supplemental Indenture and (ii)
the
terms “herein”, “hereof”, “hereunder” and any other
word of similar import refers to this Supplemental Indenture.
ARTICLE
2
The
Series of Securities
SECTION
2.01. The
Form and Title of the Securities.
There
is
hereby established a new series of Securities to be issued under the Indenture
and to be designated as the Company’s 7¾% Senior Notes due 2015 (the
“Notes”). The Notes shall be substantially in the form attached as
Exhibit A hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted
by
the Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as the Company
may deem appropriate or as may be required or appropriate to comply with any
laws or with any rules made pursuant thereto or with the rules of any securities
exchange or automated quotation system on which the Notes may be listed or
traded, or to conform to general usage, or as may, consistently with the
Indenture, be determined by the Officers executing such Notes, as evidenced
by
their execution thereof.
The
Notes
shall be executed, authenticated and delivered in accordance with the provisions
of, and shall in all respects be subject to, the terms, conditions and covenants
of the Original Indenture as supplemented by this Supplemental Indenture
(including the form of Note attached as Exhibit A hereto (the terms
of which are incorporated in and made a part of this Supplemental Indenture
for
all intents and purposes)).
SECTION
2.02. Amount.
Subject
to compliance with Section 10.11 of the Indenture, the aggregate principal
amount of the Notes that may be authenticated and delivered pursuant hereto
is
unlimited. The Trustee shall initially authenticate and deliver Notes
for original issue in an initial aggregate principal amount of up to
$600,000,000, upon delivery to the Trustee of a Company Order for the
authentication and delivery of such Notes. The aggregate principal
amount of the Notes to be issued hereunder may be increased at any time
hereafter and the series may be reopened for issuances of Additional Notes,
upon
Company Order without the consent of any Holder and without any further
supplement or amendment to the Original Indenture or this Supplemental
Indenture. The Notes issued on the date hereof and any such
Additional Notes that may be issued hereafter shall be part of the same series
of Securities for all purposes under the Indenture.
SECTION
2.03. Stated
Maturity.
The
Notes
may be issued on any Business Day on or after June 19, 2007, and the Stated
Maturity of the Notes shall be June 15, 2015.
SECTION
2.04. Interest
and Interest Rates.
The
rate
or rates at which the Notes shall bear interest, the date or dates from which
such interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable and the Regular Record Date for any interest payable
on any Interest Payment Date, in each case, shall be as set forth in the form
of
Note attached as Exhibit A hereto.
SECTION
2.05. Place
of Payment.
As
long
as any Notes are Outstanding, the Company shall maintain an office or agency
in
the United States where Notes may be presented for payment. Such
office or agency shall initially be the office or agency of the Trustee in
Dallas, Texas.
2
SECTION
2.06. Optional
Redemption.
At
its
option, the Company may redeem the Notes, in whole or in part, in principal
amounts of $1,000 or any integral multiple thereof, at any time or from time
to
time, at the applicable Redemption Prices determined as set forth in the form
of
Note attached hereto as Exhibit A, in accordance with the terms set forth
in the Notes and in accordance with Article Eleven of the Original Indenture
(as
amended and supplemented by this Supplemental Indenture, including without
limitation Section 3.06. hereof).
SECTION
2.07. Defeasance
and Discharge; Covenant Defeasance.
Article
Thirteen of the Original Indenture (as amended and supplemented by this
Supplemental Indenture) shall apply to the Notes. Furthermore, each
of the following shall constitute Additional Defeasible Provisions (as such
term
is defined in the Original Indenture):
(a) the
covenants set forth in ARTICLE 4 of this
Supplemental Indenture; and
(b) the
limitation imposed by clause (iv) of Section 8.1(a) of the Indenture (as a
result of this Supplemental Indenture).
SECTION
2.08. Global
Securities.
The
Notes
shall initially be issuable in whole or in part in the form of one or more
Global Securities. Such Global Securities (i) shall be
deposited with, or on behalf of, The Depository Trust Company, New York, New
York, which shall act as Depositary with respect to the Notes, (ii) shall bear
the legends applicable to Global Securities set forth in Sections 2.2 and 2.4
of
the Original Indenture, (iii) may be exchanged in whole or in part for
Securities in definitive form upon the terms and subject to the conditions
provided in Section 3.5 of the Original Indenture and in this Supplemental
Indenture and (iv) shall otherwise be subject to the applicable provisions
of the Indenture.
SECTION
2.09. Subsidiary
Guarantees.
Article
Fourteen of the Original Indenture (as amended and supplemented by this
Supplemental Indenture, including without limitation Section 3.09. hereof) shall apply to the
Notes. For the purposes of this Supplemental Indenture and the Notes
(including without limitation the provisions of the Original Indenture to the
extent applicable thereto), the term “Guarantor” shall mean each of the
Guarantor parties named on the signature pages of this Supplemental
Indenture.
ARTICLE
3
Amendments
to Original Indenture
With
respect to the Notes, the Original Indenture is hereby amended as set forth
below in this ARTICLE 3; provided,
however, that each such amendment
shall apply only to the Notes and not
to any other series of Securities issued under the Indenture.
SECTION
3.01. Defined
Terms.
Subject
to the limitations set forth in the preamble to ARTICLE
3 of this Supplemental Indenture, Section 1.1 of the Original Indenture
is
hereby amended by inserting or restating, as the case may be, each of the
following defined terms in its appropriate alphabetical position:
“Acquired
Debt” means, with respect to any specified Person:
(1) Indebtedness
of any other Person existing at the time such other Person is merged with or
into or became a Subsidiary of such specified Person, regardless of
3
whether
such Indebtedness is incurred in connection with, or in contemplation of, such
other Person merging with or into, or becoming a Restricted Subsidiary of,
such
specified Person, but excluding Indebtedness which is extinguished, retired
or
repaid in connection with such Person merging with or becoming a Subsidiary
of
such specified Person; and
(2) Indebtedness
secured by a Lien encumbering any asset acquired by such specified
Person.
“Acquired
Subordinated Indebtedness” means Subordinated Debt of the Company or any of its
Restricted Subsidiaries, that is Acquired Debt and was not incurred in
connection with, or in contemplation of, another Person merging with or into,
or
becoming a Restricted Subsidiary of, the Company or any of its
Subsidiaries.
“Additional
Assets” means:
(1) any
property or assets (other than Indebtedness and Capital Stock) to be used by
the
Company or a Restricted Subsidiary in a Related Business;
(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 a Restricted
Subsidiary;
(3) Capital
Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary; or
(4) Capital
Stock of any Subsidiary of the Company; provided that all the Capital
Stock of such Subsidiary held by the Company or any of its Restricted
Subsidiaries shall entitle the Company or such Restricted Subsidiary to not
less
than a pro rata portion of all dividends or other distributions made by such
Subsidiary upon any of such Capital Stock;
providedfurther,
however, that in the case of clauses (2), (3) and (4), such Subsidiary is
primarily engaged in a Related Business.
“Additional
Notes” means an unlimited maximum aggregate principal amount of Notes (other
than the Notes issued on the date hereof) issued under the Indenture pursuant
to
Section 2.02. of this Supplemental
Indenture.
“Adjusted
Consolidated Net Tangible Assets” means (without duplication), as of the date of
determination, the remainder of:
(a) the
sum of:
(i) discounted
future net revenues from proved oil and gas reserves of the Company and its
Restricted Subsidiaries calculated in accordance with SEC guidelines before
any
provincial, territorial, state, Federal or foreign income taxes, as estimated
by
the Company in a reserve report prepared as of the end of the Company’s most
recently completed fiscal year for which audited financial statements are
available and giving effect to applicable Oil and Natural Gas Hedging Contracts,
as increased by, as of the date of determination, the estimated discounted
future net revenues from:
(A) estimated
proved oil and gas reserves acquired since such year end, which reserves were
not reflected in such year end reserve report, and
4
(B) estimated
oil and gas reserves attributable to upward revisions of estimates of proved
oil
and gas reserves (including previously estimated development costs incurred
during the period and the accretion of discount since the prior period end)
since such year end due to exploration, development, exploitation or other
activities, in each case calculated in accordance with SEC
guidelines,
and
decreased by, as of the date of determination, the estimated discounted future
net revenues from:
(C) estimated
proved oil and gas reserves reflected in such reserve report produced or
disposed of since such year end, and
(D) estimated
oil and gas reserves attributable to downward revisions of estimates of proved
oil and gas reserves reflected in such reserve report since such year end due
to
changes in geological conditions or other factors which would, in accordance
with standard industry practice, cause such revisions, in each case calculated
substantially in accordance with SEC guidelines,
in
each
case as estimated by the Company’s petroleum engineers or any independent
petroleum engineers engaged by the Company for that purpose;
(ii) the
capitalized costs that are attributable to oil and gas properties of the Company
and its Restricted Subsidiaries to which no proved oil and gas reserves are
attributable, based on the Company’s books and records as of a date no earlier
than the date of the Company’s latest available annual or quarterly financial
statements;
(iii) the
Net Working Capital (excluding, to the extent included in the determination
of
discounted future net revenues under clause (i)(A) above, any adjustments made
pursuant to FAS 143) on a date no earlier than the date of the Company’s latest
annual or quarterly financial statements; and
(iv) the
greater of:
(A) the
net book value of other tangible assets of the Company and its Restricted
Subsidiaries, as of a date no earlier than the date of the Company’s latest
annual or quarterly financial statement, and
(B) the
appraised value, as estimated by independent appraisers, of other tangible
assets of the Company and its Restricted Subsidiaries, as of a date no earlier
than the date of the Company’s latest audited financial statements
(provided that the Company shall not be required to obtain such
appraisal solely for the purpose of determining this value);
minus
(b) the
sum of:
(i) the
net book value of shares of stock of any class of Capital Stock of a Restricted
Subsidiary that are not owned by the Company or a Restricted
Subsidiary;
(ii) any
net gas balancing liabilities of the Company and its Restricted Subsidiaries
reflected in the Company’s latest audited financial statements;
(iii) to
the extent included in (a)(i) above, the discounted future net revenues,
calculated in accordance with SEC guidelines (utilizing the prices utilized
in
the
5
Company’s
year end reserve report), attributable to reserves which are required to be
delivered to third parties to fully satisfy the obligations of the Company
and
its Restricted Subsidiaries with respect to Volumetric Production Payments
(determined, if applicable, using the schedules specified with respect thereto);
and
(iv) the
discounted future net revenues, calculated in accordance with SEC guidelines,
attributable to reserves subject to Dollar-Denominated Production Payments
which, based on the estimates of production and price assumptions included
in
determining the discounted future net revenues specified in (a)(i) above, would
be necessary to fully satisfy the payment obligations of the Company and its
Subsidiaries with respect to Dollar-Denominated Production Payments (determined,
if applicable, using the schedules specified with respect thereto).
If
the
Company changes its method of accounting from the full cost or a similar method
to the successful efforts method of accounting, “Adjusted Consolidated Net
Tangible Assets” will continue to be calculated as if the Company were still
using the full cost or a similar method of accounting.
“Asset
Sale” means:
(1) the
sale, lease, conveyance or other disposition of any assets or rights (including
by way of a Production Payment or a sale and leaseback transaction);
provided that the sale, lease, conveyance or other disposition of all
or substantially all of the assets of the Company or the Company and its
Restricted Subsidiaries taken as a whole will be governed by the provisions
of
Article Eight and/or Section 10.15 of this Indenture and not by the provisions
of the Asset Sale covenant set forth in Section 10.12 of this Indenture;
and
(2) the
issuance of Equity Interests in any of the Company’s Restricted Subsidiaries
(other than directors’ qualifying shares) or the sale of Equity Interests held
by the Company or its Subsidiaries in any of its Subsidiaries.
Notwithstanding
the preceding, none of the following items will be deemed to be an Asset
Sale:
(1) any
single transaction or series of related transactions that involves assets having
a Fair Market Value of less than $20.0 million;
(2) a
transfer of assets between or among the Company and its Restricted
Subsidiaries;
(3) an
issuance of Equity Interests by a Restricted Subsidiary to the Company or to
a
Restricted Subsidiary;
(4) the
sale or lease of equipment, inventory, products, services, accounts receivable
or other assets in the ordinary course of business, and any sale or other
disposition of damaged, worn-out or obsolete assets or assets that are no longer
useful in the conduct of the business of the Company and its Restricted
Subsidiaries;
(5) the
sale or other disposition of cash or Cash Equivalents;
(6) a
Restricted Payment that does not violate Section 10.9 of this
Indenture;
6
(7) the
consummation of a Permitted Investment, including, without limitation, unwinding
any Hedging Obligations;
(8) a
disposition of Hydrocarbons or mineral products inventory in the ordinary course
of business;
(9) the
sale or transfer (regardless of whether in the ordinary course of business)
of
crude oil and natural gas properties or direct or indirect interests in real
property; provided that at the time of such sale or transfer such
properties do not have associated with them any proved reserves;
(10) the
farm-out, lease or sublease of developed or undeveloped crude oil or natural
gas
properties owned or held by the Company or such Restricted Subsidiary in
exchange for crude oil and natural gas properties owned or held by another
Person;
(11) any
trade or exchange by the Company or any Restricted Subsidiaries of oil and
gas
properties or other properties or assets for oil and gas properties or other
properties or assets owned or held by another Person, provided that the
fair market value of the properties or assets traded or exchanged by the Company
or such Restricted Subsidiary (together with any cash) is reasonably equivalent
to the fair market value of the properties or assets (together with any cash)
to
be received by the Company or such Restricted Subsidiary, and provided
further that any net cash received must be applied in accordance with the
provisions of Section 10.12 of this Indenture;
(12) the
creation or perfection of a Lien (but not, except to the extent contemplated
in
clause (13) below, the sale or other disposition of the properties or assets
subject to such Lien);
(13) the
creation or perfection of a Permitted Lien and the exercise by any Person in
whose favor a Permitted Lien is granted of any of its rights in respect of
that
Permitted Lien;
(14) the
licensing or sublicensing of intellectual property, including, without
limitation, licenses for seismic data, in the ordinary course of business and
which do not materially interfere with the business of the Company and its
Restricted Subsidiaries;
(15) surrender
or waiver of contract rights or the settlement, release or surrender of
contract, tort or other claims of any kind; and
(16) the
disposition of oil and natural gas properties in connection with tax credit
transactions complying with Section 29 of the Code or any successor or analogous
provisions of the Code.
“Board
of
Directors” means, as to any Person, the board of directors of such Person or any
duly authorized committee thereof.
“Capital
Stock” means:
(1) in
the case of a corporation, corporate stock;
(2) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;
7
(3) in
the case of a partnership or limited liability company, partnership interests
(whether general or limited) or membership interests; and
(4) any
other interest or participation that confers on a Person the right to receive
a
share of the profits and losses of, or distributions of assets of, the issuing
Person, but excluding from all of the foregoing any debt securities convertible
into Capital Stock, regardless of whether such debt securities include any
right
of participation with Capital Stock.
“Capital
Lease Obligation” means, at the time any determination is to be made, the amount
of the liability in respect of a capital lease that would at that time be
required to be capitalized on a balance sheet 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 prepaid by the lessee without payment of a penalty.
“Cash
Equivalents” means:
(1) United
States dollars;
(2) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality of the United States government
(provided that the full faith and credit of the United States is
pledged in support of those securities) having maturities of not more than
one
year from the date of acquisition;
(3) marketable
general obligations issued by any state of the United States of America or
any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition thereof, having a credit rating of “A” or better from either
S&P or Moody’s;
(4) certificates
of deposit, demand deposit accounts and eurodollar time deposits with maturities
of one year or less from the date of acquisition, bankers’ acceptances with
maturities not exceeding one year and overnight bank deposits, in each case,
with any domestic commercial bank having capital and surplus in excess of $500.0
million and a Thomson Bank Watch Rating of “B” or better;
(5) repurchase
obligations with a term of not more than seven days for underlying securities
of
the types described in clauses (2), (3) and (4) above entered into with any
financial institution meeting the qualifications specified in clause (4)
above;
(6) commercial
paper having one of the two highest ratings obtainable from Moody’s or S&P
and, in each case, maturing within one year after the date of acquisition;
and
(7) money
market funds at least 95% of the assets of which constitute Cash Equivalents
of
the kinds described in clauses (1) through (6) of this definition;
and
(8) deposits
in any currency 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 its chief executive office or is engaged in
the
Related Business, provided that all such deposits are made in such
accounts in the ordinary course of business.
“Change
of Control” means:
8
(1) any
“person” or “group” of related persons (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than Permitted Holders, is or becomes
the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that such person or group shall be deemed to have “beneficial ownership”
of all shares that any such person or group has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total voting power of the Voting
Stock of the Company (or its successor by merger, consolidation or purchase
of
all or substantially all of its assets) (for the purposes of this clause, such
person or group shall be deemed to beneficially own any Voting Stock of the
Company held by an entity, if such person or group “beneficially owns” (as
defined above), directly or indirectly, more than 50% of the voting power of
the
Voting Stock of such entity);
(2) the
first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors;
(3) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all
or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act); or
(4) the
adoption of a plan or proposal for the liquidation or dissolution of the
Company.
“Change
of Control Triggering Event” means the occurrence of both a Change of Control
and a Rating Decline with respect to the Notes.
“Consolidated
Cash Flow” means, with respect to any specified Person for any period, the
Consolidated Net Income of such Person for such period plus, without
duplication:
(1) an
amount equal to any extraordinary loss plus any net loss realized by such Person
or any of its Restricted Subsidiaries in connection with an Asset Sale (together
with any related provision for taxes and any related non-recurring charges
relating to any premium or penalty paid, write-off of deferred financing costs
or other financial recapitalization charges in connection with redeeming or
retiring any Indebtedness prior to its Stated Maturity), to the extent such
losses were deducted in computing such Consolidated Net Income;
plus
(2) provision
for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was
deducted in computing such Consolidated Net Income; plus
(3) the
Fixed Charges of such Person and its Restricted Subsidiaries for such period,
to
the extent that such Fixed Charges were deducted in computing such Consolidated
Net Income; plus
(4) exploration
and abandonment expense (if applicable) to the extent deducted in calculating
Consolidated Net Income; plus
(5) depreciation,
depletion, amortization (including amortization of intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period),
impairment, other non-cash expenses and other non-cash items (excluding any
9
(6) any
interest expense attributable to any Oil and Natural Gas Hedging Contract,
to
the extent that such interest expense was deducted in computing such
Consolidated Net Income; plus
(7) the
accretion of interest charges on future plugging and abandonment obligations
and
future retirement benefits, to the extent such charges were deducted in
computing such Consolidated Net Income; minus
(8) non-cash
items increasing such Consolidated Net Income for such period, other than items
that were accrued in the ordinary course of business, and
minus
(9) 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;
in
each
case, on a consolidated basis and determined in accordance with
GAAP.
Notwithstanding
the foregoing, the provision for taxes on the income or profits of, and the
depreciation, depletion and amortization and other non-cash charges and expenses
of, a Restricted Subsidiary of the referent Person shall be added to
Consolidated Net Income to compute Consolidated Cash Flow only to the extent
(and in the same proportion) that the Net Income of such Restricted Subsidiary
was included in calculating the Consolidated Net Income of such Person and
only
if a corresponding amount would be permitted at the date of determination to
be
dividended to the referent Person by such Restricted Subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its
stockholders. Furthermore, solely for the purpose of calculating
Consolidated Cash Flow, any expenses attributable to stock appreciation rights
will not be deducted in computing Consolidated Net Income prior to payment
of
such expenses in cash.
“Consolidated
Net Income” means, with respect to any specified Person for any period, the
aggregate of the Net Income of such Person and its Restricted Subsidiaries
for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that:
(1) the
Net Income (but not loss) of any Person that is not a Restricted Subsidiary
or
that is accounted for by the equity method of accounting will be included only
to the extent of the amount of dividends or similar distributions paid in cash
to the specified Person or a Restricted Subsidiary of the Person;
(2) the
Net Income of any Restricted Subsidiary will be excluded to the extent that
the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that
10
(3) the
cumulative effect of a change in accounting principles will be
excluded;
(4) any
gain (loss) realized upon the sale or other disposition of any property, plant
or equipment of such Person or its consolidated Restricted Subsidiaries
(including pursuant to any sale or leaseback transaction) which is not sold
or
otherwise disposed of in the ordinary course of business and any gain (loss)
realized upon the sale or other disposition of any Capital Stock of any Person
will be excluded;
(5) any
asset impairment write-downs on Oil and Gas Properties under GAAP or SEC
guidelines will be excluded;
(6) any
non-xxxx xxxx-to-market adjustments to assets or liabilities resulting in
unrealized gains or losses in respect of Hedging Obligations (including those
resulting from the application of SFAS 133) shall be excluded;
(7) to
the extent deducted in the calculation of Net Income, any non-cash or
nonrecurring charges associated with any premium or penalty paid, write-off
of
deferred financing costs or other financial recapitalization charges in
connection with redeeming or retiring any Indebtedness will be excluded;
and
(8) any
net losses or expenses associated with the Pre-Issue Date Hedge Buyouts and/or
the Oil and Natural Gas Hedging Contracts mentioned in the definition of
“Pre-Issue Date Hedge Buyouts” will be excluded.
“Consolidated
Net Worth” means, with respect to any specified Person as of any date, the sum
of:
(1) the
consolidated equity of the common stockholders of such Person and its
consolidated Subsidiaries as of such date; plus
(2) the
respective amounts reported on such Person’s balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that
by
its terms is not entitled to the payment of dividends unless such dividends
may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock.
“Continuing
Directors” means, as of any date of determination, any member of the Board of
Directors of the Company who:
(1) was
a member of such Board of Directors on March 13, 2007; or
11
(2) was
nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election.
“Credit
Facilities” means, with respect to the Company or any of its Restricted
Subsidiaries, one or more debt facilities (including, without limitation, the
Senior Credit Agreement), commercial paper facilities or Debt Issuances
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to any lenders, other financiers
or
to special purpose entities formed to borrow from (or sell such receivables
to)
any lenders or other financiers against such receivables), letters of credit,
bankers’ acceptances, other borrowings or Debt Issuances, in each case, as
amended, restated, modified, renewed, extended, refunded, replaced or refinanced
(in each case, without limitation as to amount), in whole or in part, from
time
to time (including through one or more Debt Issuances) and any agreements and
related documents governing Indebtedness or obligations incurred to refinance
amounts then outstanding or permitted to be outstanding, whether provided under
the original agreement, indenture or other documentation relating
thereto).
“Currency
Agreement” means in respect of a Person any foreign exchange contract, currency
swap agreement or other similar agreement as to which such Person is a party
or
a beneficiary.
“Debt
Issuances” means, with respect to the Company or any Restricted Subsidiary, one
or more issuances after March 13, 2007 of Indebtedness evidenced by notes,
debentures, bonds or other similar securities or instruments.
“Default”
means any event which is, or after notice or passage of time or both would
be,
an Event of Default.
“Disqualified
Stock” means any Capital Stock that, by its terms (or by the terms of any
security into which it is convertible, or for which it is exchangeable, in
each
case at the option of the holder of the Capital Stock), or upon the happening
of
any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder of the
Capital Stock, in whole or in part, on or prior to the date that is 91 days
after the date on which the Notes mature. Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely
because the holders of the Capital Stock have the right to require the Company
to repurchase such Capital Stock upon the occurrence of a change of control
or
an asset sale will not constitute Disqualified Stock if the terms of such
Capital Stock provide that the Company may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with Section 10.9 of this Indenture. The amount of
Disqualified Stock deemed to be outstanding at any time for purposes of this
Indenture will be the maximum amount that the Company and its Restricted
Subsidiaries may become obligated to pay upon the maturity of, or pursuant
to
any mandatory redemption provisions of, such Disqualified Stock, exclusive
of
accrued dividends.
“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 any Restricted Subsidiary that was formed under the
laws of the United States or any state of the United States or the District
of
Columbia or that Guarantees or otherwise provides direct credit support for
any
Indebtedness of the Company or any Guarantor.
12
“Equity
Interests” means Capital Stock and all warrants, options or other rights to
acquire Capital Stock (but excluding any debt security that is convertible
into,
or exchangeable for, Capital Stock).
“Equity
Offering” means (i) an offering for cash by the Company of its Capital Stock
(other than Disqualified Stock), or options, warrants or rights with respect
to
its Capital Stock or (ii) a contribution of cash to the Company in exchange
for
its Capital Stock (other than Disqualified Stock).
“Existing
Indebtedness” means Indebtedness of the Company and its Subsidiaries (other than
Indebtedness under the Credit Agreement) in existence on March 13, 2007
(including the $500,000,000 aggregate principal amount of 7% Senior Notes due
2017 issued by the Company on March 13, 2007 and all related Guarantees of
such
notes by its Subsidiaries), until such amounts are repaid.
“Fair
Market Value” means the value that would be paid by a willing buyer to an
unaffiliated willing seller in a transaction not involving distress or necessity
of either party, determined in good faith by the Board of Directors or
management of the Company (unless otherwise provided in this Indenture), which
determination will be conclusive for all purposes under this
Indenture.
“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.
“Fixed
Charge Coverage Ratio” means with respect to any specified Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event
that the specified Person or any of its Restricted Subsidiaries incurs, assumes,
guarantees, repays, repurchases, redeems, defeases or otherwise discharges
any
Indebtedness (other than ordinary working capital borrowings) or issues,
repurchases or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on
or
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge
Coverage Ratio will be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase, redemption, defeasance or other
discharge of Indebtedness, or such issuance, repurchase or redemption of
preferred stock, and the use of the proceeds therefrom, as if the same had
occurred at the beginning of the applicable four-quarter reference
period.
In
addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions
that have been made by the specified Person or any of its Restricted
Subsidiaries, including through mergers, consolidations or otherwise (including
acquisitions of assets used or useful in a Related Business), or any Person
or
any of its Restricted Subsidiaries acquired by the specified Person or any
of
its Restricted Subsidiaries, and including any related financing transactions
and including increases in ownership of Restricted Subsidiaries, during the
four-quarter reference period or
13
subsequent
to such reference period and on or prior to the Calculation Date, shall be
deemed to have occurred on the first day of the four-quarter reference period
and the Consolidated Cash Flow for such reference period will be calculated
giving pro forma effect to any expense and cost reductions that have occurred
or, in the reasonable judgment of the chief accounting or chief financial
officer of the Company, are reasonably expected to occur (regardless of whether
those operating improvements or cost savings could then be reflected in pro
forma financial statements prepared in accordance with Regulation S-X under
the
Securities Act or any other regulation or policy of the SEC related
thereto);
(2) the
Consolidated Cash Flow attributable to discontinued operations, as determined
in
accordance with GAAP, and operations or businesses (and ownership interests
therein) disposed of prior to the Calculation Date, will be
excluded;
(3) the
Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses (and ownership interests
therein) disposed of prior to the Calculation Date, will be excluded, but only
to the extent that the obligations giving rise to such Fixed Charges will not
be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date;
(4) any
Person that is a Restricted Subsidiary on the Calculation Date will be deemed
to
have been a Restricted Subsidiary at all times during such four-quarter
period;
(5) any
Person that is not a Restricted Subsidiary on the Calculation Date will be
deemed not to have been a Restricted Subsidiary at any time during such
four-quarter period; and
(6) if
any Indebtedness bears a floating rate of interest, the interest expense on
such
Indebtedness will be calculated as if the rate in effect on the Calculation
Date
had been the applicable rate for the entire period (taking into account any
Hedging Obligation applicable to such Indebtedness if such Hedging Obligation
has a remaining term as at the Calculation Date in excess of 12
months).
“Fixed
Charges” means, with respect to any specified Person for any period, the sum,
without duplication, of:
(1) the
consolidated interest expense of such Person and its Restricted Subsidiaries
for
such period, whether paid or accrued (excluding (i) any interest attributable
to
Production Payments and Reserve Sales, (ii) write-off of deferred financing
costs and (iii) accretion of interest charges on future plugging and abandonment
obligations, future retirement benefits and other obligations that do not
constitute Indebtedness, but including, without limitation, amortization of
debt
issuance costs and original issue discount, noncash interest payments, the
interest component of any deferred payment obligations other than that
attributable to any Oil and Natural Gas Hedging Contract, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit
or
bankers’ acceptance financings), and net of the effect of all payments made or
received pursuant to Interest Rate Agreements; plus
(2) the
consolidated interest expense of such Person and its Restricted Subsidiaries
that was capitalized during such period; plus
14
(3) any
interest on Indebtedness of another Person (other than a Restricted Subsidiary
of such specified Person) that is guaranteed by the specified Person or one
or
more of its Restricted Subsidiaries or secured by a Lien on assets of such
specified Person or one or more of its Restricted Subsidiaries, regardless
of
whether such Guarantee or Lien is called upon; plus
(4) all
dividends, whether paid or accrued and regardless of whether in cash, on any
series of preferred stock of such Person or any of its Restricted Subsidiaries,
other than dividends on Equity Interests payable solely in Equity Interests
of
the Company (other than Disqualified Stock) or to the Company or a Restricted
Subsidiary.
“Guarantee”
means a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any manner
including, without limitation, by way of a pledge of assets or through letters
of credit or reimbursement agreements in respect thereof, of all or any part
of
any Indebtedness (whether arising by virtue of partnership arrangements, or
by
agreements to keep-well, to maintain financial statement conditions or
otherwise), or entered into for purposes 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).
“Guarantor”
means each Restricted Subsidiary that has become obligated under a Subsidiary
Guarantee, in accordance with the terms of the guarantee provisions of this
Indenture, but only for so long as such Subsidiary remains so obligated pursuant
to the terms of this Indenture.
“Hedging
Obligations” of any Person means the obligations of such Person pursuant to any
Interest Rate and Currency Xxxxxx and any Oil and Natural Gas Hedging
Contracts.
“Hydrocarbons”
means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons and all constituents,
elements or compounds thereof and products refined or processed
therefrom.
“Indebtedness”
means, with respect to any specified Person, without duplication, any
indebtedness of such Person, regardless of whether contingent:
(1) in
respect of borrowed money;
(2) evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);
(3) in
respect of banker’s acceptances;
(4) representing
Capital Lease Obligations;
(5) in
respect of any Guarantee by such Person of production or payment with respect
to
a Production Payment (but not any other contractual obligation in respect of
such Production Payment);
(6) representing
the balance deferred and unpaid of the purchase price of any property or
services due more than six months after such property is acquired or such
services are completed, except any such balance that constitutes an accrued
expense or a trade payable; or
(7) representing
any Interest Rate and Currency Xxxxxx,
15
if
and to
the extent any of the preceding items (other than letters of credit and Interest
Rate and Currency Xxxxxx) would appear as a liability upon a balance sheet
of
the specified Person prepared in accordance with GAAP. In addition,
the term “Indebtedness” includes (a) all indebtedness of any other Person, of
the types described above in clauses (1) through (7), secured by a Lien on
any
asset of the specified Person (regardless of whether such indebtedness is
assumed by the specified Person), provided that the amount of such
indebtedness will be the lesser of (i) the Fair Market Value of such asset
at
such date of determination and (ii) the amount of such indebtedness of such
other Person, and (b) to the extent not otherwise included, the Guarantee by
the
specified Person of any indebtedness of any other Person, of the types described
above in clauses (1) through (7).
Notwithstanding
the foregoing, the following shall not constitute “Indebtedness:”
(i) accrued
expenses and trade accounts payable arising in the ordinary course of
business;
(ii) except
as provided in clause (5) of the first paragraph of this definition, any
obligation in respect of any Production Payment and Reserve Sales;
(iii) any
obligation in respect of any Farm-In Agreement;
(iv) any
indebtedness which has been defeased in accordance with GAAP or defeased
pursuant to the deposit of cash or Government Securities (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;
(v) oil
or natural gas balancing liabilities incurred in the ordinary course of business
and consistent with past practice;
(vi) any
obligation in respect of any Oil and Natural Gas Hedging Contract;
(vii) any
unrealized losses or charges in respect of Hedging Obligations (including those
resulting from the application of FAS 133);
(viii) any
obligations in respect of (a) bid, performance, completion, surety, appeal
and
similar bonds, (b) obligations in respect of bankers’ acceptances, (c) insurance
obligations or bonds and other similar bonds and obligations and (d) any
guaranties or letters of credit functioning as or supporting any of the
foregoing bonds or obligations; provided, however that such
bonds or obligations mentioned in subclause (a), (b), (c) or (d) of
this clause (viii), are incurred in the ordinary course of the business of
the
Company and its Restricted Subsidiaries and do not relate to obligations for
borrowed money;
(ix) any
obligations in respect of completion bonds, performance bonds, bid bonds, appeal
bonds, surety bonds, bankers acceptances, letters of credit, 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
guaranties and obligations of the Company or any Restricted Subsidiary with
respect to or letters of credit functioning as or supporting any of the
foregoing bonds or obligations;
(x) any
obligation arising from any agreement providing for indemnities, guarantees,
purchase price adjustments, holdbacks, contingency payment obligations
16
based
on
the performance of the acquired or disposed assets or similar obligations (other
than guaranties of Indebtedness) incurred by any Person in connection with
the
acquisition or disposition of assets; and
(xi) all
contracts and other obligations, agreements instruments or arrangements
described in clauses (21), (22), (23) and (24) of the definition of “Permitted
Liens.”
“Interest
Rate Agreement” means with respect to any Person any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement or other similar agreement or
arrangement as to which such Person is party or a beneficiary.
“Interest
Rate and Currency Xxxxxx” of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement or Currency Agreement.
“Investment
Grade Rating” means a rating equal to or higher than:
(1) Baa3
(or the equivalent) by Moody’s; or
(2) BBB-
(or the equivalent) by S&P,
or,
if
either such entity ceases to rate the Notes for reasons outside of the Company’s
control, the equivalent investment grade credit rating from any other Rating
Agency.
“Investment
Grade Rating Event” means the first day on which the Notes have an Investment
Grade Rating from a Rating Agency and no Default has occurred and is then
continuing under this Indenture.
“Investments”
means, with respect to any Person, all direct or indirect investments by such
Person in other Persons (including Affiliates) in the forms of loans (including
Guarantees or other obligations, advances or capital contributions (excluding
endorsements of negotiable instruments and documents in the ordinary course
of
business, and commission, travel and similar advances to officers, employees
and
consultants made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If
the Company or any Restricted Subsidiary sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person
is
no longer a Restricted Subsidiary, the Company will be deemed to have made
an
Investment on the date of any such sale or disposition equal to the Fair Market
Value of the Company’s Investments in such Restricted Subsidiary that were not
sold or disposed of in an amount determined as provided in Section 10.9(d)
of
this Indenture. The acquisition by the Company or any Subsidiary of the Company
of a Person that holds an Investment in a third Person will be deemed to be
an
Investment by the Company or such Subsidiary in such third Person in an amount
equal to the Fair Market Value of the Investments held by the acquired Person
in
such third Person in an amount determined as provided in Section 10.9(d) of
this
Indenture. Except as otherwise provided in this Indenture, the amount of an
Investment will be determined at the time the Investment is made and without
giving effect to subsequent changes in value.
“Issue
Date” means the first date on which Notes are issued under this
Indenture.
17
“Leverage
Ratio” means, with respect to any Person as of any date of determination, the
ratio of (x) the total consolidated Indebtedness of such Person and its
Restricted Subsidiaries as of the end of the most recent fiscal quarter for
which internal financial statements are available, which would be reflected
as a
liability on a consolidated balance sheet of such Person and its Restricted
Subsidiaries prepared as of such date in accordance with GAAP, to (y) the
aggregate amount of Consolidated Cash Flow of such Person for the then most
recent four fiscal quarters for which internal financial statements are
available, in each case with such pro forma adjustments to the amount of
consolidated Indebtedness and Consolidated Cash Flow as are appropriate and
consistent with the pro forma adjustment provisions set forth in the definition
of Fixed Charge Coverage Ratio.
“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).
“Moody’s”
means Xxxxx’x Investors Service, Inc. or any successor to the rating agency
business thereof.
“Net
Income” means, with respect to any specified Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however:
(1) any
gain or loss, together with any related provision for taxes on such gain or
loss, realized in connection with: (a) any Asset Sale; or (b) the disposition
of
any securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries; and
(2) any
extraordinary or nonrecurring gain or loss, together with any related provision
for taxes on such extraordinary or nonrecurring gain or loss.
“Net
Proceeds” means the aggregate cash proceeds received by the Company or any of
its Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of:
(1) all
legal, accounting, investment banking, title and recording tax expenses,
commissions and other fees and expense incurred, and all Federal, state,
provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP (after taking into account any available tax credits or
deductions and any tax sharing agreements), as a consequence of such Asset
Sale;
(2) all
payments made on any Indebtedness which is secured by any assets subject to
such
Asset Sale, in accordance with the terms of any Lien upon such assets, or which
must by its terms, or in order to obtain a necessary consent to such Asset
Sale,
or by applicable law be repaid out of the proceeds from such Asset
Sale;
(3) all
distributions and other payments required to be made to holders of minority
interests in Subsidiaries or joint ventures as a result of such Asset Sale;
and
(4) the
deduction of appropriate amounts to be provided by the seller as a reserve,
in
accordance with GAAP, or held in escrow, in either case for adjustment in
respect of the sale price or for any liabilities associated with the assets
disposed of in such
18
Asset
Sale and retained by the Company or any Restricted Subsidiary after such Asset
Sale.
“Net
Working Capital” means (a) all current assets of the Company and its Restricted
Subsidiaries except current assets from Oil and Natural Gas Hedging Contracts,
less (b) all current liabilities of the Company and its Restricted Subsidiaries,
except current liabilities included in Indebtedness and any current liabilities
from Oil and Natural Gas Hedging Contracts, in each case as set forth in the
consolidated financial statements of the Company prepared in accordance with
GAAP (excluding any adjustments made pursuant to FAS 133).
“Non-Recourse
Debt” means Indebtedness:
(1) as
to which neither the Company nor any Restricted Subsidiary (a) provides any
Guarantee or credit support of any kind (including any undertaking, guarantee,
indemnity, agreement or instrument that would constitute Indebtedness) or (b)
is
directly or indirectly liable (as a guarantor or otherwise), in each case other
than Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary
or any joint venture owned by the Company or any Restricted Subsidiary to the
extent securing otherwise Non-Recourse Debt of such Unrestricted Subsidiary
or
joint venture; and
(2) no
default with respect to which (including any rights that the holders thereof
may
have to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of
the
Company or any Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable prior
to
its stated maturity.
“Notes”
means a series of Securities designated as the Company’s 7¾% Senior Notes due
2015, issued pursuant to this Indenture, as amended and supplemented by the
Third Supplemental Indenture hereto dated as of June 19, 2007.
“Notice
of Default” means a written notice of the kind specified in Section 5.1(a)(iv)
or Section 5.1(a)(v) of this Indenture.
“Officer”
means, in the case of the Company, the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Financial Officer, any Vice
President, the Treasurer or the Secretary of the Company and, in the case of
any
Guarantor, the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, any Vice President, the Treasurer or
the
Secretary of such Guarantor.
“Officers’
Certificate” means, in the case of the Company, a certificate signed by two
Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company and, in the case of any Guarantor, a certificate signed
by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of such Guarantor.
“Oil
and
Gas Properties” means all Properties, including equity or other ownership
interests therein, owned by such Person which contain “proved oil and gas
reserves” as defined in Rule 4-10 of Regulation S-X of the Securities
Act.
“Oil
and
Natural Gas Hedging Contract” means any oil and natural gas hedging agreements
and other agreements or arrangements entered into in the ordinary course of
business in the oil and gas industry for the purpose of protecting against
fluctuations in oil or natural gas prices.
19
“Permitted
Acquisition Indebtedness” means Indebtedness or Disqualified Stock of the
Company or any of the Company’s Restricted Subsidiaries to the extent such
Indebtedness or Disqualified Stock was Indebtedness or Disqualified Stock
of:
(1) a
Subsidiary prior to the date on which such Subsidiary became a Restricted
Subsidiary; or
(2) a
Person that was merged, consolidated or amalgamated into the Company or a
Restricted Subsidiary,
provided
that on the date such Subsidiary became a Restricted Subsidiary or the date
such
Person was merged, consolidated and amalgamated into the Company or a Restricted
Subsidiary, as applicable, after giving pro forma effect thereto,
(a) the
Restricted Subsidiary or the Company, as applicable, would be permitted to
incur
at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in Section 10.11 of this Indenture,
(b) the
Fixed Charge Coverage Ratio for the Restricted Subsidiary or the Company, as
applicable, would be greater than the Fixed Charge Coverage Ratio for such
Restricted Subsidiary or the Company immediately prior to such transaction,
or
(c) the
Consolidated Net Worth of the Restricted Subsidiary or the Company, as
applicable, would be greater than the Consolidated Net Worth of such Restricted
Subsidiary or the Company immediately prior to such transaction.
“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, a Related
Business as means of actively exploiting, exploring for, acquiring, developing,
processing, gathering, marketing or transporting oil, natural gas, other
hydrocarbons and minerals (including with respect to plugging and abandonment)
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 a Related Business jointly with third parties, including without limitation,
(i) ownership interests in oil, natural gas, other hydrocarbons and minerals
properties or gathering, transportation, processing, storage or related systems
and (ii) any operating agreements, joint ventures, partnership 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 and other hydrocarbons, unitization agreements,
pooling arrangements, joint bidding agreements, service contracts, partnership
agreements, limited liability company agreements, subscription agreements,
stock
purchase agreements, stockholder agreements, area of mutual interest agreements,
production sharing agreements or other similar or customary agreements,
transactions, properties, interests, or arrangements, and Investments and
expenditures in connection therewith or pursuant thereto.
“Permitted
Holders” means (i) Xxxxx X. Xxxxxx and his spouse and lineal descendants, their
respective estates or legal representatives, (ii) trusts created for the benefit
of such Persons and (iii) entities 80% or more of the Voting Stock of which
is
directly or indirectly owned by any of the preceding Persons.
“Permitted
Investments” means:
20
(1) any
Investment in the Company or in a Restricted Subsidiary;
(2) any
Investment in Cash Equivalents;
(3) any
Investment by Company or any Restricted Subsidiary in a Person, if as a result
of such Investment:
(a) such
Person becomes a Restricted Subsidiary; or
(b) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, Company
or a
Restricted Subsidiary;
(4) any
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 10.12 of
this Indenture;
(5) any
Investments received in compromise or resolution of (A) obligations of trade
creditors or customers that were incurred in the ordinary course of business
of
the Company or any of its Restricted Subsidiaries, including pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or insolvency
of any trade creditor or customer; or (B) litigation, arbitration or other
disputes with Persons who are not Affiliates;
(6) Investments
represented by Hedging Obligations;
(7) advances
to or reimbursements of employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of
business;
(8) loans
or advances to employees in the ordinary course of business or consistent with
past practice;
(9) advances
and prepayments for asset purchases in the ordinary course of business in a
Related Business of the Company or any of its Restricted
Subsidiaries;
(10) receivables
owing to Company or any Restricted Subsidiary 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;
(11) surety
and performance bonds and workers’ compensation, utility, lease, tax,
performance and similar deposits and prepaid expenses in the ordinary course
of
business;
(12) Guarantees
of Indebtedness permitted under Section 10.11 of this Indenture;
(13) guarantees
by the Company or any of its Restricted Subsidiaries of operating leases (other
than Capital Lease Obligations) or of other obligations that do not constitute
Indebtedness, in each case entered into by any Restricted Subsidiary in the
ordinary course of business;
21
(14) Investments
of a Restricted Subsidiary acquired after March 13, 2007 or of any entity merged
into the Company or merged into or consolidated or amalgamated with a Restricted
Subsidiary in accordance with Article Eight or Section 14.4 (as applicable)
of
this Indenture to the extent that such Investments were not made in
contemplation of or in connection with such acquisition, merger, consolidation
or amalgamation and were in existence on the date of such acquisition, merger
or
consolidation;
(15) Permitted
Business Investments;
(16) Investments
received as a result of a foreclosure by the Company or any of its Restricted
Subsidiaries with respect to any secured Investment in default;
(17) any
Investment in any Person solely (except to the extent of cash payments in lieu
of fractional shares) in exchange for the issuance of Equity Interests (other
than Disqualified Stock) of the Company or any of its Subsidiaries
(18) Investments
in any units of any oil and gas royalty trust;
(19) Investments
existing on March 13, 2007, and any extension, modification or renewal of any
such Investments existing on March 13, 2007, but only to the extent not
involving additional advances, contributions or other Investments of cash or
other assets or other increases of such Investments (other than as a result
of
the accrual or accretion of interest or original issue discount or the issuance
of pay-in-kind securities, in each case, pursuant to the terms of such
Investments as in effect on March 13, 2007);
(20) repurchases
of or other Investments in the Notes; and
(21) other
Investments in any Person having an aggregate Fair Market Value (measured on
the
date each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made pursuant
to this clause (21) that are at the time outstanding not to exceed the greater
of (a) 1.0% of Adjusted Consolidated Net Tangible Assets or (b) $50.0
million.
“Permitted
Liens” means, with respect to any Person:
(1) Liens
securing Indebtedness incurred under Credit Facilities pursuant to Section
10.11
of this Indenture;
(2) Liens
to secure Indebtedness (including Capital Lease Obligations) permitted by clause
(4) of Section 10.11(b) of this Indenture covering only the assets acquired
with
or financed by such Indebtedness;
(3) pledges
or deposits by such Person under workmen’s compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection
with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases
to which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits or cash or United States government
bonds
to secure surety or appeal bonds to which such Person is a party, or deposits
as
security for contested taxes or import or customs duties or for the payment
of
rent, in each case incurred in the ordinary course of business;
(4) landlords’,
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or similar
Liens arising by contract or statute in the ordinary course of
22
business
and with respect to amounts which are not yet delinquent or are being contested
in good faith by appropriate proceedings;
(5) Liens
for taxes, assessments or other governmental charges not yet subject to
penalties for non-payment or which are being contested in good faith by
appropriate proceedings provided appropriate reserves required pursuant to
GAAP
have been made in respect thereof;
(6) Liens
in favor of the issuers of surety or performance bonds or letters of credit
or
bankers’ acceptances 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;
(7) 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 properties
or
Liens incidental to the conduct of the business of such Person or to the
ownership of its properties 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;
(8) Liens
securing Hedging Obligations, so long as the related Indebtedness, if any,
is,
and is permitted under this Indenture to be, secured by a Lien on the same
property securing such Hedging Obligation;
(9) leases
and subleases of real property which do not materially interfere with the
ordinary conduct of the business of the Company and its Restricted Subsidiaries,
taken as a whole;
(10) any
attachment or judgment Liens not giving rise to an Event of
Default;
(11) Liens
for the purpose of securing the payment of all or a part of the purchase price
of, or Capitalized Lease Obligations with respect to, or the repair, improvement
or construction cost of, assets or property acquired or repaired, improved
or
constructed in the ordinary course of business; provided
that:
(a) the
aggregate principal amount of Indebtedness secured by such Liens is otherwise
permitted to be incurred under this Indenture and does not exceed the cost
of
the assets or property so acquired or repaired, improved or constructed plus
fees and expenses in connection therewith; and
(b) such
Liens are created within 180 days of repair, improvement or construction or
acquisition of such assets or property and do not encumber any other assets
or
property of the Company or any Restricted Subsidiary other than such assets
or
property and assets affixed or appurtenant thereto (including
improvements);
(12) Liens
arising solely by virtue of any statutory or common law provisions relating
to
banker’s Liens, rights of set-off or similar rights and remedies as to deposit
accounts or other funds maintained or deposited with a depositary institution;
provided 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
23
(b) such
deposit account is not intended by the Company or any Restricted Subsidiary
to
provide collateral to the depository institution;
(13) Liens
arising from Uniform Commercial Code financing statement filings regarding
operating leases entered into by the Company and its Restricted Subsidiaries
in
the ordinary course of business;
(14) Liens
existing on March 13, 2007;
(15) Liens
on property at the time the Company or a Restricted Subsidiary acquired the
property, including any acquisition by means of a merger or consolidation with
or into Company or a Restricted Subsidiary; provided, however,
that such Liens are not created, incurred or assumed in connection with, or
in
contemplation of, such acquisition; provided further, however,
that such Liens may not extend to any other property owned by the Company or
any
Restricted Subsidiary other than those of the Person merged or consolidated
with
the Company or the Restricted Subsidiary;
(16) Liens
on property or shares of stock of a Person at the time such Person becomes
a
Restricted Subsidiary; provided, however, that such Liens are
not created, incurred or assumed in connection with, or in contemplation of,
such other Person becoming a Restricted Subsidiary; provided further,
however, that such Liens may not extend to any other property
owned by
the Company or any Restricted Subsidiary;
(17) Liens
securing Indebtedness or other obligations of a Restricted Subsidiary owing
to
the Company or a Guarantor;
(18) Liens
securing the Notes, the Subsidiary Guarantees and other obligations arising
under this Indenture;
(19) Liens
securing Permitted Refinancing Indebtedness of the Company or a Restricted
Subsidiary incurred to refinance Indebtedness of the Company or a Restricted
Subsidiary that was previously so secured; provided that any such Lien
is limited to all or part of the same property or assets (plus improvements,
accessions, proceeds or dividends or distributions in respect thereof) that
secured (or, under the written arrangements under which the original Lien arose,
could secure) the Indebtedness being refinanced or is in respect of property
or
assets that is the security for a Permitted Lien hereunder;
(20) Liens
in respect of Production Payments and Reserve Sales;
(21) Liens
on pipelines and pipeline facilities that arise by operation of
law;
(22) Liens
arising under joint venture agreements, partnership agreements, oil and gas
leases or subleases, assignments, purchase and sale agreements, division orders,
contracts for the sale, purchasing, processing, transportation or exchange
of
oil or natural gas, unitization and pooling declarations and agreements,
development agreements, area of mutual interest agreements, licenses,
sublicenses, net profits interests, participation agreements, Farm-Out
Agreements, Farm-In Agreements, carried working interest, joint operating,
unitization, royalty, sales and similar agreements relating to the exploration
or development of, or production from, oil and gas properties entered into
in
the ordinary course of business in a Related Business;
(23) Liens
reserved in oil and gas mineral leases for bonus, royalty or rental payments
and
for compliance with the terms of such leases;
24
(24) Liens
on, or related to, properties or assets to secure all or part of the costs
incurred in the ordinary course of a Related Business for exploration, drilling,
development, production, processing, transportation, marketing, storage,
abandonment or operation;
(25) 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 that such Liens are solely for the benefit of the
trustees, agents or representatives in their capacities as such and not for
the
benefit of the holders of the Indebtedness;
(26) Liens
securing obligations of the Company and its Restricted Subsidiaries under
Hedging Obligations;
(27) Liens
on and pledges of the Equity Interests of any Unrestricted Subsidiary or any
joint venture owned by the Company or any Restricted Subsidiary to the extent
securing Non-Recourse Debt of such Unrestricted Subsidiary or joint venture;
and
(28) Liens
incurred in the ordinary course of business of the Company or any Restricted
Subsidiary with respect to obligations that, at any one time outstanding, do
not
exceed the greater of $20.0 million and 0.5% of Adjusted Consolidated Net
Tangible Assets.
“Permitted
Refinancing Indebtedness” means any Indebtedness of the Company or any of its
Restricted Subsidiaries, any Disqualified Stock of the Company or any preferred
stock of any Restricted Subsidiary issued (a) in exchange for, or the net
proceeds of which are used to extend, renew, refund, refinance, replace,
defease, discharge or otherwise retire for value, in whole or in part, or (b)
constituting an amendment, modification or supplement to or a deferral or
renewal of ((a) and (b) above, collectively, a “Refinancing”), any other
Indebtedness of the Company any of its Restricted Subsidiaries (other than
intercompany Indebtedness), any Disqualified Stock of the Company or any
preferred stock of a Restricted Subsidiary in a principal amount or, in the
case
of Disqualified Stock of the Company or preferred stock of a Restricted
Subsidiary, liquidation preference, not to exceed (after deduction of reasonable
and customary fees and expenses incurred in connection with the Refinancing)
the
lesser of:
(1) the
principal amount or, in the case of Disqualified Stock or preferred stock,
liquidation preference, of the Indebtedness, Disqualified Stock or preferred
stock so Refinanced (plus, in the case of Indebtedness, the amount of
premium, if any paid in connection therewith), and
(2) if
the Indebtedness being Refinanced was issued with any original issue discount,
the accreted value of such Indebtedness (as determined in accordance with GAAP)
at the time of such Refinancing.
Notwithstanding
the preceding, no Indebtedness, Disqualified Stock or preferred stock will
be
deemed to be Permitted Refinancing Indebtedness, unless:
(1) such
Indebtedness, Disqualified Stock or preferred stock has a final maturity date
or
redemption date, as applicable, later than the final maturity date or redemption
date, as applicable, of, and has a Weighted Average Life to Maturity equal
to
25
or
greater than the Weighted Average Life to Maturity of, the Indebtedness,
Disqualified Stock or preferred stock being Refinanced;
(2) if
the Indebtedness, Disqualified Stock or preferred stock being Refinanced is
contractually subordinated or otherwise junior in right of payment to the Notes,
such Indebtedness, Disqualified Stock or preferred stock has a final maturity
date or redemption date, as applicable, later than the final maturity date
or
redemption date, as applicable, of, and is contractually subordinated or
otherwise junior in right of payment to, the Notes, on terms at least as
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness, Disqualified Stock or preferred stock being
Refinanced at the time of the Refinancing; and
(3) such
Indebtedness or Disqualified Stock is incurred or issued by the Company or
such
Indebtedness, Disqualified Stock or preferred stock is incurred or issued by
the
Restricted Subsidiary who is the obligor on the Indebtedness being Refinanced
or
the issuer of the Disqualified Stock or preferred stock being Refinanced;
provided that a Restricted Subsidiary that is also a Guarantor may
guarantee Permitted Refinancing Indebtedness incurred by the Company, whether
or
not such Restricted Subsidiary was an obligor or guarantor of the Indebtedness
being renewed, refunded, refinanced, replaced, defeased or
discharged.
“Person”
means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability
company, government or any agency or political subdivision hereof or any other
entity.
“Point
Xxxxxxxx Partnerships” means the following partnerships of which Xxxxxxxx Inc.
is a managing general partner: (a) Gaviota Gas Plant Company, (b) Point Xxxxxxxx
Natural Gas Line Company, (c) Point Xxxxxxxx Pipeline Company and (d) Point
Xxxxxxxx Terminal Company.
“Pre-Issue
Date Hedge Buyouts” means the series of transactions consummated prior to March
13, 2007 to terminate or unwind, and the associated settlement and accounting
of, Oil and Natural Gas Hedging Contracts pertaining to (i) 2006 crude oil
price
swaps for 15,000 barrels of oil per day at an average price of $25.28 per
barrel, (ii) 2006 crude oil price collars for 22,000 barrels per day with a
floor price of $25.00 and an average ceiling price of $34.76, (iii) 2007 crude
oil price collars for 22,000 barrels of oil per day with a floor price of $25.00
per barrel and an average ceiling price of $34.76 per barrel and (iv) 2008
crude
oil price collars for 22,000 barrels of oil per day with a floor price of $25.00
per barrel and an average ceiling price of $34.76 per barrel.
“Principal
Property” means any property owned or leased by the Company or any Subsidiary of
the Company, the gross book value of which exceeds one percent of Consolidated
Net Worth of the Company.
“Production
Payments” means Dollar-Denominated Production Payments and Volumetric Production
Payments, collectively.
“Production
Payments and Reserve Sales” means the grant or transfer by the Company or a
Subsidiary of the Company to any Person of a royalty, overriding royalty, net
profits interest, Production Payment, partnership or other interest in oil
and
gas properties, reserves or the right to receive all or a portion of the
production or the proceeds from the sale of production attributable to such
properties, including any such grants or transfers pursuant to incentive
compensation programs on terms that are reasonably customary in the oil and
gas
business for geologists,
26
geophysicists
and other providers of technical services to the Company or a Subsidiary of
the
Company.
“Rating
Agency” means each of S&P and Xxxxx’x, or if S&P or Xxxxx’x or both
shall not make a rating on the Notes publicly available, a nationally recognized
statistical rating agency or agencies, as the case may be, selected by the
Company which shall be substituted for S&P or Xxxxx’x, or both, as the case
may be.
“Rating
Decline” means the occurrence of:
(1) a
decrease of one or more gradations (including gradations within rating
categories as well as between rating categories) in the rating of the Notes
by
either Rating Agency; or
(2) a
withdrawal of the rating of the Notes by either Rating Agency;
provided,
however, that such decrease or withdrawal occurs on, or within 90 days
before or after the earlier of (a) a Change of Control, (b) the date of public
notice of the occurrence of a Change of Control or (c) public notice of the
intention by the Company to effect a Change of Control (which period shall
be
extended so long as the rating of the Notes is under publicly announced
consideration for downgrade by either Rating Agency).
“Related
Business” means any business which is the same as or related, ancillary or
complementary to any of the businesses of the Company and its Restricted
Subsidiaries on March 13, 2007, which includes (a) the acquisition, exploration,
exploitation, development, production, operation and disposition of interests
in
oil, gas and other hydrocarbon properties, and the utilization of the Company’s
and its Restricted Subsidiaries’ properties, (b) the gathering, marketing,
treating, processing, storage, refining, selling and transporting of any
production from such interests or properties and products produced in
association therewith, (c) any power generation and electrical transmission
business, (d) oil field sales and services and related activities, (e)
development, purchase and sale of real estate and interests therein, and (f)
any
business or activity relating to, arising from, or necessary, appropriate or
incidental to the activities described in the foregoing clauses (a) through
(e)
of this definition.
“Restricted
Investment” means any Investment other than a Permitted Investment.
“Restricted
Subsidiary” means any Subsidiary of the Company other than an Unrestricted
Subsidiary.
“S&P”
means Standard & Poor’s Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc.
“Securities
Act” means the Securities Act of 1933, as amended.
“Senior
Credit Agreement” means, with respect to the Company, one or more debt
facilities (including, without limitation, the Amended and Restated Credit
Agreement, dated as of May 16, 2005, as amended by the First Amendment dated
as
of November 1, 2005, and the Second Amendment and Waiver, dated as of September
28, 2006, among the Company, JPMorgan Chase Bank, N.A., as administrative agent,
and the lenders and agents parties thereto from time to time) as provided for
in
one or more agreements or instruments in each case, as amended, restated,
modified, supplemented, increased, renewed, refunded, replaced (including
replacement after the termination of such credit facility), supplemented,
restructured or refinanced in whole or in part from time to time in one or
more
agreements or instruments.
27
“Senior
Debt” means:
(1) all
Indebtedness of the Company or any of its Restricted Subsidiaries outstanding
under Credit Facilities and all Hedging Obligations with respect
thereto;
(2) any
other Indebtedness of the Company or any of its Restricted Subsidiaries
permitted to be incurred under the terms of this Indenture, unless the
instrument under which such Indebtedness is incurred expressly provides that
it
is subordinated in right of payment to the Notes or any Subsidiary Guarantee;
and
(3) all
Obligations with respect to the items listed in the preceding clauses (1) and
(2).
Notwithstanding
anything to the contrary in the preceding sentence, Senior Debt will not
include:
(a) any
intercompany Indebtedness of the Company or any of its Subsidiaries to the
Company or any of its Affiliates;
(b) any
Indebtedness that is incurred in violation of this Indenture; or
(c) any
trade payables or taxes owed or owing by the Company or any Restricted
Subsidiary.
“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.
“Stated
Maturity” means, with respect to any installment of interest or principal on any
series of Indebtedness, the date on which the payment of interest or principal
was scheduled to be paid in the documentation governing such Indebtedness as
of
the date of this Indenture, and will not include any contingent obligations
to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
“Subordinated
Debt” means Indebtedness of the Company or a Guarantor that is contractually
subordinated in right of payment, in any respect (by its terms or the terms
of
any document or instrument relating thereto), to the Notes or the Subsidiary
Guarantee of such Guarantor, as applicable.
“Subsidiary”
means, with respect to any specified Person:
(1) any
corporation, association or other business entity of which more than 50% of
the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency and after giving effect to any voting agreement
or
stockholders’ agreement that effectively transfers voting power) to vote in the
election of directors, managers or trustees of the corporation, association
or
other business entity is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and
(2) any
partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are that Person or one or more Subsidiaries of that Person
(or
any combination thereof);
28
provided,
that the Point Xxxxxxxx Partnerships, Xxxxxxxxx Oil and Gas Company and Nuevo
Energy Company are not Subsidiaries of the Company.
“Subsidiary
Guarantee” means any guarantee of the Notes by any Guarantor in accordance with
Article Fourteen of this Indenture.
“Unrestricted
Subsidiary” means any Subsidiary of the Company that is designated by the Board
of Directors of the Company as an Unrestricted Subsidiary pursuant to a
resolution of such Board of Directors, but only to the extent that such
Subsidiary:
(1) has
no Indebtedness other than Non-Recourse Debt;
(2) except
as permitted by Section 10.13 of this Indenture, is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company;
(3) is
a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests or (b) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels
of
operating results; and
(4) has
not guaranteed or otherwise directly or indirectly provided credit support
for
any Indebtedness of the Company or any of its Restricted Subsidiaries, other
than pursuant to a Subsidiary Guarantee.
As
of the
Issue Date, each of the following entities has been designated as an
Unrestricted Subsidiary: Xxxxxx Grande Land Company, LLC, Lompoc Land
Company LLC and Montebello Land Company LLC.
“Volumetric
Production Payments” means production payment obligations recorded as deferred
revenue in accordance with GAAP, together with all related undertakings and
obligations.
“Voting
Stock” of any specified Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
“Weighted
Average Life to Maturity” means, when applied to any Indebtedness at any date,
the number of years obtained by dividing:
(1) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity, in respect of the
Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment;
by
(2) the
then outstanding principal amount of such Indebtedness.
29
SECTION
3.02. Defaults
and Remedies.
Subject
to the limitations set forth in the preamble to ARTICLE
3 of this Supplemental Indenture, Sections 5.1 and 5.2 of the Original
Indenture are hereby amended and restated in their entirety to read as
follows:
Section
5.1 Events
of Default.
(a) Each
of the following is an “Event of Default”:
(i) default
in any payment of interest on any Note under this Indenture when due, continued
for 30 days;
(ii) default
in the payment of principal of or premium, if any, on any Note under this
Indenture when due at its Stated Maturity, upon optional redemption, upon
required repurchase, upon declaration or otherwise;
(iii) failure
by the Company to comply with its obligations under Article Eight of this
Indenture or to consummate a purchase of Notes when required pursuant to Section
10.12 or Section 10.15 of this Indenture;
(iv) failure
by the Company or any of its Restricted Subsidiaries for 30 days after receipt
of a written notice (sent by registered or certified mail, specifying such
failure, requiring it to be remedied and stating that such notice is a “Notice
of Default” under this Indenture) from the Trustee or the Holders of at least
25% in aggregate principal amount of the then Outstanding Notes to comply with
Section 10.9 or Section 10.11 of this Indenture or to comply with the provisions
described under Section 10.12 or Section 10.15 of this Indenture to the extent
not described in clause (iii) of this Section 5.1(a);
(v) (A)
except as addressed in subclause (B) of this clause (v), failure by the Company
or any of its Restricted Subsidiaries for 60 days after receipt of a written
notice (sent by registered or certified mail, specifying such failure, requiring
it to be remedied and stating that such notice is a “Notice of Default” under
this Indenture) from the Trustee or the Holders of at least 25% in aggregate
principal amount of the then Outstanding Notes to comply with any of the other
agreements in this Indenture or the Notes or (B) failure by the Company for
180
days after such notice from the Trustee or the Holders of at least 25% in
aggregate principal amount of the then Outstanding Notes to comply with Section
10.7 of this Indenture;
(vi) default
under any mortgage, indenture or instrument under which there may be issued
or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of which
is
guaranteed by the Company or any of its Restricted Subsidiaries), other than
Indebtedness owed to the Company or a Restricted Subsidiary, whether such
Indebtedness or guarantee now exists, or is created after the Issue Date, which
default:
(A) is
caused by a failure to pay principal of, or interest or premium, if any, on
such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness (“payment default”); or
(B) results
in the acceleration of such Indebtedness prior to its maturity (the “cross
acceleration provision”);
30
and,
in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been
a
payment default or the maturity of which has been so accelerated, aggregates
$50.0 million or more;
(vii) failure
by the Company or any Significant Subsidiary or group of Restricted Subsidiaries
that, taken together (as of the latest audited consolidated financial statements
for the Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary to pay final judgments aggregating in excess of $50.0 million (net
of
any amounts that a reputable and creditworthy insurance company has acknowledged
liability for in writing), which judgments are not paid, discharged or stayed
for a period of 60 days;
(viii) any
Subsidiary Guarantee shall be held in a judicial proceeding to be, or be
asserted by the Company or any Guarantor, as applicable, not to be, enforceable
or valid or shall cease to be in full force and effect (except pursuant to
the
release or termination of any such Subsidiary Guarantee in accordance with
this
Indenture);
(ix) the
Company, any Significant Subsidiary of the Company or any group of Restricted
Subsidiaries of the Company that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary of the Company,
pursuant to or within the meaning of Bankruptcy Law:
(A) commences
a voluntary case,
(B) consents
to the entry of an order for relief against it in an involuntary
case,
(C) makes
a general assignment for the benefit of its creditors, or
(D) generally
is not paying its debts as they become due; and
(x) a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:
(A) is
for relief against the Company, any Significant Subsidiary of the Company or
any
group of Restricted Subsidiaries of the Company that, taken together (as of
the
latest audited consolidated financial statements for the Company and its
Restricted Subsidiaries), would constitute a Significant Subsidiary of the
Company, in an involuntary case; or
(B) appoints
a custodian of the Company, any Significant Subsidiary of the Company or any
group of Restricted Subsidiaries of the Company that, taken together (as of
the
latest audited consolidated financial statements for the Company and its
Restricted Subsidiaries), would constitute a Significant Subsidiary of the
Company, or for all or substantially all of the property of the Company, any
Significant Subsidiary of the Company or any group of Restricted Subsidiaries
of
the Company that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries), would
constitute a Significant Subsidiary of the Company; or
(C) orders
the liquidation of the Company, any Significant Subsidiary of the Company or
any
group of Restricted Subsidiaries of the
31
Company
that, taken together (as of the latest audited consolidated financial statements
for the Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary of the Company;
and
the
order or decree remains unstayed and in effect for 60 consecutive
days.
(b) The
Company shall, so long as any of the Notes are Outstanding, deliver to the
Trustee, within five Business Days after any Officer becomes aware of any
Default or Event of Default, an Officers’ Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take
with
respect thereto.
|
Section
5.2
|
Acceleration
of Maturity; Rescission and Annulment; Interest Rate
Increase.
|
(a) To
the extent permitted by applicable law, in the case of an Event of Default
specified in clause (ix) or clause (x) of Section 5.1(a) of this Indenture,
all
then Outstanding Notes will become due and payable immediately without further
action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then Outstanding Notes may declare all the Notes to be due and
payable immediately by notice in writing to the Company and, in case of a notice
by Holders, also to the Trustee specifying the respective Event of Default
and
that it is a notice of acceleration. Upon any such declaration, the
Notes shall become due and payable immediately.
(b) At
any time after such a declaration of acceleration with respect to the Notes
has
been made and before a judgment or decree for payment of the money due has
been
obtained by the Trustee as hereinafter in this Article Five provided, the
Holders of a majority in principal amount of the Outstanding Notes, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if:
(i) the
Company or one or more of the Guarantors has paid or deposited with the Trustee
a sum sufficient to pay:
(A) all
overdue interest on all Notes,
(B) the
principal of (and premium, if any, on) any Notes which have become due otherwise
than by such declaration of acceleration and any interest thereon at the rate
or
rates prescribed therefor in such Notes,
(C) to
the extent that payment of such interest is lawful, interest upon overdue
interest at the rate or rates prescribed therefor in such Notes,
and
(D) all
sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel;
and
(ii) all
Events of Default with respect to the Notes, other than the non-payment of
the
principal of the Notes which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13 of this
Indenture.
(iii) No
such rescission shall affect any subsequent default or impair any right
consequent thereon.
(c) Notwithstanding
the foregoing Section 5.2(b), if an Event of Default specified in clause (vi)
of
Section 5.1(a) above shall have occurred and be continuing, such Event of
Default and any consequential acceleration shall be automatically rescinded
if
(i) the Indebtedness that is
32
the
subject of such Event of Default has been repaid, or (ii) if the default
relating to such Indebtedness is waived or cured and if such Indebtedness has
been accelerated, then the holders thereof have rescinded their declaration
of
acceleration in respect of such Indebtedness.
(d) Upon
any failure by the Company for 60 days to comply with Section 10.7 of this
Indenture, the interest rate on the Notes will increase by 50 basis points
(0.5%) and remain at such increased rate thereafter but only for so long as
there is a Default under such Section 10.7, and upon resumption of compliance
by
the Company with such Section 10.7, the interest rate on the Notes will be
reset
at the initial rate applicable on the Issue Date.
SECTION
3.03. Notice
of Defaults.
Subject
to the limitations set forth in the preamble to ARTICLE
3 of this Supplemental Indenture, Section 6.2 of the Original Indenture
is
hereby amended and restated in its entirety to read as follows:
Section
6.2 Notice
of Defaults.
Within
90
days after the occurrence of any Default hereunder with respect to the Notes,
the Trustee shall transmit by mail to all Holders of Notes, as their names
and
addresses appear in the Security Register, notice of such Default hereunder
known to the Trustee, unless such Default shall have been cured or waived;
provided, however, that, except in the case of a Default in
the payment of the principal of or any premium or interest on any Note, the
Trustee may withhold from Holders of Notes notice of any continuing Default
or
Event of Default if the Trustee in good faith determines that the withholding
of
such notice is in the interest of the Holders of Notes; and, provided,
further, that (i) in the case of any Default of the character
specified
in Section 5.1(a)(iv), no such notice to Holders shall be given until at least
30 days after the occurrence thereof, (ii) in the case of any Default of the
character specified in Section 5.1(a)(v)(A), no such notice to Holders shall
be
given until at least 60 days after the occurrence thereof and (iii) in the
case
of any Default of the character specified in Section 5.1(a)(v)(B), no such
notice to Holders shall be given until at least 180 days after the occurrence
thereof.
SECTION
3.04. Compensation
and Reimbursement.
Subject
to the limitations set forth in the preamble to ARTICLE
3 of this Supplemental Indenture, the third paragraph of Section 6.7 of
the
Original Indenture is hereby amended and restated in its entirety to read as
follows:
Without
limiting any rights available to the Trustee under applicable law, when the
Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 5.1(a)(ix) or Section 5.1(a)(x), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services of the Trustee are intended to constitute expenses
of administration under any applicable Bankruptcy Law.
SECTION
3.05. Merger,
Consolidation or Sale of Substantially All Assets.
Subject
to the limitations set forth in the preamble to ARTICLE
3 of this Supplemental Indenture, Article Eight of the Original Indenture
is
hereby amended and restated in its entirety to read as follows:
ARTICLE
EIGHT
MERGER,
CONSOLIDATION OR SALE OF SUBSTANTIALLY ALL ASSETS
Section
8.1 Company
May Consolidate, Etc., Only on Certain Terms.
33
(a) The
Company will not, directly or indirectly, consolidate, amalgamate or merge
with
or into another Person (regardless of whether the Company is the surviving
corporation), convert into another form of entity or continue in another
jurisdiction; or sell, assign, transfer, lease, convey or otherwise dispose
of
all or substantially all of its properties or assets, in one or more related
transactions, to another Person, unless:
(i) either:
(A) the Company is the surviving corporation; or (B) the Person formed by or
surviving any such consolidation, amalgamation or merger or resulting from
such
conversion (if other than the Company) or to which such sale, assignment,
transfer, conveyance or other disposition has been made is a corporation,
limited liability company or limited partnership organized or existing under
the
laws of the United States, any state of the United States or the District of
Columbia;
(ii) the
Person formed by or surviving any such conversion, consolidation, amalgamation
or merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made assumes
all
the obligations of the Company under the Notes and this Indenture pursuant
to
agreements reasonably satisfactory to the Trustee; provided that,
unless such Person is a corporation, a corporate co-issuer of the Notes will
be
added to this Indenture by agreements reasonably satisfactory to the
Trustee;
(iii) immediately
after such transaction or transactions, no Default or Event of Default
exists;
(iv) the
Company or the Person formed by or surviving any such consolidation,
amalgamation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition has been
made:
(A) would
have Consolidated Net Worth immediately after the transaction equal to or
greater than the Consolidated Net Worth of the Company immediately preceding
the
transaction;
(B) would,
on the date of such transaction after giving pro forma effect thereto and any
related financing transactions as if the same had occurred at the beginning
of
the applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 10.11(a) of this Indenture; or
(C) would,
on the date of such transaction after giving pro forma effect thereto and any
related financing transactions as if the same had occurred at the beginning
of
the applicable four-quarter period, have a Fixed Charge Coverage Ratio that
is
not less than the Fixed Charged Coverage Ratio of the Company and its Restricted
Subsidiaries immediately prior to such transaction; and
(v) the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, amalgamation, merger, conveyance,
sale, transfer or lease and such supplemental indenture, if any, comply with
this Article Eight and that all conditions precedent herein provided for
relating to such transaction have been complied with.
(b) For
purposes of this Section 8.1, the sale, lease, conveyance, assignment, transfer,
or other disposition of all or substantially all of the properties and assets
of
one or more
34
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 assets of the Company.
(c) Notwithstanding
the restrictions described in the foregoing clause (a)(iv), any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to the Company, the Company may merge into a Restricted
Subsidiary for the purpose of reincorporating the Company in another
jurisdiction, and any Restricted Subsidiary may consolidate with, merge into
or
transfer all or part of its properties and assets to another Restricted
Subsidiary.
Section
8.2 Successor
Substituted.
Upon
any
merger or consolidation, or any sale, transfer, assignment, conveyance or other
disposition of all or substantially all of the properties or assets of the
Company and its Restricted Subsidiaries in accordance with Section 8.1 of this
Indenture, the successor Person formed by such consolidation or into which
the
Company is merged or to which such sale, transfer, assignment, conveyance or
other disposition is made, shall succeed to, and be substituted for the Company
(so that from and after the date of such consolidation, merger, sale, conveyance
or other disposition, the provisions of this Indenture referring to the
“Company” shall refer instead to the successor corporation and not to the
Company), and may exercise every right and power of the Company under this
Indenture with the same effect as if such successor Person had been named as
the
Company herein. When the successor assumes all of the Company’s
obligations under this Indenture, the Company shall be discharged from those
obligations; provided, however, that the Company will not be
released from the obligation to pay the principal of and interest on the Notes
except in the case of a sale of all of the Company’s assets in a transaction
that is subject to, and that complies with the provisions of, this Article
Eight.
SECTION
3.06. Selection
for and Notice of Redemption.
Subject
to the limitations set forth in the preamble to ARTICLE
3 of this Supplemental Indenture, Sections 11.3 and 11.4 of the Original
Indenture are hereby amended and restated in their entirety to read as
follows:
Section
11.3 Selection
by Trustee of Securities to be Redeemed.
(a) If
less than all of the Notes are to be redeemed at any time, the Trustee shall
select the Notes to be redeemed among the Holders of the Notes in compliance
with the requirements of the principal national securities exchange, if any,
on
which the Notes are listed or, if the Notes are not so listed, on a pro rata
basis, by lot or in accordance with any other method the Trustee shall deem
fair
and appropriate. In the event of partial redemption by lot, the
particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the Redemption Date
by
the Trustee from the Outstanding Notes not previously called for
redemption.
(b) The
Trustee shall promptly notify the Company in writing of the Notes selected
for
redemption and, in the case of any Note selected for partial redemption, the
principal amount at maturity thereof to be redeemed. No Notes in
amounts of $1,000 or less shall be redeemed in part. Notes and
portions of Notes selected shall be in amounts of $1,000 and integral multiples
thereof; except that if all of the Notes of a Holder are to be redeemed, the
entire Outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
35
(c) For
all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Notes shall relate, in the case of
any
Notes redeemed or to be redeemed only in part, to the portion of the principal
amount of such Notes which has been or is to be redeemed.
Section
11.4 Notice
of Redemption.
(a) At
least 30 days but not more than 60 days before a Redemption Date, the Company
shall mail or cause to be mailed, by first class mail, a notice of redemption
to
each Holder whose Notes are to be redeemed at its registered address;
provided, however, that in the case of a redemption with the
net cash proceeds of an Equity Offering, such notice may be given prior to
the
completion of the related Equity Offering.
The
notice shall identify the Notes to be redeemed and shall state:
(i) the
Redemption Date;
(ii) the
Redemption Price;
(iii) if
any Note is being redeemed in part, the portion of the principal amount of
such
Note to be redeemed and that, after the Redemption Date upon surrender of such
Note, a new Note or Notes in principal amount equal to the unredeemed portion
of
the original Note shall be issued in the name of the Holder thereof upon
cancellation of the original Note;
(iv) the
name and address of the Paying Agent;
(v) that
Notes called for redemption must be surrendered to the Paying Agent to collect
the Redemption Price and become due on the date fixed for
redemption;
(vi) that,
unless the Company defaults in making such redemption payment, interest, if
any,
on Notes called for redemption ceases to accrue on and after the Redemption
Date;
(vii) the
paragraph of the Notes and/or Section of this Indenture pursuant to which the
Notes called for redemption are being redeemed;
(viii) 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 Notes; and
(ix) any
conditions that must be satisfied prior to the Company becoming obligated to
consummate such redemption.
(b) At
the Company’s request, the Trustee shall give the notice of redemption in the
Company’s name and at the Company’s expense; provided,
however, that the Company shall have delivered to the Trustee,
at least
45 days prior to the Redemption Date (or such shorter period of time as may
be
acceptable to the Trustee), an Officers’ Certificate requesting that the Trustee
give such notice and setting forth the information to be stated in such notice
as provided in the preceding paragraph.
36
SECTION
3.07. Redemption
Upon Equity Offering.
Subject
to the limitations set forth in the preamble to ARTICLE
3 of this Supplemental Indenture, Section 11.6 of the Original Indenture
is
hereby amended by adding the following paragraph as the last paragraph of such
Section:
Notwithstanding
the preceding provisions of this Section 11.6, notice of any redemption upon
an
Equity Offering may be given prior to the completion of the related Equity
Offering, and any such redemption or notice may at the Company’s discretion, be
subject to one or more conditions precedent, including, but not limited to
completion of the related Equity Offering.
SECTION
3.08. Covenant
Defeasance.
Subject
to the limitations set forth in the preamble to ARTICLE
3 of this Supplemental Indenture, the last sentence of Section 13.3 of the
Original Indenture is hereby amended and restated in its entirety to read as
follows:
In
addition, upon the Company’s exercise under Section 13.1 hereof of the option
applicable to this Section 13.3, subject to the satisfaction of the conditions
set forth in Section 13.4 hereof, the following will no longer constitute an
Event of Default: (a) clauses (iii), (iv), (v), (vi) and (vii) of Section 5.1(a)
of this Indenture, (b) clause (ix) (but only with respect to Subsidiaries of
the
Company) of Section 5.1(a) of this Indenture and (c) clause (x) (but only with
respect to Subsidiaries of the Company) of Section 5.1(a) of this
Indenture.
SECTION
3.09. Subsidiary
Guarantees.
Subject
to the limitations set forth in the preamble to ARTICLE
3 of this Supplemental Indenture, Article Fourteen of the Original Indenture
is hereby amended by adding the following Sections 14.4 and 14.5
thereto:
Section
14.4 Guarantors
May Consolidate, etc., on Certain Terms.
Except
as
otherwise provided in Section 14.5 of this Indenture, no Guarantor may sell
or
otherwise dispose of all or substantially all of its assets to, or consolidate
with or merge with or into (regardless of whether such Guarantor is the
surviving Person) another Person, other than the Company or another Guarantor,
unless:
(a) immediately
after giving effect to such transaction, no Default or Event of Default exists;
and
(b) either:
(i) subject
to Section 14.5 hereof, if it is not such Guarantor, the Person acquiring the
property in any such sale or disposition or the Person formed by or surviving
any such consolidation or merger assumes all the obligations of that Guarantor
under this Indenture (including its Subsidiary Guarantee), on the terms set
forth herein, pursuant to a supplemental indenture in form and substance
reasonably satisfactory to the Trustee, in which case the Subsidiary Guarantee
of such Guarantor will be released as contemplated by Section 14.5 of this
Indenture; or
(ii) the
Net Proceeds of such sale or other disposition are applied in accordance with
the applicable provisions of this Indenture, including without limitation
Section 10.12.
37
In
case
of any such consolidation, merger, sale or conveyance and upon the assumption
by
the successor Person, by supplemental indenture, executed and delivered to
the
Trustee and satisfactory in form to the Trustee, of the Subsidiary Guarantee
of
such Guarantor and the due and punctual performance of all of the covenants
and
conditions of this Indenture to be performed by the Guarantor, such successor
Person will succeed to and be substituted for the Guarantor with the same effect
as if it had been named herein as a Guarantor. Such successor Person
thereupon may cause to be signed any or all of the Subsidiary Guarantee
notations to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Subsidiary Guarantees so issued will in all respects
have the same legal rank and benefit under this Indenture as the Subsidiary
Guarantees theretofore and thereafter issued in accordance with the terms of
this Indenture as though all of such Subsidiary Guarantees had been issued
at
the date of the execution hereof.
Except
as
set forth in Articles Eight and Ten of this Indenture, and notwithstanding
clauses (i) and (ii) above, nothing contained in this Indenture or in any of
the
Notes will prevent any consolidation or merger of a Guarantor with or into
the
Company or another Guarantor, or will prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section
14.5 Releases.
(a) In
the event of any sale or other disposition of all or substantially all of the
assets of any Guarantor, by way of merger, consolidation or otherwise, or a
sale
or other disposition of all of the Capital Stock of any Guarantor, in each
case
to a Person that is not (either before or after giving effect to such
transactions) the Company or a Restricted Subsidiary of the Company, then such
Guarantor (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the Capital Stock of such Guarantor)
or
the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) will
be
released and relieved of any obligations under its Subsidiary Guarantee,
provided that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture,
including without limitation Section 10.12. Upon delivery by the
Company to the Trustee of an Officers’ Certificate and an Opinion of Counsel to
the effect that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture, including without limitation
Section 10.12, the Trustee will execute any documents reasonably required in
order to evidence the release of any Guarantor from its obligations under its
Subsidiary Guarantee.
(b) In
addition, each Guarantor will be released and relieved of any obligations under
its Subsidiary Guarantee:
(i) upon
designation of such Guarantor as an Unrestricted Subsidiary in accordance with
the terms of this Indenture;
(ii) upon
Legal Defeasance in accordance with Article Thirteen of this Indenture or
satisfaction and discharge of this Indenture in accordance with Article Four
of
this Indenture;
(iii) upon
the liquidation or dissolution of such Guarantor, provided that no
Default or Event of Default shall have occurred and is continuing;
or
(iv) at
such time as such Guarantor does not have outstanding any Guarantee of any
Indebtedness (other than the Notes) of the Company or any Guarantor in excess
of
$10.0 million in aggregate principal amount.
38
(c) Any
Guarantor not released from its obligations under its Subsidiary Guarantee
as
provided in this Section 14.5 will remain liable for the full amount of
principal of and interest and premium, if any, on the Notes and for the other
obligations of any Guarantor under this Indenture as provided in this Article
Fourteen.
SECTION
3.10. Repurchase
Offers.
Subject
to the limitations set forth in the preamble to ARTICLE
3 of this Supplemental Indenture, the Original Indenture is hereby amended
by adding the following Article Fifteen thereto:
ARTICLE
FIFTEEN
REPURCHASE
OFFERS
Section
15.1 Generally.
In
the
event that, pursuant to Section 10.12 or Section 10.15 of this Indenture, the
Company shall be required to commence an offer to all Holders of Notes to
purchase all or a portion of their respective Notes (a “Repurchase Offer”), it
shall follow the procedures specified in such Sections and, to the extent not
inconsistent therewith, the procedures specified in Section 15.2
below.
Section
15.2 Repurchase
Offer Procedures.
(a) A
Repurchase Offer shall remain open for a period of no less than 30 days and
no
more than 60 days following its commencement, except to the extent that a longer
period is required by applicable law (the “Offer Period”). No later
than three Business Days after the termination of the Offer Period (the
“Purchase Date”), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 10.12 or 10.15 of this Indenture
(the “Offer Amount”) or, if less than the Offer Amount has been tendered, all
Notes tendered in response to the Repurchase Offer. Payment for any
Notes so purchased shall be made in the same manner as interest payments are
made.
(b) If
the Purchase Date is on or after an interest record date and on or before the
related Interest Payment Date, any accrued and unpaid interest shall be paid
to
the Person in whose name a Note is registered at the close of business on such
record date, and no additional interest shall be payable to Holders who tender
Notes pursuant to the Repurchase Offer.
(c) Upon
the commencement of a Repurchase Offer, the Company shall send, by first class
mail, a notice to the Trustee and each of the Holders of Notes. The
notice shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Repurchase Offer. The
Repurchase Offer shall be made to all Holders of Notes. The notice,
which shall govern the terms of the Repurchase Offer, shall state:
(i) that
the Repurchase Offer is being made pursuant to this Article Fifteen and Section
10.12 or Section 10.15 of this Indenture, and the length of time the Repurchase
Offer shall remain open;
(ii) the
Offer Amount, the purchase price and the Purchase Date;
(iii) that
any Note not tendered or accepted for payment shall continue to accrue
interest;
39
(iv) that,
unless the Company defaults in making such payment, any Note (or portion
thereof) accepted for payment pursuant to the Repurchase Offer shall cease
to
accrue interest after the Purchase Date;
(v) that
Holders electing to have a Note purchased pursuant to a Repurchase Offer may
elect to have Notes purchased equal to $1,000 and integral multiples
thereof;
(vi) that
Holders electing to have a Note purchased pursuant to any Repurchase Offer
shall
be required to surrender the Note, with the form entitled “Option of Holder to
Elect Purchase” on the reverse of the Note completed, or transfer by book entry
transfer, to the Company, the Depositary, if appointed by the Company, or a
Paying Agent at the address specified in the notice at least three days before
the Purchase Date;
(vii) that
Holders shall be entitled to withdraw their election if the Company, the
Depositary or the Paying Agent, as the case may be, receives, not later than
the
expiration of the Offer Period, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the Note
the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(viii) that,
if the aggregate amount of Notes surrendered by Holders exceeds the Offer
Amount, the Trustee shall select the Notes to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Trustee so that
only
Notes in denominations of $1,000, or and integral multiples thereof, shall
be
purchased); and
(ix) that
Holders whose Notes were purchased only in part shall be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book entry transfer).
(d) On
the Purchase Date, the Company shall, to the extent lawful, accept for payment
on a pro rata basis to the extent necessary, the Offer Amount of Notes (or
portions thereof) tendered pursuant to the Repurchase Offer, or if less than
the
Offer Amount has been tendered, all Notes tendered, and shall deliver to the
Trustee an Officers’ Certificate stating that such Notes (or portions thereof)
were accepted for payment by the Company in accordance with the terms of this
Article Fifteen. The Company, the Depositary or the Paying Agent, as
the case may be, shall promptly (but in any case not later than three days
after
the Purchase Date) mail or deliver to each tendering Holder an amount equal
to
the purchase price of Notes tendered by such Holder, as the case may be, and
accepted by the Company for purchase, and the Company shall promptly issue
a new
Note. The Trustee, upon written request from the Company shall
authenticate and mail or deliver such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Company to
the
respective Holder thereof. The Company shall publicly announce the
results of the Repurchase Offer on the Purchase Date.
ARTICLE
4
Additional
Covenants
With
respect to the Notes, Article Ten of the Original Indenture is hereby amended
as
set forth below in this ARTICLE 4;
provided, however, that each such amendment
shall apply only
to the Notes and not to any other series of Securities issued under the
Indenture.
40
SECTION
4.01. Reports.
Subject
to the limitations set forth in the preamble to ARTICLE
4 of this Supplemental Indenture, Article Ten of the Original Indenture
is
hereby further amended by adding the following Section 10.7
thereto:
Section
10.7 Reports.
(a) Regardless
of whether required by the rules and regulations of the SEC, so long as any
Notes are Outstanding, the Company will file with the SEC for public
availability, within the time periods specified in the SEC’s rules and
regulations (unless the SEC will not accept such a filing, in which case the
Company will furnish to the Holders of Notes or cause the Trustee to furnish
to
the Holders of Notes, within the time periods specified in the SEC’s rules and
regulations):
(i) all
quarterly and annual reports that would be required to be filed with the SEC
on
Forms 10-Q and 10-K under the Exchange Act if the Company were required to
file
such reports; and
(ii) all
current reports that would be required to be filed with the SEC on Form 8-K
under the Exchange Act if the Company were required to file such
reports.
(b) All
such reports will be prepared in all material respects in accordance with all
of
the rules and regulations applicable to such reports. Each annual report on
Form
10-K will include a report on the Company’s consolidated financial statements by
the Company’s certified independent accountants.
(c) If,
at any time, the Company is no longer subject to the periodic reporting
requirements of the Exchange Act for any reason, the Company will nevertheless
continue filing the reports specified in Section 10.7(a) with the SEC within
the
time periods specified above unless the SEC will not accept such a filing.
The
Company will not take any action for the purpose of causing the SEC not to
accept any such filings. If, notwithstanding the foregoing, the SEC will not
accept the Company’s filings for any reason, the Company will post the reports
referred to in the preceding paragraphs on its website within the time periods
that would apply if the Company were required to file those reports with the
SEC.
(d) If
the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries,
then, to the extent material, the quarterly and annual financial information
required by the preceding paragraphs of this Section 10.7 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.
SECTION
4.02. Taxes.
Subject
to the limitations set forth in the preamble to ARTICLE
4 of this Supplemental Indenture, Article Ten of the Original Indenture
is
hereby further amended by adding the following Section 10.8
thereto:
Section
10.8 Taxes.
The
Company shall pay, and shall cause each of its Subsidiaries to pay, prior to
delinquency, any taxes, assessments, and governmental levies except such as
are
contested in
41
good
faith and by appropriate proceedings or where the failure to effect such payment
is not adverse in any material respect to the Holders of the Notes.
SECTION
4.03. Restricted
Payments.
Subject
to the limitations set forth in the preamble to ARTICLE
4 of this Supplemental Indenture, Article Ten of the Original Indenture
is
hereby further amended by adding the following Section 10.9
thereto:
Section
10.9 Restricted
Payments.
(a) The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly:
(1) declare
or pay any dividend or make any other payment or distribution on account of
the
Company’s or any of its Restricted Subsidiaries’ Equity Interests or to the
direct or indirect holders of the Company’s or any of its Restricted
Subsidiaries’ Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock)
of
the Company and other than dividends or distributions payable to the Company
or
a Restricted Subsidiary);
(2) purchase,
redeem or otherwise acquire or retire for value (including, without limitation,
any such purchase, redemption, acquisition or retirement made in connection
with
any merger or consolidation involving the Company) any Equity Interests of
the
Company or any direct or indirect parent or other Affiliate of the Company
that
is not a Restricted Subsidiary;
(3) make
any payment on or with respect to, or purchase, redeem, defease or otherwise
acquire or retire for value any Subordinated Debt, except a payment of interest
or principal at the Stated Maturity thereof (excluding (a) any intercompany
Indebtedness between or among the Company and any of its Restricted Subsidiaries
or (b) the purchase, repurchase or other acquisition of Subordinated Debt
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
purchase, repurchase or acquisition); or
(4) make
any Restricted Investment;
(all
such
payments and other actions set forth in clauses (1) through (4) above being
collectively referred to as “Restricted Payments”),
unless,
at the time of and after giving effect to such Restricted Payment:
(i) no
Default or Event of Default has occurred and is continuing or would occur as
a
consequence of such Restricted Payment;
(ii) the
Company would, at the time of such Restricted Payment and after giving pro
forma
effect thereto as if such Restricted Payment had been made at the beginning
of
the applicable four-quarter period, have been permitted to incur at least $1.00
of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
set
forth in Section 10.11(a) of this Indenture; and
(iii) such
Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Company and its Restricted Subsidiaries since March 13,
2007 (excluding Restricted Payments permitted by clauses (ii), (iii), (iv),
(v),
(vi),
42
(vii),
(viii), (ix), (x) and (xiv) of Section 10.9(b) of this Indenture), is equal
to
or less than the sum, without duplication, of:
(A) 50%
of the Consolidated Net Income of the Company for the period (taken as one
accounting period) from July 1, 2006 to the end of the Company’s most recently
ended fiscal quarter for which internal financial statements are available
at
the time of such Restricted Payment (or, if such Consolidated Net Income for
such period is a deficit, less 100% of such deficit); plus
(B) 100%
of (1)(a) the aggregate net cash proceeds and (b) the Fair Market Value of
(x)
marketable securities (other than marketable securities of the Company), (y)
Capital Stock of a Person (other than the Company or an Affiliate of the
Company) engaged primarily in any Related Business and (z) other assets used
or
useful in any Related Business, in the case of clauses (a) and (b), received
by
the Company since July 3, 2002 as a contribution to its common equity capital
or
from the issue or sale of Equity Interests of the Company (other than
Disqualified Stock) or from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt securities of the Company
that have been converted into or exchanged for such Equity Interests (other
than
Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary
of the Company); provided, however, that the aggregate amount
calculated pursuant to this clause (1) shall not include $731.6 million
(representing the Fair Market Value of the common stock of Nuevo Energy Company
and shares of common stock of 3TEC Energy Corporation, in each case, received
by
the Company during the years 2003 and 2004 in exchange for shares of its common
stock), (2) the amount by which Indebtedness of the Company or any Restricted
Subsidiary is reduced on the Company’s consolidated balance sheet upon the
conversion or exchange after March 13, 2007 of any such Indebtedness into or
for
Equity Interests of the Company (other than Disqualified Stock or Subordinated
Debt), and (3) the aggregate net cash proceeds, if any, received by the Company
or any of its Restricted Subsidiaries upon any conversion or exchange described
in clause (1) or (2) above; plus
(C) the
amount equal to the net reduction in Restricted Investments made by the Company
or any of its Restricted Subsidiaries in any Person resulting from repurchases
or redemptions of such Restricted Investments by such Person, proceeds realized
upon the sale of such Restricted Investment to a purchaser other than the
Company or a Subsidiary of the Company, repayments of loans or advances or
other
transfers of assets (including by way of dividend or distribution) by such
Person to the Company or any Restricted Subsidiary; provided,
however, that no amount will be included under this clause (C)
to the
extent it is already included in Consolidated Net Income;
plus
(D) to
the extent that any Unrestricted Subsidiary is redesignated as a Restricted
Subsidiary after March 13, 2007, the Fair Market Value of the Company’s
Investment in such Subsidiary as of the date of such redesignation.
(b) So
long as no Default has occurred and is continuing or would be caused thereby,
Section 10.9(a) of this Indenture will not prohibit:
(i) the
payment of any dividend or the consummation of any irrevocable redemption within
60 days after the date of declaration of the dividend or giving of the
43
redemption
notice, as the case may be, if at the date of declaration or notice, the
dividend or redemption payment would have complied with the provisions of this
Indenture;
(ii) the
making of any Restricted Payment in exchange for, or out of the net cash
proceeds from the substantially concurrent sale (other than to a Restricted
Subsidiary of the Company) of, Equity Interests of the Company (other than
Disqualified Stock and other than Equity Interests issued or sold to an employee
stock ownership plan, option plan or similar trust to the extent such sale
to an
employee stock ownership plan, option plan or similar trust is financed by
loans
from or guaranteed by the Company or any of its Restricted Subsidiaries unless
such loans have been repaid with cash on or prior to the date of determination)
or from the substantially concurrent contribution of common equity capital
to
the Company; provided that the amount of any such net cash proceeds
that are utilized for any such Restricted Payment will be excluded from clause
(iii)(B) of Section 10.9(a);
(iii) the
repurchase, redemption, defeasance or other acquisition or retirement for value
of Subordinated Debt (including the payment of any required premium and any
fees
and expenses incurred in connection with such repurchase, redemption, defeasance
or other acquisition) with the net cash proceeds from a substantially concurrent
incurrence of Permitted Refinancing Indebtedness;
(iv) the
defeasance, repurchase, redemption or other acquisition or retirement for value
of any Equity Interests of the Company or any Restricted Subsidiary held by
any
of the Company’s (or any of its Restricted Subsidiaries’) current or former
directors or employees in connection with the exercise or vesting of any equity
compensation (including, without limitation, stock options, restricted stock
and
phantom stock) in order to satisfy the Company’s or such Restricted Subsidiary’s
tax withholding obligation with respect to such exercise or
vesting;
(v) repurchases
of Capital Stock deemed to occur upon the exercise of stock options if such
Capital Stock represents a portion of the exercise price thereof;
(vi) payments
to fund the purchase, redemption or other acquisition for value by the Company
of fractional shares arising out of stock dividends, splits or combinations,
business combinations or other transactions permitted by this
Indenture;
(vii) any
transfer to an Unrestricted Subsidiary of any direct or indirect interest of
the
Company and its Restricted Subsidiaries in real property so long as such
interests at the time of such sale or transfer (A) do not include any material
proved Hydrocarbons and (B) include a surface interest, and any disposition
(by
dividend or distribution in respect of Equity Interests of the Company or
otherwise) of any such Unrestricted Subsidiary;
(viii) the
defeasance, repurchase, redemption or other acquisition or retirement for value
of any Equity Interests of the Company or any Restricted Subsidiary held by
any
of the Company’s (or any of its Restricted Subsidiaries’) current or former
directors or employees; provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests may not exceed
$3.0 million in any twelve-month period (with unused amounts in any 12-month
period being permitted to be carried over into succeeding 12-month periods);
provided, further, that the amounts in any 12-month period may
be increased by an amount not to exceed (A) the cash proceeds received by the
Company or any of its Restricted Subsidiaries from the sale of the Company’s
Equity Interests (other than Disqualified Stock) to any such directors or
employees that occurs
44
after
March 13, 2007 (provided that the amount of such cash proceeds utilized
for any such repurchase, retirement or other acquisition or retirement will
not
increase the amount available for Restricted Payments under clause (iii) of
Section 10.9(a) and to the extent such proceeds have not otherwise been applied
to the payment of Restricted Payments) plus (B) the cash proceeds of
key man life insurance policies received by the Company and its Restricted
Subsidiaries after March 13, 2007;
(ix) the
declaration and payment of regularly scheduled or accrued dividends to holders
of any class or series of Disqualified Stock of the Company or any Restricted
Subsidiary issued on or after March 13, 2007 in accordance with the Fixed Charge
Coverage Ratio test set forth in Section 10.11(a) below;
(x) the
payment of any dividend (or, in the case of any partnership or limited liability
company, any similar distribution) by a Restricted Subsidiary to the holders
(other than the Company or any Restricted Subsidiary) of Equity Interests (other
than Disqualified Stock) of such Restricted Subsidiary; provided that
such dividend or similar distribution is paid to all holders of such Equity
Interests on a pro rata basis based their respective holdings of such Equity
Interests;
(xi) any
Restricted Payment as long as on the date of such Restricted Payment, after
giving pro forma effect thereto and to any related financing transactions as
if
the same had occurred at the beginning of the Company’s most recently ended four
full fiscal quarters for which internal financial statements are available,
the
Company’s Leverage Ratio would not have exceeded 2.5 to 1;
(xii) the
purchase or redemption of any Acquired Subordinated Indebtedness of the Company
or any of its Restricted Subsidiaries, by application of (A) cash provided
from
operations in the ordinary course of business or (B) proceeds from borrowings
under the revolving portion of the Senior Credit Agreement (so long as within
30
days prior to such purchase or redemption, a corresponding amount of borrowings
under the revolving portion of the Senior Credit Agreement was repaid from
cash
provided from operations in the ordinary course of business); provided,
in any such case, that the Company is able to incur an additional $1.00 of
Indebtedness pursuant to Section 10.11(a) after giving effect to such purchase
or redemption; providedfurther, that this clause (xii) shall
not permit the application any proceeds from any other borrowings under any
Credit Facility to effect any such purchase or redemption;
(xiii) repurchases
of Subordinated Debt at a purchase price not greater than (x) 101% of the
principal amount of such Subordinated Debt and accrued and unpaid interest
thereon in the event of a Change of Control or (y) 100% of the principal amount
of such Subordinated Debt and accrued and unpaid interest thereon in the event
of an Asset Sale, in each case plus accrued interest, in connection with any
change of control offer or asset sale offer required by the terms of such
Subordinated Debt, but only if:
(A) in
the case of a Change of Control Triggering Event, the Company has first complied
with and fully satisfied its obligations under Section 10.15; or
(B) in
the case of an Asset Sale, the Company has complied with and fully satisfied
its
obligations under Section 10.12; or
(xiv) other
Restricted Payments in an amount not to exceed $50.0 million.
45
(c) The
amount of all Restricted Payments (other than cash) shall be the Fair Market
Value on the date of such Restricted Payment of the asset(s) or securities
proposed to be paid, transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to such Restricted
Payment.
(d) The
Fair Market Value of any cash Restricted Payment shall be its face amount,
and
the Fair Market Value of any non-cash Restricted Payment exceeding $15.0 million
shall be determined conclusively by two Officers of the Company acting in good
faith whose conclusions with respect thereto shall be set forth in an Officers’
Certificate delivered to the Trustee, provided, however, that
if the Fair Market Value of any non-cash Restricted Payment exceeds $40.0
million, such Fair Market Value shall be determined conclusively by the Board
of
Directors of the Company and set forth in a Board Resolution, and a certified
copy of such Board Resolution shall be delivered to the Trustee. For
purposes of determining compliance with this covenant, in the event that a
Restricted Payment meets the criteria of more than one of the exceptions
described in clauses (i) through (xiv) of Section 10.9(b) or is entitled to
be
made pursuant to Section 10.9(a), the Company shall, in its sole discretion,
classify such Restricted Payment, or later classify, reclassify or re-divide
all
or a portion of such Restricted Payment, in any manner that complies with this
Section 10.9.
SECTION
4.04. Dividend
and Other Payment Restrictions Affecting Restricted
Subsidiaries.
Subject
to the limitations set forth in the preamble to ARTICLE
4 of this Supplemental Indenture, Article Ten of the Original Indenture
is
hereby further amended by adding the following Section 10.10
thereto:
Section
10.10 Dividend
and Other Payment Restrictions Affecting Restricted
Subsidiaries.
(a) The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(i) pay
dividends or make any other distributions on its Capital Stock to the Company
or
any of its Restricted Subsidiaries, or with respect to any other interest or
participation in, or measured by, its profits, or pay any indebtedness owed
to
the Company or any of its Restricted Subsidiaries;
(ii) make
loans or advances to the Company or any of its Restricted Subsidiaries;
or
(iii) sell,
lease or transfer any of its properties or assets to the Company or any of
its
Restricted Subsidiaries.
(b) However,
the preceding restrictions in Section 10.10(a) will not apply to encumbrances
or
restrictions existing under or by reason of:
(i) agreements
governing Existing Indebtedness and Credit Facilities as in effect on March
13,
2007 and any amendments, restatements, modifications, renewals, supplements,
increases, refundings, replacements or refinancings of those agreements;
provided that the amendments, restatements, modifications, renewals,
supplements, increases, refundings, replacements or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and other payment
restrictions than those contained in those agreements on March 13,
2007;
(ii) this
Indenture, the Notes and the Subsidiary Guarantees;
46
(iii) applicable
law, rule, regulation, order, approval, permit or similar
restriction;
(iv) any
instrument governing Indebtedness or Capital Stock of a Person acquired by
the
Company or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness or Capital Stock was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties
or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired; provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be
incurred;
(v) customary
non-assignment provisions in contracts, leases and licenses (including, without
limitation, licenses of intellectual property) entered into in the ordinary
course of business;
(vi) any
agreement for the sale or other disposition of assets, including without
limitation an agreement for the sale or other disposition of the Capital Stock
or assets of a Restricted Subsidiary, that restricts distributions by the
applicable Restricted Subsidiary pending the sale or other
disposition;
(vii) Permitted
Refinancing Indebtedness; provided that the restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness are not
materially more restrictive, taken as a whole, than those contained in the
agreements governing the Indebtedness being refinanced;
(viii) Liens
permitted to be incurred under the provisions of Section 10.14 that limit the
right of the debtor to dispose of the assets subject to such Liens;
(ix) the
issuance of preferred stock by a Restricted Subsidiary or the payment of
dividends thereon in accordance with the terms thereof; provided that
issuance of such preferred stock is permitted pursuant to Section 10.11 and
the
terms of such preferred stock do not expressly restrict the ability of a
Restricted Subsidiary to pay dividends or make any other distributions on its
Capital Stock (other than requirements to pay dividends or liquidation
preferences on such preferred stock prior to paying any dividends or making
any
other distributions on such other Capital Stock);
(x) other
Indebtedness of the Company or any of its Restricted Subsidiaries permitted
to
be incurred pursuant to an agreement entered into subsequent to March 13, 2007
in accordance with Section 10.11; provided that the provisions relating
to such encumbrance or restriction contained in such Indebtedness are not
materially less favorable to the Company and its Restricted Subsidiaries taken
as a whole, as determined by the Company in good faith, than the provisions
contained in the Credit Facilities and in this Indenture as in effect on March
13, 2007;
(xi) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest;
(xii) Hedging
Obligations permitted from time to time under this Indenture;
(xiii) restrictions
on cash or other deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business ; and
47
(xiv) with
respect only to encumbrances or restrictions of the type referred to in clause
(iii) of Section 10.10(a):
(A) 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) provisions
limiting the disposition or distribution of assets or property in, or transfer
of Capital Stock of, joint venture agreements, asset sale agreements,
sale-leaseback agreements, stock sale agreements and other similar agreements
entered into (1) in the ordinary course of business, consistent with past
practice or (2) with the approval of the Company’s Board of Directors, which
limitations are applicable only to the assets, property or Capital Stock that
are the subject of such agreements; and
(C) Capital
Lease Obligations, security agreements, mortgages, purchase money agreements
or
similar instruments to the extent such encumbrance or restriction restricts
the
transfer of the property (including Capital Stock) subject to such Capital Lease
Obligations, security agreements, mortgages, purchase money agreements or
similar instruments.
SECTION
4.05. Incurrence
of Indebtedness and Issuance of Preferred Stock.
Subject
to the limitations set forth in the preamble to ARTICLE
4 of this Supplemental Indenture, Article Ten of the Original Indenture
is
hereby further amended by adding the following Section 10.11
thereto:
Section
10.11 Incurrence
of Indebtedness and Issuance of Preferred Stock.
(a) The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect
to
(collectively, “incur;” with “incurrence” having a correlative meaning) any
Indebtedness (including Acquired Debt), and the Company will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that
the Company may incur Indebtedness (including Acquired Debt) and issue
Disqualified Stock, and Restricted Subsidiaries may incur Indebtedness
(including Acquired Debt) and issue preferred stock, if the Fixed Charge
Coverage Ratio for the Company’s most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding
the
date on which such additional Indebtedness is incurred or such Disqualified
Stock or preferred stock is issued, as the case may be, would have been at
least
2.25 to 1.0, determined on a pro forma basis (including a pro forma application
of the net proceeds therefrom), as if the additional Indebtedness had been
incurred or the Disqualified Stock or preferred stock had been issued, as the
case may be, at the beginning of such four-quarter period.
(b) Notwithstanding
the foregoing, Section 10.11(a) will not prohibit the incurrence of any of
the
following (the items of Indebtedness described below in this Section 10.11(b)
being referred to collectively as “Permitted Debt”):
(i) the
incurrence by the Company and any Restricted Subsidiary of Indebtedness and
letters of credit under Credit Facilities in an aggregate principal amount
48
at
any
one time outstanding under this clause (i) (with letters of credit being deemed
to have a principal amount equal to the maximum potential liability of the
Company and its Restricted Subsidiaries thereunder) not to exceed the greater
of
(x) $1.1 billion and (y) 20% of Adjusted Consolidated Net Tangible Assets,
determined as of the date of the incurrence of such Indebtedness after giving
pro forma effect to such incurrence and the application of the proceeds
therefrom;
(ii) the
incurrence by the Company and its Restricted Subsidiaries of the Existing
Indebtedness;
(iii) the
incurrence by the Company and the Guarantors of Indebtedness represented by
the
Notes or the Guarantees of the Notes, to be incurred by the Company and the
Guarantors on the Issue Date of the Notes;
(iv) the
incurrence by the Company or any of its Restricted Subsidiaries of 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 or cost of design, construction, installation or
improvement of property, plant or equipment used in the business of the Company
or any of its Restricted Subsidiaries, in an aggregate principal amount,
including all Permitted Refinancing Indebtedness incurred to renew, refund,
refinance, replace, defease or discharge any Indebtedness incurred pursuant
to
this clause (iv), not to exceed $50.0 million at any time
outstanding;
(v) the
incurrence by the Company or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are
used
to refund, refinance, replace, defease or discharge Indebtedness (other than
intercompany Indebtedness) or Disqualified Stock of the Company, or Indebtedness
(other than intercompany Indebtedness) or preferred stock of a Restricted
Subsidiary, in each case that was permitted by this Indenture to be incurred
or
issued under Section 10.11(a) or clauses (ii), (iii), (iv), (v) or (x) of this
Section 10.11(b);
(vi) the
incurrence by the Company or any of its Restricted Subsidiaries of intercompany
Indebtedness between or among the Company and any of its Restricted
Subsidiaries; provided, however, that (A) any subsequent
issuance or transfer of Equity Interests that results in any such Indebtedness
being held by a Person other than the Company or a Restricted Subsidiary and
(B)
any sale or other transfer of any such Indebtedness to a Person that is not
either the Company or a Restricted Subsidiary will be deemed, in each case,
to
constitute an incurrence of such Indebtedness by the Company or such Restricted
Subsidiary, as the case may be, that was not permitted by this clause
(vi);
(vii) the
issuance by any of the Company’s Restricted Subsidiaries to the Company or to
any of its Restricted Subsidiaries of shares of preferred stock;
provided, however, that:
(A) any
subsequent issuance or transfer of Equity Interests that results in any such
preferred stock being held by a Person other than the Company or a Restricted
Subsidiary; and
(B) any
sale or other transfer of any such preferred stock to a Person that is not
either the Company or a Restricted Subsidiary,
49
will
be
deemed, in each case, to constitute an issuance of such preferred stock by
such
Restricted Subsidiary that was not permitted by this clause (vii);
(viii) the
incurrence of obligations of the Company or a Restricted Subsidiary pursuant
to
Interest Rate and Currency Xxxxxx, in each case 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 Restricted Subsidiaries;
(ix) the
guarantee by the Company or any of the Guarantors of Indebtedness of the Company
or a Restricted Subsidiary that was permitted to be incurred by another
provision of this covenant; provided that if the Indebtedness being
guaranteed is subordinated to or pari passu with the Notes, then the
guarantee shall be subordinated or pari passu, as applicable, to the
same extent as the Indebtedness guaranteed;
(x) Permitted
Acquisition Indebtedness;
(xi) the
incurrence by the Company or any Restricted Subsidiary of Indebtedness arising
from the honoring by a bank or other financial institution of a check, draft
or
similar instrument inadvertently drawn against insufficient funds, so long
as
such Indebtedness is covered within five Business Days;
(xii) Indebtedness
consisting of the financing of insurance premiums in customary amounts
consistent with the operations and business of the Company and the Restricted
Subsidiaries;
(xiii) the
incurrence by the Company or any Restricted Subsidiary of Indebtedness arising
from agreements of the Company or any of its Restricted Subsidiaries providing
for indemnification, adjustment of purchase price or similar obligations, in
each case, incurred or assumed in connection with the disposition of any
business, assets or Capital Stock of a Subsidiary, provided that the
maximum aggregate liability in respect of all such Indebtedness shall at no
time
exceed the gross proceeds actually received by the Company and its Restricted
Subsidiaries in connection with such disposition;
(xiv) the
incurrence by the Company or any Restricted Subsidiary of Indebtedness arising
from Guarantees of Indebtedness of joint ventures at any time outstanding not
to
exceed the greater of $50.0 million and 1.0% of Adjusted Consolidated Net
Tangible Assets determined as of the date of incurrence of such Indebtedness
after giving pro forma effect to such incurrence and the application of proceeds
thereof; and
(xv) the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
in an aggregate principal amount (or accreted value, as applicable) that, when
taken together with all other Indebtedness of the Company outstanding on the
date of such incurrence (other than Indebtedness permitted by clauses (i)
through (xiv) above or Section 10.11(a)) does not exceed the greater of (x)
2.5%
of Adjusted Consolidated Net Tangible Assets determined as of the date of
incurrence of such Indebtedness and (y) $125.0 million.
(c) For
purposes of determining compliance with this Section 10.11, in the event that
an
item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xv) of Section
10.11(b), or is entitled to be incurred pursuant to Section 10.11(a), the
Company will be permitted to divide and classify such item of Indebtedness
on
the date of its incurrence, or later divide and reclassify all or a portion
50
of
such
item of Indebtedness, in any manner that complies with this Section
10.11. The accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in the
form
of additional Indebtedness with the same terms, the reclassification of
preferred stock as Indebtedness due to a change in accounting principles, and
the payment of dividends on Disqualified Stock in the form of additional shares
of the same class of Disqualified Stock will be deemed not to be an incurrence
of Indebtedness or an issuance of Disqualified Stock for purposes of this
covenant; provided, in each such case, that the amount of any such
accrual, accretion or payment is included in Fixed Charges of the Company as
accrued.
(d) For
purposes of determining compliance with any U.S. dollar-denominated restriction
on the incurrence of Indebtedness and issuance of preferred stock, the U.S.
dollar-equivalent principal amount of Indebtedness denominated in a foreign
currency shall be calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was incurred, in the case of term
Indebtedness, or first committed, in the case of revolving credit Indebtedness;
provided that if such Indebtedness is incurred to refinance other
Indebtedness denominated in a foreign currency, and such refinancing would
cause
the applicable U.S. dollar-denominated restriction to be exceeded if calculated
at the relevant currency exchange rate in effect on the date of such
refinancing, such U.S. dollar-denominated restriction shall be deemed not to
have been exceeded so long as the principal amount of such refinancing
Indebtedness does not exceed the principal amount of such Indebtedness being
refinanced. Notwithstanding any other provision of this Section
10.11, the maximum amount of Indebtedness that the Company may incur pursuant
to
this Section 10.11 shall not be deemed to be exceeded solely as a result of
fluctuations in the exchange rate of currencies. The principal amount
of any Permitted Refinancing Indebtedness incurred to refinance other
Indebtedness, if incurred in a different currency from the Indebtedness being
refinanced, shall be calculated based on the currency exchange rate applicable
to the currencies in which such Permitted Refinancing Indebtedness is
denominated that is in effect on the date of such refinancing.
SECTION
4.06. Asset
Sales.
Subject
to the limitations set forth in the preamble to ARTICLE
4 of this Supplemental Indenture, Article Ten of the Original Indenture
is
hereby further amended by adding the following Section 10.12
thereto:
Section
10.12 Asset
Sales.
(a) The
Company will not, and will not permit any of its Restricted Subsidiaries to,
consummate an Asset Sale unless:
(i) the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at least equal to the Fair Market Value of the assets or Equity
Interests issued or sold or otherwise disposed of; and
(ii) either
(x) at least 75% of the consideration received in the Asset Sale by the Company
or such Restricted Subsidiary is in the form of cash or Cash Equivalents or
(y)
the Fair Market Value of all forms of consideration other than cash and Cash
Equivalents received for all Asset Sales since March 13, 2007 does not exceed in
the aggregate 10% of the Adjusted Consolidated Net Tangible Assets of the
Company at the time each determination is made. For purposes of this
provision, each of the following will be deemed to be cash:
(A) any
liabilities, as shown on the Company’s most recent consolidated balance sheet,
of the Company or any Restricted Subsidiary (other
51
than
contingent liabilities and liabilities that are by their terms subordinated
to
the Notes or any Subsidiary Guarantee) that are assumed by the transferee of
any
such assets pursuant to a customary novation agreement that releases the Company
or such Restricted Subsidiary from further liability;
(B) any
securities, notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are converted by the Company
or
such Restricted Subsidiary into cash within 180 days after the date of the
Asset
Sale, to the extent of the cash received in that conversion;
(C) any
stock or assets of the kind referred to in clauses (ii) or (iv) of Section
10.12(b) below; and
(D) accounts
receivable of a business retained by the Company or any Restricted Subsidiary,
as the case may be, following the sale of such business, provided that
such accounts receivable are not (1) past due more than 90 days and (2) do
not
have a payment date greater than 120 days from the date of the invoice creating
such accounts receivable.
(b) Within
360 days after the receipt of any Net Proceeds from an Asset Sale, the Company
(or the applicable Restricted Subsidiary, as the case may be) may apply such
Net
Proceeds:
(i) to
repay Senior Debt;
(ii) to
invest in Additional Assets;
(iii) to
make capital expenditures in respect of a Related Business of the Company or
any
of its Restricted Subsidiaries; or
(iv) enter
into a bona fide binding contract with a Person other than an Affiliate of
the
Company to apply the Net Proceeds pursuant to clauses (ii) or (iii) above,
provided that such binding contract shall be treated as a permitted
application of the Net Proceeds from the date of such contract until the earlier
of:
(A) the
date on which such acquisition or expenditure is consummated, and
(B) the
180th day following the expiration of the aforementioned 360-day
period.
Any
Net
Proceeds from Asset Sales that are not applied or invested as provided in
clauses (i) through (iv) above will constitute “Excess Proceeds.”
(c) On
the 361st day (or upon the failure to close the contract referred to in clause
(iv) of Section 10.12(b) above within the 180 day time period thereafter) after
the Asset Sale (or, at the Company’s option, any earlier date), if the aggregate
amount of Excess Proceeds then exceeds $40.0 million, the Company will make
an
offer (the “Asset Sale Offer”) to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets, to purchase the maximum
principal amount of Notes and such other pari passu Indebtedness that
may be purchased out of the Excess Proceeds. The offer price in any
Asset Sale Offer will be equal to 100% of the principal amount plus accrued
52
and
unpaid interest, to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset
Sale Offer, the Company may use those Excess Proceeds for any purpose not
otherwise prohibited by this Indenture. If the aggregate principal
amount of Notes and other pari passu Indebtedness tendered into such
Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will select
the Notes to be purchased on a pro rata basis. Upon completion of
each Asset Sale Offer, the amount of Excess Proceeds will be reset at
zero.
(d) Notwithstanding
the foregoing, the sale, conveyance or other disposition of all or substantially
all of the assets of the Company, or of the Company and its Restricted
Subsidiaries, taken as a whole, will be governed by Sections 8.1 and/or 10.15
of
this Indenture, as applicable, and not by this Section 10.12.
(e) The
Company will comply with the requirements of Rule 14e-1 under the Exchange
Act
and any other securities laws and regulations thereunder to the extent those
laws and regulations are applicable in connection with each repurchase of Notes
pursuant to an Asset Sale Offer. To the extent that the provisions of
any securities laws or regulations conflict with the Asset Sale provisions
of
this Indenture, the Company will comply with the applicable securities laws
and
regulations and will not be deemed to have breached its obligations under the
Asset Sale provisions of this Indenture by virtue of such
compliance.
SECTION
4.07. Transactions
with Affiliates.
Subject
to the limitations set forth in the preamble to ARTICLE
4 of this Supplemental Indenture, Article Ten of the Original Indenture
is
hereby further amended by adding the following Section 10.13
thereto:
Section
10.13 Transactions
with Affiliates.
(a) The
Company will not, and will not permit any of its Restricted Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of
its
properties or assets to, or purchase any property or assets from, or enter
into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate of the Company
(each, an “Affiliate Transaction”), unless:
(i) the
Affiliate Transaction is on terms that are no less favorable to the Company
or
the relevant Restricted Subsidiary than those that would have been obtained
in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person; and
(ii) the
Company delivers to the Trustee:
(A) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $20.0 million, a Board Resolution
of the Company set forth in an Officers’ Certificate certifying that such
Affiliate Transaction complies with this Section 10.13 and that such Affiliate
Transaction has been approved by a majority of the disinterested members of
the
Board of Directors of the Company; and
(B) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $40.0 million, an opinion as
to
the fairness to the Company or such Subsidiary of such Affiliate Transaction
from a financial point of view issued by an accounting, appraisal or investment
banking firm of national standing.
53
(b) The
following items will not be deemed to be Affiliate Transactions and, therefore,
will not be subject to the provisions of the prior paragraph:
(i) any
employment, consulting or similar agreement or other compensation, or
arrangement, stock option or stock ownership plan, employee benefit plan,
officer or director indemnification agreement, restricted stock agreement,
severance agreement or other compensation plan or arrangement entered into
by
the Company or any of its Restricted Subsidiaries in the ordinary course of
business and payments, awards, grants or issuances of securities pursuant
thereto;
(ii) transactions
between or among the Company and/or its Restricted Subsidiaries;
(iii) transactions
with a Person that is an Affiliate of the Company solely because the Company
owns, directly or through a Subsidiary, an Equity Interest in, or controls,
such
Person;
(iv) reasonable
fees and expenses and compensation paid to, and indemnity or insurance provided
on behalf of, officers, directors or employees of the Company or any Restricted
Subsidiaries;
(v) any
issuance of Equity Interests (other than Disqualified Stock) of the Company
to,
or receipt of a capital contribution from, Affiliates (or a Person that becomes
an Affiliate) of the Company;
(vi) any
Permitted Investments or Restricted Payments that do not violate Section 10.9
of
this Indenture;
(vii) loans
or advances to employees in the ordinary course of business or consistent with
past practice;
(viii) advances
to or reimbursements of employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of
business;
(ix) the
performance of obligations of the Company or any of its Restricted Subsidiaries
under the terms of any written agreement to which the Company or any of its
Restricted Subsidiaries was a party on March 13, 2007, as these agreements
may
be amended, modified or supplemented from time to time; provided,
however, that any future amendment, modification or supplement
entered
into after March 13, 2007 will be permitted to the extent that its terms do
not
materially and adversely affect the rights of any Holders of the Notes (as
determined in good faith by the Board of Directors of the Company) as compared
to the terms of the agreements in effect on March 13, 2007;
(x) (A)
guarantees of performance by the Company and its Restricted Subsidiaries of
the
Company’s Unrestricted Subsidiaries in the ordinary course of business, except
for guarantees of Indebtedness in respect of borrowed money, and (B) pledges
of
Equity Interests of the Company’s Unrestricted Subsidiaries for the benefit of
lenders of the Company’s Unrestricted Subsidiaries; and
(xi) transactions
between the Company and any person, a director of which is also a director
of
the Company; provided, however, that such director abstains
from voting as a director of the Company on any matter involving such other
Person.
54
SECTION
4.08. Limitation
on Liens.
Subject
to the limitations set forth in the preamble to ARTICLE
4 of this Supplemental Indenture, Article Ten of the Original Indenture
is
hereby further amended by adding the following Section 10.14
thereto:
Section
10.14 Limitation
on Liens.
The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur or permit to exist any Lien (other than
Permitted Liens) upon any Principal Property or any shares of stock or
Indebtedness of any Restricted Subsidiary that owns or leases any Principal
Property (whether such Principal Property, shares of stock or Indebtedness
are
now owned or hereafter acquired), securing any Subordinated Debt or other
Indebtedness, unless:
(a) in
the case of Liens securing Subordinated Debt of the Company or a Guarantor,
the
Notes or Subsidiary Guarantee, as applicable, are secured by a Lien on such
Principal Property or such shares of stock or Indebtedness on a senior basis
to
the Subordinated Debt so secured with the same priority as the Notes or such
Subsidiary Guarantee, as applicable, has to such Subordinated Debt until such
time as such Subordinated Debt is no longer so secured by a Lien;
and
(b) in
the case of Liens securing other Indebtedness of the Company or a Guarantor,
the
Notes or Subsidiary Guarantees, as applicable, are secured by a Lien on such
Principal Property or such shares of stock or Indebtedness on an equal and
ratable basis with the other Indebtedness so secured until such time as such
other Indebtedness is no longer so secured by a Lien.
SECTION
4.09. Offer
to Repurchase upon a Change of Control.
Subject
to the limitations set forth in the preamble to ARTICLE
4 of this Supplemental Indenture, Article Ten of the Original Indenture
is
hereby further amended by adding the following Section 10.15
thereto:
Section
10.15 Offer
to Repurchase upon a Change of Control.
(a) If
a Change of Control Triggering Event occurs, each Holder of Notes will have
the
right to require the Company to repurchase all or any part (equal to $1,000
or
an integral multiple thereof) of that Holder’s Notes pursuant to an offer
(“Change of Control Offer”) on the terms set forth in this
Indenture. In the Change of Control Offer, the Company will offer a
payment in cash (the “Change of Control Payment”) equal to 101% of the aggregate
principal amount of Notes repurchased plus accrued and unpaid interest on the
Notes repurchased to the date of purchase (the “Change of Control Payment
Date”), subject to the rights of Holders of Notes on the relevant record date to
receive interest due on the relevant Interest Payment Date. Within 30
days following any Change of Control Triggering Event, the Company will mail
a
notice to each Holder of Notes describing the transaction or transactions that
constitute the Change of Control Triggering Event and offering to repurchase
Notes on the Change of Control Payment Date specified in the notice, which
date
will be no earlier than 30 days and no later than 60 days from the date such
notice is mailed, pursuant to the procedures described in Article Fifteen of
this Indenture (including the notice required thereby) and described in such
notice. The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent those laws and regulations are applicable in connection with
the
repurchase of the Notes as a result of a Change of Control Triggering
55
Event. To
the extent that the provisions of any securities laws or regulations conflict
with the Change of Control Triggering Event provisions of this Indenture, the
Company will comply with the applicable securities laws and regulations and
will
not be deemed to have breached its obligations under the Change of Control
Triggering Event provisions of this Indenture by virtue of such
compliance.
(b) On
the Change of Control Payment Date, the Company will, to the extent
lawful:
(i) accept
for payment all Notes or portions of Notes properly tendered pursuant to the
Change of Control Offer;
(ii) deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions of Notes properly tendered; and
(iii) deliver
or cause to be delivered to the Trustee the Notes properly accepted together
with an Officers’ Certificate stating the aggregate principal amount of Notes or
portions of Notes being purchased by the Company.
(c) The
Paying Agent will promptly mail to each Holder of Notes properly tendered the
Change of Control Payment for such Notes (or, if all the Notes are then in
global form, make such payment through the facilities of the Depositary), and
the Trustee will promptly authenticate and mail (or cause to be transferred
by
book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that
each such new Note will be in a principal amount of $1,000 or an integral
multiple thereof. Any Note so accepted for payment will cease to
accrue interest on and after the Change of Control Payment Date unless the
Company defaults in making the Change of Control Payment.
(d) The
Company will publicly announce the results of the Change of Control Offer on
or
as soon as practicable after the Change of Control Payment Date.
(e) Notwithstanding
anything to the contrary in this Section 10.15, the Company will not be required
to make a Change of Control Offer upon a Change of Control Triggering Event
if
(i) 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 Indenture
applicable to a Change of Control Offer made by the Company and purchases all
Notes properly tendered and not withdrawn under the Change of Control Offer,
or
(ii) notice of redemption with respect to the Notes has been given pursuant
to
this Indenture, unless and until there is a default in payment of the applicable
Redemption Price.
(f) A
Change of Control Offer may be made in advance of a Change of Control Triggering
Event, and conditioned upon the occurrence of such Change of Control Triggering
Event, if a definitive agreement is in place for the Change of Control
Triggering Event at the time of making the Change of Control
Offer. Notes repurchased by the Company pursuant to a Change of
Control Offer will have the status of Notes issued but not Outstanding or will
be retired and cancelled, at the Company’s option. Notes purchased by
a third party pursuant to clause (e) of this Section 10.15 will have the status
of Notes issued and Outstanding.
(g) In
the event that Holders of at least 90% of the aggregate principal amount of
the
Outstanding Notes accept a Change of Control Offer and the Company purchases
all
of the Notes held by such Holders, the Company will have the right, upon not
less than 30 nor more than 60 days’ prior notice, given not more than 30 days
following the purchase pursuant to the Change of Control Offer described above,
to redeem all of the Notes that remain Outstanding following such purchase
at a
Redemption Price equal to the Change of Control Payment plus, to the
extent not
56
included
in the Change of Control Payment, accrued and unpaid interest on the Notes
that
remain Outstanding, to the date of redemption (subject to the right of Holders
on the relevant record date to receive interest due on the relevant Interest
Payment Date).
SECTION
4.10. Designation
of Restricted and Unrestricted Subsidiaries.
Subject
to the limitations set forth in the preamble to ARTICLE
4 of this Supplemental Indenture, Article Ten of the Original Indenture
is
hereby further amended by adding the following Section 10.16
thereto:
Section
10.16 Designation
of Restricted and Unrestricted Subsidiaries.
(a) The
Board of Directors of the Company may designate any Restricted Subsidiary to
be
an Unrestricted Subsidiary if that designation would not cause a Default. If
a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
Fair Market Value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary designated as Unrestricted will be
deemed to be an Investment made as of the time of the designation and will
reduce the amount available for Restricted Payments under Section 10.9 of this
Indenture or under one or more clauses of the definition of Permitted
Investments, as determined by the Company. That designation will only
be permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
(b) Any
designation of a Subsidiary of the Company as an Unrestricted Subsidiary will
be
evidenced to the Trustee by filing with the Trustee a certified copy of a Board
Resolution of the Company giving effect to such designation and an Officers’
Certificate certifying that such designation complied with the preceding
conditions and was permitted by Section 10.9. If, at any time, any Unrestricted
Subsidiary would fail to meet the preceding requirements as an Unrestricted
Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for
purposes of this Indenture and any Indebtedness of such Subsidiary will be
deemed to be incurred by a Restricted Subsidiary as of such date and, if such
Indebtedness is not permitted to be incurred as of such date under Section
10.11, the Company will be in Default of such covenant. The Board of Directors
of the Company may at any time designate any Unrestricted Subsidiary to be
a
Restricted Subsidiary; provided that such designation will be deemed to
be an incurrence of Indebtedness by a Restricted Subsidiary of any outstanding
Indebtedness of such Unrestricted Subsidiary, and such designation will only
be
permitted if (i) such Indebtedness is permitted under Section 10.11, calculated
on a pro forma basis as if such designation had occurred at the beginning of
the
four-quarter reference period; and (ii) no Default or Event of Default would
be
in existence following such designation.
SECTION
4.11. Future
Guarantors.
Subject
to the limitations set forth in the preamble to ARTICLE
4 of this Supplemental Indenture, Article Ten of the Original Indenture
is
hereby further amended by adding the following Section 10.17
thereto:
Section
10.17 Future
Guarantors.
If
any
Domestic Restricted Subsidiary that is not a Guarantor is or becomes obligated
under any Indebtedness pursuant to a Guarantee of Indebtedness of the Company
or
any Guarantor (other than the Notes), and the maximum principal amount of
Indebtedness of such Domestic Restricted Subsidiary under such Guarantee exceeds
$10.0 million, then the Company shall cause that Domestic Restricted Subsidiary
to Guarantee the Notes and become a Guarantor,
57
pursuant
to the Subsidiary Guarantee provisions of this Indenture, by executing a
supplemental indenture and delivering it to the Trustee within 30 days after
the
date on which such Domestic Restricted Subsidiary Guaranteed such Indebtedness
of the Company or a Guarantor; provided, however, that the
Company shall not be required to cause such Domestic Restricted Subsidiary
to so
Guarantee the Notes and become a Guarantor prior to the 180th day after the
consummation of any transaction (including without limitation any merger,
consolidation or purchase) pursuant to which such Domestic Restricted Subsidiary
becomes a Subsidiary of the Company.
SECTION
4.12. Covenant
Termination.
Subject
to the limitations set forth in the preamble to ARTICLE
4 of this Supplemental Indenture, Article Ten of the Original Indenture
is
hereby further amended by adding the following Section 10.18
thereto:
Section
10.18 Covenant
Termination.
Notwithstanding
any provision of this Indenture or of the Notes to the contrary, from and after
the occurrence of an Investment Grade Rating Event, the Company and its
Restricted Subsidiaries will cease to be subject to Sections 10.9, 10.10, 10.11,
10.12, 10.13, 10.15 and 10.16 and 8.1(a)(iv) of this Indenture and no Default
or
Event of Default shall result from any failure to comply with any of the
provisions of such Sections.
ARTICLE
5
Miscellaneous
SECTION
5.01. Certain
Trustee Matters.
The
recitals contained herein shall be taken as the statements of the Company,
and
the Trustee assumes no responsibility for their correctness.
The
Trustee makes no representations as to the validity or sufficiency of this
Supplemental Indenture or the Notes or the proper authorization or the due
execution hereof or thereof by the Company.
Except
as
expressly set forth herein, nothing in this Supplemental Indenture shall alter
the duties, rights or obligations of the Trustee set forth in the Original
Indenture.
The
Trustee makes no representation or warranty as to the validity or sufficiency
of
the information contained in the prospectus supplement related to the Notes,
except such information which specifically pertains to the Trustee itself,
or
any information incorporated therein by reference.
SECTION
5.02. Continued
Effect.
Except
as
expressly supplemented and amended by this Supplemental Indenture, the Original
Indenture shall continue in full force and effect in accordance with the
provisions thereof, and the Original Indenture (as supplemented and amended
by
this Supplemental Indenture) is in all respects hereby ratified and
confirmed. This Supplemental Indenture and all its provisions shall
be deemed a part of the Original Indenture in the manner and to the extent
herein and therein provided.
SECTION
5.03. Governing
Law.
This
Supplemental Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York.
58
SECTION
5.04. Counterparts.
This
instrument may be executed in any number of counterparts, each of which shall
be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
[Remainder
of Page Intentionally Left Blank]
59
IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to
be duly executed and delivered, all as of the day and year first above
written.
|
THE
COMPANY:
|
||
|
PLAINS
EXPLORATION & PRODUCTION COMPANY
|
||
|
By:
|
/s/ Xxxxxxx
X. Xxxxxxx
|
|
|
Name:
|
Xxxxxxx
X. Xxxxxxx
|
|
|
Title:
|
Executive
Vice President & Chief Financial
Officer
|
|
|
GUARANTORS:
|
||||
|
XXXXXXXX
INC.
|
||||
|
XXXXX
PXP PROPERTIES, LLC
|
||||
|
NUEVO
GHANA INC.
|
||||
|
NUEVO
INTERNATIONAL INC.
|
||||
|
NUEVO
OFFSHORE COMPANY
|
||||
|
NUEVO
RESOURCES INC.
|
||||
|
PACIFIC
INTERSTATE OFFSHORE COMPANY
|
||||
|
PLAINS
ACQUISITION CORPORATION
|
||||
|
PLAINS
LOUISIANA INC.
|
||||
|
PLAINS
RESOURCES INC.
|
||||
|
PLAINS
RESOURCES INTERNATIONAL INC.
|
||||
|
PXP
BRUSH CREEK LLC
|
||||
|
By:
|
Plains
Resources Inc., its sole member
|
|||
|
PXP
CV PIPELINE LLC
|
||||
|
By:
|
Plains
Resources Inc., its sole member
|
|||
|
PXP
EAST PLATEAU LLC
|
||||
|
By:
|
Plains
Resources Inc., its sole member
|
|||
|
PXP
GULF COAST INC.
|
||||
|
PXP
HELL’S GULCH LLC
|
||||
|
By:
|
Plains
Resources Inc., its sole member
|
|||
|
PXP
LOUISIANA L.L.C.
|
||||
|
By:
|
Plains
Louisiana Inc., its sole member
|
|||
|
PXP
PERMIAN INC.
|
||||
|
PXP
PICEANCE LLC
|
||||
|
By:
|
Plains
Resources Inc., its sole member
|
|||
|
PXP
TEXAS INC.
|
||||
|
PXP
TEXAS LIMITED PARTNERSHIP
|
||||
|
By:
|
PXP
Texas Inc., its general partner
|
|||
|
By:
|
/s/ Xxxxxxx
X. Xxxxxxx
|
|||
|
Name:
|
Xxxxxxx
X. Xxxxxxx
|
|||
|
Title:
|
Vice
President & Treasurer
|
|||
|
PXP
DEEPWATER L.L.C.
|
||||
|
By:
|
Plains
Exploration & Production Company, its sole member
|
|||
|
By:
|
/s/ Xxxxxxx
X. Xxxxxxx
|
|||
|
Name:
|
Xxxxxxx
X. Xxxxxxx
|
|||
|
Title:
|
Vice
President & Treasurer
|
|||
|
TRUSTEE:
|
|||
|
XXXXX
FARGO BANK, N. A.
|
|||
|
By:
|
/s/
Xxxxxx Xxxxxxxxx
|
||
|
Name: Xxxxxx
Xxxxxxxxx
|
|||
|
Title:
Authorized Officer
|
|||
EXHIBIT
A
[FORM
OF FACE OF NOTE]
[If
a Global Security, insert—THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE
TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE
NAME
OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH
TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE
INDENTURE.]
[If
a Global Security, insert—EVERY SECURITY AUTHENTICATED AND DELIVERED UPON
REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS SECURITY
SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.]
[If
a Global Security, insert—UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
PLAINS
EXPLORATION & PRODUCTION COMPANY
7¾%
Senior Notes due
2015
|
No.
_________
|
U.S.$_____________
|
|
CUSIP
No. 726505 AD 2
|
PLAINS
EXPLORATION & PRODUCTION COMPANY, a company duly incorporated under the laws
of the State of Delaware (herein called the “Company”, which term includes any
successor or resulting Person under the Indenture hereinafter referred to),
for
value received, hereby promises to pay to _________________________, or
registered assigns, the principal sum of _________________________ United States
Dollars on June 15, 2015, and to pay interest thereon from June 19, 2007 or
from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on June 15 and December 15 in each year, commencing
December 15, 2007, at the rate of 7¾% per annum, until the principal hereof is
paid or made available for payment; provided, however, that
upon any failure by the Company for 60 days to comply with Section 10.7 of
such
Indenture, the interest rate on the Securities of this series will increase
by
50 basis points (0.5%) and remain at such increased rate thereafter but only
for
so long as there is a Default under such Section 10.7, and upon resumption
of
compliance by the Company with such Section 10.7, the interest rate on the
Securities of this series will be reset at the initial rate applicable on the
Issue Date. Interest on overdue principal and interest on overdue
interest, if any, will accrue at the applicable interest rate on the Securities
of this series. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the June 1 or December 1 (regardless of
whether a Business Day), as the case may be, next preceding such Interest
Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security
(or
one or more Predecessor Securities) is registered at the close of business
on a
Special Record Date for the payment of such Defaulted Interest to be fixed
by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid
at
any time in any other lawful manner not inconsistent with the requirements
of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture. Interest on the Securities of this series
will be computed on the basis of a 360-day year comprised of twelve 30-day
months.
A-1
[If
a Global Security, insert—Payment of the principal of (and
premium, if any) and any such interest on this Security will be made by transfer
of immediately available funds to a bank account in the United States designated
by the Holder in such coin or currency of the United States of America as at
the
time of payment is legal tender for payment of public and private
debts.]
[If
a Definitive Security, insert—Payment of the principal of (and
premium, if any) and any such interest on this Security will be made at the
office or agency of the Company maintained for that purpose in the United States
of America, in such coin or currency of the United States of America as at
the
time of payment is legal tender for payment of public and private debts or
subject to any laws or regulations applicable thereto and to the right of the
Company (as provided in the Indenture) to rescind the designation of any such
Paying Agent, at the offices of ________________ in ________________, or at
such
other offices or agencies as the Company may designate, by United States Dollar
check drawn on, or transfer to a United States Dollar account maintained by
the
payee with, a bank in The City of New York (so long as the applicable Paying
Agency has received proper transfer instructions in writing at least 10 days
prior to the payment date); provided, however, that payment of
interest may be made at the option of the Company by United States Dollar check
mailed to the addresses of the Persons entitled thereto as such addresses shall
appear in the Security Register or by transfer to a United States Dollar account
maintained by the payee with a bank in The City of New York (so long as the
applicable Paying Agent has received proper transfer instructions in writing
by
the record date prior to the applicable Interest Payment Date).]
Reference
is hereby made to the further provisions of this Security set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless
the certificate of authentication hereon has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Security shall
not
be entitled to any benefit under the Indenture or be valid or obligatory for
any
purpose.
IN
WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: ____________,
____
|
PLAINS
EXPLORATION AND PRODUCTION COMPANY
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
TRUSTEE’S
CERTIFICATE OF AUTHENTICATION
This
is
one of the Securities of the series designated 7¾% Senior Notes due 2015
referred to in the within-mentioned Indenture.
|
XXXXX
FARGO BANK, N.A.,
as Trustee
|
||
| By: | ||
| Authorized Signatory | ||
A-2
[FORM
OF REVERSE OF NOTE]
PLAINS
EXPLORATION & PRODUCTION COMPANY
7¾%
Senior Notes due
2015
This
Security is one of a duly authorized issue of senior securities of the Company
(herein called the “Securities”), issued and to be issued in one or more series
under an Indenture, dated as of March 13, 2007 (the “Original Indenture”),
between the Company and Xxxxx Fargo Bank, N.A., as Trustee (herein called the
“Trustee”, which term includes any successor trustee under the Indenture), as
amended and supplemented by the Third Supplemental Indenture thereto dated
as of
June 19, 2007 (the “Supplemental Indenture”), by and among the Company, the
Trustee and the Guarantors named therein (such Original Indenture, as so amended
and supplemented being herein called the “Indenture”), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement,
of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Guarantors, the Trustee and the Holders of the Securities
and of the terms upon which the Securities are, and are to be, authenticated
and
delivered. As provided in the Indenture, the Securities may be issued
in one or more series, which different series may be issued in various aggregate
principal amounts, may mature at different times, may bear interest, if any,
at
different rates, may be subject to different redemption provisions, if any,
may
be subject to different sinking, purchase or analogous funds, if any, may be
subject to different covenants and Events of Default and may otherwise vary
as
in the Indenture provided or permitted. This Security is one of the
series designated on the face hereof.
This
security is the general, unsecured, senior obligation of the Company and is
guaranteed pursuant to a guarantee (the “Subsidiary Guarantee”) by each of the
persons named as Guarantors in the Supplemental Indenture (the
“Guarantors”). The Subsidiary Guarantee is the general, unsecured,
senior obligation of each Guarantor.
Except
as
described below, and except as provided in Section 10.15(g) of the Indenture,
the Securities of this series are not redeemable until June 15,
2011. On and after June 15, 2011, the Company may redeem all or a
part of the Securities of this series, from time to time upon not less than
30
nor more than 60 days’ notice, at the following Redemption Prices (expressed as
a percentage of principal amount) plus accrued and unpaid interest on
the Securities of this series to be redeemed to the applicable 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 twelve-month period beginning on June 15 of the years indicated
below:
|
Year
|
Redemption
Price
|
|
|
2011
|
103.875%
|
|
|
2012
|
101.938%
|
|
|
2013
and thereafter
|
100.000%
|
|
The
Securities of this series will also be redeemable, in whole or in part, at
the
Company’s option at any time or from time to time, prior to June 15, 2011, at
the applicable Make-Whole Price (as defined below), in accordance with the
provisions of the Indenture.
“Make-Whole
Price” with respect to any Securities of this series to be redeemed, means
an amount equal to the greater of:
(1) 100%
of the principal amount of such Securities; and
(2) the
sum of the present values of (a) the Redemption Price of such Securities at
June
15, 2011 (as set forth above) and (b) the remaining scheduled payments of
interest from the Redemption Date to June 15, 2011 (not including any portion
of
such payments of interest accrued as of the Redemption Date) discounted back
to
the Redemption Date on a semi-annual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Rate (as defined below) plus
50 basis points;
plus,
in the case of both (1) and (2), accrued and unpaid interest on such Securities
to the Redemption Date. Unless the Company defaults in payment of the
Make-Whole Price, on and after the applicable Redemption Date, interest will
cease to accrue on the Securities of this series to be redeemed.
A-3
“Comparable
Treasury Issue” means, with respect to Securities of this series to be
redeemed, the U.S. Treasury security selected by an Independent Investment
Banker as having a maturity most nearly equal to the period from the Redemption
Date to June 15, 2011, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities;
provided if such period is less than one year, then the U.S. Treasury
security having a maturity of one year shall be used.
“Comparable
Treasury Price” means, with respect to any Redemption Date, (1) the average
of four Reference Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest of such Reference Treasury Dealer Quotations,
or (2) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer
Quotations.
“Independent
Investment Banker” means JPMorgan Securities Inc. or Xxxxxx Brothers Inc.
and their respective successors, at the Company’s option, or, if such firms or
the successors, if any, to such firms, as the case may be, are unwilling or
unable to select the Comparable Treasury Issue, an independent investment
banking institution of national standing appointed by the Company.
“Reference
Treasury Dealer” means JPMorgan Securities Inc. or Xxxxxx Brothers Inc. at
the Company’s option, and three additional primary U.S. government securities
dealers in New York City (each a “Primary Treasury Dealer”) selected by
the Company, and its successors (provided, however, that if
any such firm or any such successor, as the case may be, shall cease to be
a
primary U.S. government securities dealer in New York City, the Company shall
substitute therefor another Primary Treasury Dealer).
“Reference
Treasury Dealer Quotations” means, with respect to each Reference Treasury
Dealer and any Redemption Date, the average, as determined by the Trustee,
of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the
third
Business Day preceding such Redemption Date.
“Treasury
Rate” means, with respect to any Redemption Date, (1) the yield, under the
heading which represents the average for the immediately preceding week,
appearing in the most recently published statistical release designated
“H.15(159)” or any successor publication that is published weekly by the Board
of Governors of the Federal Reserve System and that establishes yields on
actively traded U.S. Treasury securities adjusted to constant maturity under
the
caption “Treasury Constant Maturities,” for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or
after
the stated maturity, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue shall be determined, and the
Treasury Rate shall be interpolated or extrapolated from such yields on a
straight-line basis, rounding to the nearest month) or (2) if such release
(or
any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal
to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price
for
such Redemption Date. The Treasury Rate shall be calculated on the
third Business Day preceding the Redemption Date.
The
notice of redemption with respect to the foregoing redemption need not set
forth
the Make-Whole Price but only the manner of calculation thereof. The
Company will notify the Trustee of the Make-Whole Price with respect to any
redemption promptly after the calculation, and the Trustee shall not be
responsible for such calculation.
Prior
to
June 15, 2010, the Company may on any one or more occasions redeem up to 35%
of
the principal amount of the Securities of this series, which may include
Additional Notes (as defined in the Supplemental Indenture), with all or a
portion of the net cash proceeds of one or more Equity Offerings at a Redemption
Price equal to 107.750% of the principal amount thereof, plus accrued
and unpaid interest on the Securities of this series to be redeemed 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);
provided that:
(1) at
least 65% of the aggregate principal amount of the Securities of this series
issued and Outstanding on the Issue Date, remains Outstanding after each such
redemption; and
(2) the
redemption occurs within 180 days after the closing of such Equity
Offering.
A-4
Notice
of
any redemption upon an Equity Offering may be given prior to the completion
of
the related Equity Offering, and any such redemption or notice may at the
Company’s discretion, be subject to one or more conditions precedent, including,
but not limited to completion of the related Equity Offering.
In
the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation
hereof.
If
an
Event of Default with respect to Securities of this series shall occur and
be
continuing, the principal of the Securities of this series may be declared
due
and payable in the manner and with the effect provided in the
Indenture.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the Guarantors and the rights of the Holders of the Securities of each series
to
be affected under the Indenture at any time by the Company and the Guarantors
and the Trustee with the consent of the Holders of a majority in principal
amount of the Securities at the time Outstanding of each series to be affected
(with each series voting as a separate class). The Indenture also
contains provisions permitting the Holders of specified percentages in principal
amount of the Securities of each series at the time Outstanding, on behalf
of
the Holders of all Securities of such series, to waive compliance by the Company
and the Guarantors with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent
or waiver by the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, regardless of whether notation of such consent or waiver is made
upon this Security.
No
reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of (and premium, if any) and interest
on
this Security at the times, place(s) and rate, and in the coin or currency,
herein prescribed.
[If
a Global Security, insert—This Global Security or portion hereof
may not be exchanged for Definitive Securities of this series except in the
limited circumstances provided in the Indenture. The holders of
beneficial interests in this Global Security will not be entitled to receive
physical delivery of Definitive Securities except as described in the Indenture
and will not be considered the Holders thereof for any purpose under the
Indenture.]
[If
a Definitive Security, insert—As provided in the Indenture and
subject to certain limitations therein set forth, the transfer of this Security
is registerable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Company, or, subject
to
any laws or regulations applicable thereto and to the right of the Company
(limited as provided in the Indenture) to rescind the designation of any such
transfer agent, at the offices of _______________ in ________________, or at
such other offices or agencies as the Company may designate, duly endorsed
by,
or accompanied by a written instrument of transfer in form satisfactory to
the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities
of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.]
The
Securities of this series are issuable only in registered form without coupons
in denominations of U.S. $2,000 and any integral multiple of $1,000 in excess
thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for
a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior
to
due presentment of this Security for registration of transfer, the Company,
any
Guarantor, the Trustee and any agent of the Company, a Guarantor or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, regardless of whether this Security be overdue, and
none of the Company, the Guarantors, the Trustee nor any such agent shall be
affected by notice to the contrary.
A-5
No
recourse under or upon any obligation, covenant or agreement of or contained
in
the Indenture or of or contained in any Security, or the Subsidiary Guarantee
endorsed thereon, or for any claim based thereon or otherwise in respect
thereof, or in any Security or in the Subsidiary Guarantee, or because of the
creation of any indebtedness represented thereby, shall be had against any
incorporator, shareholder, member, officer, manager or director, as such, past,
present or future, of the Company or any Guarantor or of any successor Person,
either directly or through the Company or any Guarantor or any successor Person,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment, penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released
by
the acceptance hereof and as a condition of, and as part of the consideration
for, the execution of the Indenture and the issuance of the
Securities.
The
Indenture provides that the Company and the Guarantors (a) will be discharged
from any and all obligations in respect of the Securities (except for certain
obligations described in the Indenture), or (b) need not comply with
certain restrictive covenants of the Indenture, in each case if the Company
or a
Guarantor deposits, in trust, with the Trustee money or U.S. Government
Obligations (or a combination thereof) which through the payment of interest
thereon and principal thereof in accordance with their terms will provide money,
in an amount sufficient to pay all the principal of and interest on the
Securities, but such money need not be segregated from other funds except to
the
extent required by law.
Except
as
otherwise defined herein, all terms used in this Security which are defined
in
the Indenture shall have the meanings assigned to them in the
Indenture.
This
Security shall be governed by and construed in accordance with the laws of
the
State of New York.
A-6
[If
a Definitive Security, insert as a separate
page—
FOR
VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
_______________________________________________________________ (Please Print
or
Typewrite Name and Address of Assignee) the within instrument of PLAINS
EXPLORATION & PRODUCTION COMPANY and does hereby irrevocably constitute and
appoint ___________________ Attorney to transfer said instrument on the books
of
the within-named Company, with full power of substitution in the
premises.
|
Please
Insert Social Security or Other Identifying Number of
Assignee:
|
||||
|
Dated:
|
||||
|
(Signature)
|
||||
|
Signature
Guarantee:
|
||||
|
(Participant
in a Recognized Signature
Guaranty
Medallion Program)
|
||||
NOTICE:
The signature to this assignment must correspond with the name as written upon
the face of the within instrument in every particular, without alteration or
enlargement or any change whatever.]
A-7
OPTION
OF
HOLDER TO ELECT REPURCHASE
If
you
want to elect to have this Security purchased by the Company pursuant to Section
10.12 or 10.15 of the Indenture, check the appropriate box below:
Section
10.12
Section 10.15
If
you
want to elect to have only part of the Security purchased by the Company
pursuant to Section 10.12 or Section 10.15 of the Indenture, state the amount
you elect to have purchased:
$_________________
|
Date:
|
|
Your
Signature:
|
|
|
(Sign
exactly as your name appears on the face of this
Security)
|
|
|
Tax
Identification No.:
|
|
Signature
Guarantee*:
|
|
*
|
Participant
in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the
Trustee).
|
A-8
[If
a Global Security, insert as a separate page—
SCHEDULE
OF INCREASES OR DECREASES
IN
GLOBAL SECURITY
The
following increases or decreases in this Global Security have been
made:
|
Date
of Exchange
|
Amount
of Decrease in Principal Amount of this Global
Security
|
Amount
of Increase in Principal Amount of this
Global
Security
|
Principal
Amount of this Global Security following such
decrease
(or
increase)
|
Signature
of authorized officer of Trustee or
Depositary]
|
A-9
SUBSIDIARY
GUARANTEE NOTATION
Each
of
the Guarantors (which term includes any successor Person in such capacity under
the Indenture), has fully, unconditionally and absolutely guaranteed, to the
extent set forth in the Indenture and subject to the provisions in the
Indenture, the due and punctual payment of the principal of, and premium, if
any, and interest on the Securities of this series and all other amounts due
and
payable under the Indenture and the Securities of this series by the
Company.
The
obligations of the Guarantors to the Holders of Securities of this series and
to
the Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly
set forth in Article Fourteen of the Indenture and reference is hereby made
to
the Indenture for the precise terms of the Subsidiary Guarantee.
|
Guarantors:
|
|||||
|
XXXXXXXX
INC.
|
|||||
|
XXXXX
PXP PROPERTIES, LLC
|
|||||
|
NUEVO
GHANA INC.
|
|||||
|
NUEVO
INTERNATIONAL INC.
|
|||||
|
NUEVO
OFFSHORE COMPANY
|
|||||
|
NUEVO
RESOURCES INC.
|
|||||
|
PACIFIC
INTERSTATE OFFSHORE COMPANY
|
|||||
|
PLAINS
ACQUISITION CORPORATION
|
|||||
|
PLAINS
LOUISIANA INC.
|
|||||
|
PLAINS
RESOURCES INC.
|
|||||
|
PLAINS
RESOURCES INTERNATIONAL INC.
|
|||||
|
PXP
BRUSH CREEK LLC
|
|||||
|
By:
|
Plains
Resources Inc., its sole member
|
||||
|
PXP
CV PIPELINE LLC
|
|||||
|
By:
|
Plains
Resources Inc., its sole member
|
||||
|
PXP
EAST PLATEAU LLC
|
|||||
|
By:
|
Plains
Resources Inc., its sole member
|
||||
|
PXP
GULF COAST INC.
|
|||||
|
PXP
HELL’S GULCH LLC
|
|||||
|
By:
|
Plains
Resources Inc., its sole member
|
||||
|
PXP
LOUISIANA L.L.C.
|
|||||
|
By:
|
Plains
Louisiana Inc., its sole member
|
||||
|
PXP
PERMIAN INC.
|
|||||
|
PXP
PICEANCE LLC
|
|||||
|
By:
|
Plains
Resources Inc., its sole member
|
||||
|
PXP
TEXAS INC.
|
|||||
|
PXP
TEXAS LIMITED PARTNERSHIP
|
|||||
|
By:
|
PXP
Texas Inc., its general partner
|
||||
|
By:
|
|||||
|
Name:
|
|||||
|
Title:
|
|||||
|
PXP
DEEPWATER L.L.C.
|
|||||
|
By:
|
Plains
Exploration & Production Company, its sole member
|
||||
|
By:
|
|||||
|
Name:
|
|||||
|
Title:
|
|||||
A-10
