<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
1997 OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
---- ----
COMMISSION FILE NUMBER 000-20849
RUTHERFORD-MORAN OIL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 76-0499690
----------------------------- -------------------
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
INCORPORATION OF ORGANIZATION) IDENTIFICATION NO.)
5 GREENWAY PLAZA, SUITE 220, HOUSTON, TEXAS 77046
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
(713) 622-5555
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE
LAST REPORT)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and has been subject to such
filing requirements for the past 90 days. Yes / x / No / /
As of November 7, 1997, there were 25,614,000 shares of common stock,
$.01 par value, of the registrant outstanding.
<PAGE> 2
RUTHERFORD-MORAN OIL CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
Three months Three months
ended ended
September 30, 1997 September 30, 1996
------------------ ------------------
<S> <C> <C>
Revenues:
Oil and gas revenue . . . . . . . . . . . . . . . . $ 10,187 $ --
Interest income . . . . . . . . . . . . . . . . . . 68 138
------------------ ------------------
Total revenues . . . . . . . . . . . . . . . 10,255 138
------------------ ------------------
Expenses:
Operating expense . . . . . . . . . . . . . . . . . 7,458 --
Interest expense . . . . . . . . . . . . . . . . . 1,972 241
Depreciation, depletion and amortization . . . . . 5,447 16
Salaries and wages . . . . . . . . . . . . . . . . 257 150
General and administrative . . . . . . . . . . . . 969 552
Foreign currency exchange loss, net . . . . . . . . 1,850 --
Gain on futures contracts . . . . . . . . . . . . . (410) --
------------------ ------------------
Total expenses . . . . . . . . . . . . . . . 17,543 959
------------------ ------------------
Net loss before income taxes . . . . . . . . (7,288) (821)
Income tax benefit . . . . . . . . . . . . . . . . . (3,011) (152)
------------------ ------------------
Net loss . . . . . . . . . . . . . . . . . . $ (4,277) $ (669)
================== ==================
Net loss per share . . . . . . . . . . . . . $ (.17) $ (0.03)
================== ==================
Weighted average number of common shares outstanding 25,615,000 25,495,652
================== ==================
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
<PAGE> 3
RUTHERFORD-MORAN OIL CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
Nine months January 1
ended June 18, through through
September 30, 1997 September 30, 1996 June 17, 1996
(Company) (Company) (Predecessors)
------------------ ------------------ --------------
<S> <C> <C> <C>
Revenues:
Oil and gas revenue . . . . . . . . . . . . . . . . . $ 25,784 $ -- $ --
Interest income . . . . . . . . . . . . . . . . . . . 162 158 --
------------------ ------------------ --------------
Total revenues . . . . . . . . . . . . . . . . 25,946 158 --
Expenses:
Operating expense . . . . . . . . . . . . . . . . . . 17,100 -- --
Interest expense . . . . . . . . . . . . . . . . . . 4,620 248 395
Depreciation, depletion and amortization . . . . . . 13,232 16 4
Salaries and wages . . . . . . . . . . . . . . . . . 837 165 108
General and administrative . . . . . . . . . . . . . 3,156 592 180
Foreign Currency exchange loss, net . . . . . . . . . 1,850 -- --
Gain on futures contracts . . . . . . . . . . . . . . (275) -- --
------------------ ------------------ --------------
Total expenses . . . . . . . . . . . . . . . . 40,520 1,021 687
------------------ ------------------ --------------
Loss before income taxes . . . . . . . . . . . $ (14,574) $ (863) $ (687)
Income tax benefit . . . . . . . . . . . . . . . . . . (5,584) (152) 1,921
------------------ ------------------ --------------
Net loss . . . . . . . . . . . . . . . . . . . $ (8,990) $ (711) $ (2,608)
================== ================== ==============
Net loss per share . . . . . . . . . . . . . . $ (0.35) $ (0.03) $ (0.12)
================== ================== ==============
Weighted average number of common shares outstanding . 25,612,440 25,438,462 21,000,000
================== ================== ==============
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
<PAGE> 4
RUTHERFORD-MORAN OIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
ASSETS
<TABLE>
<CAPTION>
September 30, 1997 December 31, 1996
------------------ -----------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . $ 3,415 $ 444
Accounts receivable . . . . . . . . . . . . . . . . 2,658 --
Inventory . . . . . . . . . . . . . . . . . . . . . 7,581 --
Value added tax refund receivable . . . . . . . . . 5,829 2,806
Joint interest receivable . . . . . . . . . . . . . 3,456 150
Interest receivable . . . . . . . . . . . . . . . . 3 --
Other . . . . . . . . . . . . . . . . . . . . . . 366 17
------------------ -----------------
Total current assets . . . . . . . . . . . . 23,308 3,417
Property and equipment, at cost:
Oil and gas properties (full cost method) . . . . . 217,699 123,300
Office furniture and fixtures . . . . . . . . . . . 376 197
Accumulated depreciation, depletion and amortization (13,269) (37)
------------------ -----------------
Net property and equipment . . . . . . . . . 204,806 123,460
Other assets:
Deferred financing costs, net . . . . . . . . . . . . 4,278 1,548
Restricted cash . . . . . . . . . . . . . . . . . . . 24,300 --
Deferred charges, net . . . . . . . . . . . . . . . . 1,354 1,400
------------------ -----------------
Total assets . . . . . . . . . . . . . . . . $ 258,046 $ 129,825
================== =================
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
Current liabilities:
Accounts payable and accrued liabilities . . . . . $ 4,944 $ 852
Joint interest payable . . . . . . . . . . . . . . 6,320 2,715
------------------ -----------------
Total current liabilities . . . . . . . . . 11,264 3,567
Note payable to bank . . . . . . . . . . . . . . . . 29,996 22,842
10 3/4 senior subordinated notes . . . . . . . . . . 120,000 --
Deferred income taxes . . . . . . . . . . . . . . . . 3,682 1,391
Premium on written option . . . . . . . . . . . . . . 1,238 1,400
Stockholders' equity:
Preferred stock, $0.01 par value, 10,000,000 shares
authorized, no shares issued and outstanding . -- --
Common stock, $0.01 par value, 40,000,000 shares
authorized, 25,612,440 and 25,600,000 shares issued
and outstanding at September 30, 1997 and
December 31, 1996, respectively . . . . . . . . 256 256
Additional paid-in capital . . . . . . . . . . . . . 103,302 103,143
Accumulated deficit . . . . . . . . . . . . . . . . . (10,706) (1,716)
Deferred compensation . . . . . . . . . . . . . . . . (986) (1,058)
------------------ -----------------
Total stockholders' equity . . . . . . . . . 91,866 100,625
------------------ -----------------
Total liabilities and stockholders' equity . $ 258,046 $ 129,825
================== =================
</TABLE>
See accompanying notes to unaudited consolidated financial statements
<PAGE> 5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
Nine months January 1
ended June 18, through through
September 30, 1997 September 30, 1996 June 17, 1996
(Company) (Company) (Predecessors)
------------------ ------------------ -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . $ (8,990) $ (711) $ (2,608)
Adjustments to reconcile net loss to cash flows
provided by (used in) operating activities:
Depreciation, depletion and amortization . . . . . . 13,886 245 4
Net gain on futures contracts . . . . . . . . . . . . (275) -- --
Deferred income taxes . . . . . . . . . . . . . . . . (5,584) (152) 1,921
Foreign currency exchange loss . . . . . . . . . . . 1,850 -- --
Changes in working capital . . . . . . . . . . . . . (12,738) (7,104) 5,605
------------------ ------------------ -------------
Cash provided by (used in ) operating activities (11,851) (7,722) 4,922
------------------ ------------------ -------------
Cash flows from investing activities:
Investment in oil and gas properties . . . . . . . . (57,112) (14,835) (30,377)
Investment in Maersk, net of cash acquired . . . . . (29,414) -- --
Other capital expenditures . . . . . . . . . . . . . (179) (98) (38)
------------------ ------------------ -------------
Cash used in investing activities . . . . . . . (86,705) (14,933) (30,415)
------------------ ------------------ -------------
Cash flows from financing activities:
Deferred financing costs . . . . . . . . . . . . . . (187) (1,689) --
Exercise of call option on Thai Romo Limited stock . -- (3,130) --
Proceeds from initial public offering . . . . . . . . -- 97,103 --
Redemption of Rutherford-Moran Exploration Company
stock by majority stockholders . . . . . . . . . . -- (12,360) --
Proceeds from shareholder loans . . . . . . . . . . . -- -- 15,654
Payments on shareholder loans . . . . . . . . . . . . -- (24,144) --
10 3/4 senior subordinated notes . . . . . . . . . . 120,000 -- --
Bond offering cost . . . . . . . . . . . . . . . . . (2,965) -- --
Restricted cash . . . . . . . . . . . . . . . . . . . (24,300) -- --
Borrowings under bank notes . . . . . . . . . . . . . 106,330 2,000 29,164
Repayment of bank notes . . . . . . . . . . . . . . . (99,176) (49,664) (13,885)
------------------ ------------------ -------------
Cash provided by financing activities . . . . 99,702 8,116 30,933
------------------ ------------------ -------------
Net increase (decrease) in cash . . . . . . . 1,146 (14,539) 5,440
Effect of Exchange Rate changes on cash . . . 1,825 -- --
Cash and cash equivalents, beginning of period . . . . 444 15,271 9,831
------------------ ------------------ -------------
Cash and cash equivalents, end of period . . . . . . . 3,415 732 15,271
================== ================== =============
Supplemental disclosures of cash flow information -
Cash paid during the period for interest . . . . . . 1,031 56 767
================== ================== =============
Supplemental disclosures of noncash investing and
financing activities:
Capitalization of amortized loan acquisition costs . -- -- 168
================== ================== =============
Interests in Thai Romo Limited and Rutherford-Moran
Exploration Company contributed for common stock . -- -- 24,682
================== ================== =============
Predecessor retained earnings reclassified to additional
paid-in capital . . . . . . . . . . . . . . . . . . -- 4,021 --
================== ================== =============
Premium deferred and premium on written options . . . . 388 443 557
================== ================== =============
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements
<PAGE> 6
RUTHERFORD-MORAN OIL CORPORATION
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements include
all adjustments necessary to present fairly the consolidated financial position
of Rutherford-Moran Oil Corporation ("RMOC" or the "Company") at September 30,
1997 and December 31, 1996, and its results of operations and cash flows for
the three months and nine months ended September 30, 1997 and 1996. The
financial statements herein should be read in conjunction with the consolidated
financial statements and notes to the consolidated financial statements as of
and for the year ended December 31, 1996, as included in the Company's annual
report on Form 10-K.
In order to prepare these financial statements in conformity with
generally accepted accounting principles, management of the Company has made a
number of estimates and assumptions relating to the reporting of assets and
liabilities, the disclosure of contingent assets and liabilities and reserve
information (which affects the depletion calculation as well as the computation
of the ceiling limitation). Actual results could differ from those estimates.
(2) ORGANIZATION
Rutherford-Moran Exploration Company ("RMEC") was formed on September
21, 1990, for the purpose of holding an interest in an oil and gas concession
in Thailand through Thai Romo Limited ("Thai Romo"). RMEC paid all of the
expenses of the concession on behalf of Thai Romo through November 4, 1993.
Effective September 24, 1990, the stockholders of RMEC elected to have
it treated as a Subchapter S Corporation under the Internal Revenue Code of
1986, as amended. As such, RMEC did not incur federal income taxes at the
corporate level prior to June 18, 1996, and its taxable income or losses were
passed through to the stockholders based on their interests.
In June 1991, Thai Romo was organized as a foreign corporation under
the laws of the Kingdom of Thailand for the purpose of holding an interest in
an oil and gas concession. In August 1991, Thai Romo, with two other companies,
was awarded Petroleum Concession 1/2534/36 (the "Concession"), offshore Block
B8/32 in the Gulf of
<PAGE> 7
Thailand from the Ministry of Industry in Thailand to explore for petroleum. A
subsidiary of Pogo Producing Company is the operator of the Concession. In
November 1993, Thai Romo amended its Articles of Association so that it would
be treated as a partnership for U.S. income tax purposes. As such, Thai Romo
was not subject to federal income taxes from November 1993 to June 17, 1996.
Income and losses earned by Thai Romo were passed through to the partners on
the basis of their interest in Thai Romo.
As RMEC and Thai Romo are now part of the Company's consolidated tax
return, the Company recorded a deferred tax charge of $1,921,000 on June 17,
1996, representing the difference between the book basis and tax basis of its
foreign oil and gas properties.
(3) PRINCIPLES OF PRESENTATION
In April 1996, Rutherford/Moran Oil Corporation changed its name to
RMEC. Effective June 17, 1996, the stockholders of RMEC and the partners of
Thai Romo exchanged their interests for shares of common stock of the newly
formed entity, RMOC. RMOC is the parent company of RMEC and Thai Romo Holdings,
Inc. ("TRH"). RMEC and TRH collectively own the outstanding shares of Thai
Romo. During June 1996, RMOC sold 16% of its common stock in an initial public
offering (the "Offering"), in conjunction with the consummation of the exchange
of RMEC common stock and Thai Romo interests for common stock of RMOC. At the
time of the Offering, RMEC redeemed for $12.4 million approximately 56,000
shares of its common stock from Patrick R. Rutherford and John A. Moran,
majority stockholders of RMEC (the "Redemption"), exercised RMEC's call option
on 3% of the partners' interest in Thai Romo held by Red Oak Holdings, Inc. for
$3.1 million and repaid outstanding debt of $62 million owed stockholders and
banks. On June 18, 1996, the stockholders' equity accounts were adjusted to
reflect the deficit accumulated during the development stage to additional
paid-in capital upon RMEC and Thai Romo becoming subject to federal income
taxes. During July 1996, an additional 2.4% of RMOC's common stock was sold
when the underwriters exercised their over-allotment option.
<PAGE> 8
RUTHERFORD-MORAN OIL CORPORATION
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The consolidated financial statements for 1997 include the accounts of
RMOC, its wholly owned subsidiaries, and its proportionate ownership of B8/32
Partners, Limited ("B8/32 Partners"), in which RMOC owns 46.34% of the
outstanding voting shares. All material intercompany accounts and transactions
have been eliminated in the consolidation.
The financial statements for the period January 1, 1996 through June
17, 1996, include the accounts of RMEC and Thai Romo (combined). All material
intercompany accounts and transactions have been eliminated in the combination.
The combined financial statements are presented due to the commonality of the
stockholders and partners of RMEC and Thai Romo.
During the period from September 21, 1990, through December 31, 1996,
the Company was considered a development stage company and its sole activity
was the development of Block B8/32 in the Gulf of Thailand. Production from the
Tantawan Field commenced in February 1997, at which time the Company was no
longer considered a development stage company.
(4) OIL AND GAS PROPERTY ACQUISITION
On December 19, 1996, the Company, through its wholly owned
subsidiary, Thai Romo, exercised its preferential right to purchase 46.34% of
the outstanding shares of Maersk Oil (Thailand) Limited ("MOTL"), a wholly
owned subsidiary of Maersk Olie og Gas AS of Copenhagen, Denmark ("Maersk").
MOTL is a former co-concessionaire in Block B8/32 owning a 31.67% interest. The
purchase was consummated with Maersk on March 3, 1997, with TRH, a wholly owned
subsidiary of the Company and Thai Romo's nominee under the Share Sales
Agreement, purchasing the shares for $28,617,000, which included $1,554,000 in
satisfaction of outstanding debt. After the closing, MOTL was renamed B8/32
Partners, Limited.
The remaining 53.66% of MOTL's stock was purchased by Thaipo Limited
("Thaipo"), a subsidiary of Pogo Producing Company ("Pogo"), and by Palang
Sophon Limited ("Palang") of Bangkok, Thailand. Thaipo, Palang and
<PAGE> 9
MOTL were co-concessionaires with Thai Romo prior to the sale of MOTL. As a
result of the purchase, RMOC now effectively owns a uniform interest of 46.34%
in the entire Block.
The $28.6 million purchase price of the acquisition has been
capitalized using the purchase method of accounting and has been allocated
between proven properties and unproven properties. Production from the
properties acquired is anticipated to commence in 1999 when the initial
development plan at Benchamas Field is scheduled to be completed. Finalization
of the purchase price allocation is pending the receipt of certain requested
information from the seller, fair value appraisals, and analysis of reserve
estimates by the Company.
The Company financed the purchase of MOTL by utilizing borrowings
under its Revolving Credit Facility ("Revolving Credit Facility") and $20
million from a new Credit Agreement entered into with Chase Manhattan Bank
("Chase"), which was repaid on May 2, 1997.
(5) DEBT
CREDIT FACILITY
On September 20, 1996, the Company entered into a $150 million
Revolving Credit Facility with a group of commercial lenders. The Revolving
Credit Facility has a final maturity of September 30, 1999, and had an initial
borrowing base limitation of $60 million. On April 29, 1997, the borrowing base
limitation was redetermined to $120 million. Subsequent to the issuance of the
Company's 10.75% Senior Subordinated Notes ("Notes") in September 1997, the
borrowing base was reset to $60 million. The Revolving Credit Facility is
secured by the stock of certain subsidiaries of the Company.
Under the terms of the Revolving Credit Facility, outstanding
borrowings bear interest at the Base Rate (defined as the greater of the
Federal Funds Rate plus .5% or the agent bank's prime rate) plus .25% or the
Eurodollar Rate (defined as an average of the London Interbank Offered Rate
("LIBOR") of two banks) plus 1.75%, at the Company's option. Interest is
payable quarterly. The Company is also assessed a commitment fee equal to .5%
per annum on the average daily balance of the unused borrowing base.
On September 8, 1997, the Company entered into a Credit Agreement
("Credit Agreement") with Chase Manhattan Bank for an additional borrowing of
$5 million. The Credit Agreement contains covenants substantially
<PAGE> 10
identical to those in the Revolving Credit Facility. The Credit Agreement was
repaid on September 29, 1997 with proceeds from the Notes.
The Revolving Credit Facility provides for semi-annual borrowing base
redeterminations as well as certain restrictions, including limitations on
additional indebtedness, payment of dividends and maintenance of an interest
coverage ratio. As of September 30, 1997, the Company was not in compliance
with one of its financial covenants, however such non-compliance has been
waived by its lenders. In connection with such waiver, the interest rates under
the Revolving Credit Facility was amended to be LIBOR plus 2.75% or Base Rate
plus 1.25%, at the Company's option.
At September 30, 1997, $30 million was outstanding under the Revolving
Credit Facility at interest rates ranging from 7.375% to 7.4375% per annum.
NOTES
On September 29, 1997, the Company issued $120 million of Notes due
2004 at an annual interest rate of 10.75%. The proceeds were used to repay $93
million of outstanding indebtedness under the Revolving Credit Facility and
Credit Agreement and to purchase $24 million of securities which were escrowed
to pay interest on the Notes. The Notes contain customary covenants, including
limitations on the incurrence of additional indebtedness, restricted payments
and the establishment of certain liens.
(6) CRUDE OIL HEDGING ACTIVITIES
During the first quarter of 1996, the Company entered into crude oil
price swaps with an affiliate of one of its lenders. While the swaps are
intended to reduce the Company's exposure to declines in the market price of
crude oil, they may limit the Company's gain from increases in the market
price. The crude oil price swaps qualify as hedges; and as long as they
correlate with production based on engineering estimates, any gains and losses
will be recorded when the related oil production has been delivered. Gains and
losses on closed crude oil price swap agreements will be deferred and amortized
over the original term of the agreement. Should the crude oil price swaps cease
to be recognized as a hedge, subsequent changes in value will be recorded in
the statement of operations. At September 30, 1997, the crude oil price swap
agreements incorporated one million barrels ("MMBbl") of oil volumes from April
through December 1997 at a weighted average price of $15.92 per Bbl and 1.75
MMBbl of oil volumes from January through December 1998 at a weighted average
price of $15.92 per Bbl. On April 1, 1997, the swaps went into effect and
quarterly settlements began between the Company and an affiliate of one of its
lenders. During
<PAGE> 11
the period June 30 through September 30, 1997, Brent crude oil prices averaged
$18.61 per barrel resulting in a reduction in oil and gas revenues of $895,000.
The related deferred charge of $1.8 million is being amortized against oil and
gas revenues as the hedged volumes expire, resulting in amortization of
$434,000 being recorded during the nine months ended September 30, 1997.
Based on current production estimates, the Company anticipates
producing approximately 900,000 barrels of oil during 1997; therefore,
approximately 100,000 barrels of the crude oil price swap agreement for 1997 is
considered under current accounting literature to be speculative and a loss of
$2,500 and $275,000 has been recorded in the statement of operations during the
three months and nine months, respectively, ended September 30, 1997 to reflect
the fair market value of the speculative position at September 30, 1997.
At the same time, the Company sold to an affiliate of one of its
lenders an option to purchase 1.25 MMBbl of aggregate oil volumes from January
through December 1999 at a price of $18.30 per barrel. The Company has
accounted for the swap option separately as it does not qualify as a hedge. At
September 30, 1997, the Company estimates the liability associated with this
position to be $1.2 million. During the period April 1 through September 30,
1997, the liability was decreased by $550,000 to reflect the decreased cost the
Company would incur if it chose to settle the swap option. The decrease has
been recognized in the statement of operations.
The estimated fair market value of the swap and the swap option at
October 3, 1997, is $7,960,000 and $1,425,000 respectively.
(7) REVENUE RECOGNITION
The Company recognizes revenues at the time of transfer to the
purchaser; however, crude oil inventory is recorded at the cost of production
and related depletion upon transfer to the floating production, storage and
offloading vessel.
(8) FOREIGN TRANSLATION GAIN/LOSS
The Company follows SFAS 52, "Foreign Currency Translation", which
requires that business transactions and foreign operations recorded in a
foreign currency be restated in U.S. dollars, which is the Company's functional
currency. Revenues and expenses are translated at an average exchange rate for
the month. Transaction gains
<PAGE> 12
and losses that arise from exchange rate fluctuations on transactions
denominated in a currency other than the functional currency are included in
the results of operations as incurred. During both the three months and nine
months ending September 30, 1997, currency translations resulted in a loss of
$1,850,000.
(9) OIL AND GAS PROPERTY AND EQUIPMENT
The Company and its subsidiaries follow the full cost method of
accounting for its investment in oil and gas properties. Under this method of
accounting, all costs of acquisition, exploration and development of oil and
natural gas reserves are capitalized into a "full cost pool" as incurred.
Properties in the pool are depleted and charged to operations utilizing the
unit-of-production method based on the ratio of current production to total
proved oil and natural gas reserves.
Interest in connection with expenditures on major exploration projects
is capitalized. During the three months and nine months ending September 30,
1997, $242,000 and $733,000, respectively, of interest was capitalized as
compared to $0 and $1.6 million, respectively, for the three months and nine
months ended September 30, 1996.
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the
audited consolidated financial statements as of and for the year ended December
31, 1996, included in the Company's annual report on Form 10-K. Results of
interim periods are not necessarily indicative of results for an entire year.
OVERVIEW
Oil and gas production commenced February 1, 1997, at which time the
Company was no longer considered a development stage company.
The Company and its subsidiaries follow the full cost method of
accounting for their investment in oil and gas properties. Under this method of
accounting, all costs of acquisition, exploration and development of oil and
natural gas reserves are capitalized into a "full cost pool" as incurred.
Properties in the pool are depleted and charged to operations utilizing the
unit-of-production method based on the ratio of current production to total
proved oil and natural gas reserves.
RESULTS OF OPERATIONS
Three Months Ended September 30, 1997, Compared with Three Months Ended
September 30, 1996.
The Company's net loss of $ 4.3 million or $ 0.17 per share for the
three months ended September 30, 1997, increased from the Company's net loss of
$669,000 or $0.03 per share for the three months ended September 30, 1996,
primarily due to the commencement of production operations on February 1, 1997,
net of related costs, offset by increased interest expense due to higher debt
levels, a foreign exchange loss and higher salaries and wages and
administrative expenses.
The Company's total revenues for the three months ended September 30,
1997, were $10.3 million as compared to $138,000 for the three months ended
September 30, 1996. Oil and gas revenues were $10.2 million and interest income
was $68,000 for the current period as compared to $138,000 of interest income
during the corresponding period in 1996.
<PAGE> 14
Production volumes for the third quarter of 1997, before royalties,
were 236,026 barrels of oil and 3,944,487 MCF of gas.
Operating expenses incurred for the three months ended September 30,
1997, were $7.5 million as compared to no operating expenses previously.
Depreciation, depletion and amortization expense recorded for the
three months ended September 30, 1997, was $5.4 million as compared to $16,000
for the three months ended September 30, 1996. This increase is due to the
commencement of production during February 1997.
Interest expense of $2.0 million for the three months ended September
30, 1997, increased compared to $241,000 for the three months ended September
30, 1996. This increase is due primarily to an increase in borrowings as well
as the amortization of deferred financing costs. Salaries and wages and general
and administrative expenses of $257,000 and $969,000, respectively, for the
three months ended September 30, 1997, increased compared to $150,000 and
$552,000, respectively, for the three months ended September 30, 1996. This
increase is primarily due to the capitalization of a greater portion of
salaries and wages and costs in 1996 compared to 1997. Additionally, there was
an increase in personnel during the third and fourth quarters of 1996 resulting
in higher administrative costs for 1997 compared to 1996.
During the three months ended September 30, 1997, $242,000 of interest
expense was capitalized to unproved properties.
The foreign exchange loss of $1,850,000 primarily reflects the impact
of the decline in value of the Thai baht on the Company's receivables during
the third quarter of 1997.
<PAGE> 15
Nine Months Ended September 30, 1997, Compared with Nine Months Ended September
30, 1996.
The Company's net loss of $9.0 million, or $0.35 per share for the
nine months ended September 30, 1997, increased from the Company's net loss of
$3.3 million, or $ 0.14 per share for nine months ended September 30, 1996. The
increase in net loss is primarily due to interest expense caused by higher debt
levels, a foreign exchange loss, higher salaries and wages and administrative
expenses, offset by the recognition of a tax benefit and revenues associated
with the commencement of production, net of related costs.
The Company's total revenues for the nine months ended September 30,
1997, were $26.0 million as compared to $158,000 for the nine months ended
September 30, 1996. Oil and gas revenues were $25.8 million and interest income
was $0.2 million for the current period as compared to interest income of
$158,000 during the nine months ended September 30, 1996.
Production volumes for the nine months ended September 30, 1997,
before royalties, were 586,904 barrels of oil and 9,436,471 MCF of gas,
compared to no production volumes previously.
Operating expenses incurred for the nine months ended September 30,
1997, were $17.1 million as compared to no operating expenses previously.
Depreciation, depletion and amortization expense recorded for the nine
months ended September 30, 1997, was $13.2 million as compared to $20,000 for
the nine months ended September 30, 1996. This increase is due to the
commencement of production during February 1997.
Interest expense of $4.6 million for the nine months ended September
30, 1997, increased compared to $643,000 for the nine months ended September
30, 1996. This increase is due to an increase in borrowings and the
amortization of deferred financing costs. Outstanding debt at September 30,
1997, was $150 million as compared to $2 million at September 30, 1996.
Salaries and wages and general and administrative expenses of $837,000
and $3.2 million, respectively, for the nine months ended September 30, 1997,
increased compared to $273,000 and $772,000, respectively, for the nine months
ended September 30, 1996. This increase is primarily due to the capitalization
of a greater portion of salaries
<PAGE> 16
and wages and costs in 1996 compared to 1997. Additionally, there was an
increase in personnel during the third and fourth quarters of 1996 resulting in
higher administrative costs for 1997 compared to 1996.
During the nine months ended September 30, 1997, $733,000 of interest
expense was capitalized to unproved properties as compared to $1.6 million
capitalized to unproved properties during 1996.
The foreign exchange loss of $1,850,000 primarily reflects the impact
of the decline in value of the Thai baht on the Company's receivable during the
third quarter of 1997.
As a result of the initial public offering in June 1996, the Company
became a taxable entity and recorded a one-time charge of $1,921,000,
representing the difference between the book and tax basis of its foreign oil
and gas properties.
LIQUIDITY AND CAPITAL RESOURCES
On September 20, 1996, the Company entered into a $150 million
Revolving Credit Facility with a group of commercial lenders. The Revolving
Credit Facility has a final maturity of September 30, 1999, and had an initial
borrowing base limitation of $60 million. The Revolving Credit Facility is
secured by the stock of certain subsidiaries of the Company.
On February 25, 1997, the Company entered into a Credit Agreement with
Chase for an additional borrowing of $20 million. This Credit Agreement
contained covenants substantially identical to those in the Revolving Credit
Facility.
On April 29, 1997, the borrowing base in the Revolving Credit Facility
was redetermined to $120 million. As a result, the Company repaid the amount
due under the Credit Agreement with additional borrowings under the Revolving
Credit Facility.
On September 8, 1997, the Company entered into a Credit Agreement with
Chase for an additional borrowing of $5 million. This Credit Agreement
contained covenants substantially identical to those in the Revolving
<PAGE> 17
Credit Facility. On September 29, 1997, the Company repaid the borrowing under
the Credit Agreement with proceeds from the Notes.
On September 29, 1997, the Company issued $120 million of Notes due
October 1, 2004. The net proceeds from this offering were used to repay $93
million of outstanding debt under the Revolving Credit Facility and the Credit
Agreement and purchase a portfolio of U.S. Government obligations of
approximately $24 million, which is sufficient to provide for payment in full
when due of the first four scheduled interest payments on the Notes.
The borrowing base limitation under the Revolving Credit Agreement was
reset at $60 million upon the completion of the Note offering. At September 30,
1997, $30 million was outstanding under the Revolving Credit Facility at
interest rates ranging from 7.375% to 7.4375%.
Since the completion of its recent Note offering, the Company has been
funding its operations from internally generated cash flow and additional
borrowings under its Revolving Credit Facility, under which $16 million was
available at November 10, 1997. As of September 30, 1997, the Company was not
in compliance with one of its financial covenants, however such non-compliance
has been waived by its lenders. The Company is currently in the process of
arranging an amended Revolving Credit Facility, subject to final approval of
certain of its lenders and completion of satisfactory documentation, to provide
for a fixed borrowing base of $150 million until September 30, 1998 (or on the
completion of certain new financings or other specified events, if earlier).
The amended facility will provide that the Company pay interest at rates based
on a margin of 1.75% over LIBOR for the first $60 million outstanding and a
margin of 2.75% over LIBOR for additional outstandings. Alternatively, the
Company may pay a margin over prime rate of 0.25% and 1% respectively, for
similar levels of borrowings. As of September 30, 1998 and semi-annually
thereafter, the borrowing base will be redetermined by the lenders on customary
industry terms based upon the Company's then current reserve base. Bank
borrowings in excess of the redetermined borrowing base, if any, will have to
be repaid over a six month period subsequent to the redetermination.
The Company makes, and will continue to make, substantial capital
expenditures for the exploration, development and production of oil and natural
gas reserves. For 1998, the Company currently expects capital expenditures to
be in the range of $110 million to $120 million. Over the next 24 months, the
Company expects to expend approximately $114 million to fabricate production
facilities for the Benchamas Field. The Benchamas
<PAGE> 18
expenditures account for a substantial portion of the 1998 spending estimate.
The Company also expects to spend additional monies over the next several years
to support additional exploration and development activities in Block B8/32.
The Company has been funding and expects to continue to fund these activities
during the remainder of 1997 with net cash flow from operations and additional
bank borrowings, assuming the Revolving Credit Facility is amended as described
above. However, in order to continue to fund these activities at the current or
higher levels, the Company will have to raise substantial additional funds, the
cost of some of which may be higher than the Company's current cost of funds.
The Company believes it can raise adequate funds at an acceptable cost to
permit it to meet its capital commitments.
All of the Company's gas revenues are denominated in Thai Baht (See
"Market conditions and Changing Oil and Gas Prices" and "Foreign Currency
Fluctuations"). For many years, the Baht was linked to a basket of currencies
in which the U.S. dollar predominated, however since July 2, 1997, the value of
the Baht has been determined by market forces and its value has subsequently
declined against the U.S. dollar by approximately 50%. However, the Company's
gas sales agreement with the Petroleum Authority of Thailand ("PTT") contains
an adjustment factor which insulates the Company from much of the impact of the
declining value of the Baht. The Company believes that these reductions should
be substantially recouped over time based upon other adjustment factors in the
Gas Sales Agreement.
MARKET CONDITIONS AND CHANGING OIL AND GAS PRICES
The revenues expected to be generated by the Company's future
operations will be highly dependent upon the prices of, and demand for, oil and
natural gas. Natural gas produced from the Company's Tantawan Field is subject
to the Gas Sales Agreement with PTT, as prices are subject to semi-annual
adjustment (or more frequent adjustments under certain circumstances) based on
movements in, among other things, inflation, oil prices and the Thai Baht/U.S.
Dollar exchange rate. The price received by the Company for its oil production
and the level of production will depend on numerous factors beyond the
Company's control, including the condition of the world economy, political and
regulatory conditions in Thailand and other oil and gas producing countries,
and the actions of the Organization of Petroleum Exporting Countries.
In early July the Company had its first oil lifting from the Tantawan
Field and sold 278,000 barrels of oil pursuant to a Memorandum of Understanding
("MOU") with PTT. In October, the Company and the other
<PAGE> 19
concessionaires received permission from the Department of Mineral Resources to
export crude oil produced from Block B8/32 and sold its second oil lifting for
U.S. dollars to a third party purchaser for export. The Company expects that
the concessionaires will continue to sell their crude oil for U.S. dollars to a
number of purchasers at market prices. As a result, the Company expects that
the MOU with PTT will be terminated.
<PAGE> 20
RECENT ACCOUNTING PRONOUNCEMENTS
Effective December 1997, the Company will be required to adopt
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS 128"). SFAS 128 introduces the concept of basic earnings per share,
which represents net income divided by the weighted average common shares
outstanding --- without the dilutive effects of common stock equivalents
(options, warrants, etc.). Diluted earnings per share, giving effect for common
stock equivalents, will be reported when SFAS 128 is adopted in the fourth
quarter of 1997. The impact of adopting SFAS 128 is anticipated to be
immaterial.
Effective December 1997, the Company will be required to adopt
Statement of Financial Accounting Standards No. 129, "Disclosure of Information
about Capital Structure" ("SFAS 129"). SFAS 129 requires that all entities
disclose in summary form within the financial statements the pertinent rights
and privileges of the various securities outstanding. An entity is to disclose
within the financial statements the number of shares issued upon conversion,
exercise, or satisfaction of required conditions during at least the most
recent annual fiscal period and any subsequent interim period presented. Other
special provisions apply to preferred and redeemable stock. The Company's
adoption of SFAS 129 in the fourth quarter of 1997 is not expected to have a
material impact on reported results.
In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("SFAS 130"), which establishes standards for reporting and display of
comprehensive income and its components. The components of comprehensive income
refer to revenues, expenses, gains and losses that are excluded from net income
under current accounting standards, including unrecognized foreign currency
translation items, minimum pension liability adjustments and unrealized gains
and losses on certain investments in debt and equity securities. SFAS 130
requires that all items that are recognized under accounting standards as
components of comprehensive income be reported in a financial statement
displayed in equal prominence with the other financial statements; the total of
other comprehensive income for a period is required to be transferred to a
component of equity that is separately displayed in a statement of financial
position at the end of an accounting period. SFAS 130 is effective for both
interim and annual periods beginning after December 15, 1997, at which time the
Company will adopt the provisions. The Company does not expect SFAS 130 to have
a material effect on reported results.
<PAGE> 21
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS 131"). SFAS 131 establishes standards for the way public
enterprises are to report information about operating segments in annual
financial statements and requires the reporting of selected information about
operating segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas, and major customers. SFAS 131 is effective for periods
beginning after December 15, 1997, at which time the Company will adopt the
provisions. The Company does not expect SFAS 131 to have a material effect on
its reported results.
FOREIGN CURRENCY FLUCTUATIONS
The Company does not currently hold significant amounts of cash, cash
equivalents, long-term financial instruments or investments denominated in
foreign currencies. However, all of its gas revenues are denominated in Thai
Baht. For many years, the Thai Baht/U.S. dollar exchange rate has been stable,
as the Baht was linked to a basket of currencies, primarily the U.S. Dollar. On
July 2, 1997 the Thai government decided to allow the value of the Baht to be
determined by market forces. Since the announcement, the value of the Thai Baht
has declined against the U. S. dollar by approximately 50%. The Company's gas
sales agreement contains an adjustment factor which insulates the Company from
much of the impact of the declining value of the Baht. The Company believes
that these reductions in revenue should be substantially recouped over time
based upon other adjustment factors in the Gas Sales Agreement.
The Company will also consider instruments intended to mitigate the
foreign currency risks associated with such revenues through currency rate
hedging transactions such as options, futures or other derivative financial
instruments. The Revolving Credit Facility imposes certain limitations on such
transactions.
FORWARD-LOOKING STATEMENTS
Certain statements in this Quarterly Report constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties, and other factors which may cause the actual
results, performance, or achievements of the Company to be materially different
from any future results, performance, or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, the
following: the volatility of oil and gas prices, the Company's ability to
develop its oil and gas reserves, the Company's need for and availability of
substantial additional capital resources, the reliance upon estimates of proved
reserves, operating hazards and uninsured risks, competition, government
regulation, local economic conditions, fluctuations in foreign currencies and
the ability of the
<PAGE> 22
Company to implement its business strategy. These factors are discussed in more
detail in the Company's most recent Annual Report on Form 10-K.
<PAGE> 23
PART II----OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4(a) Indenture dated as of September 29, 1997 among
Rutherford-Moran Oil Corporation, the Subsidiary Guarantors
named therein and Bank of Montreal Company, as Trustee
4(b) Registration Rights Agreement dated as of September 29, 1997
27 Financial Data Schedule
(b) Reports on Form 8-K
During the three month period ended June 30, 1997, no reports
on Form 8-K were filed.
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: RUTHERFORD-MORAN OIL CORPORATION
By: /s/ DAVID F. CHAVENSON
---------------------------------
David F. Chavenson
Vice President, Finance and Chief
Financial Officer and Treasurer
<PAGE> 25
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- - ------- -------
4(a) Indenture dated as of September 29, 1997 among
Rutherford-Moran Oil Corporation, the Subsidiary
Guarantors named therein and Bank of Montreal Company
as Trustee
4(b) Registration rights Agreement dated as of September
29, 1997
27 Financial Data Schedule
<PAGE> 1
================================================================================
INDENTURE
between
RUTHERFORD-MORAN OIL CORPORATION,
as Issuer,
and
BANK OF MONTREAL TRUST COMPANY,
as Trustee
Dated as of September 29, 1997
Senior Subordinated Notes Due 2004
================================================================================
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE I Definitions and Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . 25
SECTION 1.04. Rules of Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE II The Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.01. Form and Dating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.02. Execution and Authentication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.03. Registrar and Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.04. Payments On The Notes; Paying Agent To Hold Money in Trust. . . . . . . . . . . . . . . . . . 27
SECTION 2.05. Noteholder Lists. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.06. Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.07. Replacement Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.08. Outstanding Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.09. Temporary Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.10. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.11. Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.12. CUSIP/CINS Numbers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE III Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.01. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.02. Notices to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.03. Selection of Notes To Be Redeemed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.04. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.05. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.06. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.07. Notes Redeemed in Part. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE IV Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.01. Payment of Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.02. Commission Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.03. Limitation on Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 4.04. Limitation on Indebtedness and Preferred
Stock of Restricted Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.05. Limitation on Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 4.06. Limitation on Restrictions on Distributions from
Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>
ii
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SECTION 4.07. Limitation on Sales of Assets and Subsidiary Stock. . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.08. Limitation on Affiliate Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 4.09. Limitation on the Sale or Issuance of Capital Stock
of Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.10. Change of Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.11. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 4.12. Restrictions with Respect to B8/32 Partners . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 4.13. Future Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 4.14. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 4.15. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 4.16. Further Instruments and Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE V Successor Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.01. When Company May Merge or Transfer Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VI Defaults and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.04. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.05. Control by Majority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.06. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.07. Rights of Holders to Receive Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.08. Collection Suit by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.09. Trustee May File Proofs of Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.11. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.12. Waiver of Stay or Extension Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE VII Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.01. Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.02. Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.03. Individual Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.06. Reports by Trustee to Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.07. Compensation and Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.08. Replacement of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7.09. Successor Trustee by Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7.10. Eligibility; Disqualification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.11. Preferential Collection of Claims Against Company. . . . . . . . . . . . . . . . . . . . . . 59
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ARTICLE VIII Discharge of Indenture; Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.01. Discharge of Liability on Notes; Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.02. Conditions to Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.03. Application of Trust Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.04. Repayment to Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.05. Indemnity for Government Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.06. Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE IX Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.01. Without Consent of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.02. With Consent of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 9.03. Compliance with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.04. Revocation and Effect of Consents and Waivers. . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.05. Notation on or Exchange of Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.06. Trustee To Sign Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.07. Payment for Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE X Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.01. Agreement To Subordinate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.03. Default on Senior Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.04. Acceleration of Payment of Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.05. When Distribution Must Be Paid Over. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.06. Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.07. Relative Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.08. Subordination May Not Be Impaired by Company. . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.09. Rights of Trustee and Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.10. Distribution or Notice to Representative. . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit
Right To Accelerate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.12. Trust Moneys Not Subordinated. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.13. Trustee Entitled To Rely . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.14. Trustee To Effectuate Subordination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.15. Reliance by Holders of Senior Indebtedness on
Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE XI Subsidiary Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.01. Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.02. Limitation on Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.03. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.04. No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
</TABLE>
iv
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<TABLE>
<CAPTION>
Page
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<S> <C>
SECTION 11.05. Modification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.06. Release of Subsidiary Guarantor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE XII Subordination of Subsidiary Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 12.01. Agreement To Subordinate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 12.03. Default on Senior Indebtedness of Subsidiary Guarantor. . . . . . . . . . . . . . . . . . . 74
SECTION 12.04. Demand for Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 12.05. When Distribution Must Be Paid Over. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 12.06. Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 12.07. Relative Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 12.08. Subordination May Not Be Impaired by Company. . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 12.09. Rights of Trustee and Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 12.10. Distribution or Notice to Representative. . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 12.11. Article 12 Not To Prevent Defaults Under a Subsidiary
Guaranty or Limit Right To Demand Payment . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 12.12. Trustee Entitled To Rely. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 12.13. Trustee To Effectuate Subordination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 12.14. Reliance by Holders of Senior Indebtedness on
Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE XIII Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 13.01. Trust Indenture Act Controls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 13.02. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 13.03. Communication by Holders with Other Holders. . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 13.04. Certificate and Opinion as to Conditions Precedent. . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.05. Statements Required in Certificate or Opinion. . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.06. When Notes Disregarded. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.08. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.09. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 13.10. No Recourse Against Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 13.11. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 13.12. Multiple Originals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 13.13. Table of Contents; Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
</TABLE>
v
<PAGE> 6
INDENTURE dated as of September 29, 1997, among
Rutherford-Moran Oil Corporation, a Delaware corporation (the "Company"), the
Subsidiary Guarantors (as hereinafter defined) and Bank of Montreal Trust
Company (the "Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's
103/4% Senior Subordinated Notes Due 2004 (the "Initial Notes") and, if and
when issued in exchange for Initial Notes as provided in the Registration
Rights Agreement (as hereinafter defined), the Company's 103/4% Senior
Subordinated Notes Due 2004 (the "Exchange Notes") and, if and when issued in
exchange for Initial Notes as provided in the Registration Rights Agreement,
the Company's 103/4 Senior Subordinated Notes Due 2004 (the "Private Exchange
Notes" and together with the Exchange Notes and the Initial Notes, the
"Notes"):
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in an Oil and Gas Business; (ii) the Capital
Stock of a Person that becomes a Restricted Subsidiary as a result of the
acquisition of such Capital Stock by the Company or another Restricted
Subsidiary; or (iii) Capital Stock constituting a minority interest in any
Person that at such time is a Restricted Subsidiary; provided, however, that
any such Restricted Subsidiary described in clauses (ii) or (iii) above is
primarily engaged in an Oil and Gas Business.
"Adjusted Consolidated Net Tangible Assets" means (without
duplication), as of the date of determination, (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 Commission guidelines
before any state or federal income taxes, as estimated by a nationally
recognized firm of independent petroleum engineers in a reserve report prepared
as of the end of the Company's most recently completed fiscal year, 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 the
date of such year-end reserve report, and (B) estimated oil and gas reserves
attributable to upward revisions of estimates of proved oil and gas reserves
since the date of such year-end reserve report due to exploration, development
or exploitation activities, in each case calculated in accordance with
Commission guidelines (utilizing the prices utilized in such year-end reserve
report), and decreased by, as of the date of determination, the estimated
discounted future net revenues from (C) estimated proved oil and gas reserves
produced or disposed of since the date of such year-end reserve report and (D)
estimated oil and gas reserves attributable to downward revisions of estimates
of proved oil
<PAGE> 7
and gas reserves since the date of such year-end reserve report due to changes
in geological conditions or other factors which would, in accordance with
standard industry practice, cause such revisions, in each case calculated in
accordance with Commission guidelines (utilizing the prices utilized in such
year-end reserve report); provided, that in the case of each of the
determinations made pursuant to clauses (A) through (D), such increases and
decreases shall be as estimated by the Company's petroleum engineers, except
that in the event there is a Material Change as a result of such acquisitions,
dispositions or revisions, then the discounted future net revenues utilized for
purposes of this clause (a)(i) shall be confirmed in writing by a nationally
recognized firm of independent petroleum engineers, (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 annual or quarterly financial statements,
(iii) the Net Working Capital 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 on a date no earlier than the date of the Company's
latest annual or quarterly financial statements or (B) the appraised value, as
estimated by independent appraisers, of other tangible assets (including,
without duplication, investments in unconsolidated Restricted Subsidiaries) of
the Company and its Restricted Subsidiaries, as of the date no earlier than the
date of the Company's latest audited financial statements, minus (b) the sum of
(i) minority interests (other than a minority interest in a Subsidiary that is
a business trust or similar entity formed for the primary purpose of issuing
preferred securities the proceeds of which are loaned to 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 Commission
guidelines (utilizing the prices utilized in the Company's year-end reserve
report), attributable to reserve 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 on the schedules
specified with respect thereto and (iv) to the extent included in (a)(i) above,
the discounted future net revenues, calculated in accordance with Commission
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)(1)
above, would be necessary to fully satisfy the payment obligations of the
Company and its Restricted Subsidiaries with respect to Dollar-Denominated
Production Payments on the schedules specified with respect thereto. For
purposes of this definition and any related defined term used herein, the
calculations above will include giving effect to the Company and its Restricted
Subsidiaries' percentage interests in B8/32 Partners in accordance with GAAP.
If the Company changes its method of accounting from the full cost method to
the successful efforts method or a similar method of accounting, "Adjusted
Consolidated Net Tangible Assets" will continue to be calculated as if the
Company were still using the full cost method of accounting.
"Affiliate" means, as to any Person, any Subsidiary of such and any
other Person which, directly or indirectly, controls or is controlled by or
under direct or indirect common control with such specified Person. For the
purposes of this definition, "control," when used with respect to any Person
means the possession of the power to direct or cause the direction
2
<PAGE> 8
of management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing. Notwithstanding the foregoing, no individual shall be an Affiliate
of any Person solely by reason of his or her being a director, officer or
employee of such Person. For purposes of Sections 4.05, 4.07 and 4.08 only,
"Affiliate" shall also mean any beneficial owner of Capital Stock representing
10% or more of the total voting power of the Voting Stock (on a fully diluted
basis) of the Company or of rights or warrants to purchase such Capital Stock
(whether or not currently exercisable) and any Person who would be an Affiliate
of any such beneficial owner pursuant to the first sentence hereof.
"Applicable Premium" means, with respect to a Note at any Redemption
Date, the greater of (i) 1.0% of the principal amount of such Note and (ii) the
excess of (A) the present value at such time of (1) the redemption price of
such Note at October 1, 2001 plus (2) all required interest payments due on
such Note through October 1, 2001, computed using a discount rate equal to the
Treasury Rate plus 100 basis points, over (B) the principal amount of such
Note.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of (i) any shares of Capital
Stock of a Restricted Subsidiary (other than directors, qualifying shares or
shares required by applicable law to be held by a Person other than the Company
or a Restricted Subsidiary), (ii) all or substantially all the assets of any
division or line of business of the Company or any Restricted Subsidiary or
(iii) any other assets of the Company or any Restricted Subsidiary outside of
the ordinary course of business of the Company or such Restricted Subsidiary
(other than, in the case of (i), (ii) and (iii) above, (w) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (x) for purposes of Section 4.07 only,
a disposition that constitutes a Restricted Payment permitted by Section 4.05,
(y) a disposition of assets with a fair market value of less than $250,000 and
(z) the relinquishment of unexplored acreage in accordance with the Concession
Agreement). For purposes of this definition, the term "Asset Disposition"
shall not include (i) any trade or exchange of interest(s), either directly or
through the acquisition of the Capital Stock of a Person, in Block B8/32 owned
by the Company or any Restricted Subsidiary for any other interest(s) in Block
B8/32 owned by any other Owner of Block B8/32 or (ii) any trade or exchange of
properties and assets used in the Oil and Gas Business (other than as described
in clause (i)) or shares of Capital Stock in any Person in the Oil and Gas
Business owned by the Company or any Restricted Subsidiary for properties and
assets used in the Oil and Gas Business or shares of Capital Stock in any
Person owned or held by another Person, in each case for any transfer of
properties or assets in a single transaction or series of related transactions
having a fair market value of less than $50 million (each, an "Asset Swap"),
provided, that (A) the fair market value of the properties, assets, shares or
ownership interests in Block B8/32, as the case may be, traded or exchanged by
the Company or such Restricted Subsidiary (including any cash or cash
equivalents, not to exceed 20% of such fair market value, to be delivered by
the Company or such Restricted Subsidiary) is
3
<PAGE> 9
reasonably equivalent to the fair market value of the properties, assets and
shares of Capital Stock or ownership interests in Block B8/32, as the case may
be (together with any cash or cash equivalents, not to exceed 20% of such fair
market value), to be received by the Company or such Restricted Subsidiary as
determined in good faith by the Board of Directors of the Company as certified
by a certified resolution delivered to the Trustee if such fair market value is
equal to or in excess of $5 million, provided, that if such resolution shall be
accompanied by a written appraisal by a nationally recognized investment
banking firm or appraisal firm, in each case specializing or having a specialty
in oil and gas properties, and (B) such exchange is approved by a majority of
the Disinterested Directors of the Company.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by the Notes, compounded annually) of the total obligations of the
lessee for rental payments during the remaining term of the lease included in
such Sale/Leaseback Transaction (including any period for which such lease has
been extended).
"Authorized Denominations" means $1,000 or any integral multiple of
$1,000 in excess thereof.
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness
or redemption or similar payment with respect to such Preferred Stock
multiplied by the amount of such payment by (ii) the sum of all such payments.
"Banks" has the meaning specified in the Revolving Credit Agreement.
"Bank Indebtedness" means any and all amounts, whether outstanding on
the Issue Date or thereafter Incurred, payable by the Company under or in
respect of the Revolving Credit Agreement and any related notes, collateral
documents, letters of credit and guarantees, including principal, premium (if
any), interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company or any of
its Subsidiaries whether or not a claim for post filing interest is allowed in
such proceedings), fees, charges, expenses, reimbursement obligations,
guarantees and all other amounts payable thereunder or in respect thereof.
"Block B8/32" or "Block" or "Concession" means Petroleum Concession
No. 1/2534/36, which as of the date hereof, covers approximately 750,000 acres
in the central portion of the Gulf of Thailand.
"B8/32 Joint Operating Agreement" means, collectively, (i) the Joint
Operating Agreement dated as of August 1, 1990 between Maersk, Thai Romo,
Thaipo, and Sophonpanich, (ii) the Transfer Agreement dated March 2, 1995
between Maersk, Thai Romo, Thaipo, and Sophonpanich, whereby Maersk agreed to
convey its interest and operatorship in respect of the Tantawan Area of Block
B8/32 to Thaipo and (iii) the Agreement of
4
<PAGE> 10
Operatorship and Conveyance of Interest dated as of March 3, 1995 between
Maersk and Thaipo, in each case as the same may be modified, supplemented and
in effect from time to time.
"B8/32 Partners" means B8/32 Partners, Limited, and a company existing
under the laws of Thailand.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means any day on which commercial banks are not
authorized or required to close in New York City.
"Capital Lease Obligations" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined
in accordance with GAAP; and the Stated Maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interests in (however designated) equity of such Person, including any
Preferred Stock, but excluding any debt securities convertible into such
equity.
"Captive Insurance Company" means any Wholly Owned Subsidiary of the
Company that provides insurance or reinsurance to the Company and its
Restricted Subsidiaries.
"Change of Control" means the occurrence of any of the following
events:
(i) any "Person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than one or more Permitted
Holders, is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 of the Exchange Act provided that such person shall be
deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly,
of more than 40% of the total voting power of the Voting Stock of the
Company; provided, however, that the Permitted Holders beneficially own
(as defined above), directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the Voting Stock of the Company
than such other person and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a
majority of the Board of Directors (for the purposes of this clause
(i), such other person shall be deemed to beneficially own any Voting
Stock of a specified corporation held by a parent corporation, if such
other person is the beneficial owner (as defined in this clause (i)),
5
<PAGE> 11
directly or indirectly, of more than 40% of the voting power of the
Voting Stock of such parent corporation and the Permitted Holders
beneficially own (as defined above), directly or indirectly, in the
aggregate a lesser percentage of the voting power of the Voting Stock
of such parent corporation and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election
a majority of the board of directors of such parent corporation);
(ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board
of Directors (together with any new directors whose election by such
Board of Directors or whose nomination for election by the
shareholders of the Company was approved by a vote of 66-2/3% of the
directors of the Company then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in
office; or
(iii) the merger or consolidation of the Company with or
into another Person or the merger of another Person with or into the
Company, or the sale of all or substantially all the assets of the
Company to another Person (other than a Person that is controlled by
the Permitted Holders), and, in the case of any such merger or
consolidation, the securities of the Company that are outstanding
immediately prior to such transaction and which represent 100% of the
aggregate voting power of the Voting Stock of the Company are changed
into or exchanged for cash, securities or property, unless pursuant to
such transaction such securities are changed into or exchanged for, in
addition to any other consideration, securities of the surviving
corporation that represent immediately after such transaction, at
least a majority of the aggregate voting power of the Voting Stock of
the surviving corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Commodity Hedging Agreement" means, for any Person, an agreement or
arrangement between such Person and one or more financial institutions or other
entities providing for the transfer or mitigation of risks of fluctuations in
the prices of hydrocarbons, either generally or under specific circumstances.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters for which financial statements are
available prior to the date of such determination to (ii) Consolidated Interest
Expense for such four fiscal quarters; provided, however, that (1) if the
Company or any Restricted Subsidiary has Incurred any Indebtedness since the
beginning
6
<PAGE> 12
of such period that remains outstanding or if the transaction giving rise to
the need to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, or both, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
period and the discharge of any other Indebtedness repaid, repurchased,
defeased or otherwise discharged with the proceeds of such new Indebtedness as
if such discharge had occurred on the first day of such period, (2) if the
Company or any Restricted Subsidiary has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the beginning of such period or if
any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged
(in each case other than Indebtedness Incurred under any revolving credit
facility unless such Indebtedness has been permanently repaid and has not been
replaced) on the date of the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for
such period shall be calculated on a pro forma basis as if such discharge had
occurred on the first day of such period and as if the Company or such
Restricted Subsidiary has not earned the interest income actually earned during
such period in respect of cash or Temporary Cash Investments used to repay,
repurchase, defease or otherwise discharge such Indebtedness, (3) if since the
beginning of such period the Company or any Restricted Subsidiary shall have
made any Asset Disposition, the EBITDA for such period shall be reduced by an
amount equal to the EBITDA (if positive) directly attributable to the assets
which are the subject of such Asset Disposition for such period, or increased
by an amount equal to the EBITDA (if negative), directly attributable thereto
for such period and Consolidated Interest Expense for such period shall be
reduced by an amount equal to the Consolidated Interest Expense directly
attributable to any Indebtedness of the Company or any Restricted Subsidiary
repaid, repurchased, defeased or otherwise discharged with respect to the
Company and its continuing Restricted Subsidiaries in connection with such
Asset Disposition for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the extent
the Company and its continuing Restricted Subsidiaries are no longer liable for
such Indebtedness after such sale), (4) if since the beginning of such period
the Company or any Restricted Subsidiary (by merger or otherwise) shall have
made an Investment in any Restricted Subsidiary (or any person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any acquisition
of assets occurring in connection with a transaction requiring a calculation to
be made under this definition, which constitutes all or substantially all of an
operating unit of a business, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving pro forma effect thereto (including the
Incurrence of any Indebtedness) as if such Investment or acquisition occurred
on the first day of such period and (5) if since the beginning of such period
any Person (that subsequently became a Restricted Subsidiary or was merged with
or into the Company or any Restricted Subsidiary since the beginning of such
period) shall have made any Asset Disposition, any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (3) or (4)
above if made by the Company or a Restricted Subsidiary during such period,
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto as if such Asset Disposition, Investment
or acquisition occurred on the first day of such period. For purposes of this
definition and any related defined terms used herein, the calculations above
will include giving effect to the Company and its Restricted Subsidiaries'
percentage interests
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<PAGE> 13
in B8/32 Partners in accordance with GAAP. For purposes of this definition,
whenever pro forma effect is to be given to an acquisition of assets, the
amount of income or earnings relating thereto and the amount of Consolidated
Interest Expense associated with any Indebtedness Incurred in connection
therewith, the pro forma calculations shall be determined in good faith by a
responsible financial or accounting Officer of the Company. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest of such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Agreement applicable to such
Indebtedness during such period).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries as
determined in accordance with GAAP, plus, to the extent not included in such
interest expense, and to the extent incurred by the Company or its Restricted
Subsidiaries, without duplication, (i) interest expense attributable to capital
leases and the interest expense attributable to leases constituting part of a
Sale/Leaseback Transaction, (ii) amortization of debt discount and debt
issuance cost, (iii) capitalized interest, (iv) non-cash interest expenses, (v)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (vi) net costs associated with
Interest Rate Agreements (including amortization of fees), (vii) Preferred
Stock dividends in respect of all Preferred Stock held by Persons other than
the Company or a Wholly Owned Subsidiary, (viii) interest incurred in
connection with Investments in discontinued operations, (ix) interest accruing
on any Indebtedness of any other Person to the extent such Indebtedness is
Guaranteed by (or secured by the assets of) the Company or any Restricted
Subsidiary and (x) the cash contributions to any employee stock ownership plan
or similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Subsidiaries as determined in accordance with
GAAP; provided, however, that there shall not be included in such Consolidated
Net Income:
(i) any net income (or loss) of any Person (other than the
Company) if such Person is not a Restricted Subsidiary, except that
(A) subject to the exclusion contained in clause (iv) below, the
Company's equity in the net income of any such Person for such period
shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by such Person during such period
to the Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution
paid to a Restricted Subsidiary, to the limitations contained in
clause (iii) below) and (B) the Company's equity in a net loss of any
such Person for such period shall be included in determining such
Consolidated Net Income;
(ii) any net income (or loss) of any Person acquired by the
Company or a Subsidiary in a pooling of interests transaction for any
period prior to the date of such acquisition;
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<PAGE> 14
(iii) any net income of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions
by such Restricted Subsidiary, directly or indirectly, to the Company,
except that (A) subject to the exclusion contained in clause (iv)
below, the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such
Restricted Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution paid to another
Restricted Subsidiary, to the limitation contained in this clause) and
(B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(iv) any gain (but not loss) realized upon the sale or other
disposition of any assets of the Company, its consolidated
Subsidiaries or any other Person (including pursuant to any
sale-and-leaseback arrangement) which is not sold or otherwise
disposed of in the ordinary course of business and any gain (but not
loss) realized upon the sale or other disposition of any Capital Stock
of any Person;
(v) any write-downs of non-current assets;
(vi) extraordinary gains or losses; and
(vii) the cumulative effect of a change in accounting
principles.
Notwithstanding the foregoing, for the purpose of Section 4.05 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries
to the Company or a Restricted Subsidiary to the extent such dividends,
repayments or transfers are actually used to increase the amount of Restricted
Payments permitted under such Section pursuant to clause (a)(3)(D) thereof.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of
any action for the purpose of which the determination is being made, as (i) the
par or stated value of all outstanding Capital Stock of the Company plus (ii)
paid-in capital or capital surplus relating to such Capital Stock plus (iii)
any retained earnings or earned surplus less (A) any accumulated deficit and
(B) any amounts attributable to Disqualified Stock.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement designed to
protect such Person against fluctuations in currency values.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
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<PAGE> 15
"Designated Senior Indebtedness" means (i) the Bank Indebtedness and
(ii) any other Senior Indebtedness of the Company which, at the date of
Incurrence, has an aggregate principal amount outstanding of, or under which,
at the date of Incurrence, the holders thereof are committed to lend up to, at
least $25 million and is specifically designated by the Company in the
instrument evidencing or governing such Senior Indebtedness as "Designated
Senior Indebtedness" for purposes of this Indenture.
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors is required
to deliver its resolution under this Indenture, a member of the Board of
Directors who does not have any material direct or indirect financial interest
(other than an interest arising solely from the beneficial ownership of Capital
Stock in the Company) in or with respect to such transaction or series of
transactions.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock or (iii) is redeemable at the option of the holder thereof,
in whole or in part, in each case on or prior to the first anniversary of the
Stated Maturity of the Notes; provided, however, that any Capital Stock that
would not constitute Disqualified Stock but for provisions thereof giving
holders thereof the right to require such Person to repurchase or redeem such
Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the first anniversary of the Stated Maturity of the Notes
shall not constitute Disqualified Stock if the "asset sale" or "change of
control" provisions applicable to such Capital Stock are not more favorable to
the holders of such Capital Stock than the provisions of Sections 4.07 and
4.10.
"Dollar-Denominated Production Payments" means production payment
obligations of the Company or any Subsidiary Guarantor which are payable from a
specified share of proceeds received from production from specific Properties,
together with all undertakings and obligations in connection therewith.
"EBITDA" for any period means the sum of Consolidated Net Income, plus
Consolidated Interest Expense plus the following to the extent deducted in
calculating such Consolidated Net Income: (a) all income tax expense of the
Company and its consolidated Restricted Subsidiaries and (b) the aggregate
depreciation, depletion, amortization, impairment and other non-cash expenses
or charges of the Company and its consolidated Restricted Subsidiaries reducing
Consolidated Net Income for such period, determined on a consolidated basis in
accordance with GAAP (excluding any such non-cash expense or charge to the
extend that it represents an accrual or reserve for cash expenditures in any
future period), in each case for such period decreased (to the extent included
in determining Consolidated Net Income) by the sum of (i) the amount of
deferred revenues that are amortized during such period and are attributable to
reserves that are subject to Volumetric Production Payments and (ii) amounts
recorded in accordance with GAAP as repayments of principal and interest
pursuant to Dollar-Denominated Production Payments during such period.
Notwithstanding
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<PAGE> 16
the foregoing, the provision for taxes based on the income or profits of, and
the depreciation and amortization and non- cash charges of, a Restricted
Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to
the extent (and in the same proportion) that the net income of such Restricted
Subsidiary was included in calculating Consolidated Net Income and only if a
corresponding amount would be permitted at the date of determination to be
dividend to the Company by such Restricted Subsidiary without prior approval
(that has not been obtained), pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Restricted Subsidiary or its
stockholders.
"Equity Offering" means an underwritten primary public offering of
common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in (i) the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants (the "AICPA"), (ii)
statements and pronouncements of the Financial Accounting Standards Board of
the AICPA, (iii) such other statements by such other entity as approved by a
significant segment of the accounting profession and (iv) the rules and
regulations of the Commission governing the inclusion of financial statements
(including pro forma financial statements) in periodic reports required to be
filed pursuant to Section 13 of the Exchange Act, including opinions and
pronouncements in staff accounting bulletins and similar written statements
from the accounting staff of the SEC. All ratios and computations based on
GAAP contained in this Indenture shall be computed in conformity with GAAP.
"Global Notes" means in respect of each series of Notes, the single
global Note in registered form in respect of such series.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation of such Person (whether arising by virtue
of partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take-or-pay or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided, however, that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning. The term
"Guarantor" shall mean any Person Guaranteeing any obligation.
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<PAGE> 17
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity
Hedging Agreement entered into in the ordinary course of business and not for
speculation, including without limitation, swaps, options, forward sales and
future contracts entered into in connection with interest rates, currencies and
energy related commodities.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred
by such Subsidiary at the time it becomes a Subsidiary. The term "Incurrence",
when used as a noun, shall have a correlative meaning.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(i) the principal in respect of (A) indebtedness of
such Person for money borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment
of which such Person is responsible or liable including, in each case,
any premium on such indebtedness to the extent such premium has become
due and payable excluding trade accounts payable and other current
liabilities incurred in the ordinary course of business;
(ii) all Capital Lease Obligations of such Person and
all Attributable Debt in respect of Sale/Leaseback Transactions
entered into by such Person;
(iii) all obligations of such Person issued or assumed
as the deferred purchase price of property, all conditional sale
obligations of such Person and all obligations of such Person under
any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business);
(iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction (other than obligations with
respect to letters of credit securing obligations (other than
obligations described in clauses (i) through (iii) above) entered into
in the ordinary course of business of such Person to the extent such
letters of credit are not drawn upon or, if and to the extent drawn
upon, such drawing is reimbursed no later than the tenth Business Day
following payment on the letter of credit);
(v) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary of such Person,
the liquidation preference with respect to, any Preferred Stock (but
excluding, in each case, any accrued dividends);
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<PAGE> 18
(vi) all obligations of the type referred to in
clauses (i) through (v) of other Persons and all dividends of other
Persons for the payment of which, in either case, such Person is
responsible or liable, directly or indirectly, as obligor, guarantor
or otherwise, including by means of any Guarantee;
(vii) all obligations of the type referred to in
clauses (i) through (vi) of other Persons secured by any Lien on any
property or asset of such Person (whether or not such obligation is
assumed by such Person), the amount of such obligation being deemed to
be the lesser of the value of such property or assets or the amount of
the obligation so secured;
(viii) all Production Payments granted by such Person
but solely to the extent of any warranties or guarantees of production
or payment by such Person with respect to such Production Payment; and
(ix) to the extent not otherwise included in this
definition, Hedging Obligations of such Person granted by such Person.
Notwithstanding clauses (i) through (ix) above, the term "Indebtedness" shall
not include any of the foregoing which are subject to irrevocable legal
defeasance in accordance with the terms thereof. When used with respect to
Thai Romo or any other Restricted Subsidiary that owns an interest in any field
or area but which is not the operator of such hydrocarbon interest,
"Indebtedness" shall include Thai Romo's or such other Restricted Subsidiary's
obligations to reimburse the operator under the Operating Agreement or the
Joint Operating Agreement, or similar agreement in the case of such other
Restricted Subsidiary, for Thai Romo's or such other Restricted Subsidiary's
pro rata share of payments made by such operator in respect of Indebtedness
incurred by such operator in connection with transactions under such
agreements.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Interest Payment Dates" means April 1 and October 1 commencing April
1, 1998.
"Interest Rate Agreement" means in respect of a Person any interest
rate swap agreement, interest rate cap agreement or other financial agreement
or arrangement designed to protect such Person against fluctuations in interest
rates.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers or extensions of trade credit not in excess
of 90 days in the ordinary course of business that are recorded as accounts
receivable on the balance sheet of the lender) or other extensions of credit
(including by way of Guarantee or similar arrangement) or
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<PAGE> 19
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary", the definition of "Restricted Payment" and Section
4.05, (i) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of any Subsidiary of the Company at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary equal to an amount (if positive) equal to (x) the Company's
"Investment" in such Subsidiary at the time of such redesignation less (y) the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors.
"Issue Date" means the date on which the Notes are originally issued.
"Joint Operating Agreements" means the B8/32 Joint Operating Agreement
and the Tantawan Joint Operating Agreement.
"Lien" means with respect to any Property, any assignment in trust,
mortgage, lien, pledge, charge, fiduciary or security assignment, security
interest or encumbrance of any kind in respect of such Property (including,
without limitation, any Production Payment, advance, payment or similar
arrangement with respect to minerals in place). For purposes of the foregoing,
a Person shall be deemed to own subject to a Lien any Property that it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
(other than an operating lease) relating to such Property.
"Maersk" means Maersk Oil (Thailand) Ltd., a wholly owned subsidiary
of Maersk Oil and Gas AS of Denmark.
"Material Change" means an increase or decrease (excluding changes
that result solely from changes in prices) of more than 25% during a fiscal
quarter in the estimated discounted future net cash flows from proved oil and
gas reserves of the Company and its Restricted Subsidiaries, calculated in
accordance with clause (a)(i) of the definition of Adjusted Consolidated Net
Tangible Assets; provided, however, that the following will be excluded from
the calculation of Material Change: (i) any acquisitions during the quarter of
oil and gas reserves that have been estimated by a nationally recognized firm
of independent petroleum engineers and on which a report or reports exist and
(ii) any disposition of properties held at the beginning of such quarter that
have been disposed of as provided in Section 4.07.
"Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other
14
<PAGE> 20
disposition of any securities received as consideration, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations
relating to such properties or assets or received in any other noncash form),
in each case net of (i) all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be accrued as a liability under
GAAP, as a consequence of such Asset Disposition, (ii) all payments made on any
Indebtedness which is secured by any assets subject to such Asset Disposition,
in accordance with the terms of any Lien upon or other security agreement of
any kind with respect to such assets, or which must by its terms, or in order
to obtain a necessary consent to such Asset Disposition, or by applicable law,
be repaid out of the proceeds from such Asset Disposition, (iii) all
distributions and other payments required to be made to minority interest
holders in Restricted Subsidiaries as a result of such Asset Disposition and
(iv) the deduction of appropriate amounts provided by the seller as a reserve,
in accordance with GAAP, against any liabilities associated with the property
or other assets disposed in such Asset Disposition and retained by the Company
or any Restricted Subsidiary after such Asset Disposition; provided, that any
amounts remaining after any adjustment, realization or liquidation or such
reserve shall constitute Net Available Cash.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees and expenses actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Net Working Capital" means (a) all current assets of the Company and
its Restricted Subsidiaries, minus (b) all current liabilities of the Company
and its Restricted Subsidiaries, except current liabilities included in
Indebtedness, in each case as set forth in financial statements for the Company
prepared in accordance with GAAP.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of the Company or a Restricted Subsidiary of any property or
assets and as to which (a) the holders of such Indebtedness agree that they
will look solely to the property or assets so acquired and securing such
Indebtedness for payment on or in respect of such Indebtedness and (b) no
default with respect to such Indebtedness of the Company or a Restricted
Subsidiary, will entitle (after notice or passage of time or both) any holder
of any other Indebtedness of the Company or a Restricted Subsidiary to declare
a default under such other Indebtedness or cause the payment of such other
Indebtedness to be accelerated or payable prior to its stated maturity.
"Offering" means the offering of $120 million aggregate principal
amount of the Initial Notes on September 29, 1997.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company.
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<PAGE> 21
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company.
"Oil and Gas Business" means (a) the acquisition, exploration,
exploitation, development, operation and disposition of interests in oil, gas
and other hydrocarbon properties, (b) the gathering, marketing, treating,
processing, refining storage, selling and transporting of any production from
such interests or properties, (c) any business relating to or arising from
exploration for or exploitation, development, production, treatment,
processing, refining storage, transportation or marketing of oil, gas and other
minerals and products produced in association therewith and (d) any activity
necessary, appropriate, complementary or incidental to the activities described
in the foregoing clauses (a) through (c) of this definition.
"Operating Agreement" shall mean the Operating Agreement between SBM
Marine Services Thailand Ltd. and Tantawan Services, LLC, dated February 9,
1996, relating to the operation of the "TANTAWAN EXPLORER," as the same may be
modified, supplemented and in effect from time to time.
"Opinion of Counsel" means a written opinion of legal counsel for the
Company (or any Subsidiary Guarantor, if applicable) including an employee of
the Company (or any Subsidiary Guarantor, if applicable), who is reasonably
acceptable to the Trustee.
"Owners of Block B8/32" means, as of any date of determination, any
Person that directly owns an interest in the Concession.
"Permitted Holders" means (i) John A. Moran, Patrick D. Rutherford,
their respective spouses, issue or any spouse of their issue, (ii) any Person
controlled directly or indirectly by any one or more of the Persons referred to
in clause (i), (iii) any trust, all of the beneficiaries of which are any one
or more of the persons referred to in clause (i), or (iv) any bona fide legal
representative of any of the individuals in clause (i) duly appointed as a
result of the death or legal incapacity of such individual.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) the Company, a Restricted Subsidiary or a Person
that will, upon the making of such Investment, become a Restricted Subsidiary;
provided, however, that the primary business of such Restricted Subsidiary is
an Oil and Gas Business; (ii) another Person if as a result of such Investment
such other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or a Restricted
Subsidiary; provided, however, that such Person's primary business is an Oil
and Gas Business; (iii) Temporary Cash Investments; (iv) receivables owing to
the Company or any Restricted Subsidiary if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; provided, however, that such trade terms may include such
concessionary trade terms as the Company or any such Restricted Subsidiary
deems reasonable under the circumstances; (v) payroll, travel and similar
advances to cover matters that are expected at the time of such advances
ultimately to be treated as
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<PAGE> 22
expenses for accounting purposes and that are made in the ordinary course of
business; (vi) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such Restricted
Subsidiary; (vii) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the Company or
any Restricted Subsidiary or in satisfaction of judgments; (viii) Hedging
Obligations; (ix) entry into operating agreements, joint ventures, partnership
agreements, concession agreements, working interests, royalty interests,
mineral leases, processing agreements, farm-out agreements, contracts for the
sale, transportation or exchange of oil and natural gas, unitization
agreements, pooling arrangements, areas of mutual interest agreements or other
similar or customary agreements, transactions, properties, interests or
arrangements, and Investments and expenditures in connection therewith or
pursuant thereto, in each case made or entered into in the ordinary course of
the Company's or its Restricted Subsidiaries' Oil and Gas Business; (x) B8/32
Partners in an amount up to 46.35% of the share capital of B8/32 Partners; (xi)
the Capital Stock or Indebtedness of a Captive Insurance Company in an amount
sufficient for such Captive Insurance Company to maintain sufficient capital to
provide insurance or reinsurance coverage to the Company or its Restricted
Subsidiaries in amounts which are customary for the Oil and Gas Business
conducted by the Company and its Restricted Subsidiaries; and (xii) any Person
to the extent such Investment represents the non-cash portion of the
consideration received for an Asset Disposition as permitted pursuant to
Section 4.07.
"Person" means any individual, corporation, voluntary association,
partnership, limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivision thereof.
"Pledge Account" means an account established with the Trustee
pursuant to the terms of Section 4.17 for the deposit of the Pledged Securities
to be purchased by the Company with a portion of the net proceeds from the sale
of the Initial Notes.
"Pledged Securities" means the U.S. government securities to be
purchased by the Company and held in the Pledge Account in accordance with
Section 4.17.
"Preferred Stock," as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"Principal" of a Note means the principal of the Note plus the
premium, if any, payable on the Note which is due or overdue or is to become
due at the relevant time.
"Property" means any property of any kind whatsoever, whether real,
personal or mixed and whether tangible or intangible, including any right or
interest therein or thereto.
"Production Payment" means, collectively, Dollar-Denominated
Production Payments and Volumetric Production Payments.
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<PAGE> 23
"QIB" means a "qualified institutional buyer" under Rule 144A.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that (i) such
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) such Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced and (iii) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or
if Incurred with original issue discount, the aggregate value) then outstanding
or committed (plus fees and expenses, including any premium and defeasance
costs) under the Indebtedness being Refinanced; provided further, however, that
Refinancing Indebtedness shall not include (x) Indebtedness of a Subsidiary
that Refinances Indebtedness of the Company or (y) Indebtedness of the Company
or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted
Subsidiary.
"Registered Exchange Offer" has the meaning set forth in the
Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of September 29, 1997, by and among the Company, the
Subsidiary Guarantors and the Initial Purchasers, as the same may be modified
and supplemented and in effect from time to time.
"Regulation S" means Regulation S under the Securities Act.
"Representative" means any trustee, agent or representative (if any)
for an issue of Senior Indebtedness.
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving such Person) or similar payment to the direct
or indirect holders of its Capital Stock (other than dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock) and
dividends or distributions payable solely to the Company or a Restricted
Subsidiary, and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or
owners of an equivalent interest in the case of a Subsidiary that is an entity
other than a corporation)), (ii) the purchase, redemption or other acquisition
or retirement for value of any Capital Stock of the Company held by any Person
or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company
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<PAGE> 24
(other than a Restricted Subsidiary), including the exercise of any option to
exchange any Capital Stock (other than into Capital Stock of the Company that
is not Disqualified Stock), (iii) the purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value, prior to scheduled
maturity, scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations (other than the purchase, repurchase, or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each
case due within one year of the date of acquisition) or (iv) the making of any
Investment in any Person (other than a Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.
"Revolving Credit Agreement" means (i) the Credit Agreement dated as
of September 20, 1996, among the Company, Rutherford Moran Exploration Company
("RMEC"), Thai Romo Limited ("Thai Romo"), Thai Romo Holdings, Inc. ("TRH"),
the other Subsidiary Guarantors party thereto, the Lenders party thereto and
The Chase Manhattan Bank, as administrative agent, as the same may be amended,
modified, supplemented and in effect from time to time (the "Credit Agreement")
and (ii) any renewal, extension, refunding, restructuring, replacement or
refinancing thereof (whether with the original Administrative Agent and lenders
or another administrative agent or agent or other lenders and whether provided
under the original Credit Agreement or any other agreement).
"Rule 144A" means Rule 144A under the Securities Act.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person.
"Secured Indebtedness" means any Indebtedness of the Company or a
Subsidiary Guarantor secured by a Lien.
"Securities" means the Notes issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means, (i) Indebtedness of the Company, whether
outstanding on the Issue Date or thereafter Incurred, and (ii) accrued and
unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company to the
extent post-filing interest is allowed in such proceeding) in respect of (A)
indebtedness of such Company for money borrowed and (B) indebtedness evidenced
by notes, debentures, bonds or other similar instruments for the payment of
which the Company is responsible or liable unless, in the case of (i) and (ii),
in the instrument creating or evidencing the same or pursuant to which the same
is outstanding it is provided that such obligations are subordinate in right of
payment to the Notes; provided, however, that Senior Indebtedness shall not
include (1) any obligation of the Company to any Subsidiary,
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<PAGE> 25
(2) any liability for Federal, state, local or other taxes owed or owing by the
Company, (3) any accounts payable or other liability to trade creditors arising
in the ordinary course of business (including guarantees thereof or instruments
evidencing such liabilities), (4) any Indebtedness of the Company (and any
accrued and unpaid interest in respect thereof) which is subordinate or junior
in any respect to any other Indebtedness or other obligation of the Company or
(5) that portion of any Indebtedness which at the time of Incurrence is
Incurred in violation of this Indenture but, as to any such Indebtedness, no
such violation shall be deemed to exist for purposes of this clause (5) if the
holder(s) of such Indebtedness or their representative or the Company shall
have furnished to the Trustee an opinion of counsel unqualified in all material
respects of independent legal counsel, addressed to the Trustee (which legal
counsel may, as to matters of fact, including financial covenant compliance
calculations, rely upon a certificate of the Company) to the effect that the
Incurrence of such indebtedness does not violate the provisions of this
Indenture; provided that the foregoing exclusions shall not affect the
priorities of any Indebtedness arising solely by operation of law in any
bankruptcy, insolvency, receivership, liquidation, reorganization, assignment
for the benefit of creditors or other similar event, case or proceeding.
"Senior Subordinated Indebtedness" means the Notes and any other
Indebtedness of the Company that specifically provides that such Indebtedness
is to rank pari passu with the Notes, in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company which is not Senior Indebtedness.
"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 Commission.
"Sophonpanich" means Palang Sophon Limited, a company organized under
the laws of Thailand and its successor.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Notes pursuant to a written
agreement to that effect.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
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"Subsidiary Guarantor" means each Subsidiary of the Company in
existence on the Issue Date and each Subsidiary (other than Unrestricted
Subsidiaries) created or acquired by the Company after the Issue Date.
"Subsidiary Guarantor Senior Indebtedness" means, with respect to any
Subsidiary Guarantor (excluding Insurance Company, Inc. ("Thai Tex"), whether
outstanding on the Issue Date or thereafter issued, any Guarantee of the Bank
Indebtedness by such Subsidiary Guarantor, all other Guarantees by such
Subsidiary Guarantor of Senior Indebtedness of the Company and all Indebtedness
of such Subsidiary Guarantor, including interest and fees thereon, unless, in
the instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that the obligations of such Subsidiary Guarantor
in respect of such Indebtedness are not superior in right of payment to the
obligations of such Subsidiary Guarantor under the Subsidiary Guaranty;
provided, however, that Subsidiary Guarantor Senior Indebtedness shall not
include (1) any obligations of such Subsidiary Guarantor to the Company or any
other Subsidiary of the Company, (2) any liability for Federal, state, local or
other taxes owed or owing by such Subsidiary Guarantor, (3) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business (including Guarantees thereof or instruments evidencing such
liabilities) or (4) any Indebtedness, Guarantee or obligation of such
Subsidiary Guarantor that is expressly subordinate or junior in right of
payment to any other Indebtedness, Guarantee or obligation of such Subsidiary
Guarantor, including any Subsidiary Guarantor Senior Subordinated Indebtedness
and Subsidiary Guarantor Subordinated Obligations of such Subsidiary Guarantor.
"Subsidiary Guarantor Senior Subordinated Indebtedness" means with
respect to a Subsidiary Guarantor, the obligations of such Subsidiary Guarantor
under the Subsidiary Guaranty and any other Indebtedness of such Subsidiary
Guarantor that specifically provides that such Indebtedness is to rank pari
passu in right of payment with the obligations of such Subsidiary Guarantor
under the Subsidiary Guaranty and is not subordinated by its terms in right of
payment to any Indebtedness or other obligation of such Subsidiary Guarantor
which is not Subsidiary Guarantor Senior Indebtedness of such Subsidiary
Guarantor.
"Subsidiary Guarantor Subordinated Obligation" means, with respect to
a Subsidiary Guarantor, any indebtedness of such Subsidiary Guarantor (whether
outstanding on the Issue Date or thereafter incurred) which is subordinate or
junior in right of payment to the obligations of such Subsidiary Guarantor
under the Subsidiary Guaranty pursuant to a written agreement.
"Subsidiary Guaranty" means the Guarantee of the Notes by a Subsidiary
Guarantor.
"Tantawan Joint Operating Agreement" means the Joint Operating
Agreement dated as of March 3, 1995 among Thaipo, Thai Romo and Sophonpanich.
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"Temporary Cash Investments" means any of the following:
(i) any investment in direct obligations of the United
States of America or any agency thereof or obligations guaranteed by
the United States of America or any agency thereof,
(ii) investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date
of acquisition thereof issued by a bank or trust company which is
organized under the laws of the United States of America, any state
thereof or any foreign country recognized by the United States of
America, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $50 million (or the foreign
currency equivalent thereof) and has, or whose parent holding company
has, outstanding debt which is rated "A" (or such similar equivalent
rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act)
or any money-market fund sponsored by a registered broker dealer or
mutual fund distributor,
(iii) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described in
clause (ii) above,
(iv) investments in commercial paper, maturing not more
than 90 days after the date of acquisition, issued by a corporation
(other than an Affiliate of the Company) organized and in existence
under the laws of the United States of America or any foreign country
recognized by the United States of America with a rating at the time
as of which any investment therein is made of "P-1" (or higher)
according to Moody's Investors Service, Inc. or "A-1" (or higher)
according to Standard and Poor's Ratings Group, and
(v) investments in securities with maturities of six
months or less from the date of acquisition issued or fully guaranteed
by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority thereof,
and rated at least "A" by Standard & Poor's Ratings Group or "A" by
Moody's Investors Service, Inc.
"Thailand" means the Kingdom of Thailand.
"Thaipo" means Thaipo Limited, a company organized under the laws of
Thailand and a wholly owned subsidiary of Pogo Producing Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519)
which has become publicly available at
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<PAGE> 28
least two Business Days prior to the Redemption Date (or, if such Statistical
Release is no longer published, any publicly available source or similar market
data)) most nearly equal to the period from Redemption Date to October 1, 2001;
provided, however, that if the period from the Redemption Date to October 1,
2001 is not equal to the constant maturity of a United States Treasury security
for which a weekly average yield is given, the Treasury Rate shall be obtained
by linear interpolation (calculated to the nearest one-twelfth of a year) from
the weekly average yields of the United States Treasury securities for which
such yields are given, except that if the period from the Redemption Date to
October 1, 2001 is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year shall be used.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of
its Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien
on any property of, the Company or any other Subsidiary of the Company that is
not a Subsidiary of the Subsidiary to be so designated; provided, however, that
either (A) the Subsidiary to be so designated has total assets of $1,000 or
less or (B) if such Subsidiary has assets greater than $1,000, such designation
would be permitted under Section 4.05. The Board of Directors may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however,
that immediately after giving effect to such designation (x) the Company could
Incur $1.00 of additional Indebtedness under Section 4.03(a) and (y) no Default
shall have occurred and be continuing. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the resolution of the Board of Directors giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"Volumetric Production Payments" means production payment obligations
of the Company or any Subsidiary Guarantor or any of its Subsidiaries which are
payable from a
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specified share of production from specific properties together with all
undertakings and obligations in connection therewith.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by
the Company or one or more Wholly Owned Subsidiaries provided, that, if such
Restricted Subsidiary is required by the applicable laws of a foreign
jurisdiction to be partially owned by the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction,
such Restricted Subsidiary shall be deemed a Wholly Owned Subsidiary so long as
the Company or another Restricted Subsidiary owns the remaining Capital Stock
or ownership interest in such Restricted Subsidiary and, by contract or
otherwise, controls the management and business of such Restricted Subsidiary
and derives the economic benefits of ownership of such restricted Subsidiary to
substantially the same extent as if such Restricted Subsidiary were a wholly
owned Subsidiary.
SECTION 1.02. Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
---- ----------
<S> <C>
"Affiliate Transaction" 4.08(a)
"Bankruptcy Law" 6.01
"Blockage Notice" 10.03
"Covenant Defeasance Option" 8.01(b)
"Custodian" 6.01
"defeasance trust" 8.01
"Event of Default" 6.01
"Legal Defeasance Option" 8.01(b)
"Legal Holiday" 13.08
"Obligations" 11.01
"Offer" 4.07(b)
"Offer Amount" 4.07(c)(2)
"Offer Period" 4.07(c)(2)
"Pay its Subsidiary Guaranty" 12.03
"Pay the Notes" 10.03
"Paying Agent" 2.03
"Payment Blockage Period" 10.03
"Purchase Date" 4.07(c)(1)
"Registrar" 2.03
"Successor Company" 5.01(a)
</TABLE>
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<PAGE> 30
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Noteholders;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be shown
on a balance sheet of the issuer dated such date prepared in accordance with
GAAP and accretion of principal on such security shall not be deemed to be the
Incurrence of Indebtedness pursuant to Section 4.03;
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory
redemption or mandatory repurchase price with respect to such Preferred Stock,
whichever is greater;
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<PAGE> 31
(9) all references to the date the Notes were originally issued shall
refer to the date the Initial Notes were originally issued; and
(10) unless otherwise indicated, section references are to the
applicable section in this Indenture.
ARTICLE II
The Notes
SECTION 2.01. Form and Dating. The Notes will be issued in fully
registered form, without coupons in denomination of $1,000 and any integral
multiple of $1,000. Provisions relating to the Initial Notes, the Exchange
Notes and the Private Exchange Notes are set forth in the Rule 144A/Regulation
S Appendix attached hereto (the "Appendix") which is hereby incorporated in and
expressly made part of this Indenture. The Initial Notes and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit 1
to the Appendix which is hereby incorporated in and expressly made a part of
this Indenture. The Exchange Notes, the Private Exchange Notes and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A, which is hereby incorporated in and expressly made a part of this
Indenture. The Notes may have notations, legends or endorsements required by
law, stock exchange rule, agreements to which the Company is subject, if any,
or usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). Each Note shall be dated the date of its
authentication. The terms of the Notes set forth in the Appendix and Exhibit A
are part of the terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall sign
the Notes for the Company by manual or facsimile signature. The Company's seal
shall be impressed, affixed, imprinted or reproduced on the Notes and may be in
facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate and deliver: (1) Initial Notes for
original issue in an aggregate principal amount of $120,000,000 and (2)
Exchange Notes or Private Exchange Notes for issue only in a Registered
Exchange Offer or a Private Exchange, respectively, pursuant to the
Registration Rights Agreement, for a like principal amount of Initial Notes, in
each case upon a written order of the Company signed by two Officers of the
Company. Such order shall specify the amount of the Notes to be authenticated
and the date on which the original issue of Notes is to be authenticated and
whether the Notes are to be Initial Notes, Exchange Notes or Private Exchange
Notes. The aggregate principal amount of Notes
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<PAGE> 32
outstanding at any time may not exceed $120,000,000 except as provided in
Section 2.07 of this Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency where Notes may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Notes may be
presented for payment (the "Paying Agent"). The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company may have
one or more co-registrars and one or more additional paying agents. The term
"Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
7.07. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer
agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Notes.
SECTION 2.04. Payments On The Notes; Paying Agent To Hold Money in
Trust. On the Issue Date, the Company shall purchase, or cause to be
purchased, and pledge to the Trustee, or direct the Trustee to purchase, as
security for the benefit of the Holders the Pledged Securities in such amounts
and with maturities as will be sufficient, upon receipt of scheduled interest
and principal payments of such securities to provide for payment in full of the
first four scheduled interest payments due on the Notes. The Trustee will hold
the Pledged Securities in the Pledge Account. Pursuant to Section 4.17,
immediately prior to each of the first four Interest Payment Dates, the Company
may either deposit with the Trustee from funds otherwise available to the
Company cash sufficient to pay the interest scheduled to be paid on such date
or the Company may direct the Trustee to release a like amount of proceeds from
the Pledge Account, including directing the Trustee to sell Pledged Securities
to the extent necessary to make an interest payment when due. The Pledged
Securities and Pledge Account will also secure the repayment of the principal
amount and premium, if any, on the Notes. After the first four scheduled
interest payments have been made the Company shall, prior to each due date of
interest and, if applicable, principal on any Note, deposit with the Paying
Agent a sum sufficient to pay such interest and, if applicable, principal when
so becoming due. The Company shall require each Paying Agent (other than
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<PAGE> 33
the Trustee) to agree in writing that the Paying Agent shall hold in trust for
the benefit of Noteholders or the Trustee all money held by the Paying Agent
for the payment of principal of or interest on the Notes and shall notify the
Trustee of any default by the Company in making any such payment. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate the money held
by it as Paying Agent and hold it as a separate trust fund. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee and
to account for any funds disbursed by the Paying Agent. Upon complying with
this Section, the Paying Agent shall have no further liability for the money
delivered to the Trustee.
SECTION 2.05. Noteholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Noteholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Noteholders.
SECTION 2.06. Transfer and Exchange. The Notes shall be issued in
fully registered form and shall be transferable only upon the surrender of the
Notes being transferred for registration of transfer. Global Notes shall be
issued, transferred, and exchanged in accordance with Sections 2.1, 2.3 and 2.4
of the Appendix. When a Note is presented to the Registrar or a co-registrar
with a request to register a transfer, the Registrar shall register the
transfer as requested if the requirements of this Indenture and Section
8-401(1) of the Uniform Commercial Code are met. When Notes are presented to
the Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Notes of other denominations, the Registrar shall make the
exchange as requested if the same requirements are met. To permit registration
of transfers and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's or co-registrar's request. The Company
may require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges in connection with any transfer or exchange pursuant to
this Section. The Company shall not be required to make and the Registrar need
not register transfers or exchanges of Notes selected for redemption (except,
in the case of Notes to be redeemed in part, the portion thereof not to be
redeemed) or any Notes for a period of 15 days before a selection of Notes to
be redeemed or 15 days before an interest payment date.
At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denomination or denominations (including an exchange of Initial
Notes for Exchange Notes), of a like aggregate principal amount, upon surrender
of the Notes to be exchanged at such office or agency. Whenever any Notes are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes of the same series which the Holder making
the exchange is entitle to receive; provided that (i) no exchanges of Notes for
Exchange Notes shall occur until an Exchange Offer Registration Statement shall
have been declared effective by the Commission and (ii) any Notes that are
exchanged for Exchange Notes shall be canceled by the Trustee.
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Prior to the due presentation for registration of transfer of any
Note, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Note is registered
as the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of the Company, the Trustee, the
Paying Agent, the Registrar or any co-registrar shall be affected by notice to
the contrary.
All Notes issued upon any transfer or exchange pursuant to the terms
of this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Notes surrendered upon such transfer or
exchange.
SECTION 2.07. Replacement Notes. If a mutilated Note is surrendered
to the Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note if the requirements of Section 8-405 of the
Uniform Commercial Code are met and the Holder satisfies any other reasonable
requirements of the Trustee. If required by the Trustee or the Company, such
Holder shall furnish an indemnity bond sufficient in the judgment of the
Company and the Trustee to protect the Company, the Trustee, the Paying Agent,
the Registrar and any co-registrar from any loss which any of them may suffer
if a Note is replaced. The Company and the Trustee may charge the Holder for
their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company.
SECTION 2.08. Outstanding Notes. Notes outstanding at any time are
all Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. A Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Note is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Notes (or
portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Noteholders on
that date pursuant to the terms of this Indenture, then on and after that date
such Notes (or portions thereof) cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.09. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes, in each case upon a written order of the Company signed by two Officers
of the Company. Temporary Notes shall be substantially in the form of
definitive Notes but may have variations that the Company considers appropriate
for temporary Notes. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate definitive Notes. After the
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preparation of definitive Notes, the temporary Notes shall be exchangeable for
definitive Notes upon surrender of the temporary Notes at any office or agency
maintained by the Company for the purpose and such exchange shall be without
charge to the Holder. Upon surrender for cancellation of any or more temporary
Notes, the Company shall execute, and the Trustee shall authenticate and
deliver in exchange therefor, one or more definitive Notes representing an
equal principal amount of Notes. Until so exchanged, the Holder of temporary
Notes shall in all respects be entitled to the same benefits under this
Indenture as a holder of definitive Notes.
SECTION 2.10. Cancellation. The Company at any time may deliver
Notes to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel and
dispose of (subject to the record retention requirements of the Exchange Act)
all Notes surrendered for registration of transfer, exchange, payment or
cancellation in accordance with its standard record retention and disposition
policies in effect from time to time unless the Company directs the Trustee to
deliver canceled Notes to the Company. The Company may not issue new Notes to
replace Notes it has redeemed, paid or delivered to the Trustee for
cancellation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Notes, the Company shall pay defaulted interest
(plus interest on such defaulted interest ("defaulted interest") to the extent
lawful) in any lawful manner. The Company may pay the defaulted interest to
the persons who are Noteholders on a subsequent special record date. The
Company shall fix or cause to be fixed any such special record date and payment
date to the reasonable satisfaction of the Trustee and shall promptly mail to
each Noteholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Note and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such defaulted interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when so deposited to be held in
trust for the benefit of the Person entitled to such defaulted interest as
provided in this Section.
SECTION 2.12. CUSIP/CINS Numbers. The Company in issuing the Notes
may use "CUSIP" or "CINS" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" or "CINS" numbers in notices of redemption as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers.
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ARTICLE III
Redemption
SECTION 3.01. General. (a) Except as set forth in this Section, the
Notes will not be redeemable at the option of the Company prior to October 1,
2001. Thereafter, the Notes will be redeemable, at the Company's option, in
whole or in part, at any time or from time to time, upon compliance with the
requirement of this Article, at the following redemption prices (expressed in
percentages of principal amount), plus accrued and unpaid interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on October 1 of the years set
forth below:
<TABLE>
<CAPTION>
Redemption
Period Price
------ -----------
<S> <C>
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.375%
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.6875%
2003 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%
</TABLE>
(b) At any time prior to October 1, 2001, the Notes may be redeemed
as a whole at the option of the Company upon the occurrence of a Change of
Control, upon not less than 30 nor more than 60 days prior notice (but in no
event more than 90 days after the occurrence of such Change of Control), at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued but unpaid interest, if any, to, the date
of redemption (subject to the right of holders of record on the relevant record
date to receive interest due on the relevant interest payment date).
(c) At any time and from time to time prior to October 1, 2000, the
Company may redeem in the aggregate up to 35% of the original principal amount
of the Notes with the proceeds of one or more Equity Offerings, at a redemption
price (expressed as a percentage of principal amount) of 1103/4% plus accrued
interest 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, however, that at least 65% of the original aggregate
principal amount of the Notes must remain outstanding after each such
redemption.
SECTION 3.02. Notices to Trustee. If the Company elects to redeem
Notes pursuant to paragraph 5 of the Notes it shall notify the Trustee in
writing of the redemption date, the principal amount of Notes to be redeemed
and the paragraph of the Notes pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
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SECTION 3.03. Selection of Notes To Be Redeemed. If fewer than all
the Notes are to be redeemed, the Trustee shall select the Notes to be redeemed
pro rata or by lot or by a method that complies with applicable legal and
securities exchange requirements, if any, and that the Trustee in its sole
discretion shall deem to be fair and appropriate and in accordance with methods
generally used at the time of selection by fiduciaries in similar
circumstances. The Trustee shall make the selection from outstanding Notes not
previously called for redemption. The Trustee may select for redemption
portions of the principal of Notes that have denominations larger than $1,000.
Notes and portions of them the Trustee selects shall be in amounts of $1,000 or
a whole multiple of $1,000. Provisions of this Indenture that apply to Notes
called for redemption also apply to portions of Notes called for redemption.
The Trustee shall notify the Company promptly of the Notes or portions of Notes
to be redeemed.
SECTION 3.04. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Notes, the Company shall mail a
notice of redemption by first-class mail to each Holder of Notes to be redeemed
at such Holder's registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Notes are to be
redeemed, the identification and portion of the principal amounts of
the particular Notes to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on Notes (or
portion thereof) called for redemption ceases to accrue on and after
the redemption date;
(7) the paragraph of the Notes pursuant to which the Notes
called for redemption are being redeemed;
(8) the CUSIP or CINS number, if any, printed on the Notes
being redeemed; and
(9) that no representation is made as to the correctness or
accuracy of the CUSIP or CINS number, if any, listed in such notice or
printed on the Notes.
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At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.05. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Notes shall be paid at the redemption price
stated in the notice, plus accrued interest to the redemption date; provided
however that if the redemption date is after a regular record date and on or
prior to an interest payment date, the accrued interest shall be payable to the
Holder of the redeemed Notes registered on the relevant record date. Failure
to give notice or any defect in the notice to any Holder shall not affect the
validity of the notice to any other Holder.
SECTION 3.06. Deposit of Redemption Price. Prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Notes to be redeemed on that date other than Notes or portions of Notes called
for redemption which have been delivered by the Company to the Trustee for
cancellation.
SECTION 3.07. Notes Redeemed in Part. Upon surrender of a
Note that is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder and issue in the name of the Holder (at the
Company's expense) a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.
ARTICLE IV
Covenants
SECTION 4.01. Payment of Notes. The Company shall promptly pay the
principal of and interest on the Notes on the dates and in the manner provided
in the Notes and in this Indenture. Principal and interest shall be considered
paid on the date due if on such date the Trustee or the Paying Agent holds in
accordance with this Indenture money sufficient to pay all principal and
interest then due and the Trustee or the Paying Agent, as the case may be, is
not prohibited from paying such money to the Noteholders on that date pursuant
to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. Commission Reports. The Company shall file with the
Trustee and provide Noteholders, within 15 days after it files them with the
SEC, copies of its annual reports and the information, documents and other
reports (or copies of such portions of any of
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the foregoing as the Commission may by rules and regulations prescribe) which
the Company is required to and does file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act. Notwithstanding that the Company may
not be required to remain subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, the Company shall continue to provide the Trustee
and Noteholders with such annual reports and such information, documents and
other reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, such information,
documents and reports within 15 days after the Company would have been required
to file documents and reports under such Sections with the Commission. Upon
qualification of this Indenture under the TIA, the Company also shall comply
with the other provisions of TIA Section 314(a).
SECTION 4.03. Limitation on Indebtedness. (a) The Company shall not
and shall not permit any of its Restricted Subsidiaries to Incur, directly or
indirectly, any Indebtedness unless, on the date of such Incurrence and after
giving effect thereto, (i) the Consolidated Coverage Ratio exceeds 1.75 to 1.00
for any period ending prior to or including the first anniversary of the
Closing Date, 2.00 to 1.00 for any period thereafter ending prior to or
including the second anniversary of the Closing Date, and 2.50 to 1.00 for any
period thereafter and (ii) no Default or Event of Default would occur or be
continuing.
(b) Notwithstanding Section 4.03(a), the Company and its Restricted
Subsidiaries may Incur any or all of the following Indebtedness:
(1) Indebtedness Incurred pursuant to the Revolving Credit
Agreement (including, without limitation, any renewal, extension,
refunding, restructuring, replacement or refinancing thereof referred
to in clause (ii) of the definition thereof); provided, that, the
aggregate principal amount of all Indebtedness Incurred pursuant to
this Section 4.03(b)(1) does not exceed an amount equal to the sum of
(x) $150 million and (y) 20% of Adjusted Consolidated Net Tangible
Assets determined as of the date of the most recent quarterly
consolidated financial statements of the Company and its Restricted
Subsidiaries, less the amount of Net Available Cash applied to reduce
Senior Indebtedness or Indebtedness pursuant to Section 4.03(b)(3);
(2) Indebtedness represented by Capitalized 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 construction or improvement of property used in an
Oil and Gas Business or Incurred to Refinance any such purchase price
or cost of construction or improvement, in each case Incurred no later
than 365 days after the date of such acquisition or the date of
completion of such construction or improvement; provided, however,
that the principal amount of an Indebtedness Incurred pursuant to this
Section 4.03(b)(2) shall not exceed $50 million at any time;
(3) Indebtedness (other than Indebtedness described in
Sections 4.03(b)(1) and (2)) in a principal amount which, when taken
together with the principal amount of all other Indebtedness Incurred
pursuant to this Section 4.03(b)(3) and then outstanding,
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<PAGE> 40
will not exceed $20 million (it being understood that any Indebtedness
Incurred under this Section 4.03(b)(3) shall cease to be deemed
Incurred or outstanding for purposes of this Section 4.03(b)(3) but
shall be deemed to be Incurred for purposes of Section 4.03(a)) from
and after the first date on which the Company or its Restricted
Subsidiaries could have Incurred such Indebtedness under the foregoing
Section 4.03(b)(1) without reliance upon this Section 4.03(a);
(4) Indebtedness owed to and held by a Wholly Owned
Subsidiary; provided, however, that any subsequent issuance or
transfer of any Capital Stock which results in any such Wholly Owned
Subsidiary ceasing to be a Wholly Owned Subsidiary or any subsequent
transfer of such Indebtedness (other than to another Wholly Owned
Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the Company;
(5) the Notes;
(6) Indebtedness in respect of bid, performance or surety
bonds issued or other reimbursement obligations for the account of the
Company or any Restricted Subsidiary in the ordinary course of
business, including letters of credit supporting such bid,
performance, surety bonds or other reimbursement obligations (in each
case other than an obligation for money borrowed);
(7) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (4), (5) or (6) of this Section
4.03(b));
(8) Refinancing Indebtedness in respect of Indebtedness
Incurred pursuant to Section 4.03(a) or pursuant to clause (5) or (7)
of this Section 4.03(b) or this Section 4.03(b)(8); and
(9) Hedging Obligations consisting of (x) Interest Rate
Agreements directly related to Indebtedness permitted to be Incurred
by the Company pursuant to this Indenture and (y) commodity Hedging
Agreements and Currency Agreements entered into for the purpose of
hedging fluctuations in commodity prices or currency rates,
respectively, and not for speculation.
(c) Notwithstanding Section 4.03(a) Thai Romo or any other Restricted
Subsidiary that owns an interest in any field or area but is not the operator
of such hydrocarbon interest may incur Indebtedness consisting of obligations
to reimburse the operator under the Operating Agreement or similar agreement in
the case of such other Restricted Subsidiaries or the Joint Operating Agreement
for Thai Romo's or such other Restricted Subsidiary's pro rata share of
payments made by such operator in respect of Indebtedness incurred by such
operator in connection with transactions under such agreements.
(d) Notwithstanding the foregoing, neither the Company nor any
Restricted Subsidiary shall Incur any Indebtedness pursuant to Section 4.03(b)
if the proceeds thereof are used, directly or indirectly, to Refinance any
Subordinated Obligations of the Company unless such
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Indebtedness shall be subordinated to the Notes to at least the same extent as
such Subordinated Obligations. No Subsidiary Guarantor shall Incur any
Indebtedness under Section 4.03(b) above if the proceeds thereof are used,
directly or indirectly, to Refinance any Subsidiary Guarantor Subordinated
Obligation of such Subsidiary Guarantor unless such Indebtedness shall be
subordinated to the obligations of such Subsidiary Guarantor under the
Subsidiary Guaranty to at least the same extent as such Subsidiary Guarantor
Subordinated Obligation.
(e) In addition, the Company shall not Incur any Secured Indebtedness
which is not Senior Indebtedness unless contemporaneously therewith effective
provision is made to secure the Notes equally and ratably with such Secured
Indebtedness for so long as such Secured Indebtedness is secured by a Lien;
provided that the Company may grant a lien on a specified account or
investments which contain or consist solely of a portion of the proceeds
received in connection with the issuance of Indebtedness (and investment
earnings thereon) if the amounts on deposit in such account or such investments
are to be used solely to make payments of principal or interest on such
Indebtedness. No Subsidiary Guarantor shall Incur any Secured Indebtedness
which is not Subsidiary Guarantor Senior Indebtedness unless contemporaneously
therewith effective provision is made to secure such Subsidiary Guarantor's
obligations under the Subsidiary Guaranty equally and ratably with such Secured
Indebtedness for so long as such Secured Indebtedness is secured by a Lien.
(f) For purposes of determining compliance with this Section 4.03,
(i) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described herein, the Company, in its sole
discretion, will classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of the above clauses
and (ii) an item of Indebtedness may be divided and classified in more than one
of the types of Indebtedness described herein.
(g) Notwithstanding Section 4.03(a) or 4.03(b), the Company shall not
Incur any Indebtedness if such Indebtedness is subordinate or junior in ranking
in any respect to any Senior Indebtedness unless such Indebtedness is Senior
Subordinated Indebtedness or is contractually subordinated in right of payment
to Senior Subordinated Indebtedness. No Subsidiary Guarantor shall Incur any
Indebtedness if such Indebtedness is contractually subordinate or junior in
ranking in any respect to any Guarantor Senior Indebtedness of such Subsidiary
Guarantor unless such Indebtedness is Subsidiary Guarantor Senior Subordinated
Indebtedness of such Subsidiary Guarantor or is contractually subordinated in
right of payment to Subsidiary Guarantor Senior Subordinated Indebtedness of
such Subsidiary Guarantor. Unsecured Indebtedness is not deemed to be
subordinate or junior to Secured Indebtedness merely because it is unsecured.
SECTION 4.04. Limitation on Indebtedness and Preferred Stock of
Restricted Subsidiaries. The Company shall not permit any Restricted
Subsidiary to Incur, directly or indirectly, any Indebtedness or Preferred
Stock except:
(a) Indebtedness or Preferred Stock issued to and held by the
Company or a Wholly Owned Subsidiary; provided, however, that any
subsequent issuance or transfer
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of any Capital Stock which results in any such Wholly Owned Subsidiary
ceasing to be a Wholly Owned Subsidiary or any subsequent transfer of
such Indebtedness or Preferred Stock (other than to the Company or a
Wholly Owned Subsidiary) shall be deemed, in each case, to constitute
the issuance of such Indebtedness or Preferred Stock by the issuer
thereof;
(b) Indebtedness or Preferred Stock of a Subsidiary Incurred
and outstanding on or prior to the date on which such Subsidiary was
acquired by the Company (other than Indebtedness or Preferred Stock
Incurred in connection with, or to provide all or any portion of the
funds or credit support utilized to consummate, the transaction or
series of related transactions pursuant to which such Subsidiary
became a Subsidiary or was acquired by the Company); provided,
however, that on the date of such acquisition and after giving effect
thereto, the Company would have been able to Incur at least $1.00 of
Indebtedness pursuant to Section 4.03(a) or (b);
(c) Indebtedness or Preferred Stock outstanding on the Issue
Date (other than Indebtedness described in clause (a) or (b) of this
Section 4.04); and
(d) Refinancing Indebtedness Incurred in respect of
Indebtedness or Preferred Stock referred to in clause (b) or (c) of
this Section 4.04 or this clause (d); provided, however, that to the
extent such Refinancing Indebtedness directly or indirectly Refinances
Indebtedness or Preferred Stock of a Subsidiary described in clause
(b) of this Section 4.04, such Refinancing Indebtedness shall be
Incurred only by such Subsidiary.
SECTION 4.05. Limitation on Restricted Payments. (a) The Company
shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to make a Restricted Payment if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) the Company is not able to Incur an additional $1.00 of
Indebtedness under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date would exceed the sum
of:
(A) 50% of the Consolidated Net Income accrued during
the period (treated as one accounting period) from the
beginning of the fiscal quarter immediately following the
fiscal quarter during which the Notes are originally issued to
the end of the most recent fiscal quarter ending prior to the
date of such Restricted Payment for which financial statements
are available (or, in case such Consolidated Net Income shall
be a deficit, minus 100% of such deficit);
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(B) the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other
than Disqualified Stock) subsequent to the Issue Date (other
than an issuance or sale to a Subsidiary of the Company and
other than an issuance or sale to an employee stock ownership
plan or to a trust established by the Company or any of its
Subsidiaries for the benefit of their employees);
(C) the amount by which Indebtedness of the Company is
reduced on the Company's balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date of any Indebtedness of the
Company convertible or exchangeable for Capital Stock (other
than Disqualified Stock) of the Company (less the amount of
any cash, or the fair value of any other property, distributed
by the Company upon such conversion or exchange);
(D) an amount equal to the sum of (i) the net reduction
in Investments in Unrestricted Subsidiaries resulting from
dividends, repayments of loans or advances or other transfers
of assets, in each case to the Company or any Restricted
Subsidiary from Unrestricted Subsidiaries, and (ii) the
portion (proportionate to the Company's equity interest in
such Subsidiary) of the fair market value of the net assets of
an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary; provided,
however, that the foregoing sum shall not exceed, in the case
of any Unrestricted Subsidiary, the amount of Investments
previously made (and treated as a Restricted Payment) by the
Company or any Restricted Subsidiary in such Unrestricted
Subsidiary; and
(E) $15,000,000.
(b) The provisions of Section 4.05(a) shall not prohibit:
(i) any Restricted Payment made by exchange for, or out of
the proceeds of the substantially concurrent sale of, or any
acquisition of any Capital Stock of the Company made by exchange for,
Capital Stock of the Company (other than Disqualified Stock and other
than Capital Stock issued or sold to a Subsidiary of the Company or an
employee stock ownership plan or to a trust established by the Company
or any of its Subsidiaries for the benefit of their employees);
provided, however, that (A) such Restricted Payment shall be excluded
in the calculation of the amount of Restricted Payments and (B) the
Net Cash Proceeds from such sale shall be excluded from the
calculation of amounts under clause (3)(B) of Section 4.05(a);
(ii) any purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value of Subordinated Obligations
made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company or Indebtedness of
the Company which is permitted to be Incurred pursuant to Section
4.03; provided, however, that such purchase, repurchase, redemption,
defeasance or
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other acquisition or retirement for value shall be excluded in the
calculation of the amount of Restricted Payments;
(iii) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with Section 4.05(a); provided, however, that at the
time of payment of such dividend, no other Default shall have occurred
and be continuing (or result therefrom); provided further, however,
that such dividend shall be included in the calculation of the amount
of Restricted Payments; or
(iv) the repurchase or other acquisition of shares of, or
options to purchase shares of, common stock of the Company or any of
its Subsidiaries from employees, former employees, directors or former
directors of the Company or any of its Subsidiaries (or permitted
transferees of such employees, former employees, directors or former
directors), pursuant to the terms of the agreements (including
employment agreements) or plans (or amendments thereto) approved by
the Board of Directors under which such individuals purchase or sell
or are granted the option to purchase or sell, shares of such common
stock; provided, however, that the aggregate amount of such
repurchases and other acquisitions shall not exceed $1 million in any
calendar year; provided further, however, that such repurchases and
other acquisitions shall be excluded in the calculation of the amount
of Restricted Payments.
If the Company or any Restricted Subsidiary makes a Restricted
Payment which, at the time of the making of such Restricted Payment, would in
the good faith determination of the Company be permitted under the requirements
of the Indenture, such Restricted Payment shall be deemed to have been made in
compliance with the Indenture notwithstanding any subsequent adjustments made
in good faith to the Company's financial statements affecting Consolidated Net
Income for any period.
SECTION 4.06. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or restriction on the ability of
any Restricted Subsidiary to (a) pay dividends or make any other distributions
on its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the Company
or (c) transfer any of its property or assets to the Company, except:
(i) any encumbrance or restriction pursuant to an
agreement in effect at or entered into on the Issue Date, including
the Revolving Credit Agreement;
(ii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by such Restricted Subsidiary on or prior to the
date on which such Restricted Subsidiary was acquired by the Company
(other than Indebtedness Incurred as consideration in, or to provide
all or any portion of the funds or credit support utilized to
consummate, the transaction or
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series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the
Company) and outstanding on such date;
(iii) any encumbrance or restriction pursuant to an
agreement effecting a Refinancing of Indebtedness Incurred pursuant to
an agreement referred to in clause (i) or (ii) of this Section 4.06 or
this clause (iii) or contained in any amendment to an agreement
referred to in clause (i) or (ii) of this Section 4.06 or this clause
(iii); provided, however, that the encumbrances and restrictions with
respect to such Restricted Subsidiary contained in any such
refinancing agreement or amendment are no less favorable to the
Noteholders than encumbrances and restrictions with respect to such
Restricted Subsidiary contained in such predecessor agreements;
(iv) any such encumbrance or restriction consisting of
customary nonassignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of the
lease or the property leased thereunder;
(v) in the case of Section 4.06(c), restrictions contained
in security agreements or mortgages securing Indebtedness of a
Restricted Subsidiary to the extent such restrictions restrict the
transfer of the property subject to such security agreements or
mortgages;
(vi) any restriction with respect to a Restricted
Subsidiary imposed pursuant to an agreement entered into for the sale
or disposition of all or substantially all the Capital Stock or assets
of such Restricted Subsidiary pending the closing of such sale or
disposition; and
(vii) encumbrances or restrictions arising or existing by
reason of applicable law.
SECTION 4.07. Limitation on Sales of Assets and Subsidiary Stock.
(a) The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, consummate any Asset Disposition unless (i) the Company
or such Restricted Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value (including as to the value
of all non-cash consideration), as determined in good faith by the Board of
Directors, of the shares and assets subject to such Asset Disposition, (ii) at
least 80% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash, cash equivalents or forgiveness
of debt and (iii) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company (or such Restricted Subsidiary, as
the case may be) (A) first, to the extent the Company elects (or is required by
the terms of any Indebtedness), to prepay, repay, redeem or purchase Senior
Indebtedness or Indebtedness (other than any Disqualified Stock) of a Wholly
Owned Subsidiary (in each case other than Indebtedness owed to the Company or
an Affiliate of the Company) within one year from the later of the date of such
Asset Disposition or the receipt of such Net Available Cash; (B) second, to the
extent of the balance of such Net Available Cash after application in
accordance with clause (A) of this Section 4.07(a), to the extent the Company
elects, to acquire Additional Assets within one year from the later of the date
of
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such Asset Disposition or the receipt of such Net Available Cash; and (C)
third, to the extent of the balance of such Net Available Cash after
application in accordance with clauses (A) and (B) of this Section 4.07(a), to
make an Offer to the holders of the Notes (and to holders of other Senior
Subordinated Indebtedness designated by the Company) to purchase Notes (and
such other Senior Subordinated Indebtedness) pursuant to and subject to the
conditions of Section 4.07(b); in each case within one year from the later of
the receipt of such Net Available Cash and the date the offer described in
Section 4.07(b) is consummated; provided, however, that in connection with any
prepayment, repayment or purchase of Indebtedness pursuant to clause (A) or (C)
of this Section 4.07(a), the Company or such Restricted Subsidiary shall
permanently retire such Indebtedness and shall cause the related loan
commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased except in the case of Clause
(A) of this Section 4.07(a) (to the extent the proceeds are applied to reduce
borrowings under a working capital facility). Notwithstanding the foregoing
provisions of this Section 4.07(a), the Company and the Restricted Subsidiaries
shall not be required to apply any Net Available Cash in accordance with this
Section 4.07(a) except to the extent that the aggregate Net Available Cash from
all Asset Dispositions which are not applied in accordance with this Section
4.07(a) exceeds $10 million (provided such amount shall be carried forward for
purposes of determining whether such an offer is required with respect to Net
Available Cash from any subsequent Asset Disposition). Pending application of
Net Available Cash pursuant to this Section 4.07(a), such Net Available Cash
shall be invested in Permitted Investments.
For the purposes of this Section 4.07, the following are deemed to be
cash or cash equivalents: (x) the assumption by the transferee of Senior
Indebtedness of the Company or Indebtedness of any Restricted Subsidiary of the
Company and the release of the Company or such Restricted Subsidiary from all
liability on such Senior Indebtedness or Indebtedness (in which case the
Company shall, without further action, be deemed to have applied such assumed
Indebtedness in accordance with clause (A) of Section 4.07(a)) and (y)
securities received by the Company or any Restricted Subsidiary of the Company
from the transferee that are promptly converted by the Company or such
Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the purchase
of the Notes (and other Senior Subordinated Indebtedness) pursuant to Section
4.07(a)(iii)(C), the Company shall be required to purchase Notes tendered
pursuant to an offer by the Company for the Notes (and other Senior
Subordinated Indebtedness) (the "Offer") at a purchase price of 100% of their
principal amount (without premium) plus accrued but unpaid interest (or, in
respect of such other Senior Subordinated Indebtedness, such lesser price, if
any, as may be provided for by the terms of such Senior Subordinated
Indebtedness) in accordance with the procedures (including prorationing in the
event of oversubscription) set forth in Section 4.07(c). If the aggregate
purchase price of Notes (and any other Senior Subordinated Indebtedness)
tendered pursuant to the Offer is less than the Net Available Cash allotted to
the purchase thereof, the Company may retain the remaining Net Available Cash
as permitted by this Indenture for its general corporate purposes.
(c) (1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall be obligated to deliver
to the Trustee and
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send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Notes purchased by the Company either in whole or
in part (subject to prorating as hereinafter described in the event the Offer
is oversubscribed) in integral multiples of $1,000 of principal amount, at the
applicable purchase price. The notice shall specify a purchase date not less
than 30 days nor more than 60 days after the date of such notice (the "Purchase
Date") and shall contain such information concerning the business of the
Company which the Company in good faith believes will enable such Holders to
make an informed decision (which at a minimum will include (i) the most
recently filed Annual Report on Form 10-K (including audited consolidated
financial statements) of the Company, the most recent subsequently filed
Quarterly Report on Form 10-Q and any Current Report on Form 8-K of the Company
filed subsequent to such Quarterly Report, other than Current Reports
describing Asset Dispositions otherwise described in the offering materials (or
corresponding successor reports), (ii) a description of material developments
in the Company's business subsequent to the date of the latest of such Reports,
and (iii) if material, appropriate pro forma financial information) and all
instructions and materials necessary to tender Notes pursuant to the Offer,
together with the information contained in clause (3).
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided below, the Company shall deliver to the
Trustee an Officers' Certificate as to (i) the amount of the Offer (the "Offer
Amount"), (ii) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (iii) the
compliance of such allocation with the provisions of Section 4.07(a). On such
date, the Company shall also irrevocably deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust) in Temporary Cash Investments, maturing on the last day
prior to the Purchase Date or on the Purchase Date if funds are immediately
available by open of business, an amount equal to the Offer Amount to be held
for payment in accordance with the provisions of this Section 4.07. Upon the
expiration of the period for which the Offer remains open (the "Offer Period"),
the Company shall deliver to the Trustee for cancellation the Notes or portions
thereof which have been properly tendered to and are to be accepted by the
Company. The Trustee shall, on the Purchase Date, mail or deliver payment to
each tendering Holder in the amount of the purchase price. In the event that
the aggregate purchase price of the Notes delivered by the Company to the
Trustee is less than the Offer Amount, the Trustee shall deliver the excess
funds to the Company immediately after the expiration of the Offer Period.
(3) Holders electing to have a Note purchased shall be required to
surrender the Note, with an appropriate form duly completed, to the Company at
the address specified in the notice at least three Business Days prior to the
Purchase Date. Holders shall be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
Purchase Date, a telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Note which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Note purchased. If at the expiration of the Offer Period
the aggregate principal amount of Notes surrendered by Holders exceeds the
Offer Amount, the Company shall select the Notes to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples thereof,
shall
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be purchased). Holders whose Notes are purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered.
(4) At the time the Company delivers Notes to the Trustee which are
to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Notes are to be accepted by the Company pursuant
to and in accordance with the terms of this Section 4.07. A Note shall be
deemed to have been accepted for purchase at the time the Trustee, directly or
through an agent, mails or delivers payment therefor to the surrendering
Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.07, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.07 by virtue
thereof.
SECTION 4.08. Limitation on Affiliate Transactions. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly enter into or permit to exist any transaction or series of related
transactions (including the purchase, sale, lease or exchange of any property,
or the rendering of any service) with any Affiliate of the Company (an
"Affiliate Transaction") unless the terms thereof (i) are no less favorable to
the Company or such Restricted Subsidiary than those that could be obtained at
the time of such transaction in arm's-length dealings with a Person who is not
such an Affiliate or in the event no comparable transaction with an unrelated
third party who is not an Affiliate is available, on terms that are fair to the
Company or such Restricted Subsidiary from a financial point of view, (ii) if
such Affiliate Transaction involves an amount in excess of $1 million, (1) are
set forth in writing and (2) have been approved by a majority of the members of
the Board of Directors having no personal stake in such Affiliate Transaction
and (iii) if such Affiliate Transaction involves an amount in excess of $5
million, have been determined by a nationally recognized investment banking
firm to be fair, from a financial standpoint, to the Company and its Restricted
Subsidiaries.
(b) The provisions of Section 4.08(a) shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to Section 4.05, (ii) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors, (iii) the
grant of stock options or similar rights to employees and directors of the
Company pursuant to plans approved by the Board of Directors, (iv) loans or
advances to employees in the ordinary course of business in accordance with
customary practices in the Oil and Gas Business, but in any event not to exceed
$1 million in the aggregate outstanding at any one time, (v) the payment of
reasonable fees to directors of the Company and its Restricted Subsidiaries who
are not employees of the Company or its Restricted Subsidiaries, (vi) any
Affiliate Transaction between the Company and a Wholly Owned Subsidiary or
between Wholly Owned Subsidiaries, (vii) the issuance or sale of any Capital
Stock (other than Disqualified Stock) of the Company, (viii) indemnification
agreements with, and the
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payment of fees and indemnities to, directors, officers and employees of the
Company and its Restricted Subsidiaries, in each case on customary terms, (ix)
transactions pursuant to agreements as in existence on the Issue Date and (x)
any employment, noncompetition or confidentiality agreements entered into by
the Company or any of its Restricted Subsidiaries with its employees in the
ordinary course of business.
SECTION 4.09. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries. The Company shall not sell or otherwise dispose of
any Capital Stock of a Restricted Subsidiary, and shall not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell or otherwise
dispose of any of its Capital Stock except (i) to the Company or a Wholly Owned
Subsidiary and (ii) if, immediately after giving effect to such issuance, sale
or other disposition, neither the Company nor any of its Subsidiaries own any
Capital Stock of such Restricted Subsidiary or after giving effect to such
issuance, sale or other disposition, such Restricted Subsidiary would no longer
constitute a Restricted Subsidiary and any Investment in such Person remaining
after giving effect thereto would have been permitted to be made under the
covenant described in Section 4.05 if made on the date of such issuance, sale
or other disposition.
SECTION 4.10. Change of Control. (a) Upon the occurrence of a
Change of Control and provided that the Company has not exercised its option to
redeem the Notes pursuant to Section 3.01(b), each Holder shall have the right
to require that the Company repurchase such Holder's Notes at a purchase price
in cash equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of holders of
record on the relevant record date to receive interest on the relevant interest
payment date), in accordance with the terms contemplated in Section 4.10(b).
(b) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder with a copy to the Trustee stating:
(1) that a Change of Control has occurred and that such
Holder has the right to require the Company to purchase such Holder's
Notes at a purchase price in cash equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of Holders of record on the relevant
record date to receive interest on the relevant interest payment
date);
(2) the circumstances and relevant facts regarding such
Change of Control (including information with respect to pro forma
historical income, cash flow and capitalization, each after giving
effect to such Change of Control);
(3) the repurchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent
with this Section 4.10, that a Holder must follow in order to have its
Notes purchased.
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(c) Holders electing to have a Note purchased will be required to
surrender the Note, with an appropriate form duly completed, to the Company at
the address specified in the notice at least three Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Note which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Note purchased.
(d) On the purchase date, all Notes purchased by the Company under
this Section 4.10 shall be delivered by the Trustee for cancellation, and the
Company shall pay the purchase price plus accrued and unpaid interest, if any,
to the Holders entitled thereto.
(e) The Company will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer at the same purchase price, at the same times and otherwise in
substantial compliance with the requirements applicable to a Change of Control
offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
(f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 4.10. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
SECTION 4.11. Compliance Certificate. The Company shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default
that occurred during such period. If they do, the certificate shall describe
the Default, its status and what action the Company is taking or proposes to
take with respect thereto. The Company also shall comply with TIA Section
314(a)(4).
SECTION 4.12. Restrictions with Respect to B8/32 Partners. Neither
the Company nor any of its Restricted Subsidiaries will vote any shares or
other equity interests in B8/32 Partners owned or controlled by it in favor of,
or otherwise consent to, any action by or on behalf of B8/32 Partners which
action would not be permitted to be undertaken by a Restricted Subsidiary
pursuant to the terms and conditions of this Indenture.
SECTION 4.13. Future Guarantors. The Company shall cause each
Restricted Subsidiary (excluding Thai Tex but including each Restricted
Subsidiary created or acquired following the Issue Date) to Guarantee the Notes
pursuant to a Subsidiary Guaranty, as provided in Section 11.07.
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SECTION 4.14. Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, the City of New York, an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee,
Registrar or co-registrar) where Notes may be surrendered for registration of
transfer or for exchange and where notices and demands to or upon the Company
in respect of the Notes and this Indenture may be served. The Company shall
give prompt written notice to the Trustee of the location, and any change in
the location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designation; provided,
however, that no such designation or rescission shall in any manner relieve
the Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
SECTION 4.15. Corporate Existence. Subject to Article 5 and Section
11.03 hereof, the Company and the Subsidiary Guarantors shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of the Restricted Subsidiaries, in accordance with the respective organizations
documents (as the same may be amended from time to time) of the Company or any
such Restricted Subsidiary and (ii) the rights (charter and statutory),
licenses and franchises of the Company and the Restricted Subsidiaries;
provided, however, that the Company and Subsidiary shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Restricted Subsidiaries, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Restricted Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.16. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.17. Deposit and Pledge of Pledged Securities for Certain
Payments. (a) Upon the issuance of the Notes under this Indenture, the
Company will deposit or cause to be deposited with the Trustee irrevocably, or
direct the Trustee to purchase, Pledged Securities, the scheduled interesst and
principal payments on which will be in amounts and with maturities sufficient
to pay and discharge the amounts due for the first four scheduled interest
payments on the Notes. The cash available upon interest payments on and
maturities of the Pledged Securities shall be available in the Pledge Account
to pay each of the first four interest payments not later than the Business Day
prior to each such Interest Payment Date. The Company hereby assigns and
pledges to the Trustee for the equal and ratable benefit of the Holders, and
hereby grants to the Trustee, for the equal and ratable benefit of the Holders,
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a security interest in, all of the Company's right, title and interest in the
Pledged Securities and to all property (including, but not limited to, cash,
securities and bank deposits) in the Pledge Account within the Special Account
described below. The provisions of Article X of this Indenture shall not be in
effect with respect to the Pledged Securities so deposited pursuant to this
Section 4.17.
There is hereby created a trust account in the name of the
Trustee (the "Special Account") in which the Pledged Securities so deposited
pursuant to the first paragraph of this Section 4.17(a) shall be held. There
are hereby created within the Special Account two sub-accounts: the Pledge
Account and a sub-account designated as the "Company Account." All amounts held
in the Pledge Account in excess of the amount of money required to pay interest
on each Interest Payment Date through and including April 1, 1999 on the Notes
shall be transferred into the Company Account as soon as is commercially
practicable. The Pledged Securities (and any moneys related thereto) in each
such sub-account shall not in any way be commingled with securities or funds in
any other trust account maintained by the Trustee.
The Company may notify the Trustee after the Company has paid
or caused to be paid any of the first four interest payments on the Notes
(other than from amounts on deposit in the Pledge Account). The Trustee shall,
upon receipt of such notice, release from the Pledge Account funds not in excess
of the amount equal to the interest so paid by the Company, provided that
sufficient trust amounts remain on deposit in the Pledge Account to pay the
remaining interest on the Notes payable on each Interest Payment Date through
and including April 1, 1999.
If the Company shall not have caused to be paid to the Paying
Agent, for payment over to the Holders of the Notes, at least one Business Day
prior to each Interest Payment Date occurring through and including April 1,
1999 sufficient money in immediately available legal tender funds for the
interest payments then due and upon notice thereof from the Paying Agent to the
Trustee, the Company hereby authorizes and directs the Trustee to, and the
Trustee shall, withdraw the funds from the Pledge Account for the payment, when
due, of the interest payments on the Notes due and deliver such funds to the
Paying Agent for payment to the Holders, whereupon such funds shall be deemed to
have been paid by the Company. If funds are not immediately available in the
Pledge Account to pay interest on the Notes on the Business Day immediately
preceding the applicable Interest Payment Date, the Trustee is hereby authorized
to sell the Pledged Securities in amounts sufficient to generate such funds, and
shall not be liable for any loss incurred in connection with such sales. Any
amounts in the Pledge Account remaining after the payment of interest scheduled
to be paid on April 1, 1999 shall be transferred to the Company Account;
provided, however, that if there occurs, on or prior to April 1, 1999 an Event
of Default, then any and all amounts deposited in the Pledge Account shall be
allocable to the payment of principal of (and premium, if any, on) the Notes
outstanding at the time of such occurrence.
(b) Any moneys held by the Trustee pursuant to paragraph (a)
of this Section 4.17 shall be invested or reinvested by the Trustee, to the
extent permitted by law, at the oral request of an Officer of the Company acting
on behalf of the Company to be followed by
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written confirmation of such request, in U.S. Government Obligations. The
Trustee need not make any such investments unless so requested by the Company.
The Trustee may invest or reinvest in any and all such U.S.
Government Obligations through its own bond department or the bond department
of any bank or trust company under common control with the Trustee. Such
investment in U.S. Government Obligations shall be held in an account
maintained by Harris Trust and Savings Bank in the name of the Trustee.
The Trustee shall pay over to the Company from time to time at
the oral request of an Officer of the Company acting on behalf of the Company
to be followed by written confirmation of such request any and all funds
deposited in the Company Account. Other than following an acceleration of the
Notes pursuant to Section 6.02 hereof, the Trustee shall not have any right to
withdraw funds from the Company Account to pay any amount due on the Notes or
to the Trustee or for any other purpose except as provided in the immediately
preceding sentence.
(c) So long as any Pledged Securities (including any moneys
related thereto) remain in the Pledge Account, the Company shall comply with
TIA Section 314(d). Any certificate or opinion delivered in compliance with
TIA Section 314(d) may be made by an Officer of the Company except in cases
where TIA Section 314(d) requires that such certificate or opinion be made by
an independent person.
ARTICLE V
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets. (a) The
Company shall not consolidate with or merge with or into, or convey, transfer
or lease, in one transaction or a series of transactions, all or substantially
all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a Person organized and existing under
the laws of the United States of America, any State thereof or the
District of Columbia and the Successor Company (if not the Company)
shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Notes and this Indenture;
(ii) immediately after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the
Successor Company or any Subsidiary as a result of such transaction as
having been Incurred by such Successor Company or such Subsidiary at
the time of such transaction), no Default or Event of Default shall
have occurred and be continuing;
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(iii) immediately after giving effect to such transaction,
the Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a);
(iv) immediately after giving effect to such transaction,
the Successor Company shall have Consolidated Net Worth in an amount
that is not less than the Consolidated Net Worth of the Company
immediately prior to such transaction; and
(v) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental indenture
(if any) comply with this Indenture.
The Successor Company shall be the successor to the Company and shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture, but the predecessor Company in the case of a
conveyance, transfer or lease shall not be released from the obligation to pay
the principal of and interest on the Notes.
Notwithstanding the foregoing clauses (i) and (ii) of this Section
5.01(a), (1) any Restricted Subsidiary of the Company may consolidate with,
merge into or transfer all or part of its properties and assets to the Company
and (2) the Company may merge with an Affiliate incorporated solely for the
purpose of reincorporating the Company in another jurisdiction to realize tax
or other benefits.
(b) The Company shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or series of transactions, all or substantially all of its assets
to the Company or another Subsidiary Guarantor or to a Person other than the
Company or another Subsidiary Guarantor (whether or not affiliated with the
Guarantor) unless: (i) the resulting, surviving or transferee Person (if not
such Subsidiary) shall be a Person organized and existing under the laws of the
jurisdiction under which such Subsidiary was organized or under the laws of the
United States of America (provided that any entity that is organized under the
laws of Thailand may be merged with or into Thai Romo), or any State hereof or
the District of Columbia, and such Person shall expressly assume, by an
amendment to this Indenture, in a form acceptable to the Trustee, all the
obligations of such Subsidiary, if any, under its Subsidiary Guaranty; (ii)
immediately after giving effect to such transaction or transactions on a pro
forma basis (and treating any Indebtedness which becomes an obligation of the
resulting, surviving or transferee Person as a result of such transaction as
having been issued by such Person at the time of such transaction), no Default
or Event of Default shall have occurred and be continuing; and (iii) the
Company delivers to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such
amendment to this Indenture, if any, complies with this Indenture.
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ARTICLE VI
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(1) the Company (i) defaults in any payment of interest on
the Notes through the first four scheduled interest payment dates when
the same becomes due and payable, whether or not such payment shall be
prohibited by Article 10, or (ii) defaults in any payment of interest
after the first four scheduled interest payment dates on any Note when
the same becomes due and payable, whether or not such payment shall be
prohibited by Article 10, and such default continues for a period of
30 days;
(2) the Company (i) defaults in the payment of the principal
of any Note when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise, whether or not such payment shall be
prohibited by Article 10;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11 or 4.12 (other than a
failure to purchase Notes when required under Section 4.07 or 4.10)
and such failure continues for 30 days after the notice specified
below;
(5) the Company fails to comply with any of its agreements in
the Notes or this Indenture (other than those referred to in Section
6.1(1), (2), (3) or (4)) and such failure continues for 60 days after
the notice specified below;
(6) Indebtedness of the Company or any Significant Subsidiary
is not paid within any applicable grace period after final maturity or
is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness unpaid or accelerated exceeds $10
million, or its foreign currency equivalent at the time;
(7) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against
it in an involuntary case;
(C) consents to the appointment of a Custodian of it or
for any substantial part of its property; or
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(D) makes a general assignment for the benefit of its
creditors; or takes any comparable action under any foreign
laws relating to insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for any substantial part of its
property; or
(C) orders the winding up or liquidation of the Company
or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess
of $10 million or its foreign currency equivalent at the time is
entered against the Company or any Significant Subsidiary, remains
outstanding for a period of 60 days following the entry of such
judgment or decree and is not discharged, waived or the execution
thereof stayed within 10 days after the notice specified below;
(10) any Subsidiary Guaranty by a Significant Subsidiary
ceases to be in full force and effect (other than in accordance with
the terms of this Indenture) or a Subsidiary Guarantor that is a
Significant Subsidiary denies or disaffirms its obligations under this
Indenture and such default continues for 10 days; or
(11) the Trustee shall cease to have a valid and enforceable
first priority Lien in the Pledged Securities.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar
official under any Bankruptcy Law.
Notwithstanding the foregoing, Default under clauses (4), (5), or (9)
is not an Event of Default until the Trustee or the holders of at least 25% in
principal amount of the outstanding Notes notify the Company of the Default and
the Company does not cure such Default within
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the time specified after receipt of such notice. Such notice must specify the
Default, demand that it be remedied and state that such notice is a "Notice of
Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the outstanding Notes by notice
to the Company and the Trustee, may declare the principal of and accrued but
unpaid interest on all the Notes to be due and payable. Upon such a
declaration, such principal and interest shall be due and payable immediately.
If an Event of Default specified in Section 6.01(7) or (8) with respect to the
Company occurs and is continuing, the principal of and interest on all the
Notes shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Noteholders. The
Holders of a majority in principal amount of the outstanding Notes by notice to
the Trustee may rescind an acceleration with respect to the Notes and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Notes then outstanding by notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Note or (ii) a Default in respect
of a provision that under Section 9.02 cannot be amended without the consent of
each Noteholder affected. When a Default is waived, it is deemed cured, but no
such waiver shall extend to any subsequent or other Default or impair any
consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the outstanding Notes may direct the time, method and place
of conducting any proceeding for exercising any remedy available to the Trustee
or of exercising any trust or power
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conferred on the Trustee. The Trustee, however, may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section
7.01, that the Trustee determines is unduly prejudicial to the rights of any
other Noteholder or that would involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion against all losses and expenses caused by taking
or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no
Noteholder may pursue any remedy with respect to this Indenture or the Notes
unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in principal amount of the
outstanding Notes do not give the Trustee a direction inconsistent
with the request during such 60-day period.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Notes held by such Holder, on or
after the respective due dates expressed in the Notes, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Noteholders
allowed in any judicial proceedings relative to the
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Company, its creditors or its property and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder
to make payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness of the Company to the
extent required by Article 10;
THIRD: to Noteholders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for
principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 6.10. At least 15 days before such record
date, the Company shall mail to each Noteholder and the Trustee a notice that
states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Notes.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been
enacted.
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ARTICLE VII
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by this Indenture or by law.
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(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.01 and to the provisions of the
TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights
or powers; provided, however, that the Trustee's conduct does not constitute
wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Notes shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of its
rights or powers under this Indenture at the request of any Holder of Notes
unless such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense and then only to the
extent required by the terms of this Indenture.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in the Indenture or in any document issued in
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connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Noteholder notice of the Default within 90 days after it occurs. Except in the
case of a Default in the payment of principal of or interest on any Note
(including payments pursuant to the mandatory redemption provisions of such
Note, if any), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Noteholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Noteholder a brief report dated as of such May 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed with the Commission and each stock exchange (if any) on which the
Notes are listed. The Company agrees to notify promptly the Trustee whenever
the Notes become listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Company shall indemnify the Trustee against any
and all loss, liability or expense (including attorneys' fees) incurred by it
in connection with the administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Company promptly of any claim
for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The
Company shall defend the claim and the Trustee may have separate counsel and
the Company shall pay the fees and expenses of such counsel. The Company need
not reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own wilful misconduct, negligence
or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Notes.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a
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Default specified in Section 6.01(7) or (8) with respect to the Company, the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal
amount of the Notes may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Notes and such Holders do not reasonably
promptly appoint a successor Trustee, or if a vacancy exists in the office of
Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
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In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Notes so authenticated; and in case
at that time any of the Notes shall not have been authenticated, any successor
to the Trustee may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Notes or in this Indenture provided that the certificate of the Trustee
shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Trustee or the
bank holding company of which the Trustee is a wholly-owned subsidiary shall
have a combined capital and surplus of at least $100 million as set forth in
its most recent published annual report of condition. The Trustee shall comply
with TIA Section 310(b); provided, however, that there shall be excluded from
the operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or
been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Notes; Defeasance. (a) When
(i) the Company delivers to the Trustee all outstanding Notes (other than Notes
replaced pursuant to Section 2.07) for cancellation or (ii) all outstanding
Notes have become due and payable, whether at maturity or as a result of the
mailing of a notice of redemption pursuant to Article 3 hereof and the Company
irrevocably deposits with the Trustee funds sufficient to pay at maturity or
upon redemption all outstanding Notes, including interest thereon to maturity
or such redemption date (other than Notes replaced pursuant to Section 2.07),
and if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section 8.01(c), cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
and an Opinion of Counsel and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (i) all its obligations under the Notes and this Indenture ("legal
defeasance option") or (ii) its obligations under Sections 4.02, 4.03, 4.04,
4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 5.01(a)(iii) and (iv) and
the operation of Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and
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6.01(9) (but, in the case of Sections 6.01(7) and (8), with respect only to
Significant Subsidiaries) and the limitations contained in Sections
5.01(a)(iii) and (iv) ("covenant defeasance option"). The Company may exercise
its legal defeasance option notwithstanding its prior exercise of its covenant
defeasance option.
If the Company exercises its legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of
the Notes may not be accelerated because of an Event of Default specified in
Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of
Sections 6.01(7) and (8), with respect only to Significant Subsidiaries) or
because of the failure of the Company to comply with Section 5.01(a)(iii) or
(iv). If the Company exercises its legal defeasance option or its covenant
defeasance option, each Subsidiary Guarantor, if any, shall be released from
all its obligations with respect to its Subsidiary Guaranty.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and
in this Article 8 shall survive until the Notes have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust (the
"defeasance trust") with the Trustee money or U.S. Government
Obligations for the payment of principal of and interest on the Notes
to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and
interest when due on all the Notes to maturity or redemption, as the
case may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.01(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
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(5) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Noteholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such deposit and defeasance and will be subject to Federal income tax
on the same amounts, in the same manner and at the same times as would
have been the case if such deposit and defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Noteholders will not recognize income, gain or loss
for Federal income tax purposes as a result of such deposit and
covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such deposit and covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the Notes as
contemplated by this Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Notes. Money and
securities so held in trust are not subject to Article 10.
SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Noteholders entitled to the money must look to the Company for
payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed
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against deposited U.S. Government Obligations or the principal and interest
received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
this Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to this Article 8 until such time as the Trustee or
Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
Company has made any payment of interest on or principal of any Notes because
of the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
Amendments
SECTION 9.01. Without Consent of Holders. The Company and the
Trustee may amend this Indenture or the Notes without notice to or consent of
any Noteholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to provide for the assumption by a successor corporation
of the obligations of the Company under Article 5;
(3) to provide for uncertificated Notes in addition to or in
place of certificated Notes; provided, however, that the
uncertificated Notes are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Notes are described in Section 163(f)(2)(B) of the Code;
(4) to make any change in Article 10 that would limit or
terminate the benefits available to any holder of Senior Indebtedness
(or Representatives therefor) under Article 10;
(5) to add further Guarantees with respect to the Notes,
including any Subsidiary Guaranties, or to further secure the Notes;
(6) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company;
(7) to comply with any requirements of the Commission in
connection with qualifying, or maintaining the qualification of, this
Indenture under the TIA; or
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(8) to make any change that does not adversely affect the
rights of any Noteholder.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of Senior Indebtedness then
outstanding unless the holders of such Senior Indebtedness (or their
Representative) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Noteholders a notice briefly describing such amendment. The
failure to give such notice to all Noteholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. The Company and the Trustee
may amend this Indenture or the Notes with the written consent of the Holders
of at least a majority in principal amount of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange for
the Notes) and any past default or compliance with any provisions may also be
waived with the consent of the Holders of a majority in principal amount of the
Notes then outstanding. However, without the consent of each Holder of an
outstanding Note affected thereby, an amendment may not:
(1) reduce the amount of Notes whose Holders must consent to
an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Note;
(3) reduce the principal of or extend the Stated Maturity of
any Note;
(4) reduce the premium payable upon the redemption of any
Note or change the time at which any Note may or shall be redeemed in
accordance with Article 3;
(5) make any Note payable in money other than that stated in
the Note;
(6) impair the right of any Holder of the Notes to receive
payment of principal of an interest on such Holder's Notes on or after
the due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Notes;
(7) make any change in Section 6.04 or 6.07 or this Section;
(8) make any change in any Subsidiary Guaranty or modify or
amend Sections 6.01(10) or Article 11, or any other provisions in this
Indenture relating to Subsidiary Guarantors that would adversely
affect the Noteholders; or
(9) release any of the Pledged Securities from the Lien
arising under Section 4.18(a).
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It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
materially adversely affects the rights of any holder of Senior Indebtedness
then outstanding unless the holders of such Senior Indebtedness (or any group
or representative thereof authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Noteholders a notice briefly describing such amendment. The
failure to give such notice to all Noteholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Notes shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Note shall bind the Holder
and every subsequent Holder of that Note or portion of the Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
or waiver is not made on the Note. However, any such Holder or subsequent
Holder may revoke the consent or waiver as to such Holder's Note or portion of
the Note if the Trustee receives the notice of revocation before the date the
amendment or waiver becomes effective. After an amendment or waiver becomes
effective, it shall bind every Noteholder. An amendment or waiver becomes
effective upon the execution of such amendment or waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding
the immediately preceding paragraph, those Persons who were Noteholders at such
record date (or their duly designated proxies), and only those Persons, shall
be entitled to give such consent or to revoke any consent previously given or
to take any such action, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Notes. If an amendment
changes the terms of a Note, the Trustee may require the Holder of the Note to
deliver it to the Trustee. The Trustee may place an appropriate notation on
the Note regarding the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Note shall issue and the Trustee shall authenticate a new Note
that reflects the changed terms. Failure to make the appropriate notation or
to issue a new Note shall not affect the validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect
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the rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may but need not sign it. In signing such amendment the Trustee shall
be entitled to receive indemnity reasonably satisfactory to it and to receive,
and (subject to Section 7.01) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Notes unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE X
Subordination
SECTION 10.01. Agreement To Subordinate. The Company agrees, and
each Noteholder by accepting a Note agrees, that the Indebtedness evidenced by
the Notes is unsecured (other than with respect to amounts on deposit in the
Pledge Account) and subordinated in right of payment, to the extent and in the
manner provided in this Article 10, to the prior payment of all Senior
Indebtedness of the Company or all Subsidiary Guarantor Senior Indebtedness of
the relevant Subsidiary Guarantor, as the case may be, whether outstanding on
the Issue Date or thereafter incurred, including the obligations of the Company
and the Subsidiary Guarantors under the Revolving Credit Agreement, and that
the subordination is for the benefit of and enforceable by the holders of such
Senior Indebtedness. The Notes and each Subsidiary Guarantor shall in all
respects rank pari passu with all other Senior Subordinated Indebtedness of the
Company and Subsidiary Guarantor Senior Subordinated Indebtedness of the
relevant Subsidiary Guarantor as the case may be, and only Indebtedness of the
Company or a Subsidiary Guarantor which is Senior Indebtedness or Subsidiary
Guarantor Senior Indebtedness, as the case may be, shall rank senior to the
Notes and the relevant Subsidiary Guaranty in accordance with the provisions
set forth herein. All provisions of this Article 10 shall be subject to
Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets or of the Company to creditors upon a
total or partial liquidation or a total or partial dissolution of the Company
or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property:
(1) holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full of such Senior Indebtedness before
Noteholders shall be entitled to receive any payment with respect to
the Notes;
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(2) until such Senior Indebtedness is paid in full, any
payment or distribution to which Noteholders would be entitled but for
this Article 10 shall be made to holders of such Senior Indebtedness
as their interests may appear, except that Noteholders may receive
shares of stock and any debt securities that are subordinated to such
Senior Indebtedness to at least the same extent as the Notes; and
(3) holders of indebtedness of the Company's Subsidiaries,
including trade creditors, secured creditors and creditors holding
indebtedness and guarantees issued by such subsidiaries, and preferred
stockholders (if any) of such Subsidiaries shall be entitled to
receive payment in full of such indebtedness (whether or not such
indebtedness constitutes Senior Indebtedness) before creditors of the
Company, including Holders of the Notes, shall be entitled to receive
any payment of assets or earnings of the Company.
SECTION 10.03. Default on Senior Indebtedness. The Company may not
pay the principal of, premium (if any) or interest on the Notes or make any
deposit pursuant to Section 8.01 and may not repurchase, redeem or (except for
Notes delivered to the Trustee pursuant to the second sentence of paragraph 6
of the Notes) otherwise retire any Notes (collectively, "pay the Notes") if (i)
any Designated Senior Indebtedness is not paid when due or (ii) any other
default on Designated Senior Indebtedness occurs and the maturity of such
Designated Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, (x) the default has been cured or waived and any such
acceleration has been rescinded or (y) such Designated Senior Indebtedness has
been paid in full; provided, however, that the Company may pay the Notes
without regard to the foregoing if the Company and the Trustee receive written
notice approving such payment from the Representative of such Designated Senior
Indebtedness. During the continuance of any default (other than a default
described in clause (i) or (ii) of the preceding sentence) with respect to any
Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Company may not pay the Notes for a period (a "Payment Blockage
Period") commencing upon the receipt by the Company and the Trustee of written
notice (a "Blockage Notice") of such default from the Representative of such
Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) because
the default giving rise to such Blockage Notice is no longer continuing or
(iii) because such Designated Senior Indebtedness has been repaid in full).
Notwithstanding the provisions described in the immediately preceding sentence
(but subject to the provisions contained in the first sentence of this
Section), unless the holders of such Designated Senior Indebtedness or the
Representative of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness, the Company may resume payments on the Notes
after termination of such Payment Blockage Period. Not more than one Blockage
Notice may be given in any consecutive 360-day period, irrespective of the
number of defaults with respect to Designated Senior Indebtedness during such
period; provided, however, that if any Blockage Notice within such 360-day
period is given by or on behalf of any holders of Designated Senior
Indebtedness (other than the Bank Indebtedness),
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the Representative of the Bank Indebtedness may give another Blockage Notice
within such period; provided further, however, that in no event may the total
number of days during which any Payment Blockage Period or Periods is in effect
exceed 179 days in the aggregate during any 360-consecutive-day period. For
purposes of this Section, no default or event of default which existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Designated Senior Indebtedness initiating such Payment Blockage
Period shall be, or be made, the basis of the commencement of a subsequent
Payment Blockage Period by the Representative of such Designated Senior
Indebtedness, whether or not within a period of 360 consecutive days, unless
such default or event of default shall have been cured or waived for a period
of not less than 90 consecutive days. In the event that, notwithstanding the
foregoing, the Company makes any payment or distribution to the Trustee or the
Holder of any Note prohibited by the subordination provisions of this Article,
then such payment or distribution will be required to be paid over and
delivered forthwith to the holder (or their Representative) of Designated
Senior Debt.
SECTION 10.04. Acceleration of Payment of Notes. If payment of the
Notes is accelerated because of an Event of Default, the Company or the Trustee
shall promptly notify the holders of the Designated Senior Indebtedness (or
their Representatives) of the acceleration. The Company may not pay the Notes
until five Business Days after the Holders or the Representatives of the
Designated Senior Indebtedness receive notice of such acceleration and,
thereafter, may pay the Notes in accordance with this Article X.
SECTION 10.05. When Distribution Must Be Paid Over. If a
distribution is made to Noteholders that because of this Article 10 should not
have been made to them, the Noteholders who receive the distribution shall hold
it in trust for holders of Senior Indebtedness of the Company and pay it over
to them as their interests may appear.
SECTION 10.06. Subrogation. After all Senior Indebtedness of the
Company is paid in full and until the Notes are paid in full, Noteholders shall
be subrogated to the rights of holders of such Senior Indebtedness to receive
distributions applicable to such Senior Indebtedness. A distribution made
under this Article 10 to holders of such Senior Indebtedness which otherwise
would have been made to Noteholders is not, as between the Company and
Noteholders, a payment by the Company on such Senior Indebtedness.
SECTION 10.07. Relative Rights. This Article 10 defines the relative
rights of Noteholders and holders of Senior Indebtedness of the Company.
Nothing in this Indenture shall:
(1) impair, as between the Company and Noteholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
or
(2) prevent the Trustee or any Noteholder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness of the Company to receive distributions otherwise
payable to Noteholders.
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SECTION 10.08. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of the Company to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or by its failure to comply with this
Indenture. The provisions of this Article 10 are intended to be for the
benefit of, and shall be enforceable directly by, the holders of Senior Debt.
SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Notes and shall not be charged with knowledge of the existence of facts that
would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice as specified in the following sentence to it that payments may
not be made under this Article 10. The Company, the Registrar or co-registrar,
the Paying Agent, a Representative or a holder of Senior Indebtedness may give
the notice; provided, however, that, if an issue of Senior Indebtedness of the
Company has a Representative, only the Representative, or in the case of the
Revolving Credit Agreement, either the agent or Banks holding 662/3% of the
Commitments or the amounts outstanding thereunder may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness of the Company with the same rights it would have if it were not
Trustee. The Registrar and co-registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article 10 with respect to any Senior Indebtedness of the Company which
may at any time be held by it, to the same extent as any other holder of such
Senior Indebtedness; and nothing in Article 7 shall deprive the Trustee of any
of its rights as such holder. Nothing in this Article 10 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.07.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness
of the Company, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment pursuant to the Notes by
reason of any provision in this Article 10 shall not be construed as preventing
the occurrence of a Default. Nothing in this Article 10 shall have any effect
on the right of the Noteholders or the Trustee to accelerate the maturity of
the Notes.
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Notes shall not be subordinated
to the prior payment of any Senior Indebtedness or subject to the restrictions
set forth in this Article 10, and none of the Noteholders shall be obligated to
pay over any such amount to the Company or any holder of Senior Indebtedness of
the Company or any other creditor of the Company.
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SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Noteholders shall
be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section
10.02 are pending, (ii) upon a certificate of the liquidating trustee or agent
or other Person making such payment or distribution to the Trustee or to the
Noteholders or (iii) upon the Representatives for the holders of Senior
Indebtedness of the Company for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of such
Senior Indebtedness and other Indebtedness of the Company, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 10. In the event that the
Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness of the Company to
participate in any payment or distribution pursuant to this Article 10, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held
by such Person, the extent to which such Person is entitled to participate in
such payment or distribution and other facts pertinent to the rights of such
Person under this Article 10, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of
Sections 7.01 and 7.02 shall be applicable to all actions or omissions of
actions by the Trustee pursuant to this Article 10.
SECTION 10.14. Trustee To Effectuate Subordination. Each Noteholder
by accepting a Note authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Noteholders and the holders of Senior Indebtedness of
the Company as provided in this Article 10 and appoints the Trustee as
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 at least 30 days before the expiration of the time
to file such claim, a Representative or each lender under, or holder of, Senior
Debt is hereby authorized to file an appropriate claim for and on behalf of the
Holders of the Notes.
SECTION 10.15. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Noteholder by accepting a Note acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness of
the Company, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Notes, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of such Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
SECTION 10.16. No Waiver of Subordination Provisions. Without in any
way limiting the generality of Section 10.08, the holders of Senior Debt may,
at any time and from time to time, without the consent of or notice to the
Trustee or the Holders, without incurring responsibility to the Holders and
without impairing or releasing the subordination provided in this Article 10 or
the obligations hereunder of the Holders to the holders of Senior Debt, do any
one or more of the following: (a) change the manner, place or terms of payment
or
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extend the time of payment of, or renew or alter, Senior Debt or any instrument
evidencing the same or any agreement under which Senior Debt is outstanding or
secured; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (c) release any Person
liable in any manner for the collection of Senior Debt; and (d) exercise or
refrain from exercising any rights against the Company, any Subsidiary
Guarantor and any other Person.
ARTICLE XI
Subsidiary Guaranties
SECTION 11.01. Guaranties. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, on an
unsecured, senior subordinated basis, to each Holder and to the Trustee and its
successors and assigns (a) the full and punctual payment of principal of and
interest on the Notes when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company
under this Indenture and the Notes, including the obligation to repurchase
Notes under Section 4.10, and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under this
Indenture and the Notes (all the foregoing being hereinafter collectively
called the "Obligations"). Each Subsidiary Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from such Subsidiary Guarantor and that such Subsidiary
Guarantor will remain bound under this Article 11 notwithstanding any extension
or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Obligations and also waives
notice of protest for nonpayment. Each Subsidiary Guarantor waives notice of
any default under the Notes or the Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Company or any other Person under this Indenture, the Notes
or any other agreement or otherwise; (b) any extension or renewal of any
thereof; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Notes or any other agreement; (d)
the release of any security held by any Holder or the Trustee for the
Obligations or any of them; (e) the failure of any Holder or the Trustee to
exercise any right or remedy against any other guarantor of the Obligations; or
(f) any change in the ownership of such Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Obligations.
Each Subsidiary Guaranty is, to the extent and in the manner set forth
in Article 12, subordinated and subject in right of payment to the prior
payment in full of the principal of and premium, if any, and interest on all
Subsidiary Guarantor Senior Indebtedness of the
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Subsidiary Guarantor giving such Subsidiary Guaranty and each Subsidiary
Guaranty is made subject to such provisions of this Indenture.
Except as expressly set forth in Sections 8.01(b), 11.02 and 11.06,
the obligations of each Subsidiary Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall
not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Subsidiary Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Notes or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of
law or equity.
Each Subsidiary Guarantor further agrees that its Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Obligation when and as the same shall
become due, whether at maturity, by acceleration, by redemption or otherwise,
or to perform or comply with any other Obligation, each Subsidiary Guarantor
hereby promises to and will, upon receipt of written demand by the Trustee,
forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an
amount equal to the sum of (i) the unpaid amount of such Obligations, (ii)
accrued and unpaid interest on such Obligations (but only to the extent not
prohibited by law) and (iii) all other monetary Obligations of the Company to
the Holders and the Trustee.
Each Subsidiary Guarantor further agrees that, as between it, on the
one hand, and the Holders and the Trustee, on the other hand, (x) the maturity
of the Obligations Guaranteed hereby may be accelerated as provided in Article
6 for the purposes of such Subsidiary Guarantor's Subsidiary Guaranty herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article 6, such Obligations (whether or not due and payable) shall forthwith
become due and payable by such Subsidiary Guarantor for the purposes of this
Section.
Each Subsidiary Guarantor that makes a payment or distribution under a
Subsidiary Guaranty shall be entitled to a contribution from each other
Subsidiary Guarantor in a pro rata amount based on the Adjusted Consolidated
Net Assets of each Subsidiary Guarantor.
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Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
SECTION 11.02. Limitation on Liability. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum, aggregate amount
of the Obligations guaranteed hereunder by any Subsidiary Guarantor shall not
exceed the maximum amount that will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor (including,
without limitation, any guarantees under the Revolving Credit Agreement) and
after giving effect to any collections from or payments made by or on behalf of
any other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Subsidiary Guaranty or pursuant to its
contribution obligations under this Indenture, result in the obligations of
such Subsidiary Guarantor under the Subsidiary Guaranty not constituting a
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally under federal, state or Thai law.
SECTION 11.03. Successors and Assigns. This Article 11 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Notes shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.04. No Waiver. Neither a failure nor a delay on the part
of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 11 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of
any right, power or privilege. The rights, remedies and benefits of the
Trustee and the Holders herein expressly specified are cumulative and not
exclusive of any other rights, remedies or benefits which either may have under
this Article 11 at law, in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or waiver of
any provision of this Article 11, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 11.06. Release of Subsidiary Guarantor. Upon the sale
(including any sale pursuant to any exercise of remedies by a holder of Senior
Indebtedness) or other disposition (including by way of consolidation or merger
or otherwise) of a Subsidiary Guarantor or the sale or disposition of all or
substantially all the assets of such Subsidiary Guarantor (in each case other
than to the Company or an Affiliate of the Company and whether or not an
Affiliate of the Subsidiary Guarantor) in compliance with this Indenture
(including the provisions of Section 4.07), such Subsidiary Guarantor shall be
deemed released from all
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obligations under this Indenture without any further action required on the
part of the Trustee or any Holder and its Subsidiary Guaranty and such
Subsidiary Guaranty shall terminate; provided, however, that any such
termination shall occur only to the extent that all obligations of such
Subsidiary Guarantor under the Revolving Credit Agreement and all of its
Guarantees of, and under all of its pledges of assets or other security
interests which secure, any other Indebtedness of the Company shall also
terminate upon such release, sale or transfer. At the request of the Company,
the Trustee shall execute and deliver an appropriate instrument evidencing such
release.
SECTION 11.07. Right of Contribution. Each Subsidiary Guarantor
hereby agrees that to the extent that a Subsidiary Guarantor shall have paid
more than its proportionate share of any payment made hereunder, such
Subsidiary Guarantor shall be entitled to seek and receive contribution from
and against any other Subsidiary Guarantor hereunder who has not paid its
proportionate share of such payment. Each Subsidiary Guarantor's right of
contribution shall be subject to the terms and conditions of Section 11.08.
The provisions of this Section 11.07 shall in no respect limit the Obligations
and liabilities of any Subsidiary Guarantor to the Trustee and the Noteholders
and each Subsidiary Guarantor shall remain liable to the Trustee and the
Noteholders for the full amount guaranteed by such Subsidiary Guarantor
hereunder.
SECTION 11.08. No Subrogation. Notwithstanding any payment or
payments made by any of the Subsidiary Guarantors hereunder, no Guarantor shall
be entitled to be subrogated to any of the rights of the Trustee or any
Noteholders against the Company or any other Subsidiary Guarantor or any
collateral security or guarantee or right of offset held by the Trustee or any
Noteholder for the payment of the Obligations, nor shall any Subsidiary
Guarantor seek or be entitled to seek any contribution or reimbursement from
the Company or any other Subsidiary Guarantor in respect of payments made such
Subsidiary Guarantor hereunder, until all amounts owing to the Trustee and the
Noteholders by the Company and all obligations to which the Obligations are
subordinated as provided in Article 12 on account of the Obligations and all
obligations to which the Obligations are subordinated as provided in Article 12
are paid in full. If any amount shall be paid to any Guarantor on account of
such subrogation rights at any time when all of the obligations and all
obligations to which the Obligations are subordinated as provided in Article 12
shall not have been paid in full, such amount shall be held by from other funds
of such Subsidiary Guarantor in trust for the Trustee and the Noteholders and
the holders of such other obligations as specified in Article 12, segregated
from other funds of such Subsidiary Guarantor to the Trustee, if require), to
be applied against the Obligations and all obligations to which the Obligations
are subordinated as provided in Article 12.
SECTION 11.09. Additional Subsidiary Guarantors. Concurrently with
the creation or acquisition by the Company of any Subsidiary (other than an
Unrestricted Subsidiary), the Company, such Subsidiary and the Trustee shall
execute and deliver a supplement to this Indenture providing that such
Subsidiary will be a Subsidiary Guarantor hereunder. Each such supplement
shall be in a form reasonably satisfactory to the Trustee.
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ARTICLE XII
Subordination of Subsidiary Guarantees
SECTION 12.01. Agreement To Subordinate. Each Subsidiary Guarantor
agrees, and each Noteholder by accepting a Note agrees, that the Obligations of
such Subsidiary Guarantor are subordinated in right of payment, to the extent
and in the manner provided in this Article 12, to the prior payment of all
Senior Indebtedness of such Subsidiary Guarantor and that the subordination is
for the benefit of and enforceable by the holders of such Senior Indebtedness.
The Obligations of a Subsidiary Guarantor shall in all respects rank pari passu
with all other Senior Subordinated Indebtedness of such Subsidiary Guarantor
and only Senior Indebtedness of such Subsidiary Guarantor (including such
Subsidiary Guarantor's Guarantee of Senior Indebtedness of the Company) shall
rank senior to the Obligations of such Subsidiary Guarantor in accordance with
the provisions set forth herein.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of any Subsidiary Guarantor to creditors
upon a total or partial liquidation or a total or partial dissolution of such
Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Subsidiary Guarantor or its
property:
(1) holders of Senior Indebtedness of such Subsidiary Guarantor shall
be entitled to receive payment in full of such Senior Indebtedness in cash or
cash equivalents before Noteholders shall be entitled to receive any payment
pursuant to any Obligations of such Subsidiary Guarantor; and
(2) until the Senior Indebtedness of any Subsidiary Guarantor is paid
in full in cash or cash equivalents, any payment or distribution to which
Noteholders would be entitled but for this Article 12 shall be made to holders
of such Senior Indebtedness as their interests may appear, except that
Noteholders may receive shares of stock and any debt securities of such
Subsidiary Guarantor that are subordinated to Senior Indebtedness, and to any
debt securities received by holders of Senior Indebtedness, of such Subsidiary
Guarantor to at least the same extent as the Obligations of such Subsidiary
Guarantor are subordinated to Senior Indebtedness of such Subsidiary Guarantor.
SECTION 12.03. Default on Senior Indebtedness of Subsidiary
Guarantor. No Subsidiary Guarantor may make any payment pursuant to any of its
Obligations or repurchase, redeem or otherwise retire or defease any Notes or
other Obligations (collectively, "pay its Subsidiary Guaranty") if (i) any
Designated Senior Indebtedness of the Company is not paid when due or (ii) any
other default on Designated Senior Indebtedness of the Company occurs and the
maturity of such Designated Senior Indebtedness is accelerated in accordance
with its terms unless, in either case, (x) the default has been cured or waived
and any such acceleration has been rescinded or (y) such Designated Senior
Indebtedness has been paid in full; provided, however, that any Subsidiary
Guarantor may pay its Subsidiary Guaranty without regard to the foregoing if
such Subsidiary Guarantor and the Trustee receive written notice approving such
payment from the Representatives of the Designated Senior
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Indebtedness. No Subsidiary Guarantor may pay its Subsidiary Guaranty during
the continuance of any Payment Blockage Period after receipt by the Company and
the Trustee of a Payment Notice under Section 10.03. Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section), unless the holders
of Designated Senior Indebtedness giving such Payment Notice or the
Representative of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness, any Subsidiary Guarantor may resume payments
pursuant to its Subsidiary Guaranty after termination of such Payment Blockage
Period.
SECTION 12.04. Demand for Payment. If a demand for payment is made
on a Subsidiary Guarantor pursuant to Article 11, the Trustee shall promptly
notify the holders of the Designated Senior Indebtedness (or their
Representatives) of such demand.
SECTION 12.05. When Distribution Must Be Paid Over. If a
distribution is made to Noteholders that because of this Article 12 should not
have been made to them, the Noteholders who receive the distribution shall hold
it in trust for holders of the relevant Senior Indebtedness and pay it over to
them or their Representatives as their interests may appear.
SECTION 12.06. Subrogation. After all Senior Indebtedness of a
Subsidiary Guarantor is paid in full and until the Notes are paid in full,
Noteholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to Senior Indebtedness. A
distribution made under this Article 12 to holders of such Senior Indebtedness
which otherwise would have been made to Noteholders is not, as between the
relevant Subsidiary Guarantor and Noteholders, a payment by such Subsidiary
Guarantor on such Senior Indebtedness.
SECTION 12.07. Relative Rights. This Article 12 defines the relative
rights of Noteholders and holders of Senior Indebtedness of a Subsidiary
Guarantor. Nothing in this Indenture shall:
(1) impair, as between a Subsidiary Guarantor and Noteholders,
the obligation of such Subsidiary Guarantor, which is absolute and
unconditional, to pay the Obligations to the extent set forth in
Article 11 or the relevant Subsidiary Guaranty; or
(2) prevent the Trustee or any Noteholder from exercising its
available remedies upon a default by such Subsidiary Guarantor under
the Obligations, subject to the rights of holders of Senior
Indebtedness of such Subsidiary Guarantor to receive distributions
otherwise payable to Noteholders.
SECTION 12.08. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of any Subsidiary Guarantor to
enforce the subordination of the Obligations of such Subsidiary Guarantor shall
be impaired by any act or failure to act by such Subsidiary Guarantor or by its
failure to comply with this Indenture. The provisions of this Article 12 are
intended to be for the benefit of, and shall be enforceable directly by, the
holders of Senior Debt.
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SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 12.03, the Trustee or Paying Agent may continue to make payments on any
Subsidiary Guaranty and shall not be charged with knowledge of the existence of
facts that would prohibit the making of any such payments unless, not less than
two Business Days prior to the date of such payment, a Trust Officer of the
Trustee receives written notice as specified in the following sentence to it
that payments may not be made under this Article 12. The Company, the relevant
Subsidiary Guarantor, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness of any Subsidiary Guarantor
may give the notice; provided, however, that, if an issue of Senior
Indebtedness of any Subsidiary Guarantor has a Representative, only the
Representative, or in the case of the Revolving Credit Agreement, either the
agent or Banks holding 66 2/3% of the Commitments or the amounts outstanding
thereunder may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not the Trustee.
The Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 12 with respect to any Senior Indebtedness of any Subsidiary Guarantor
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness; and nothing in Article 7 shall deprive the Trustee of any
of its rights as such holder. Nothing in this Article 12 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.07.
SECTION 12.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness
of any Subsidiary Guarantor, the distribution may be made and the notice given
to their Representative (if any).
SECTION 12.11. Article 12 Not To Prevent Defaults Under a Subsidiary
Guaranty or Limit Right To Demand Payment. The failure to make a payment
pursuant to a Subsidiary Guaranty by reason of any provision in this Article 12
shall not be construed as preventing the occurrence of a default under such
Subsidiary Guaranty. Nothing in this Article 12 shall have any effect on the
right of the Noteholders or the Trustee to make a demand for payment on any
Subsidiary Guarantor pursuant to Article 11 or the relevant Subsidiary
Guaranty.
SECTION 12.12. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Noteholders shall
be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section
12.02 are pending, (ii) upon a certificate of the liquidating trustee or agent
or other Person making such payment or distribution to the Trustee or to the
Noteholders or (iii) upon the Representatives for the holders of any Subsidiary
Guarantor Senior Indebtedness for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of such
Senior Indebtedness and other indebtedness of such Subsidiary Guarantor, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 12. In the
event that the Trustee determines, in good faith, that evidence is required
with respect to the right of any Person as a holder of any Subsidiary Guarantor
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 12, the Trustee may request such
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Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of such Subsidiary Guarantor Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and other facts pertinent to the rights of such Person
under this Article 12, and, if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment. The provisions of Sections 7.01 and
7.02 shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article 12.
SECTION 12.13. Trustee To Effectuate Subordination. Each Noteholder
by accepting a Note authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Noteholders and the holders of any Subsidiary
Guarantor Senior Indebtedness as provided in this Article 12 and appoints the
Trustee as attorney-in-fact for any and all such purposes. If the Trustee does
not file a proper proof of claim or proof of debt in the form required in any
proceeding referred to in Section 6.09 at least 30 days before the expiration
of the time to file such claim, a Representative or each lender under, or
holder of, Senior Debt is hereby authorized to file an appropriate claim for
and on behalf of the Holders of the Notes.
SECTION 12.14. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Noteholder by accepting a Note acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness of
any Subsidiary Guarantor, whether such Senior Indebtedness was created or
acquired before or after the issuance of the Notes, to acquire and continue to
hold, or to continue to hold, such Senior Indebtedness and such holder of
Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Indebtedness.
SECTION 12.15. No Waiver of Subordination Provisions. Without in any
way limiting the generality of Section 10.07, the holders of Senior Debt may,
at any time and from time to time, without the consent of or notice to the
Trustee or the Holders, without incurring responsibility to the Holders and
without impairing or releasing the subordination provided in this Article 12 or
the obligations hereunder of the Holders to the holders of Senior Debt, do any
one or more of the following: (a) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Senior Debt or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding or secured; (b) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt; (c) release any
Person liable in any manner for the collection of Senior Debt; and (d) exercise
or refrain from exercising any rights against the Company, and Subsidiary
Guarantor and any other Person.
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ARTICLE XIII
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company or any Subsidiary Guarantor:
Rutherford-Moran Oil Corporation
5 Greenway Plaza, Suite 220
Houston, TX 77046
(713) 622-5555
Attention of: David Chavenson
if to the Trustee:
Bank of Montreal Trust Company
88 Pine Street, 19th Floor
New York, NY 10005
(212) 701-7650
Attention of: Corporate Trust Department
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to
the Noteholder at the Noteholder's address as it appears on the registration
books of the Registrar and shall be sufficiently given if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other
Noteholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communication by Holders with Other Holders.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
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SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or
refrain from taking any action under this Indenture, the Company shall furnish
to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. When Notes Disregarded. In determining whether the
Holders of the required principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Notes outstanding at the time shall be
considered in any such determination.
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Noteholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in
the State of New York. If a
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payment date is a Legal Holiday, payment shall be made on the next succeeding
day that is not a Legal Holiday, and no interest shall accrue for the
intervening period. If a regular record date is a Legal Holiday, the record
date shall not be affected.
SECTION 13.09. Governing Law. This Indenture and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York but without giving effect to applicable principles of conflicts of law to
the extent that the application of the laws of another jurisdiction would be
required thereby.
SECTION 13.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company or any Subsidiary Guarantor
shall not have any liability for any obligations of the Company or any
Subsidiary Guarantor under the Notes or this Indenture or for any claim based
on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Noteholder shall waive and release all such liability.
The waiver and release shall be part of the consideration for the issue of the
Notes.
SECTION 13.11. Successors. All agreements of the Company and the
Subsidiary Guarantors in this Indenture and the Notes shall bind their
respective successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 13.12. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 13.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
RUTHERFORD-MORAN OIL CORPORATION
By: /s/ [ILLEGIBLE]
------------------------------------
Name:
Title:
RUTHERFORD-MORAN EXPLORATION
COMPANY
By: /s/ [ILLEGIBLE]
------------------------------------
Name:
Title:
THAI ROMO HOLDINGS, INC.
By: /s/ [ILLEGIBLE]
------------------------------------
Name:
Title:
THAI ROMO LIMITED
By: /s/ [ILLEGIBLE]
------------------------------------
Name:
Title:
BANK OF MONTREAL TRUST COMPANY
By: /s/ AMY ROBERTS
------------------------------------
Name: Amy Roberts
Title: Vice President
<PAGE> 87
RULE 144A/REGULATION S APPENDIX
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO
RULE 144A AND TO CERTAIN PERSONS IN OFFSHORE TRANSACTIONS IN RELIANCE ON
REGULATION S.
PROVISIONS RELATING TO INITIAL NOTES
EXCHANGE NOTES AND PRIVATE EXCHANGE NOTES
1. Definitions
1.1 Definitions.
For the purposes of this Appendix the following terms shall
have the meanings indicated below:
"Depositary" or "DTC" means The Depository Trust Company,
its nominees and their respective successors.
"Exchange Notes" means the Senior Subordinated Notes Due
2004 to be issued pursuant to this Indenture in connection with a Registered
Exchange Offer pursuant to the Registration Rights Agreement.
"Initial Purchasers" means Credit Suisse First Boston
Corporation, NationsBanc Capital Markets, Inc., Bear, Stearns & Co. Inc. and
Chase Securities Inc.
"Initial Notes" means the Senior Subordinated Notes Due
2004, issued under this Indenture on or about the date hereof.
"Notes" means the Initial Notes, the Exchange Notes and
the Private Exchange Notes, treated as a single class.
"Notes Custodian" means the custodian with respect to a
Global Note (as appointed by DTC), or any successor person thereto and shall
initially be the Trustee.
"Private Exchange" means the offer by the Company,
pursuant to the Registration Rights Agreement, to the Initial Purchasers to
issue and deliver to each Initial Purchaser, in exchange for the Initial Notes
held by the Initial Purchaser as part of its initial distribution, a like
aggregate principal amount of Private Exchange Notes.
"Private Exchange Notes" means the 10% Senior
Subordinated Notes Due 2004 to be issued pursuant to this Indenture to the
Initial Purchasers in a Private Exchange.
"Purchase Agreement" means the Purchase Agreement dated
September 24, 1997, between the Company, the Subsidiary Guarantors and the
Initial Purchasers.
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"QIB" means a "qualified institutional buyer" as defined
in Rule 144A.
"Registered Exchange Offer", means the offer by the
Company, pursuant to the Registration Rights Agreement, to certain Holders of
Initial Notes, to issue and deliver to such Holders, in exchange for the
Initial Notes, a like aggregate principal amount of Exchange Notes registered
under the Securities Act.
"Registration Rights Agreement" means the Registration
Rights Agreement dated September 29, 1997, among the Company, the Subsidiary
Guarantors and the Initial Purchasers.
"Securities Act" means the Securities Act of 1933, as
amended.
"Shelf Registration Statement" means the registration
statement issued by the Company, in connection with the offer and sale of
Initial Notes, Exchange Notes or Private Exchange Notes, pursuant to the
Registration Rights Agreement.
"Transfer Restricted Notes" means Notes that bear or are
required to bear the legend set forth in Section 2.3(b) hereto.
1.2 Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term section:
---- -------
<S> <C>
"Participants" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
"Global Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
"Regulation S" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
"Rule 144A" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
</TABLE>
2. The Notes.
2.1 Form and Dating.
The Initial Notes are being offered and sold by the Company
pursuant to the Purchase Agreement.
(a) Global Notes. Initial Notes offered and sold to a
QIB in reliance on Rule 144A under the Securities Act ("Rule 144A") or in
reliance on Regulation S under the Securities Act ("Regulation S"), in each
case as provided in the Purchase Agreement, shall be issued initially in the
form of one or more permanent global Notes in definitive, fully registered form
without interest coupons with the global notes legend and restricted securities
legend set forth in Exhibit 1 hereto (each, a "Global Note"), which shall be
deposited on behalf of the purchasers of the Initial Notes represented thereby
with the Trustee, at its New York office, as custodian for DTC (or with such
other custodian as DTC may direct), and
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<PAGE> 89
registered in the name of DTC or a nominee of DTC, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee and DTC or its
nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall
apply only to a Global Note deposited with or on behalf of DTC.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially one or more Global
Notes that (a) shall be registered in the name of DTC for such Global Note or
Global Notes or the nominee of DTC and (b) shall be delivered by the Trustee to
DTC or pursuant to DTC's instructions or held by the Trustee as custodian for
DTC.
Members of DTC, or accounts of institutions that have accounts
with DTC or its nominee ("participants"), shall have no rights under this
Indenture with respect to any Global Note held on their behalf by DTC or by the
Trustee as the custodian of DTC or under such Global Note, and DTC may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by DTC or impair,
as between DTC and its participants, the operation of customary practices of
DTC governing the exercise of the rights of a holder of a beneficial interest
in any Global Note.
(c) Certificated Notes. Except as provided in Section
2.3 or 2.4, owners of beneficial interests in Global Notes will not be entitled
to receive physical delivery of certificated Notes.
2.2 Authentication.
The Trustee shall authenticate and deliver: (1) Initial Notes
for original issue in an aggregate principal amount of $120,000,000 and (2)
Exchange Notes or Private Exchange Notes for issue only in a Registered
Exchange Offer, or a Private Exchange, respectively, pursuant to the
Registration Rights Agreement, for a like principal amount of Initial Notes, in
each case upon a written order of the Company signed by two Officers or by an
Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company. Such order shall specify the amount of the Notes to be authenticated
and the date on which the original issue of Notes is to be authenticated and
whether the Notes are to be Initial Notes, Exchange Notes or Private Exchange
Notes. The aggregate principal amount of Notes outstanding at any time may not
exceed $120,000,000 except as provided in Section 2.07 of this Indenture.
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes.
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(i) The transfer and exchange of Global Notes or
beneficial interests therein shall be effected through DTC, in
accordance with this Indenture (including applicable restrictions on
transfer set forth herein, if any) and the procedures of DTC therefor.
A transferor of a beneficial interest in a Global Note shall deliver
to the Registrar a written order given in accordance with DTC's
procedures containing information regarding the participant account of
DTC to be credited with a beneficial interest in the Global Note. The
Registrar shall, in accordance with such instructions instruct DTC to
credit to the account of the Person specified in such instructions a
beneficial interest in the Global Note and to debit the account of the
Person making the transfer the beneficial interest in the Global Note
being transferred.
(ii ) Notwithstanding any other provisions of this
Appendix (other than the provisions set forth in Section 2.4), a
Global Note may not be transferred as a whole except by DTC to a
nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC
or by DTC or any such nominee to a successor to DTC or a nominee of
such successor to DTC.
(iii) In the event that a Global Note is exchanged for
Notes in definitive registered form pursuant to Section 2.06 or
Section 2.09 of this Indenture, prior to the consummation of a
Registered Exchange Offer or the effectiveness of a Shelf Registration
Statement with respect to such Notes, such Notes may be exchanged only
in accordance with such procedures as are substantially consistent
with the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Notes intended to
ensure that such transfers comply with Rule 144A or Regulation S, as
the case may be) and such other procedures as may from time to time be
adopted by the Company.
(b) Legends.
(i) Except as permitted by the following paragraphs
(ii), (iii) and (iv), each Note certificate evidencing the Global
Notes (and all Notes issued in exchange therefor or in substitution
thereof) shall bear a legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY
WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE UNITED
STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE
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<PAGE> 91
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES
FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(i)(a) INSIDE THE UNITED STATES TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (ii) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, OR (iii) TO THE
COMPANY, IN EACH OF CASES (i) THROUGH (iii) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(ii ) Upon any sale or transfer of a Transfer Restricted
Note (including any Transfer Restricted Note represented by a Global
Note) pursuant to Rule 144 under the Securities Act, in the case of
any Transfer Restricted Note that is represented by a Global Note, the
Registrar shall permit the Holder thereof to exchange such Transfer
Restricted Note for a certificated Note that does not bear the legend
set forth above and rescind any restriction on the transfer of such
Transfer Restricted Note, if the Holder certifies in writing to the
Registrar that its request for such exchange was made in reliance on
Rule 144 (such certification to be in the form set forth on the
reverse of the Security).
(iii) After a transfer of any Initial Notes or Private
Exchange Notes during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial Notes or Private
Exchange Notes, as the case may be, all requirements pertaining to
legends on such Initial Note or such Private Exchange Note will cease
to apply, the requirements requiring any such Initial Note or such
Private Exchange Note issued to certain Holders be issued in global
form will cease to apply, and a certificated Initial Note or Private
Exchange Note without legends will be available to
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<PAGE> 92
the transferee of the Holder of such Initial Notes or Private Exchange
Notes upon exchange of such transferring Holder's certificated Initial
Note or Private Exchange Note or directions to transfer such Holder's
interest in the Global Note, as applicable.
(iv ) Upon the consummation of a Registered Exchange
Offer with respect to the Initial Notes pursuant to which Holders of
such Initial Notes are offered Exchange Notes in exchange for their
Initial Notes, all requirements pertaining to such Initial Notes that
Initial Notes issued to certain Holders be issued in global form will
cease to apply and certificated Initial Notes with the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders of such Initial Notes that do not exchange their Initial
Notes, and Exchange Notes in certificated or global form will be
available to Holders that exchange such Initial Notes in such
Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with
respect to the Initial Notes pursuant to which Holders of such Initial
Notes are offered Private Exchange Notes in exchange for their Initial
Notes, all requirements pertaining to such Initial Notes that Initial
Notes issued to certain Holders be issued in global form will still
apply, and Private Exchange Notes in global form with the Restricted
Securities Legend set forth in Exhibit 1 hereto will be available to
Holders that exchange such Initial Notes in such Private Exchange.
(c) Cancellation or Adjustment of Global Note. At such
time as all beneficial interests in a Global Note have either been exchanged
for certificated or Definitive Notes, redeemed, repurchased or canceled, such
Global Note shall be returned to DTC for cancellation or retained and canceled
by the Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Note is exchanged for certificated or definitive Notes,
redeemed, repurchased or canceled, the principal amount of Notes represented by
such Global Note shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Notes Custodian for such Global
Note) with respect to such Global Note, by the Trustee or the Notes Custodian,
to reflect such reduction.
(d) Obligations with Respect to Transfers and Exchanges
of Notes.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall
authenticate certificated Notes and Global Notes at the Registrar's or
co-registrar's request.
(ii ) No service charge shall be made for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax, assessments, or
similar governmental charge payable in connection therewith (other
than any such transfer taxes, assessments or similar governmental
charge payable upon exchange or transfer pursuant to Sections 3.06,
4.08 and 9.05 of this Indenture).
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<PAGE> 93
(iii) The Registrar or co-registrar shall not be
required to register the transfer of or exchange of (a) any
certificated Note selected for redemption in whole or in part pursuant
to Article III of this Indenture, except the unredeemed portion of any
certificated Note being redeemed in part, or (b) any Note for a period
beginning 15 Business Days before the mailing of a notice of an offer
to repurchase or redeem Notes or 15 Business Days before an interest
payment date.
(iv ) Prior to the due presentation for registration of
transfer of any Note, the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar may deem and treat the person in whose
name a Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and interest on such Note
and for all other purposes whatsoever, whether or not such Note is
overdue, and none of the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice to the
contrary.
(v) All Notes issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as the
Notes surrendered upon such transfer or exchange.
(e) No obligation of the Trustee.
(i) The Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Note, a member of, or a
participant in DTC or other Person with respect to the accuracy of the
records of DTC or its nominee or of any participant or member thereof,
with respect to any ownership interest in the Notes or with respect to
the delivery to any participant, member, beneficial owner or other
Person (other than DTC) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to
such Notes. All notices and communications to be given to the Holders
and all payments to be made to Holders under the Notes shall be given
or made only to or upon the order of the registered Holders (which
shall be DTC or its nominee in the case of a Global Note). The rights
of beneficial owners in any Global Note shall be exercised only
through DTC subject to the applicable rules and procedures of DTC.
The Trustee may rely and shall be fully protected in relying upon
information furnished by DTC with respect to its members, participants
and any beneficial owners.
(ii ) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions
on transfer imposed under this Indenture or under applicable law with
respect to any transfer of any interest in any Security (including any
transfers between or among DTC participants, members or beneficial
owners in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
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<PAGE> 94
2.4 Certificated Notes.
(a) Notes transferred in certificated fully registered form
are referred to herein as "Certificated Notes." Global Notes shall be
exchangeable for corresponding Certificated Notes registered in the name of
persons other than DTC or its nominee only if (A) DTC (i) notifies the Company
that it is unwilling or unable to continue as Depositary for any of the Global
Notes or (ii) at any time ceases to be a clearing agency registered under the
Exchange Act, (B) there shall have occurred and be continuing an Event of
Default (as defined in this Indenture) with respect to the applicable Notes or
(C) the Company executes and delivers to the Trustee, an order that the Global
Notes shall be so exchangeable. Any Certificated Notes will be issued only in
fully registered form, and shall be issued without coupons in denominations of
$1,000 and integral multiples thereof. Any Certificated Notes so issued will
be registered in such names and in such denominations as DTC shall request.
(b) Any Global Note that is transferable to the
beneficial owners thereof pursuant to this Section shall be surrendered by DTC
to the Trustee located in the Borough of Manhattan, The City of New York, to be
so transferred, in whole or from time to time in part, without charge, and the
Trustee shall authenticate and deliver, upon such transfer of each portion of
such Global Note, an equal aggregate principal amount of certificated Initial
Notes of authorized denominations. Any portion of a Global Note transferred
pursuant to this Section shall be executed, authenticated and delivered only in
denominations of $1,000 and any integral multiple thereof and registered in
such names as DTC shall direct. Any certificated Initial Note delivered in
exchange for an interest in the Global Note shall, except as otherwise provided
by Section 2.3(b), bear the restricted securities legend set forth in Exhibit 1
hereto.
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Note may grant proxies and otherwise authorize
any Person, including DTC participants and Persons that may hold interests
through DTC participants, to take any action which a Holder is entitled to take
under this Indenture or the Notes.
(d) In the event of the occurrence of either of the
events specified in Section 2.4(a), the Company will promptly make available to
the Trustee a reasonable supply of certificated Notes in definitive, fully
registered form without interest coupons.
A-8
<PAGE> 95
EXHIBIT 1
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF INITIAL NOTE]
CUSIP/CINS No.
---------
RUTHERFORD-MORAN OIL CORPORATION
10 3/4% SENIOR SUBORDINATED NOTES DUE 2004
No. $
------- --------
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Rule 144A Notes Legend]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING
E1-1
<PAGE> 96
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (i)(a) INSIDE THE UNITED STATES TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER
THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (ii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (iii) TO THE COMPANY, IN EACH OF CASES (i) THROUGH (iii) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
Rutherford-Moran Oil Corporation, a Delaware corporation,
promises to pay to __________________, or registered assigns, the principal sum
of ___________________ Dollars on October 1, 2004.
Interest Payment Dates: April 1 and October 1.
Record Dates: March 15 and September 15.
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<PAGE> 97
Additional provisions of this Security are set forth on the
other side of this Note.
Dated: RUTHERFORD-MORAN OIL CORPORATION
by
--------------------------------------
Name:
Title:
by
--------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Notes
referred to in the Indenture.
BANK OF MONTREAL TRUST COMPANY,
as Trustee,
by
------------------------------
Authorized Signatory
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<PAGE> 98
[REVERSE SIDE OF INITIAL NOTE]
10 3/4% Senior Subordinated Note Due 2004
1. Interest
Rutherford-Moran Oil Corporation, a Delaware corporation (such
corporation, and its successors and assigns under the indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on
the principal amount of this Note at the rate per annum shown above; provided,
however, that [if (i) on or prior to 60 days after the Issue Date, neither the
Exchange Offer Registration Statement nor the Shelf Registration Statement has
been filed with the Commission; (ii) on or prior to 180 days after the original
issuance of the Notes, neither the Exchange Offer is consummated nor the Shelf
Registration Statement is declared effective; or (iii) after either the
Exchange Offer Registration Statement or the Shelf Registration Statement is
declared effective, such Registration Statement thereafter ceases to be
effective or usable (subject to certain exceptions described in the
Registration Rights Agreement) in connection with resales of Notes or Exchange
Notes in accordance with and during the periods specified in the Registration
Rights Agreement (each such event referred to in clause (i) through (iii), a
"Registration Default"), additional interest will accrue on the Notes, in each
case at the rate of 0.50% per annum from and including the date on which any
such Registration Default shall occur until the earlier of (i) the date on
which such Registration Default has been cured or (ii) the date on which all
the Notes otherwise become freely transferable by holders other than affiliates
of the Company without further registration under the Securities Act,
calculated on the principal amount of the Notes.](1)
The Company will pay interest semiannually on October 1 and
April 1 of each year, commencing April 1, 1998. Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from September 29, 1997, interest will be computed on
the basis of a 360-day year of twelve 30-day months.
2. Method of Payment
The Company will pay interest on the Notes (except defaulted interest)
to the Persons who are registered holders of Notes at the close of business on
the March 15 or September 15 immediately preceding the interest payment date
even if Notes are canceled after the record date and on or before the interest
payment date. Holders must surrender Notes to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of
the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Notes represented by a
Global Note (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Note (including principal, premium and interest) by
- - --------------------
(1) To be included in each Security prior to expiration of the
obligations of the Company and the Subsidiary Guarantors under the
Registration Rights Agreement.
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<PAGE> 99
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on a certificated Note will be made by wire transfer to a
U.S. dollar account maintained by the payee with a bank in the United States if
such Holder elects payment by wire transfer by giving written notice to the
Trustee or the Paying Agent to such effect designating such account no later
than 30 days immediately preceding the relevant due date for payment (or such
other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, Bank of Montreal Trust Company, a New York corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint
and change any Paying Agent, Registrar or co-registrar without notice to any
Noteholder. The Company or any of its domestically incorporated Wholly-Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar or transfer
agent.
4. Indenture
The Company issued the Notes under an Indenture dated as of September
29, 1997 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), among the Company, the Subsidiary
Guarantors named therein (the "Subsidiary Guarantors") and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all such terms, and
Noteholders are referred to the Indenture and the Act for a statement of those
terms.
The Notes are unsecured senior subordinated obligations of the Company
limited to $120 million aggregate principal amount (subject to Section 2.07 of
the Indenture). This Note is one of the Initial Notes referred to in the
Indenture. The Notes include the Initial Notes and any Exchange Notes and
Private Exchange Notes issued in exchange for the Initial Notes pursuant to the
Indenture and the Registration Rights Agreement. The Initial Notes, the
Exchange Notes and Private Exchange Notes are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on
the Incurrence of Indebtedness by the Company and its Restricted Subsidiaries,
the payment of dividends and other distributions on the Capital Stock of the
Company and its Restricted Subsidiaries, the purchase or redemption of Capital
Stock of the Company and Capital Stock of such Restricted Subsidiaries, certain
purchases or redemptions of Subordinated Obligations, the sale or transfer of
assets and Capital Stock of Restricted Subsidiaries, the issuance or sale of
Capital Stock of Restricted Subsidiaries, the investments of the Company and
its Restricted Subsidiaries and transactions with Affiliates. In addition, the
Indenture limits the ability of the Company and its Restricted Subsidiaries to
restrict distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal and
interest, if any, on the Notes and all other amounts payable by the Company
under the Indenture and the Notes when
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<PAGE> 100
and as the same shall be due and payable, whether at maturity, by acceleration
or otherwise, according to the terms of the Notes and the Indenture, the
Subsidiary Guarantors have, jointly and severally, unconditionally guaranteed
such obligations on a senior subordinated basis pursuant to the terms of the
Indenture.
5. Optional Redemption
Except as set forth in this paragraph 5, the Notes will not be
redeemable at the option of the Company prior to October 1, 2001. On and after
such date, the Notes will be redeemable, at the Company's option, in whole or
in part, upon not less than 30 nor more than 60 days' prior notice mailed by
first class mail to each Holder's registered address, at the following
redemption prices (expressed as percentages of principal amount), plus accrued
and unpaid interest 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):
<TABLE>
<CAPTION>
if redeemed during the 12-month period
commencing on October 1 of the Redemption
years set forth below: Price
----------------------------------- ----------
<S> <C>
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.375%
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.6875%
2003 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%
</TABLE>
At any time or from time to time prior to October 1, 2000, the Company
may redeem in the aggregate up to 35% of the original principal amount of the
Notes with the proceeds of one or more Equity Offerings at a redemption price
(expressed as a percentage of principal amount) of 1103/4%, plus accrued
interest 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, however, that after giving effect to each such
redemption, at least 65% of the original aggregate principal amount of the
Notes remain outstanding after each such redemption.
At any time prior to October 1, 2001, the Notes may be redeemed as a
whole at the option of the Company upon the occurrence of a Change of Control,
upon not less than 30 nor more than 60 days' prior notice (but in no event more
than 90 days after the occurrence of such Change of Control) mailed by
first-class mail to each Holder's registered address, at a redemption price
equal to 100% of the principal amount thereof plus the Applicable Premium as
of, and accrued but unpaid interest, if any, to, the date of redemption
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date).
E1-6
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6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Notes to be redeemed at
his registered address. Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If money sufficient to
pay the redemption price of and accrued and unpaid interest on all Notes (or
portions thereof) to be redeemed on the redemption date is deposited with the
Paying Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Notes (or
such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control and subject to the Company's right prior to
October 1, 2001 to redeem the Notes pursuant to paragraph 5 of this Note, any
Holder of Notes will have the right to cause the Company to repurchase all or
any part of the Notes of such Holder at a repurchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date) as provided
in, and subject to the terms of, the Indenture.
8. Subordination
The Notes are subordinated to Senior Indebtedness, as defined in the
Indenture. To the extent provided in the Indenture, Senior Indebtedness must
be paid before the Notes may be paid. The Company agrees, and each Noteholder
by accepting a Note agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give them effect and appoints the
Trustee as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange Notes
in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements or transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Notes selected for
redemption (except, in the case of a Note to be redeemed in part, the portion
of the Note not to be redeemed) or any Notes for a period beginning 15 days
before a selection of Notes to be redeemed or beginning 15 days before an
interest payment date.
10. Persons Deemed Owners
The registered holder of this Note may be treated as the owner of it
for all purposes.
E1-7
<PAGE> 102
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Notes and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal of and interest on the Notes to
redemption or maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders
of at least a majority in principal amount of the outstanding Notes and (ii)
any default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount of the outstanding
Notes. Subject to certain exceptions set forth in the Indenture, without the
consent of any Noteholder, the Company, the Subsidiary Guarantors and the
Trustee may amend the Indenture or the Notes to cure any ambiguity, omission,
defect or inconsistency, or to comply with Article V of the Indenture, or to
provide for uncertificated Notes in addition to or in place of certificated
Notes, or to make any change in Article X of the Indenture that would limit or
terminate the benefits available to any holder of Senior Indebtedness (or
Representatives therefor) so long as such change does not adversely affect such
holders without their consent, or to add guarantees with respect to the Notes
or to secure the Notes, or to add additional covenants for the benefit of the
Holders or surrender rights and powers conferred on the Company, or to comply
with any request of the Commission in connection with qualifying the Indenture
under the Act, or to make any change that does not adversely affect the rights
of any Noteholder, or to provide for the issuance of Exchange Notes or Private
Exchange Notes.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default in payment
of interest on the Notes through the first four scheduled interest payment
dates when the same becomes due and payable or default for 30 days in payment
of interest on the Notes after the first four scheduled interest payment dates
when the same becomes due and payable; (ii) default in payment of principal on
the Notes at maturity, upon redemption pursuant to paragraph 5 of the Notes,
upon required repurchase, upon declaration of acceleration or otherwise; (iii)
failure by the Company to comply with Section 5.01 of the Indenture; (iv)
failure by the Company to comply with other agreements in the Indenture or the
Notes, in certain cases subject to notice and lapse of time; (v) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company or its Significant Subsidiaries
if
E1-8
<PAGE> 103
the amount accelerated (or so unpaid) exceeds $10.0 million, or its foreign
currency equivalent; (vi) certain events of bankruptcy or insolvency with
respect to the Company or any Significant Subsidiary; (vii) certain final,
non-appealable judgments or decrees for the payment of money in excess of $10.0
million against the Company or any Significant Subsidiary that remains
outstanding for 60 days and is not discharged, waived or stayed within 10 days
after notice; and (viii) any Subsidiary Guaranty by a Significant Subsidiary
ceases to be in full force and effect (except as contemplated by the terms of
the Indenture) or any Subsidiary Guarantor that is a Significant Subsidiary
denies or disaffirms its obligations under the Indenture, respectively, and
such default continues for 10 days. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Notes may declare all the Notes to be due and payable immediately. Certain
events of bankruptcy or insolvency are Events of Default which will result in
the Notes being due and payable immediately upon the occurrence of such Events
of Default.
Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders notice of any continuing Default (except a Default in
payment of principal or interest) if it determines that withholding notice is
in their interest.
15. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with and collect obligations
owed to it by the Company or its Affiliates and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
or any Subsidiary Guarantor shall not have any liability for any obligations of
the Company or any Subsidiary Guarantor under the Notes or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Note, each Noteholder waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Notes.
17. Authentication
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Note.
E1-9
<PAGE> 104
18. Abbreviations
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors
Act).
19. CUSIP/CINS Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP/CINS numbers
to be printed on the Notes and has directed the Trustee to use CUSIP/CINS
numbers in notices of redemption as a convenience to Noteholders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
20. Holders' Compliance with Registration Rights Agreement
Each holder of a Note, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including, without
limitation, the obligations of the Holders with respect to a registration and
the indemnification of the Company to the extent provided therein.
21. Governing Law
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
THE COMPANY WILL FURNISH TO ANY NOTEHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE TO THE NOTEHOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE
TEXT OF THIS NOTE. REQUESTS MAY BE MADE TO: RUTHERFORD-MORAN OIL COMPANY, 5
GREENWAY PLAZA, SUITE 220, HOUSTON, TEXAS, 77046, ATTENTION: DAVID CHAVENSON.
E1-10
<PAGE> 105
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint __________ agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.
Date: Your Signature:
----------------- -----------------------------
(Sign exactly as your name
appears on the other side of
this Note.)
Signature Guarantee:
---------------------------------------------------------
(Signature must be guaranteed by an "eligible
guarantor institution," that is, a bank, stockbroker,
savings and loan association or credit union meeting
the requirements of the Registrar, which requirements
include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended)
E1-11
<PAGE> 106
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been
made:
<TABLE>
<CAPTION>
Signature of
Principal amount of authorized
Amount of decrease in Amount of increase this Global Note officer
Date of Principal Amount of in Principal Amount of following such of Trustee or
Exchange this Global Note this Global Note decrease or increase Notes Custodian
<S> <C> <C> <C> <C>
</TABLE>
E1-12
<PAGE> 107
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.07 or 4.10 of the Indenture, check the box:
----------
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.07 or 4.10 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: Your Signature:
----------------- -----------------------------
(Sign exactly as your name
appears on the other side of
this Note.)
Signature Guarantee:
---------------------------------------------------------
(Signature must be guaranteed by an "eligible
guarantor institution," that is, a bank, stockbroker,
savings and loan association or credit union meeting
the requirements of the Registrar, which requirements
include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended)
E1-13
<PAGE> 108
EXHIBIT A
[FORM OF FACE OF EXCHANGE NOTE
OR PRIVATE EXCHANGE NOTE]
RUTHERFORD-MORAN OIL CORPORATION
No. Principal Amount $
--------- ---------
CUSIP NO.
10 3/4% Senior subordinated Note Due 2004
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
Rutherford-Moran Oil Corporation, a Delaware corporation, promises to
pay to _____________, or registered assigns, the principal sum of _____________
Dollars on October 1, 2004.
Interest Payment Dates: April 1 and October 1.
Record Dates: March 15 and September 15.
- - ---------------------
* [If the Note is a Private Exchange Note issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial
allotment, add the Restricted Securities Legend from Exhibit 1 to
Appendix A and replace the Assignment Form included in this Exhibit A
with the Assignment Form included in such Exhibit 1.1]
EA-1
<PAGE> 109
Additional provisions of this Note are set forth on the other side
of this Note.
Dated: RUTHERFORD-MORAN OIL CORPORATION
by
----------------------------------
Name:
Title:
by
----------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Notes
referred to in the Indenture.
BANK OF MONTREAL TRUST COMPANY
as Trustee,
by
-------------------------------------
Authorized Signatory
EA-2
<PAGE> 110
[REVERSE SIDE OF EXCHANGE NOTE
OR PRIVATE EXCHANGE NOTE]
RUTHERFORD-MORAN OIL CORPORATION
10 3/4% Senior Subordinated Note Due 2004
1. Interest
Rutherford-Moran Oil Corporation, a Delaware corporation (such
corporation, and its successors and assigns under the indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on
the principal amount of this Note at the rate per annum shown above; provided,
however, that [if (i) on or prior to 60 days after the Issue Date, neither the
Exchange Offer Registration Statement nor the Shelf Registration Statement has
been filed with the Commission; (ii) on or prior to 180 days after the original
issuance of the Notes, neither the Exchange Offer is consummated nor the Shelf
Registration Statement is declared effective; or (iii) after either the
Exchange Offer Registration Statement or the Shelf Registration Statement is
declared effective, such Registration Statement thereafter ceases to be
effective or usable (subject to certain exceptions described in the
Registration Rights Agreement) in connection with resales of Notes or Exchange
Notes in accordance with and during the periods specified in the Registration
Rights Agreement (each such event referred to in clause (i) through (iii), a
"Registration Default"), additional interest will accrue on the Notes, in each
case at the rate of 0.50% per annum from and including the date on which any
such Registration Default shall occur until the earlier of (i) the date on
which such Registration Default has been cured or (ii) the date on which all
the Notes otherwise become freely transferable by holders other than affiliates
of the Company without further registration under the Securities Act,
calculated on the principal amount of the Notes.](1)
The Company will pay interest semiannually on October 1 and April 1 of
each year, commencing April 1 1998. Interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from September 29, 1997, interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment
The Company will pay interest on the Notes (except defaulted interest)
to the Persons who are registered holders of Notes at the close of business on
the March 15 or September 15 immediately preceding the interest payment date
even if Notes are canceled after the record date and on or before the interest
payment date. Holders must surrender Notes to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of
the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Notes represented by a
Global Note (including
- - -------------------------------
(1) To be included in each Security prior to expiration of the
obligations of the Company and the Subsidiary Guarantors under the
Registration Rights Agreement.
EA-3
<PAGE> 111
principal, premium and interest) will be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company. The
Company will make all payments in respect of a certificated Note (including
principal, premium and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on a certificated Note
will be made by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire transfer
by giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
3. Paying Agent and Registrar
Initially, Bank of Montreal Trust Company, a New York corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint
and change any Paying Agent, Registrar or co-registrar without notice to any
Noteholder. The Company or any of its domestically incorporated Wholly-Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar or transfer
agent.
4. Indenture
The Company issued the Notes under an Indenture dated as of September
29, 1997 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), among the Company, the Subsidiary
Guarantors named therein (the "Subsidiary Guarantors") and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all such terms, and
Noteholders are referred to the Indenture and the Act for a statement of those
terms.
The Notes are unsecured senior subordinated obligations of the Company
limited to $120 million aggregate principal amount (subject to Section 2.07 of
the Indenture). This Note is one of the Initial Notes referred to in the
Indenture. The Notes include the Initial Notes and any Exchange Notes and
Private Exchange Notes issued in exchange for the Initial Notes pursuant to the
Indenture and the Registration Rights Agreement. The Initial Notes, the
Exchange Notes and Private Exchange Notes are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on
the Incurrence of Indebtedness by the Company and its Restricted Subsidiaries,
the payment of dividends and other distributions on the Capital Stock of the
Company and its Restricted Subsidiaries, the purchase or redemption of Capital
Stock of the Company and Capital Stock of such Restricted Subsidiaries, certain
purchases or redemptions of Subordinated Obligations, the sale or transfer of
assets and Capital Stock of Restricted Subsidiaries, the issuance or sale of
Capital Stock of Restricted Subsidiaries, the investments of the Company and
its Restricted Subsidiaries and transactions with Affiliates. In addition, the
Indenture limits the ability of the Company and its Restricted Subsidiaries to
restrict distributions and dividends from Restricted Subsidiaries.
EA-4
<PAGE> 112
To guarantee the due and punctual payment of the principal and
interest, if any, on the Notes and all other amounts payable by the Company
under the Indenture and the Notes when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Notes and the Indenture, the Subsidiary Guarantors have, jointly
and severally, unconditionally guaranteed such obligations on a senior
subordinated basis pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth in this paragraph 5, the Notes will not be
redeemable at the option of the Company prior to October 1, 2001. On and after
such date, the Notes will be redeemable, at the Company's option, in whole or
in part, upon not less than 30 nor more than 60 days' prior notice mailed by
first class mail to each Holder's registered address, at the following
redemption prices (expressed as percentages of principal amount), plus accrued
and unpaid interest 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):
<TABLE>
<CAPTION>
if redeemed during the 12-month period
commencing on October 1 of the Redemption
years set forth below: Price
----------------------------------- ----------
<S> <C>
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.375%
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.6875%
2003 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%
</TABLE>
At any time or from time to time prior to October 1, 2000, the Company
may redeem in the aggregate up to 35% of the original principal amount of the
Notes with the proceeds of one or more Equity Offerings at a redemption price
(expressed as a percentage of principal amount) of 1103/4% plus accrued
interest 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, however, that after giving effect to each such
redemption, at least 65% of the original aggregate principal amount of the
Notes remain outstanding after each such redemption.
At any time prior to October 1, 2001, the Notes may be redeemed as a
whole at the option of the Company upon the occurrence of a Change of Control,
upon not less than 30 nor more than 60 days' prior notice (but in no event more
than 90 days after the occurrence of such Change of Control) mailed by
first-class mail to each Holder's registered address, at a redemption price
equal to 100% of the principal amount thereof plus the Applicable Premium as
of, and accrued but unpaid interest, if any, to, the date of redemption
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date).
EA-5
<PAGE> 113
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Notes to be redeemed at
his registered address. Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If money sufficient to
pay the redemption price of and accrued and unpaid interest on all Notes (or
portions thereof) to be redeemed on the redemption date is deposited with the
Paying Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Notes (or
such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control and subject to the Company's right prior to
October 1, 2001 to redeem the Notes pursuant to paragraph 5 of this Note, any
Holder of Notes will have the right to cause the Company to repurchase all or
any part of the Notes of such Holder at a repurchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date) as provided
in, and subject to the terms of, the Indenture.
8. Subordination
The Notes are subordinated to Senior Indebtedness, as defined in the
Indenture. To the extent provided in the Indenture, Senior Indebtedness must
be paid before the Notes may be paid. The Company agrees, and each Noteholder
by accepting a Note agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give them effect and appoints the
Trustee as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange Notes
in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements or transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Notes selected for
redemption (except, in the case of a Note to be redeemed in part, the portion
of the Note not to be redeemed) or any Notes for a period beginning 15 days
before a selection of Notes to be redeemed or beginning 15 days before an
interest payment date.
10. Persons Deemed Owners
The registered holder of this Note may be treated as the owner of it
for all purposes.
EA-6
<PAGE> 114
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Notes and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal of and interest on the Notes to
redemption or maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders
of at least a majority in principal amount of the outstanding Notes and (ii)
any default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount of the outstanding
Notes. Subject to certain exceptions set forth in the Indenture, without the
consent of any Noteholder, the Company, the Subsidiary Guarantors and the
Trustee may amend the Indenture or the Notes to cure any ambiguity, omission,
defect or inconsistency, or to comply with Article V of the Indenture, or to
provide for uncertificated Notes in addition to or in place of certificated
Notes, or to make any change in Article X of the Indenture that would limit or
terminate the benefits available to any holder of Senior Indebtedness (or
Representatives therefor) so long as such change does not adversely affect such
holders without their consent, or to add guarantees with respect to the Notes
or to secure the Notes, or to add additional covenants for the benefit of the
Holders or surrender rights and powers conferred on the Company, or to comply
with any request of the Commission in connection with qualifying the Indenture
under the Act, or to make any change that does not adversely affect the rights
of any Noteholder, or to provide for the issuance of Exchange Notes or Private
Exchange Notes.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default in payment
of interest on the Notes through the first four scheduled interest payment
dates when the same becomes due and payable or default for 30 days in payment
of interest on the Notes after the first four scheduled interest payment dates
when the same becomes due and payable; (ii) default in payment of principal on
the Notes at maturity, upon redemption pursuant to paragraph 5 of the Notes,
upon required repurchase, upon declaration of acceleration or otherwise; (iii)
failure by the Company to comply with Section 5.01 of the Indenture; (iv)
failure by the Company to comply with other agreements in the Indenture or the
Notes, in certain cases subject to notice and lapse of time; (v) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company or its Significant Subsidiaries
if the amount accelerated (or so unpaid) exceeds $10 million, or its foreign
currency equivalent; (vi) certain events of bankruptcy or insolvency with
respect to the Company or any
EA-7
<PAGE> 115
Significant Subsidiary; (vii) certain final, non-appealable judgments or
decrees for the payment of money in excess of $10 million against the Company
or any Significant Subsidiary that remain outstanding for 60 days and is not
discharged, waived or stayed within 10 days after notice; and (viii) any
Subsidiary Guaranty by a Significant Subsidiary ceases to be in full force and
effect (except as contemplated by the terms of the Indenture) or any Subsidiary
Guarantor that is a Significant Subsidiary denies or disaffirms its obligations
under the Indenture, respectively, and such default continues for 10 days. If
an Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Notes may declare all the Notes to be due
and payable immediately. Certain events of bankruptcy or insolvency are Events
of Default which will result in the Notes being due and payable immediately
upon the occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders notice of any continuing Default (except a Default in
payment of principal or interest) if it determines that withholding notice is
in their interest.
15. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with and collect obligations
owed to it by the Company or its Affiliates and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
or Subsidiary Guarantor shall not have any liability for any obligations of the
Company or any Subsidiary Guarantor under the Notes or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Note, each Noteholder waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Notes.
17. Authentication
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Note.
EA-8
<PAGE> 116
18. Abbreviations
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
19. CUSIP/CINS Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP/CINS numbers
to be printed on the Notes and has directed the Trustee to use CUSIP/CINS
numbers in notices of redemption as a convenience to Noteholders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
20. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Note, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including, without
limitation, the obligations of the Holders with respect to a registration and
the indemnification of the Company to the extent provided therein.
21. Governing Law
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
THE COMPANY WILL FURNISH TO ANY NOTEHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE TO THE NOTEHOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE
TEXT OF THIS NOTE. REQUESTS MAY BE MADE TO: RUTHERFORD-MORAN OIL CORPORATION,
5 GREENWAY PLAZA, SUITE 220, HOUSTON, TEXAS 77046, ATTENTION: DAVID CHAVENSON.
EA-9
<PAGE> 117
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ____________ agent to transfer this Note on the books
of the Company. The agent may substitute another to act for him.
Date: Your Signature:
----------------- -----------------------------
(Sign exactly as your name
appears on the other side of
this Note.)
Signature Guarantee:
---------------------------------------------------------
(Signature must be guaranteed by an "eligible
guarantor institution," that is, a bank, stockbroker,
savings and loan association or credit union meeting
the requirements of the Registrar, which requirements
include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended)
EA-10
<PAGE> 118
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been
made:
<TABLE>
<CAPTION>
Signature of
Principal amount of authorized
Amount of decrease in Amount of increase this Global Note officer
Date of Principal Amount of in Principal Amount of following such of Trustee or
Exchange this Global Note this Global Note decrease or increase Notes Custodian
<S> <C> <C> <C> <C>
</TABLE>
EA-11
<PAGE> 119
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.07 or 4.10 of the Indenture, check the box:
__________
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.07 or 4.10 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: Your Signature:
----------------- -----------------------------
(Sign exactly as your name
appears on the other side of
this Note.)
Signature Guarantee:
---------------------------------------------------------
(Signature must be guaranteed by an "eligible
guarantor institution," that is, a bank, stockbroker,
savings and loan association or credit union meeting
the requirements of the Registrar, which requirements
include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended)
EA-12
<PAGE> 1
RUTHERFORD-MORAN OIL CORPORATION
10 3/4% Senior Subordinated Notes due 2004
REGISTRATION RIGHTS AGREEMENT
September 29, 1997
Credit Suisse First Boston Corporation
Bear, Stearns & Co. Inc.
Chase Securities Inc.
NationsBanc Capital Markets, Inc.
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010-3629
Ladies and Gentlemen:
Rutherford-Moran Oil Corporation, a Delaware corporation (the
"Issuer" or "Company"), proposes to issue and sell to Credit Suisse First
Boston Corporation, Bear, Stearns & Co. Inc., Chase Securities Inc. and
NationsBanc Capital Markets, Inc. (collectively, the "Initial Purchasers"),
upon the terms set forth in a purchase agreement of even date herewith (the
"Purchase Agreement"), $120,000,000 aggregate principal amount of its 10 3/4%
Senior Subordinated Notes due 2004 (the "Notes") to be unconditionally
guaranteed on a senior subordinated basis (the "Subsidiary Guaranties") by
Rutherford-Moran Exploration Company, Thai Romo Holdings, Inc., and Thai Romo
Limited and each Restricted Subsidiary (as defined in the Indenture described
below) hereafter existing (collectively, the "Subsidiary Guarantors" and
together with the Issuer, the "Company"). The Notes will be issued pursuant to
an Indenture, dated as of September 29, 1997 (the "Indenture") among the
Issuer, the Subsidiary Guarantors and Bank of Montreal Trust Company, as
Trustee (the "Trustee"). As an inducement to the Initial Purchasers, the
Company agrees with the Initial Purchasers, for the benefit of the holders of
the Notes (including, without limitation, the Initial Purchasers), the Exchange
Notes (as defined below) and the Private Exchange Notes (as defined below)
(collectively the "Holders"), as follows:
1. Registered Exchange Offer. The Company shall, at its
cost, prepare and, not later than 60 days after (or if the 60th day is not a
business day, the first business day thereafter) the date of original issue of
the Notes (the "Issue Date"), file with the Securities and Exchange Commission
(the "Commission") a registration statement (the "Exchange Offer Registration
Statement") on an appropriate form under the Securities Act of 1933, as amended
(the "Securities Act"), with
<PAGE> 2
2
respect to a proposed offer (the "Registered Exchange Offer") to the Holders of
Transfer Restricted Notes (as defined in Section 6(d) hereof), who are not
prohibited by any law or policy of the Commission from participating in the
Registered Exchange Offer, to issue and deliver to such Holders, in exchange
for the Notes, a like aggregate principal amount of debt securities (the
"Exchange Notes") of the Issuer issued under the Indenture and identical in all
material respects to the Notes (except for the transfer restrictions relating
to the Notes) that would be registered under the Securities Act. The Company
shall use its best efforts to cause such Exchange Offer Registration Statement
to become effective under the Securities Act within 180 days (or if the 180th
day is not a business day, the first business day thereafter) after the Issue
Date of the Notes and shall keep the Exchange Offer Registration Statement
effective for not less than 30 days (or longer, if required by applicable law)
after the date notice of the Registered Exchange Offer is mailed to the Holders
(such period being called the "Exchange Offer Registration Period").
If the Issuer effects the Registered Exchange Offer, the
Issuer will be entitled to close the Registered Exchange Offer 30 days after
the commencement thereof provided that the Company has accepted all the Notes
theretofore validly tendered in accordance with the terms of the Registered
Exchange Offer.
Following the declaration of the effectiveness of the Exchange
Offer Registration Statement, the Company shall promptly commence the
Registered Exchange Offer, it being the objective of such Registered Exchange
Offer to enable each Holder of Transfer Restricted Notes electing to exchange
the Notes for Exchange Notes (assuming that such Holder is not an affiliate of
the Company within the meaning of the Securities Act, acquires the Exchange
Notes in the ordinary course of such Holder's business and has no arrangements
with any person to participate in the distribution of the Exchange Notes and is
not prohibited by any law or policy of the Commission from participating in the
Registered Exchange Offer) to trade such Exchange Notes from and after their
receipt without any limitations or restrictions under the Securities Act and
without material restrictions under the securities laws of the several states
of the United States.
The Company acknowledges that, pursuant to current
interpretations by the Commission's staff of Section 5 of the Securities Act,
in the absence of an applicable exemption therefrom, (i) each Holder which is a
broker dealer electing to exchange Notes, acquired for its own account as a
result of market making activities or other trading activities, for Exchange
Notes (an "Exchanging Dealer"), is required to deliver a prospectus containing
the information set forth in Annex A hereto on the cover, in Annex B hereto in
the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer"
section, and in Annex C hereto in the "Plan of Distribution"
<PAGE> 3
3
section of such prospectus in connection with a sale of any such Exchange Notes
received by such Exchanging Dealer pursuant to the Registered Exchange Offer
and (ii) an Initial Purchaser that elects to sell Exchange Notes acquired in
exchange for Notes constituting any portion of an unsold allotment is required
to deliver a prospectus containing the information required by Items 507 or 508
of Regulation S-K under the Securities Act, as applicable, in connection with
such sale.
The Company shall use its best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein, in order to permit such prospectus to be lawfully
delivered by all persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as such persons must comply with such
requirements in order to resell the Exchange Notes; provided, however, that (i)
in the case where such prospectus and any amendment or supplement thereto must
be delivered by an Exchanging Dealer or an Initial Purchaser, such period shall
be the lesser of 180 days and the date on which all Exchanging Dealers and the
Initial Purchasers have sold all Exchange Notes held by them (unless such
period is extended pursuant to Section 3(j) below) and (ii) the Company shall
make such prospectus and any amendment or supplement thereto, available to any
broker-dealer for use in connection with any resale of any Exchange Notes for a
period not less than 90 days after the consummation of the Registered Exchange
Offer.
If, upon consummation of the Registered Exchange Offer, any
Initial Purchaser holds Notes acquired by it as part of its initial
distribution, the Company, simultaneously with the delivery of the Exchange
Notes pursuant to the Registered Exchange Offer, shall issue and deliver to
such Initial Purchaser upon the written request of such Initial Purchaser, in
exchange (the "Private Exchange") for the Notes held by such Initial Purchaser,
a like principal amount of debt securities of the Company issued under the
Indenture and identical in all material respects (including the existence of
restrictions on transfer under the Securities Act and the securities laws of
the several states of the United States) to the Notes (the "Private Exchange
Notes"). The Notes, the Exchange Notes and the Private Exchange Notes are
herein collectively called the "Securities".
In connection with the Registered Exchange Offer, the Company
shall:
(a) mail to each Holder a copy of the prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
<PAGE> 4
4
(b) keep the Registered Exchange Offer open for not less than
30 days (or longer, if required by applicable law) after the date
notice thereof is mailed to the Holders;
(c) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City
of New York, which may be the Trustee or an affiliate of the Trustee;
(d) permit Holders to withdraw tendered Notes at any time
prior to the close of business, New York time, on the last business
day on which the Registered Exchange Offer shall remain open; and
(e) otherwise comply with all applicable laws.
As soon as practicable after the close of the Registered
Exchange Offer or the Private Exchange, as the case may be, the Company shall:
(i) accept for exchange all the Notes validly tendered and not
withdrawn pursuant to the Registered Exchange Offer and the Private
Exchange;
(ii) deliver to the Trustee for cancellation all the Notes so
accepted for exchange; and
(iii) cause the Trustee to authenticate and deliver promptly to
each Holder of the Notes, Exchange Notes or Private Exchange Notes, as
the case may be, equal in principal amount to the Notes of such Holder
so accepted for exchange.
The Indenture will provide that the Exchange Notes will not be
subject to the transfer restrictions set forth in the Indenture and that all
the Securities will vote and consent together on all matters as one class and
that none of the Securities will have the right to vote or consent as a class
separate from one another on any matter.
Interest on each Exchange Note and Private Exchange Note
issued pursuant to the Registered Exchange Offer and in the Private Exchange
will accrue from the last interest payment date on which interest was paid on
the Notes surrendered in exchange therefor or, if no interest has been paid on
the Notes, from the date of original issue of the Notes.
Each Holder participating in the Registered Exchange Offer
shall be required to represent to the Company that at the time of the
consummation of the Registered Exchange Offer (i) any Exchange Notes received
by such Holder will be acquired in the ordinary course of business, (ii) such
Holder will have no arrangements or understanding with any person to
participate in
<PAGE> 5
5
the distribution of the Notes or the Exchange Notes within the meaning of the
Securities Act, (iii) such Holder is not an "affiliate", as defined in Rule 405
of the Securities Act, of the Company or if it is an affiliate, such Holder
will comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable, (iv) if such Holder is not a
broker-dealer, that it is not engaged in, and does not intend to engage in, the
distribution of the Exchange Notes and (v) if such Holder is a broker-dealer,
that it will receive Exchange Notes for its own account in exchange for Notes
that were acquired as a result of market-making activities or other trading
activities and that it will be required to acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes.
Notwithstanding any other provisions hereof, the Company will
ensure that (i) any Exchange Offer Registration Statement and any amendment
thereto and any prospectus forming part thereof and any supplement thereto
complies in all material respects with the Securities Act and the rules and
regulations thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of any Exchange Offer Registration Statement,
and any supplement to such prospectus, does not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
2. Shelf Registration. If, (i) because of any change in law
or in applicable interpretations thereof by the staff of the Commission, the
Company is not permitted to effect a Registered Exchange Offer, as contemplated
by Section 1 hereof, (ii) the Registered Exchange Offer is not consummated
within 180 days of the Issue Date, (iii) any Initial Purchaser so requests with
respect to the Notes (or the Private Exchange Notes) not eligible to be
exchanged for Exchange Notes in the Registered Exchange Offer and held by it
following consummation of the Registered Exchange Offer or (iv) any Holder
(other than an Exchanging Dealer) is not eligible to participate in the
Registered Exchange Offer or, in the case of any Holder (other than an
Exchanging Dealer) that participates in the Registered Exchange Offer, such
Holder does not receive freely tradeable Exchange Notes on the date of the
exchange, the Company shall take the following actions:
(a) The Company shall, at its cost, as promptly as
practicable (but in no event more than 30 days after so required or
requested pursuant to this Section 2) file with the Commission and
thereafter shall use its best efforts to
<PAGE> 6
6
cause to be declared effective a registration statement (the "Shelf
Registration Statement" and, together with the Exchange Offer
Registration Statement, a "Registration Statement") on an appropriate
form under the Securities Act relating to the offer and sale of the
Transfer Restricted Notes by the Holders thereof from time to time in
accordance with the methods of distribution set forth in the Shelf
Registration Statement and Rule 415 under the Securities Act
(hereinafter, the "Shelf Registration"); provided, however, that no
Holder (other than an Initial Purchaser) shall be entitled to have the
Securities held by it covered by such Shelf Registration Statement
unless such Holder agrees in writing to be bound by all the provisions
of this Agreement applicable to such Holder.
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the
prospectus included therein to be lawfully delivered by the Holders of
the relevant Securities until the expiration of the holding period
with respect to the Securities set forth in clause (k) of Rule 144
promulgated under the Securities Act (or for such longer period if
extended pursuant to Section 3(j) below) or such shorter period that
will terminate when all the Securities covered by the Shelf
Registration Statement have been sold pursuant thereto. The Company
shall be deemed not to have used its best efforts to keep the Shelf
Registration Statement effective during the requisite period if it
voluntarily takes any action that would result in Holders of
Securities covered thereby not being able to offer and sell such
Securities during that period, unless such action is required by
applicable law.
(c) Notwithstanding any other provisions of this Agreement to
the contrary, the Company shall cause the Shelf Registration Statement
and the related prospectus and any amendment or supplement thereto, as
of the effective date of the Shelf Registration Statement, amendment
or supplement, (i) to comply in all material respects with the
applicable requirements of the Securities Act and the rules and
regulations of the Commission and (ii) not to contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
3. Registration Procedures. In connection with any Shelf
Registration contemplated by Section 2 hereof and, to the extent applicable,
any Registered Exchange Offer contemplated by Section 1 hereof, the following
provisions shall apply:
(a) The Company shall (i) furnish to each Initial Purchaser,
prior to the filing thereof with the Commission,
<PAGE> 7
7
a copy of the Registration Statement and each amendment thereof and
each supplement, if any, to the prospectus included therein and, in
the event that an Initial Purchaser (with respect to any portion of an
unsold allotment from the original offering) is participating in the
Registered Exchange Offer or the Shelf Registration Statement, shall
use its best efforts to reflect in each such document, when so filed
with the Commission, such comments as such Initial Purchaser
reasonably may propose; (ii) include the information set forth in
Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
Procedures" section and the "Purpose of the Exchange Offer" section
and in Annex C hereto in the "Plan of Distribution" section of the
prospectus forming a part of the Exchange Offer Registration Statement
and include the information set forth in Annex D hereto in the Letter
of Transmittal delivered pursuant to the Registered Exchange Offer;
(iii) if requested by an Initial Purchaser, include the information
required by Items 507 or 508 of Regulation S-K under the Securities
Act, as applicable, in the prospectus forming a part of the Exchange
Offer Registration Statement; (iv) include within the prospectus
contained in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution" reasonably acceptable to the Initial
Purchasers, which shall contain a summary statement of the positions
taken or policies made by the staff of the Commission with respect to
the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) of Exchange
Notes received by such broker-dealer in the Registered Exchange Offer
(a "Participating Broker-Dealer"), whether such positions or policies
have been publicly disseminated by the staff of the Commission or such
positions or policies, in the reasonable judgment of the Initial
Purchasers based upon advice of counsel (which may be in-house
counsel), represent the prevailing views of the staff of the
Commission; and (v) in the case of a Shelf Registration Statement,
include the names of the Holders, who propose to sell Securities
pursuant to the Shelf Registration Statement, as selling security
holders.
(b) The Company shall give written notice to the Initial
Purchasers, the Holders of the Securities and any Participating
Broker-Dealer from whom the Company has received prior written notice
that it will be a Participating Broker-Dealer in the Registered
Exchange Offer (which notice pursuant to clauses (ii)-(v) hereof shall
be accompanied by an instruction to suspend the use of the prospectus
until the requisite changes have been made):
(i) when the Registration Statement or any amendment
thereto has been filed with the Commission
<PAGE> 8
8
and when the Registration Statement or any post-effective
amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus
included therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel
of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such
purpose; and
(v) of the happening of any event that requires the
Company to make changes in the Registration Statement or the
prospectus in order that the Registration Statement or the
prospectus do not contain an untrue statement of a material
fact nor omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the
case of the prospectus, in light of the circumstances under
which they were made) not misleading.
(c) The Company shall make every reasonable effort to obtain
the withdrawal at the earliest possible time, of any order suspending
the effectiveness of the Registration Statement.
(d) The Company shall furnish to each Holder of Securities
included within the coverage of the Shelf Registration, without
charge, at least one copy of the Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules, and, if the Holder so requests in writing, all exhibits
thereto (including those, if any, incorporated by reference).
(e) The Company shall deliver to each Exchanging Dealer and
each Initial Purchaser, and to any other Holder who so requests,
without charge, at least one copy of the Exchange Offer Registration
Statement and any post-effective amendment thereto, including
financial statements and schedules, and, if any Initial Purchaser or
any such Holder requests, all exhibits thereto (including those
incorporated by reference).
(f) The Company shall, during the Shelf Registration Period,
deliver to each Holder of Securities included within
<PAGE> 9
9
the coverage of the Shelf Registration, without charge, as many copies
of the prospectus (including each preliminary prospectus) included in
the Shelf Registration Statement and any amendment or supplement
thereto as such person may reasonably request. The Company consents,
subject to the provisions of this Agreement, to the use of the
prospectus or any amendment or supplement thereto by each of the
selling Holders of the Securities in connection with the offering and
sale of the Securities covered by the prospectus, or any amendment or
supplement thereto, included in the Shelf Registration Statement.
(g) The Company shall deliver to each Initial Purchaser, any
Exchanging Dealer, any Participating Broker-Dealer and such other
persons required to deliver a prospectus following the Registered
Exchange Offer, without charge, as many copies of the final prospectus
included in the Exchange Offer Registration Statement and any
amendment or supplement thereto as such persons may reasonably
request. The Company consents, subject to the provisions of this
Agreement, to the use of the prospectus or any amendment or supplement
thereto by any Initial Purchaser, if necessary, any Participating
Broker-Dealer and such other persons required to deliver a prospectus
following the Registered Exchange Offer in connection with the
offering and sale of the Exchange Notes covered by the prospectus, or
any amendment or supplement thereto, included in such Exchange Offer
Registration Statement.
(h) Prior to any public offering of the Securities, pursuant
to any Registration Statement, the Company shall register or qualify
or cooperate with the Holders of the Securities included therein and
their respective counsel in connection with the registration or
qualification of the Securities for offer and sale under the
securities or "blue sky" laws of such states of the United States as
any Holder of the Securities reasonably requests in writing and do any
and all other acts or things necessary or advisable to enable the
offer and sale in such jurisdictions of the Securities covered by such
Registration Statement; provided, however, that the Company shall not
be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified or (ii) take any action
which would subject it to general service of process or to taxation in
any jurisdiction where it is not then so subject.
(i) The Company shall cooperate with the Holders of the
Securities to facilitate the timely preparation and delivery of
certificates representing the Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as the Holders may request
a reasonable period
<PAGE> 10
10
of time prior to sales of the Securities pursuant to such Registration
Statement.
(j) Upon the occurrence of any event contemplated by
paragraphs (ii) through (v) of Section 3(b) above during the period
for which the Company is required to maintain an effective
Registration Statement, the Company shall promptly prepare and file a
post-effective amendment to the Registration Statement or a supplement
to the related prospectus and any other required document so that, as
thereafter delivered to Holders of the Notes or purchasers of
Securities, the prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the
Company notifies the Initial Purchasers, the Holders of the Securities
and any known Participating Broker-Dealer in accordance with
paragraphs (ii) through (v) of Section 3(b) above to suspend the use
of the prospectus until the requisite changes to the prospectus have
been made, then the Initial Purchasers, the Holders of the Securities
and any such Participating Broker-Dealers shall suspend use of such
prospectus, and the period of effectiveness of the Shelf Registration
Statement provided for in Section 2(b) above and the Exchange Offer
Registration Statement provided for in Section 1 above shall each be
extended by the number of days from and including the date of the
giving of such notice to and including the date when the Initial
Purchasers, the Holders of the Securities and any known Participating
Broker-Dealer shall have received such amended or supplemented
prospectus pursuant to this Section 3(j).
(k) Not later than the effective date of the applicable
Registration Statement, the Company will provide a CUSIP number for
the Notes, the Exchange Notes or the Private Exchange Notes, as the
case may be, and provide the applicable trustee with printed
certificates for the Notes, the Exchange Notes or the Private Exchange
Notes, as the case may be, in a form eligible for deposit with The
Depository Trust Company.
(l) The Company will comply with all rules and regulations of
the Commission to the extent and so long as they are applicable to the
Registered Exchange Offer or the Shelf Registration and will make
generally available to its security holders (or otherwise provide in
accordance with Section 11(a) of the Securities Act) an earnings
statement satisfying the provisions of Section 11(a) of the Securities
Act, no later than 45 days after the end of a 12-month period (or 90
days, if such period is a fiscal year) beginning with the first month
of the Company's first fiscal quarter commencing after the effective
date of the
<PAGE> 11
11
Registration Statement, which statement shall cover such 12-month
period.
(m) The Company shall cause the Indenture to be qualified
under the Trust Indenture Act of 1939, as amended, in a timely manner
and containing such changes, if any, as shall be necessary for such
qualification. In the event that such qualification would require the
appointment of a new trustee under the Indenture, the Company shall
appoint a new trustee thereunder pursuant to the applicable provisions
of the Indenture.
(n) The Company may require each Holder of Securities to be
sold pursuant to the Shelf Registration Statement to furnish to the
Company such information regarding the Holder and the distribution of
the Securities as the Company may from time to time reasonably require
for inclusion in the Shelf Registration Statement, and the Company may
exclude from such registration the Securities of any Holder that
unreasonably fails to furnish such information within a reasonable
time after receiving such request. No Holder of Securities shall be
entitled to receive additional interest pursuant to Section 6 unless
and until such Holder shall have provided all such reasonable
requested information.
(o) The Company shall enter into such customary agreements
(including if requested an underwriting agreement in customary form)
and take all such other action, if any, as any Holder of the
Securities shall reasonably request in order to facilitate the
disposition of the Securities pursuant to any Shelf Registration.
(p) In the case of any Shelf Registration, the Company shall
(i) make reasonably available for inspection by the Holders of the
Securities, any underwriter participating in any disposition pursuant
to the Shelf Registration Statement and any attorney, accountant or
other agent retained by the Holders of the Securities or any such
underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and (ii) cause the
Company's officers, directors, employees, accountants and auditors to
supply all relevant information reasonably requested by the Holders of
the Securities or any such underwriter, attorney, accountant or agent
in connection with the Shelf Registration Statement, in each case, as
shall be reasonably necessary to enable such persons, to conduct a
reasonable investigation within the meaning of Section 11 of the
Securities Act; provided, however, that the foregoing inspection and
information gathering shall be coordinated on behalf of the Initial
Purchasers by you and on behalf of the other parties, by one counsel
designated by and on behalf of such other parties as described in
Section 4 hereof.
<PAGE> 12
12
(q) In the case of any Shelf Registration, the Company, if
requested by any Holder of Securities covered thereby, shall cause (i)
its counsel to deliver an opinion and updates thereof relating to the
Securities in customary form addressed to such Holders and the
managing underwriters, if any, thereof and dated, in the case of the
initial opinion, the effective date of such Shelf Registration
Statement (it being agreed that the matters to be covered by such
opinion shall include, without limitation, the due incorporation and
good standing of the Company and its subsidiaries; the qualification
of the Company and its subsidiaries to transact business as foreign
corporations; the due authorization, execution and delivery of the
relevant agreement of the type referred to in Section 3(o) hereof; the
due authorization, execution, authentication and issuance, and the
validity and enforceability, of the applicable Securities; the absence
of material legal or governmental proceedings involving the Company
and its subsidiaries; the absence of governmental approvals required
to be obtained in connection with the Shelf Registration Statement,
the offering and sale of the applicable Securities, or any agreement
of the type referred to in Section 3(o) hereof; the compliance as to
form of such Shelf Registration Statement and any documents
incorporated by reference therein and of the Indenture with the
requirements of the Securities Act and the Trust Indenture Act,
respectively; and, as of the date of the opinion and as of the
effective date of the Shelf Registration Statement or the most recent
post- effective amendment thereto, as the case may be, the absence
from such Shelf Registration Statement and the prospectus included
therein, as then amended or supplemented, and from any documents
incorporated by reference therein of an untrue statement of a material
fact or the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading (in the case of any such documents, in the light of the
circumstances existing at the time that such documents were filed with
the Commission under the Exchange Act); (ii) its officers to execute
and deliver all customary documents and certificates and updates
thereof requested by any underwriters of the applicable Securities;
and (iii) its independent public accountants and the independent
public accountants with respect to any other entity for which
financial information is provided in the Shelf Registration Statement
to provide to the selling Holders of the applicable Securities and any
underwriter therefor a comfort letter in customary form and covering
matters of the type customarily covered in comfort letters in
connection with primary underwritten offerings, subject to receipt of
appropriate documentation as contemplated, and only if permitted, by
Statement of Auditing Standards No. 72.
<PAGE> 13
13
(r) In the case of the Registered Exchange Offer, if
requested by any Initial Purchaser or any known Participating
Broker-Dealer, the Company shall cause (i) its counsel to deliver to
such Initial Purchaser or such Participating Broker-Dealer a signed
opinion in the form set forth in Sections 6(c) and 6(d) of the
Purchase Agreement with such changes as are customary in connection
with the preparation of a Registration Statement and (ii) its
independent public accountants and the independent public accountants
with respect to any other entity for which financial information is
provided in the Registration Statement to deliver to such Initial
Purchaser or such Participating Broker-Dealer a comfort letter, in
customary form, meeting the requirements as to the substance thereof
as set forth in Section 6(a) of the Purchase Agreement, with
appropriate date changes.
(s) If a Registered Exchange Offer or a Private Exchange is
to be consummated, upon delivery of the Notes by Holders to the
Company (or to such other Person as directed by the Company) in
exchange for the Exchange Notes or the Private Exchange Notes, as the
case may be, the Company shall mark, or caused to be marked, on the
Notes so exchanged that such Notes are being canceled in exchange for
the Exchange Notes or the Private Exchange Notes, as the case may be;
in no event shall the Notes be marked as paid or otherwise satisfied.
(t) The Company will use its best efforts to (a) if the Notes
have been rated prior to the initial sale of such Notes, confirm such
ratings will apply to the Securities covered by a Registration
Statement, or (b) if the Notes were not previously rated, cause the
Securities covered by a Registration Statement to be rated with the
appropriate rating agencies, if so requested by Holders of a majority
in aggregate principal amount of Securities covered by such
Registration Statement, or by the managing underwriters, if any.
(u) In the event that any broker-dealer registered under the
Exchange Act shall underwrite any Securities or participate as a
member of an underwriting syndicate or selling group or "assist in the
distribution" (within the meaning of the Conduct Rules of the National
Association of Securities Dealers, Inc. ("NASD")) thereof, whether as
a Holder of such Securities or as an underwriter, a placement or sales
agent or a broker or dealer in respect thereof, or otherwise, the
Company will assist such broker-dealer in complying with the
requirements of such Conduct Rules, including, without limitation, by
(i) if such Rules, including Rule 2720 thereof, shall so require,
engaging a "qualified independent underwriter" (as defined in Rule
2720) to participate in the preparation of the
<PAGE> 14
14
Registration Statement relating to such Securities, to exercise usual
standards of due diligence in respect thereto and, if any portion of
the offering contemplated by such Registration Statement is an
underwritten offering or is made through a placement or sales agent,
to recommend the yield of such Securities, (ii) indemnifying any such
qualified independent underwriter to the extent of the indemnification
of underwriters provided in Section 5 hereof and (iii) providing such
information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of such Conduct Rules.
(v) The Company shall use its best efforts to take all other
steps necessary to effect the registration of the Securities covered
by a Registration Statement contemplated hereby.
4. Registration Expenses. The Company shall bear all fees
and expenses incurred in connection with the performance of its obligations
under Sections 1 through 3 hereof (including the reasonable fees and expenses,
if any, of Milbank, Tweed, Hadley & McCloy, counsel for the Initial Purchasers,
incurred in connection with the Registered Exchange Offer), whether or not the
Registered Exchange Offer or a Shelf Registration is filed or becomes
effective, and, in the event of a Shelf Registration, shall bear or reimburse
the Holders of the Securities covered thereby for the reasonable fees and
disbursements of one firm of counsel designated by the Holders of a majority in
principal amount of the Securities covered thereby to act as counsel for the
Holders of the Securities in connection therewith.
5. Indemnification. (a) The Issuer and each Subsidiary
Guarantor agrees, jointly and severally, to indemnify and hold harmless each
Holder of the Securities, any Participating Broker-Dealer and each person, if
any, who controls such Holder or such Participating Broker-Dealer within the
meaning of the Securities Act or the Exchange Act (each Holder, any
Participating Broker-Dealer and such controlling persons are referred to
collectively as the "Indemnified Parties") from and against any losses, claims,
damages or liabilities, joint or several, or any actions in respect thereof
(including, but not limited to, any losses, claims, damages, liabilities or
actions relating to purchases and sales of the Securities) to which each
Indemnified Party may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement or prospectus or in
any amendment or supplement thereto or in any preliminary prospectus relating
to a Shelf Registration, or arise out of, or are based upon, the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall
reimburse,
<PAGE> 15
15
as incurred, the Indemnified Parties for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action in respect thereof; provided, however, that
(i) the Issuer and the Subsidiary Guarantors shall not be liable in any such
case to the extent that such loss, claim, damage or liability arises out of or
is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in a Registration Statement or prospectus or in any
amendment or supplement thereto or in any preliminary prospectus relating to a
Shelf Registration in reliance upon and in conformity with written information
pertaining to such Holder and furnished to the Issuer by or on behalf of such
Holder specifically for inclusion therein and (ii) with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus relating to a Shelf Registration Statement, the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Holder or Participating Broker-Dealer from whom the person
asserting any such losses, claims, damages or liabilities purchased the
Securities concerned, to the extent that a prospectus relating to such
Securities was required to be delivered by such Holder or Participating
Broker-Dealer under the Securities Act in connection with such purchase and any
such loss, claim, damage or liability of such Holder or Participating
Broker-Dealer results from the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Securities
to such person, a copy of the final prospectus if the Company had previously
furnished copies thereof to such Holder or Participating Broker-Dealer;
provided further, however, that this indemnity agreement will be in addition to
any liability which the Issuer or any Subsidiary Guarantor may otherwise have
to such Indemnified Party. The Issuer and each Subsidiary Guarantor shall
also, jointly and severally, indemnify underwriters, their officers and
directors and each person who controls such underwriters within the meaning of
the Securities Act or the Exchange Act to the same extent as provided above
with respect to the indemnification of the Holders of the Securities if
requested by such Holders.
(b) Each Holder of the Securities, severally and not jointly,
will indemnify and hold harmless the Issuer, each Subsidiary Guarantor and
their respective officers and directors and each person, if any, who controls
the Issuer or any Subsidiary Guarantor within the meaning of the Securities Act
or the Exchange Act from and against any losses, claims, damages or liabilities
or any actions in respect thereof, to which the Issuer, each Subsidiary
Guarantor or any such controlling person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or
<PAGE> 16
16
supplement thereto or in any preliminary prospectus relating to a Shelf
Registration, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or omission or alleged untrue statement or omission was made in
reliance upon and in conformity with written information pertaining to such
Holder and furnished to the Issuer by or on behalf of such Holder specifically
for inclusion therein; and, subject to the limitation set forth immediately
preceding this clause, shall reimburse, as incurred, the Issuer for any legal
or other expenses reasonably incurred by the Issuer, each Subsidiary Guarantor
or any such controlling person in connection with investigating or defending
any loss, claim, damage, liability or action in respect thereof. This indemnity
agreement will be in addition to any liability which such Holder may otherwise
have to the Issuer, such Subsidiary Guarantor or any of its controlling
persons.
(c) Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action or proceeding (including
a governmental investigation), such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this Section
5, notify the indemnifying party of the commencement thereof; but the omission
so to notify the indemnifying party will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof the
indemnifying party will not be liable to such indemnified party under this
Section 5 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an
<PAGE> 17
17
indemnified party under subsections (a) or (b) above, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to in subsection (a) or (b) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party on the
other from the exchange of the Notes, pursuant to the Registered Exchange
Offer, or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof) as well as any other relevant equitable considerations. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Issuer on the one hand or such Holder or such other
indemnified person, as the case may be, on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omissions. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding any other provision of this subsection (d),
the Holders of the Securities shall not be required to contribute any amount in
excess of the amount by which the net proceeds received by such Holders from
the sale of the Securities pursuant to a Registration Statement exceeds the
amount of damages which such Holders have otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this subsection (d), each person, if any, who controls such
indemnified party within the meaning of the Securities Act or the Exchange Act
shall have the same rights to contribution as such indemnified party and each
person, if any, who controls the Issuer or any Subsidiary Guarantor within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as the Issuer or any Subsidiary Guarantor.
(e) The agreements contained in this Section 5 shall survive
the sale of the Securities pursuant to a Registration Statement and shall
remain in full force and effect, regardless
<PAGE> 18
18
of any termination or cancellation of this Agreement or any investigation made
by or on behalf of any indemnified party.
6. Additional Interest Under Certain Circumstance. (a)
Additional interest (the "Additional Interest") with respect to the Securities
shall be assessed as follows if any of the following events occur (each such
event in clauses (i) through (iii) below a "Registration Default"):
(i) If by November 28, 1997, neither the Exchange Offer
Registration Statement nor a Shelf Registration Statement has been
filed with the Commission;
(ii) If by March 30, 1998, neither the Registered Exchange Offer
is consummated nor, if required in lieu thereof, the Shelf
Registration Statement is declared effective by the Commission; or
(iii) If after either the Exchange Offer Registration Statement or
the Shelf Registration Statement is declared effective (A) such
Registration Statement thereafter ceases to be effective; or (B) such
Registration Statement or the related prospectus ceases to be usable
(except as permitted in paragraph (b) below) in connection with
resales of Transfer Restricted Notes during the periods specified
herein because either (1) any event occurs as a result of which the
related prospectus forming part of such Registration Statement would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or (2) it
shall be necessary to amend such Registration Statement or supplement
the related prospectus, to comply with the Securities Act or the
Exchange Act or the respective rules thereunder.
Additional Interest shall accrue on the Notes over and above the interest set
forth in the title of the Notes from and including the date on which any such
Registration Default shall occur to but excluding the date on which all such
Registration Defaults have been cured, at a rate of 0.50% per annum.
(b) A Registration Default referred to in Section
6(a)(iii)(B) shall be deemed not to have occurred and be continuing in relation
to a Shelf Registration Statement or the related prospectus if (i) such
Registration Default has occurred solely as a result of (x) the filing of a
post-effective amendment to such Shelf Registration Statement to incorporate
annual audited financial information with respect to the Company where such
post-effective amendment is not yet effective and needs to be declared
effective to permit Holders to use the related prospectus or (y) other material
events with respect to the Company that would need to be described in such
Shelf
<PAGE> 19
19
Registration Statement or the related prospectus and (ii) in the case of clause
(y), the Company is proceeding promptly and in good faith to amend or
supplement such Shelf Registration Statement and related prospectus to describe
such events; provided, however, that in any case if such Registration Default
occurs for a continuous period in excess of 30 days, Additional Interest shall
be payable in accordance with the above paragraph from the day such
Registration Default occurs until such Registration Default is cured.
(c) Any amounts of Additional Interest due pursuant to clause
(a)(i), (a)(ii) or (a)(iii) of Section 6 above will be payable in cash on the
regular interest payment dates with respect to the Notes. The amount of
Additional Interest will be determined by multiplying the applicable Additional
Interest rate by the principal amount of the Notes, multiplied by a fraction,
the numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
comprised of twelve 30-day months), and the denominator of which is 360.
(d) "Transfer Restricted Notes" means each Security until (i)
the date on which such Transfer Restricted Note has been exchanged by a person
other than a broker-dealer for a freely transferrable Exchange Note in the
Registered Exchange Offer, (ii) following the exchange by a broker-dealer in
the Registered Exchange Offer of a Transfer Restricted Note for an Exchange
Note, the date on which such Exchange Note is sold to a purchaser who receives
from such broker-dealer on or prior to the date of such sale a copy of the
prospectus contained in the Exchange Offer Registration Statement, (iii) the
date on which such Transfer Restricted Note has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement or (iv) the date on which such Transfer Restricted Note
is distributed to the public pursuant to Rule 144 under the Securities Act or
is saleable pursuant to Rule 144(k) under the Securities Act.
7. Rules 144 and 144A. The Company shall use its best
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the request of any Holder of
Transfer Restricted Notes, make publicly available other information so long as
necessary to permit sales of their securities pursuant to Rules 144 and 144A.
The Company covenants that it will take such further action as any Holder of
Transfer Restricted Notes may reasonably request, all to the extent required
from time to time to enable such Holder to sell Transfer Restricted Notes
without registration under the Securities Act within the limitation of the
exemptions provided by Rules 144 and 144A (including the requirements of Rule
144A(d)(4)). The Company will provide a copy of this Agreement to prospective
purchasers of Notes identified
<PAGE> 20
20
to the Company by the Initial Purchasers upon request. Upon the request of any
Holder of Transfer Restricted Notes, the Company shall deliver to such Holder a
written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.
8. Underwritten Registrations. If any of the Transfer
Restricted Notes covered by any Shelf Registration are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering ("Managing Underwriters") will be
selected by the Holders of a majority in aggregate principal amount of such
Transfer Restricted Notes to be included in such offering provided that such
investment bankers and managers must be reasonably satisfactory to the Company.
No person may participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's Transfer Restricted Notes on the
basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
9. Miscellaneous.
(a) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, except by the Company
and the written consent of the Holders of a majority in principal amount of the
Securities affected by such amendment, modification, supplement, waiver or
consents.
(b) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand delivery,
first-class mail, facsimile transmission, or air courier which guarantees
overnight delivery:
(1) if to a Holder of the Securities, at the most current
address given by such Holder to the Company in accordance with the
provisions of this Section 9(b), which address initially is, with
respect to each Holder, the address of such Holder to which
confirmation of the sale of the Notes to such Holder was first sent by
the Initial Purchasers, with a copy in like manner to you as follows:
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, NY 10010-3629
Fax No.: (212) 318-0532
Attention: Transactions Advisory Group
<PAGE> 21
21
with a copy to:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, NY 10005
Fax No.: (212) 530-5219
Attention: Jonathan Rod
(2) if to the Initial Purchasers, at the addresses
specified in Section 9(b)(1);
(3) if to the Company, at its address as follows:
Rutherford-Moran Oil Corporation
5 Greenway Plaza
Suite 220
Houston, Texas 77046
Fax No.: (713) 621-7072
Attention: David Chavenson
with a copy to:
Hughes & Luce, L.L.P.
1717 Main Street
Suite 2800
Dallas, Texas 75201
Fax No.: (214) 939-5849
Attention: Alan Bogdanow
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; three
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged by recipient's facsimile machine operator, if sent
by facsimile transmission; and on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.
(c) No Inconsistent Agreements. The Company has not, as of
the date hereof, entered into, nor shall it, on or after the date hereof, enter
into, any agreement with respect to its securities that is inconsistent with
the rights granted to the Holders herein or otherwise conflicts with the
provisions hereof.
(d) Successors and Assigns. This Agreement shall be binding
upon the Company and its successors and assigns.
(e) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
<PAGE> 22
22
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
(h) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(i) Securities Held by the Company. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Securities
is required hereunder, Securities held by the Company or its affiliates (other
than subsequent Holders of Securities if such subsequent Holders are deemed to
be affiliates solely by reason of their holdings of such Securities) shall not
be counted in determining whether such consent or approval was given by the
Holders of such required percentage.
<PAGE> 23
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Issuer a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the several Initial Purchasers, the Issuer and the several
Subsidiary Guarantors in accordance with its terms.
Very truly yours,
RUTHERFORD-MORAN OIL CORPORATION
By: /s/ ILLEGIBLE
----------------------------
Name:
Title:
RUTHERFORD-MORAN EXPLORATION
COMPANY
By: /s/ ILLEGIBLE
----------------------------
Name:
Title:
THAI ROMO HOLDINGS, INC.
By: /s/ ILLEGIBLE
----------------------------
Name:
Title:
THAI ROMO LIMITED
By: /s/ ILLEGIBLE
----------------------------
Name:
Title:
<PAGE> 24
The foregoing Registration
Rights Agreement is hereby
confirmed and accepted as of
the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
NATIONSBANC CAPITAL MARKETS, INC.
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ ILLEGIBLE
----------------------------
Name:
Title:
<PAGE> 25
ANNEX A
Each broker-dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Notes where such Notes
were acquired by such broker-dealer as a result of market-making activities or
other trading activities. The Company has agreed that, for a period of 180
days after the Expiration Date (as defined herein), it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."
A-1
<PAGE> 26
ANNEX B
Each broker-dealer that receives Exchange Notes for its own
account in exchange for Notes, where such Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. See "Plan of Distribution."
B-1
<PAGE> 27
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Existing Notes where such Existing Notes were acquired as a result
of market- making activities or other trading activities. The Company has
agreed that, for a period of 180 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until ,
199 , all dealers effecting transactions in the Exchange Notes may be required
to deliver a prospectus.*
The Company will not receive any proceeds from any sale of
Exchange Notes by broker-dealers. Exchange Notes received by broker-dealers
for their own account pursuant to the Exchange Offer may be sold from time to
time in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Notes. Any broker-dealer that resells Exchange Notes that were received by it
for its own account pursuant to the Exchange Offer and any broker or dealer
that participates in a distribution of such Exchange Notes may be deemed to be
an "underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Notes and any commission or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that, by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date the Company
will promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for
- - ----------------------------
* In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.
C-1
<PAGE> 28
the Holders of the Notes) other than commissions or concessions of any brokers
or dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
C-2
<PAGE> 29
ANNEX D
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
------------------------------------------------
Address:
---------------------------------------------
-------------------------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents that it
is not engaged in, and does not intend to engage in, a distribution of Exchange
Notes. If the undersigned is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Notes that were acquired as a result
of market-making activities or other trading activities, it acknowledges that
it will deliver a prospectus in connection with any resale of such Exchange
Notes; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
D-1
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